TITLE:(Following FS Material Not for Publication) (04/14/92)
*EPF255  04/14/92 *

(Following FS Material Not for Publication)
(Text:  Washington Post article of April 14)  (720)
On April 14, The Washington Post published the following article by George
Lardner Jr. on page A5 under the headline, "U.S. DEMANDS FOR ECONOMIC

(begin text)
CIA Director Robert M. Gates said yesterday that government demands for
intelligence about international economic affairs have increased
dramatically, outnumbering other issues the nation's intelligence community
has been asked to address.

A recent review of the intelligence requirements in 20 policymaking agencies
and departments found that 40 percent of the requirements "are economic in
nature," Gates said in a speech to the Economic Club of Detroit.

Gates said the CIA and the rest of the U.S. intelligence community have no
intention of engaging in industrial espionage. But he said the areas they
will watch "cover a lot of ground," from global economic trends and
technological developments to government lobbying, suspicious financial
links and unusual commercial deals.

The special study of national security needs was ordered by President Bush
last November and sought to assess future requirements through the year
2005. While U.S. intelligence will continue to give higher priority to
1roblems such as turmoil in the former Soviet republics, weapons
proliferation, international terrorism and narcotics trafficking, the study
"highlighted the dramatic increased importance of international economic
affairs," Gates told an audience of more than 500 at Detroit's Cobo Center.

"The most senior policymakers of the government clearly see that many of the
most important challenges through and beyond the end of this decade are in
the international economic arena -- and they have fleshed out that insight
with a detailed set of requirements for the intelligence community," Gates
said in his prepared text.

The proposed new U.S. intelligence budget for fiscal 1993, estimated at a
record $30 billion-plus, has already been changed markedly from the initial
submission in February to reflect the results of the special study. Gates
said nearly two thirds of the new intelligence budget "will be directed at
a wide range of issues and challenges other than the former Soviet Union."
By contrast, he said, in 1980 "at the height of our commitment of resources
to the Cold War," 40 percent of the budget was aimed at other problems.

The CIA director outlined "three broad tasks" for the intelligence community
in the economic field.

The first, and the broadest, he said, is supporting the administration and
Congress "as they set this country's economic course." This involves
monitoring global economic trends, bilateral and multilateral economic
negotiations and the economic traditions, customs, laws and regulations of
individual countries.

Gates said some countries act as "sharpsters in the international economic
arena." In targeting them, he said, "subsidies, government-to-government
lobbying, schemes to promote exports and restrain imports, unwritten
agreements, strange financial links and unusual commercial deals are all
illustrative of economic behavior that we in the intelligence community
need to understand and follow."

A second related task, he said, is to monitor technological trends that
could affect national security, such as new high-performance computers that
could be used for military purposes, semiconductor devices that could lead
to new generations of smart weapons, and breakthroughs in
telecommunications that could give rise to entirely new industries.

"In each of these areas," Gates observed, "U.S. dominance is a thing of the

The third main task, he said, is counterintelligence, "to protect our
economy from those who do not play by the rules." Some foreign intelligence
services "have turned from politics to economics and ... the United States
is their prime target," Gates said.

Gates emphasized, however, that U.S. intelligence "does not, should not, and
will not engage in industrial espionage." He said such spying raises
serious ethical and legal questions as well as problems involving sources
and methods.

"Plainly put," Gates said, "it is the role of U.S. business to size up their
foreign competitors' trade secrets, marketing strategies, and bid
proposals. Some years ago, one of our clandestine service officers said to
me: 'You know, I'm prepared to give my life for my country, but not for a
company.' That case officer was absolutely right."

(end text)
(Preceding FS Material Not for Publication)