August 13, 2000

By Duncan Campbell and Paul Lashmar

Response to comments about report on US economic intelligence policy

We are replying to comments published here¹ concerning our report “The new Cold War: How America spies on us for its oldest friend -- the Dollar”, which was published by the Independent on Sunday (UK) on 2 July 2000.

The Independent on Sunday report included, as published by the newspaper, passages from a CIA report. It was claimed that we as authors had missed out these passages.

This complaint is ill-founded. The CIA report which deals with Chinese and Pakistan nuclear collaboration appears as a substantial illustration in the centre of the article. That report is headed "China and US discuss US Demarche on Nuclear Assistance". The words alleged to have been omitted appear in full. The context of the CIA report - US attention to nuclear dealings between the two countries - is clear from the illustration.

Our article was not originally published or republished by Cryptome. This complaint on Cryptome was linked to a US reproduction of our article on a site called Corporate Watch. There is a warning notice on this reproduction, which reads "This document contains copyrighted material whose use has not been specifically authorized by the copyright owner …We believe that this constitutes a 'fair use' of the copyrighted material … If you wish to use this copyrighted material for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.”

It is correct that the story was reproduced by Corporate Watch without the knowledge or consent of the Independent. Their reproduction omits the front page lead story, the illustration, and two explanatory boxes. The omissions they made include the material which the authors are criticised for omitting. Thus, this was a bowdlerised and unauthorised third party reproduction, and was not the newspaper report published to British readers.

In order to clear up any misunderstandings, the Independent on Sunday website has kindly given John Young permission to mirror these articles and their components in full on Cryptome, and they now appear on this site.

Jeff Richelson's attribution and identification of the origins of two of the Sigint reports mentioned is absolutely correct. We would have been happy to confirm this to him or anyone else who asked. The phrase "obtained by the IoS" was inserted by a sub-editor, but it is still factually correct. A further implied complaint appears to be that the article did not say specifically that one document was obtained by the IoS from the National Security Archive, a second from an Australian book and the third from Bill Gertz's book/Cryptome. That is because this was a newspaper article. Newspaper editors do not allow space for the comprehensive references and footnotes that are customary and necessary in academic publications. There was not even space to give details of the third UKUSA Sigint report we referred to, which concerned world oil trade.

The important issue is whether these three documents, and others do contain information that is "economic in nature". They do. The documents were included to show that the US Sigint System readily obtains information about contracts and trade, such as messages between different offices of a French bank. The reason that the intercepted information was reported by NSA in two of these cases, and eventually made available in public, was its relevance to atomic and nuclear issues. Our article did not suggest otherwise. There are not always hard and fast lines between economic and trade matters and political or defence issues, as these cases illustrate. These examples were not presented as examples of the Clinton administration's trade policy, which it is quite clear they are not. They are examples of the collection capabilities of the international five-nation Sigint system that has been in operation for many decades, including before 1972, and whose capabilities are relevant to the general discussion.

We could have cited other cases where US signals intelligence tasking has acted with mixed motives, such as by placing the European Tornado fighter aircraft on the NSA "watch list". [See IC2000 report, “Panavia European Fighter Aircraft consortium and Saudi Arabia”]. This action had the effect of providing data about European trade, although it was also intended to monitor arms sales because of regional military concerns. In another case in the Middle East, the US obtained communications intelligence about bids for a power station contract because of concern about regional proliferation, but then exploited the intelligence to defeat a foreign company bidding for the contract. A US company gained the contract instead. The intention of the intelligence gathering may have been to deal with proliferation, but the effect was manifestly economic in nature.

This use (or abuse) of the U.S. Sigint system was widely reported in U.S. media in 1994-96, years before anyone in Europe had raised issues about Sigint or Echelon (or had even heard of Echelon). Prominent reports appeared in the New York Times ², on NBC Nightly News³, and in the Baltimore Sun,^4,5 In April and May 2000, Bob Windrem of MSNBC published an excellent and extensive series of articles reviewing the development and managements of US commercial espionage policy under the Clinton administration. ^6,7

Bill Gertz, the Washington Times defence reporter whose book contained the China-Pakistan Sigint report, has also published his own sources' understanding of these matters. (Notes from the Pentagon - Inside the Ring, Bill Gertz and Rowan Scarborough, Washington Times, July 14, 2000). Gertz reports one source as telling him: "It [the Sigint system] is quite an incredible system and it clearly has the capability to monitor line-to-line telephone conversations as well as cellular phones. It can also derive specific information from anything in a microwave transmission to a simple computer message. It is used primarily for national-level strategic intelligence collection. However, I am not unconvinced that economic data is not collected by this system."

Another intelligence source quoted by Gertz added: "The military downlinks only have access to military-related information, Bosnia, Kosovo, Montenegro and these places. However, at the [National Security Agency and the White House], they have links into economic intelligence that gives the United States and England incredible power over the global economic status and overall picture of the European financial markets."

That is the point.

Duncan Campbell and Paul Lashmar

1. Richelson Disputes US Economic-Spying Report, Cryptome, July 12, 2000.

2. “How Washington Inc makes a sale”, David Sanger, New York Times,, 19 February 1995.

3. “Espionage – tonight, the new spy game”, Mike Jensen, NBC Nightly News, 11 May 1995.

“With the Soviet Union gone, the CIA has found a new target: foreign business. NBC's Mike Jensen tonight with the results of an NBC News investigation into how spying affects the bottom line for US companies.

4. "America's Fortress of Spies", by Scott Shane and Tom Bowman, Baltimore Sun, 3 December 1995.

5. “Mixing business with spying; secret information is passed routinely to U.S.", by Scott Shane, Baltimore Sun, 1 November 1996.

5. “U.S. spying pays off for business”, by Robert Windrem, MSNBCNews, 14 April 2000. (link has broken)

6. “U.S. steps up commercial spying”, by Robert Windrem, MSNBC News, 7 May 2000.