America is facing an international challenge to its intellectual assets and proprietary
information. The challenge stems from the economic competition currently dominating the
global economy. This competition is an element of international relationships not likely
to change in the future. The question is broader than efforts by traditional adversaries
to avail themselves of the latest military technology. Historic allies engage in
systematic efforts to enhance their economic viability at the expense of American
This paper attempts to place the actions of foreign governments utilizing intelligence
assets to illicitly acquire US corporate research and development in perspective. This
activity has a detrimental effect on the national security of the US. The historical
definition of "National Security" requires reevaluation reflecting economic
viability as a true measure of national power.
Existing governmental resources are available at minimal cost to provide proactive
security countermeasures to industry. To be of value the government must afford these
resources to business in a non-burdensome value added manner.
The Challenge Facing Government and Industry
"We are the Federal Bureau of Investigation, not the Federal Bureau of
Prevention." This comment was made at a recent Counterintelligence presentation to US
Government contractors by a Special Agent of the Federal Bureau of Investigation (FBI).
This observation sums up a dilemma currently confronting the Federal Government with
respect to its efforts to protect American high technology, intellectual property, and
pleading edge research and development. Does the government have a role in
protecting those assets that ensure US military superiority and commercial success?
Where the information to be protected is classified, programs like the National
Industrial Security Program (NISP) are in place to ensure adequate security
countermeasures are present. Assistance is provided to government contractors by the
Defense Investigative Service (DIS) or other government activities as appropriate.
However, a void exists with respect to efforts to provide a similar service for
industrys intellectual property, targeted by Foreign Intelligence Services (FISs).
Large corporations are well aware of the competitive threats to their proprietary
information and implement security countermeasures to safeguard identified assets.
Small to midsize companies lacking professional security staffs are left largely to
their own devices in dealing with this threat to their businesses. You could debate the
effectiveness of these measures but security professionals unanimously agree that if
targeted by a foreign intelligence service corporate resources are inadequate.
Currently business can expect minimal assistance from the US government unless a
connection with classified information is present. The FBI is making a solid effort to
provide security awareness via their recent ANSIR (Awareness of National Security Issues
and Response) Program. This is an expansion of the Defensive Counterintelligence Awareness
program (DECA) used for many years to disseminate the counterintelligence message to
industry. As presently configured these efforts constitute an effort at security awareness
but do not address the proactive implementation of security countermeasures.
A report prepared by the American Society for
Industrial Security (ASIS), ASIS Special Report: Trends
in Intellectual Property Loss 1 identifies and quantifies the foreign sponsored threat to private industry. The survey reports incidents
involving sixteen foreign entities eight of which were among twelve nations assessed by
the US counterintelligence community as the most actively involved in targeting US
Data indicates some foreign companies and governments pose a
significant and continuing threat to intellectual property, defined as patents,
copyrights, trademarks, and trade secrets. The severity of the problem has also been
recognized by Congress.
Legislation introduced by Senator Cohen of Maine in January 25, 1996, became law on
October 11, 1996. Senator Cohens comments introducing the bill provide additional
insight into the governments perception of this issue. "It is imperative the
United States send a clear message to both our friends and our foes that this country does
not accept international state-sponsored economic espionage as a legitimate business
practice. We must demonstrate our resolve to combat this unfair economic practice,
regardless of who engages in it.
This legislation will fight a practice that is polluting the international free market
and robbing our nations firms and workers of the success they have earned with their
technological innovation and marketing know-how."
The National Counterintelligence Center (NACIC) and the US Department of States
Overseas Security Advisory Council (OSAC) conducted a survey in December 1994 to assess
the severity of the threat. Fourteen hundred surveys were mailed to corporate security
managers. Key findings of the survey highlight the following:
· the mechanisms
in place for the exchange and sharing of counterintelligence (CI) information need
energizing and improvement, and
· more emphasis is
required for awareness training to heighten employee sensitivities to the information
collection tactics of foreign governments and the potential for losss through
industrial theft and other illicit practices by foreign interests
Further illustrating the extent and seriousness of the
problem is the Central Intelligence Agency (CIA) report issued in May 1996 which for
the first time, publicly identified six nations as aggressive collectors of economic
The new Economic Espionage legislation will provide
enforcement activities like the FBI with an effective tool for investigating and
prosecuting instances of economic espionage after they occur. Investigation and
prosecution though desirable and necessary do little to prevent the loss of private sector
research and development illicitly acquired by foreign interests. The comments by the FBI
special agent referring to the Bureau as an "investigative rather than a preventive
agency" are particularly insightful. The obvious question is "What proactive
measures should be implemented to level the playing field for US industry targeted by the
intelligence services of foreign governments"?
