Fw: [EHIPPIES] How America spies on Brits for its oldest friend

[ricardo dominguez <rdom@thing.net>]

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From: the electrohippies collective's news network <ehippies@tesco.net>
To: List Member <rdom@thing.net>
Date: Sunday, July 09, 2000 10:43 AM
Subject: [EHIPPIES] How America spies on Brits for its oldest friend


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INDEPENDENT (London) 2 July 2000

The new Cold War: How America spies on Brits for its oldest friend -- the
Dollar

Exclusive: Documents shed light on US policy of covert surveillance of
British and European industry

By Duncan Campbell and Paul Lashmar

It is the new Cold War. The United States intelligence agencies, facing
downsizing after the fall of the Berlin wall, have found themselves a new
role spying on foreign firms to help American business in global markets.

Documents obtained by the Independent on Sunday reveal how the CIA and
National Security Agency (NSA) -- propelled by the newly-elected Clinton
administration's policy of "aggressive advocacy" to support American firms
compete for overseas contracts -- have immersed themselves in the new hot
trade war. Targets have included UK and European firms. At stake are
contracts worth billions of dollars.

For America's spies an important tool has been the global eavesdropping
system known by the code name Echelon, which has come to invoke the tag of
the Big Brother of the cyberspace age.

Echelon is part of a British and American-run world-wide spy system that
can "suck up" phone calls, faxes and e-mails sent by satellite. America's
intelligence agencies have been able to intercept these vital private
communications, often between foreign governments and European businesses,
to help the US win major contracts.

The implications of eavesdropping business communications are dramatic,
according to Dr Brian Gladwell, a British former top Nato computer expert.

"The analogy I use is where we were 250 years ago with pirates on the high
seas. Governments never admitted they sponsored piracy, yet they all did
behind the scenes. If we now look at cyberspace we have state- sponsored
information piracy. We can't have a global e-commerce until governments
like the US stop state-sponsored theft of commercial information," he says.

Britain's role in Echelon, via its ultra-secret eavesdropping agency GCHQ,
has put Tony Blair's government in the dock facing its European partners.

European politicians meet on Wednesday in Strasbourg and Berlin to call
for inquiries into electronic espionage by the US to beat competitors.
These debates follow two years of controversy about Echelon as its
astonishing power has gradually been revealed.

But the real origin of the current row lies in the early Nineties, when US
politicians and intelligence chiefs decided that the formidable but
under-employed Cold War US intelligence apparatus should be redirected
against its allies' economies.

At stake was not just routine international trade, but new opportunities
created by the demise of communism and fast-growing markets in countries
that US trade officials dubbed "BEMs" -- Big Emerging Markets, such as
China, Brazil and Indonesia.

Perhaps the most startling result of the new Clinton policy came in
January 1994, when the then French Prime Minister Edouard Balladur flew to
Riyadh to conclude a $6bn (=A34bn) deal for arms, airliners and
maintenance= , including sales of the European Airbus. He flew home
empty-handed.

The Baltimore Sun later reported that "from a commercial communications
satellite, NSA lifted all the faxes and phone-calls between the European
consortium Airbus, the Saudi national airline and the Saudi government.
The agency found that Airbus agents were offering bribes to a Saudi
official. It passed the information to US officials pressing the bid of
Boeing Co."

Clinton's government intervened with the Saudis and the contract went to
Boeing.

A second contract where US intelligence played a decisive role concerned
Brazil. In 1994, NSA intercepted phone-calls between France's Thomson-CSF
and Brazil concerning SIVAM, a $1.4bn surveillance system for the Amazon
rain forest. The company was alleged to have bribed members of the
Brazilian government selection panel. The contract was awarded to the US
Raytheon Corporation -- which announced afterwards that "the Department of
Commerce worked very hard in support of US industry on this project".

This is just one of hundreds of "success" stories openly boasted by the US
Government's "Advocacy Center" up to the present day. They do not say
where the CIA or NSA was decisive in winning the contract, but often brag
of beating UK, European or Japanese competitors.

Cases where the US "beat British" competitors include power generation,
engineering and telecommunications contracts in the Philippines, Malawi,
Peru, Tunisia and the Lebanon. In India, the CIA tracked British
competitive strategies in a competition to built a 700MW power station
near Bombay. In January 1995, the $400m contract was awarded to the US
companies Enron, GE and Bechtel.

Also in 1995, General Electric Power Systems won a $120m tender to build a
plant in Tunisia. "They beat intense competition from French, German,
Italian and British firms for the project," the Center boasts.

Documents and information obtained by the IoS show that the critical
question of whether US intelligence should systematically help business
was resolved after the election of Clinton in 1993. He appointed key
Democratic National Party fund-raisers, including the late Secretary of
State for Commerce, Ron Brown, to senior posts and launched a policy "to
aggressively support US bidders in global competitions where advocacy is
in the national interest". Soon, every US government department, from the
Bureau of Mines to the CIA and the giant, super-secret National Security
Agency, was playing a role in landing contracts for the booming US economy.

