ACCESSION NUMBER:271215 FILE ID:POL204 DATE:03/09/93 TITLE:WOOLSEY: INTELLIGENCE CRUCIAL IN POST-COLD WAR WORLD (03/09/93) TEXT:*93030904.POL WOOLSEY: INTELLIGENCE CRUCIAL IN POST-COLD WAR WORLD (Sees role in improving economic security) (370) By Paul Malamud USIA Staff Writer 1ashington -- The new director of Central Intelligence, James Woolsey, urged members of Congress March 9 to proceed slowly with intelligence budget cuts, warning that the United States still needs a first-rate intelligence capacity to survive in an increasingly fragmented world. "It is important (to) warn of threats" including threats to "important aspects of our economic well-being," he emphasized, stressing that "the intelligence community has something to offer in terms of improving our economic security." While "the risk of a full-scale nuclear exchange with one power...is effectively gone" due to the end of the Cold War, in a "number of ways...our safety and security may be endangered (by) a more demanding problem for intelligence than existed before" due to the complexity of the post-Cold War world, Woolsey said. "The situation now," he noted "is much less predictable." In response to questions by members of the House Intelligence Committee following his prepared statement, Woolsey conceded that the CIA does not need to do "things that can be done efficiently and effectively" by other government agencies. But he stressed that the United States still needs "human resources...signals intelligence (and) imagery" information to warn policymakers of impending trouble and to provide input for an effective foreign policy. Woolsey told the legislators that the intelligence community will attempt to streamline operations by using "satellite resources" more efficiently, by simplifying the "classification and security system" and by consolidating physical facilities where possible. Asked whether the United States, under the Clinton administration, will engage in industrial espionage, Woolsey said that that practice is "fraught with legal and foreign policy difficulties." Woolsey emphasized that the "existing policy" is "not to conduct industrial espionage on behalf of American corporations." However, he added that "economic intelligence broadly described is very important to the United States" in such areas as "general economic trends...effectiveness of sanctions" and the examination of "new technologies" that have both civilian and military potential. Woolsey noted that some "friends and allies of the United States" engage in outright industrial espionage against U.S. corporations and in addition bribe third parties to award them -- rather than U.S. firms -- with valuable contracts. Woolsey said the United States was "relatively gentle about this" during the Cold War, but he added that if the Clinton administration decides the time has come to be "considerably more forceful and effective" in combating these practices, "I will approach that subject with particular vigor." Woolsey commented that the CIA is "increasingly involved" in tracking worldwide the flow of illicit funds used by terrorists and drug traffickers. He added that "We are working very hard on the international aspects" of the World Trade Center bombing. NNNN .