French spies shop for trade secrets: A 21-page masterplan has revealed US and British commercial targets, writes Leonard Doyle

Leonard Doyle
Monday 10 May 1993 23:02 BST

FRANCE'S intelligence services are engaged in economic espionage against British subsidiaries of American defence companies including the helicopter manufacturer Westland, according to a masterplan for French spies operating under diplomatic cover that has been obtained by the Independent.

The 21-page shopping list for commercial secrets, the authenticity of which has gone unchallenged by the French government, goes on to list the country's 'intelligence requirements' across a broad commercial spectrum. It even names Carla Hills, the former US trade negotiator in the Gatt talks, as a priority target.

Ms Hills was apparently well aware of the ham-fisted espionage efforts and says that she always took her briefcase with her, even when going to dinner, while conducting negotiations with the European Community.

The document, obtained from a US Congressman who got it from the CIA, provides unusual insight into the behind-the-scenes efforts of a European power to gain a competitive edge by stealing commercial secrets that are then fed to government-owned or subsidised hi-tech companies.

French officials have dismissed the document as 'old news', saying that in January 1990 the then head of the CIA, William Webster, met Claude Silberzahn, head of French external intelligence, and the two services agreed to stop spying on each other's secrets - government and commercial.

That accord broke down when two French officials were caught red- handed working undercover at Bell Textron in Fort Worth, Texas. The officials were hurriedly recalled to Paris after US protests.

The company they were trying to steal from makes the still experimental V-22 Osprey, an advanced 'tilt-rotor' aircraft that can take off and land like a helicopter but flies like a plane at up to 350mph. The French agents were looking for information on Osprey's marketing alliance with Westland in Britain. France is not the only country engaged in industrial espionage, according to US intelligence sources, though it may be the most maladroit, given the number of times its agents have been rumbled by the FBI.

Gerard Burke, a former top official in the US's secretive electronic eavesdropping organisation, the National Security Agency, and a one-time member of the US president's Foreign Intelligence Advisory Board, said in an interview yesterday that as far as he knew Britain, Sweden, Switzerland, Germany and Israel were among the 20 countries actively engaged in economic espionage. The French document, which dates from 1990, was authentic in his view. 'Its concentration on learning the marketing strategies of US competitors made perfect sense because of the immediate bottom-line benefit to French companies and the immediate loss to ours,' he said.

The main threat to US industrial secrets from government-sponsored commercial spying does not come France, in the view of the former head of a European intelligence agency contacted this week. He rates Germany, Britain and Sweden, in that order, as having the most effective commercial spy networks - all the more so because their agents are rarely caught and publicly exposed.

The now widely circulating French document was prepared by an intelligence unit called the Departmemt of Economics, Science and Technology, and gives top priority to cracking Bell Textron for V-22 Osprey technology and finding its 'commercial strategy in association with Westland (UK)'. Agents are encouraged also to discover the helicopter manufacturer Sikorsky's joint industrial strategy with Westland for 'penetration of European market'.

The shopping list includes solid rocket booster technology, satellite research and information about high-definition televisions, where European companies lag far behind the US. It also orders French intelligence agents to penetrate Wall Street banks, securities houses and consultants, including Citibank, Chase Manhattan and Goldman Sachs - giving top priority to finding out about investment plans in Europe. It asks agents to pay particular attention to lawyers and consultants who are often privy to inner secrets of clients and are notorious for being careless with documents and on the telephone.

For years businessmen travelling to France have been warned of possible eavesdropping bugs in the first-class compartment of Air France and on Concorde, and top US officials are told by the State Department's Overseas Advisory Council (which brings corporations and government agencies together to advise more than 1,000 corporations on security threats) to assume that papers left in hotel rooms will be photocopied and conversations overheard.

France's obsession with stealing US commercial secrets can be attributed in part to the deep-rooted fear that the country was going to be overrun by US corporations that emerged in the early 1970s with the publication of Le defi Americain (The American Challenge), by the author Jean-Jacques Servan- Schreiber. That, intelligence experts say, provided one rationalisation for ordering its spies to concentrate on commercial secrets.

More recently, the end of the Cold War and the recession has focused government attention on economic challenges. 'The market has shrunk so trade and sales become more important,' said Vincent Cannistraro, a former top CIA official. 'However, very few countries are willing to use classic espionage techniques.'

'Sure there is lots of business intelligence and sharp practices by countries like Japan, which are particularly predatory, but suborning agents for classic intelligence penetration is much more serious.'

The damaging fallout for France is already apparent with the withdrawal of Hughes Aircraft from next month's Paris Air Show, in part because of fears of espionage. Hughes lost a dollars 258m ( pounds 164m) satellite contract with the Arab world to the French recently and US politicians are now calling for a ban on US defence officials from attending the Paris show until France has issued a formal apology for spying.

The French document goes on to list Boeing as a prime target, and concludes that section by advising its agents to seek information on the 'dispute with Airbus (notably as regards Gatt)'.

More revealing is the attention given by the French foreign intelligence service, the General Directorate for External Security, to stealing the fruits of US research and development into high- definition television, an area where the EC is falling far behind. The spy agency gives priority to getting the names of companies and 'the names of officials' involved in the project, which once it is commercially available, is expected to be worth billions of dollars a year in television sales.

(Photograph omitted)

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