The new policy, dubbed "levelling the playing field" by the Clinton
administration, included arrangements for collecting, receiving and
handling secret intelligence to use to benefit US commerce.

Three Sigint (signals intelligence) reports obtained by the IoS are
economic in nature. One details messages between Banque Nationale de Paris
offices in France and Delhi, concerned with loans to build an atomic power
station near Madras. A second gives details of OPEC negotiations,
including French diplomatic messages.

A 1997 report details phone calls and faxes between Pakistani officials in
Islamabad and Beijing, and laments that the Chinese-based official was
told to send future messages by the diplomatic pouch. The report warns
that if this order was obeyed, it would "severely limit our ability to
monitor". All the reports are classified "TOP SECRET UMBRA", indicating
that highly-sensitive monitoring techniques were used to get the
information.

The heart of the new, co-ordinated Clinton trade campaign is the "Advocacy
Center" inside the Department of Commerce. The Center is run by the "Trade
Promotion Co-ordinating Committee", part of the US Department of Commerce.
Declassified minutes of the Trade Promotion Co-ordinating Committee from
1994 show that the CIA's role in drumming up business for the US was not
limited to looking for bribery, or even lobbying by foreign governments.
For a series of meetings dealing with Indonesia, 16 officials were
circulated with information. Five of the officials were from the CIA.
Three of the five worked inside the Commerce Department itself, in a
department called the "Office of Executive Support". The fifth, Robert
Beamer, was from CIA headquarters.

The "Office of Executive Support" is, in reality, a high-security office
located inside the Commerce Department. It is staffed by CIA officials
with top-secret security clearances and equipped with direct links from US
intelligence agencies. Until recently, it was known, more revealingly, as
the "Office of Intelligence Liaison".

According to Loch K Johnson, a staff member of the US intelligence reform
commission set up in 1993, officials at the departments of Commerce,
Treasury and State pass information to US companies without revealing the
intelligence source. "At Commerce, there's no code or book to consult to
say when and what information can be passed to a US company," he says.

If, for instance, a government official learned that a foreign competitor
was about to win a contract sought by a US company, he explained, "someone
in Commerce might call a US executive and say: 'Look, you might have a
better shot at that contract if you sweetened your bid a little,'" Johnson
added. "They pass on the information. But they usually do it in a very
veiled fashion."

In 1994, a report to the Congressional (house) intelligence committee said
that the "core of the intelligence community in this area [industrial
espionage] has focused on alerting US policymakers about
government-to-government lobbying efforts to disadvantage US firms seeking
international trade. "A review of intelligence reporting since 1986 has
identified about 250 cases of aggressive lobbying by foreign governments
on behalf of their domestic industries that are competing against US firms
for business overseas", the report stated, adding that since the start of
the Clinton administration, 72 cases involving $30bn had been under
intelligence scrutiny.

In a March article for the Wall Street Journal, entitled "Why we spy on
our allies", former CIA director James Woolsey claimed there was only one
reason why the CIA tracked European companies. "Most European technology
just isn't worth our stealing." he wrote. "We have spied on you because
you bribe. Your companies' products are often more costly, less
technically advanced, or both, than your American competitors."

Yet some of the earliest deals clinched by US "advocacy" with CIA support
are among the most corrupt deals of all time. In 1994, President Clinton
signed off on $40bn of business agreements between Indonesia and US firms
on one day. Among the deals was a $2.6bn power plant at Paiton, Java. At
the time the contract was signed, the US knew one of President Suharto's
daughters had been cut in on the deal, and was given a stake in the
project worth more than $150m.

Two months ago, the directors of the CIA and NSA appeared before the US
Congress intelligence committee. CIA director George Tenet told the
Committee: "With respect to allegations of industrial espionage, the
notion that we collect intelligence to promote American business interests
is simply wrong. We do not target foreign companies to support American
business interests.

"If we did this, where would we draw the line? Which companies would we
help? Corporate giants? The little guy? All of them? I think we quickly
would get into a mess"

Three years before European politicians had heard about ECHELON, news of
how the satellite spy system was gaining business for the US was revealed
in the US. A May 1995 report by NBC news said that the US National
Security Agency was intercepting business faxes and phone calls from
stations in the US, the UK and Hong Kong.

Earlier this year, NBC published more revelations about how US
intelligence has been spying for business. For the original reports see
'U.S. spying pays off for business', by Robert Windrem (14 April 2000) and
'U.S. steps up commercial spying', by Robert Windrem (7 May 2000)

Robert Windrem of NBC News contributed to this report.


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