Spy Touts Crypto

[John Young <jya@pipeline.com>]

Date: Sun, 15 Feb 1998 16:40:04 -0500

Frankfurt, Germany (AP) -- Germany's spy chief has denied U.S. 
allegations that his agents spy on American companies, but he 
warned German firms that such economic espionage is soaring 
internationally. 

Bernd Schmidbauer said in comments published Saturday that, in 
contrast to most countries' spy agencies, Germany's is not 
involved in any economic espionage. 

The Frankfurter Allgemeine daily reported that the FBI last 
month accused Germany of running a post near Frankfurt that 
eavesdrops on U.S. phones and tries to break into American 
computer systems. 

"We're astounded about those reports from the FBI," the 
newspaper quoted Schmidbauer as saying. He said the post is 
involved only in trying to prevent the spread of weapons of 
mass destruction. 

The FBI does not normally identify governments it suspects of 
economic spying. But an article last month, written by an FBI 
agent for the industry magazine Public Administration Review, 
lists Germany along with France, Israel, China and South Korea 
as major offenders. 

The article said more than 700 investigations involving 
economic espionage by foreign governments are pending before 
the bureau. The FBI confirmed that figure last month. 

The American Society for Industrial Security estimated that 
American businesses lost $300 billion in intellectual property 
to foreign and domestic spies last year. 

Schmidbauer said German companies also are increasingly 
targeted, and warned that any conversations, faxes or computer 
information carried over phone lines or mobile phones could be 
eavesdropped. 

"A lot of money is being lost through this form of espionage," 
Schmidbauer said, without giving a figure. "And it's not only 
east European spies that are snapping up know-how from German 
companies."

"Our companies are relatively naive," he said. "Concrete steps 
must be taken ... including encoding techniques."

[End]

Thanks to DN.