Posted at 6:29 a.m. PST Monday, January 12, 1998
Spies took $300 billion toll on U.S. firms in 1997
LOS ANGELES (AP) -- Foreign spies have increased their attacks on
U.S.-based companies, who lost an estimated $300 billion in 1997 alone
in intellectual property losses, it was reported today.
Governments of at least 23 countries, ranging from Germany to China, are
targeting U.S. firms, according to the FBI. The information was
published today by the Los Angeles Times, which obtained the results of
a survey by the American Society for Industrial Security due for release
Wednesday.
``The odds are not favorable for any American company when they are
targeted for clandestine action by some country's intelligence
service,'' said Larry Torrence, deputy assistant director of national
security who urged U.S. firms to notify the FBI if they suspect
espionage.
The society's periodic surveys, which FBI Director Louis J. Freeh has
cited in congressional testimony, provide the federal government with
its only estimate of potential damage from economic espionage, the
newspaper reported.
More than 1,100 documented incidents of economic espionage and 550
suspected incidents that could not be fully documented were reported
last year by major companies in the survey.
The 1997 survey disclosed that high-tech companies were the most
frequent targets of foreign spies, followed by manufacturing and service
industries. The spies targeted research and development strategies,
manufacturing and marketing plans and customer lists.
The FBI does not identify governments that sponsor economic espionage,
but a recent article in Public Administration Review, published by the
American Society for Public Administration, offered a look at commercial
spying by foreign intelligence services.
In the article by Edwin Fraumann, a New York-baesd FBI agent who teaches
at John Jay College of Criminal Justice, France, Germany, Israel, China.
Russia and South Korea were listed as major offenders.
The FBI confirmed Fraumann's report that more than 700 foreign
counterintelligence investigations involving economic espionage are
pending before the bureau. It said economic spying by countries
considered friends as well as adversaries of the United States has been
increasing, despite passage of the 1996 Economic Espionage Act.
The act makes theft of proprietary economic information a felony
punishable by a $10-million fine and 15-year prison sentence.
China was involved in one of the few cases the FBI has brought into
court so far under the act. Harold C. Worden, 56, a retired Eastman
Kodak manager, pleaded guilty in November to stealing Kodak's formulas,
drawings and blueprints and passing them along to China.
He agreed to cooperate in a continuing investigation.
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