Is National Security Involved?
Decision makers in government and industrial leaders need to determine if the
government has a role to play in assisting industry in protecting their unclassified
research and development. President Clintons statement on Economic Espionage October
15, 1996 emphasizes that in todays world the economy and national security are
incontrovertibly linked, " Trade secrets are an integral part of virtually every
sector of our economy and are essential to maintaining the health and competitiveness of
critical industries operating in the United States. Economic espionage and trade secret
theft threaten our Nations national security and economic well-being". The
Presidents remarks state that this issue is one of National Security extending
outside traditional boundaries.
Perhaps one of the first steps to be considered if the national leadership desires to
effectively address this issue is to formalize and verbalize a new definition of National
Security with a major emphasis being placed on economic competition. The passage of the
Economic Espionage Act of 1996 is an excellent starting point in formally recognizing the
serious nature of the threat posed by foreign governments. The US can look to the
government of France as an example of one governments attempt to define its national
security interests. French criminal law does not limit spying to only military and
political matters. Its definition now includes industrial and commercial matters,
particularly those dealing with scientific and technological innovations. The concept of a
threat to "national defense interests" is replaced by that of a threat to the
"fundamental interests of the nation". This includes the environment and
essential elements of scientific and economic potential and cultural heritage. The new
laws not only provide sanctions for the covert collection of secret information but also
"open" intelligence which consists of gathering information that might
present a risk to the fundamental interests of the nation, even if each piece of
information by itself is not secret.3 It is not
being suggested that the French definition is appropriate for the US but rather to
illustrate that traditional definitions of national security based solely on a nations
military strength do not portray the competitive nature of the present global economy.
Existing Government Resources
By virtue of its traditional role in the NISP, and its recent efforts to integrate
security counter measures with counterintelligence education and awareness DIS is uniquely
positioned to be a key contributor in any program designed to assist industry in
protecting assets of national significance. DIS has no role in operational
counterintelligence matters. However, its charter as a security countermeasures
organization makes it ideally suited to provide industry with a proactive approach to
implementing effective countermeasures tailored to the appropriate threat level likely to
be encountered. DIS currently has a work force of trained industrial security
professionals, a field structure positioned to respond to industrys needs and
contacts within the intelligence community facilitating a mutually beneficial relationship
If the government desires to be effective in assisting industry in protecting
unclassified information of value it must accurately ascertain industrys needs. The
government must approach industry as a viable consumer of a value added product and offer
its services in a rational, threat appropriate, cost effective manner. Attempts to impose
a compliance based regulatory program are doomed to fail. Industry has little desire to
increase the regulatory burden it currently faces. Incentives must be basic, and obviously
motivated by self interest (the desire to protect company assets).
Industry must be convinced that the service afforded by the government will be of
value. The first step in this process is to identify key industry requirements. The
aforementioned NACIC/OSAC survey identifies corporations highest priority as
information on foreign government targeting of their proprietary information, employees,
telecommunications or facilities or more simply stated "threat information".
Ensuring the private sector has a clear comprehension of the threat is a must. The ANSIR
program is an attempt to provide this knowledge in a generic fashion. Specific threat
information presented in a manner that satisfies clearance and classification issues
should be the objective. However, the FBI with its primary mission as an operational and
investigative one, may not be positioned most effectively to obtain and convey this threat
data from the intelligence community. The recent DoD initiatives to integrate
counterintelligence with security countermeasures within DIS are proving fruitful and may
be worthy of further exploration as an effective means of providing industry with the
information it desires.
Senior management officials must recognize the nature of the problem. There must be a
clear understanding that the expenditure of additional resources by industry will be
minimal. Additionally, management must be able to conceptualize a return on investment
that will improve the overall profitability of the business. Finally, industry requires an
Economic Espionage security countermeasures methodology which is standardized,
understandable, limited in scope and customized to the individual nature of the business.4
DIS possesses the expertise and infrastructure to address each of industrys
needs. Assuming senior policy makers recognize existing synergies it would not be
difficult to broaden the services currently provided by DIS to encompass security
education and awareness training to address company intellectual property assets. The
ability to obtain and disseminate threat data satisfies two crucial industry requirements.
The security countermeasures which DIS overseas in the classified Defense arena can easily
be tailored to the protection of intellectual property. DIS assets are an existing force
multiplier available for increased exploitation to the ultimate benefit of the nation.