FROM SWORDS TO PLOWSHARES

FROM SWORDS TO PLOWSHARES

The Central Intelligence Agency and some very important allies at the top of the Clinton administration have decided that the post-Cold War mission of the CIA should be helping U.S. companies win business overseas.

While that new focus has been discussed in general terms since the fall of the Berlin Wall, its details will be the subject of classified House and Senate hearings when Congress returns from recess in September.At the same time that Congress is working to diminish the role of government in the private sector, these secret hearings will be considering a policy that could vastly enlarge it.

Under consideration will be a report prepared at the direction of President Clinton by Richard Neu, an economist with ties to the CIA who served until several weeks ago as an adviser to the White House on intelligence matters. The results are likely to be previewed in a Sept. 12 speech by CIA director John Deutsch.

The White House and CIA refused repeated requests for comment on this story. CIA public affairs officer Dave Christian said his office was too busy to attempt to answer any questions on this topic and ruled out pursuing answers at a later date.

The classified report, delivered by Mr. Neu in July, proposes that economic espionage - and counter-espionage - become one of the primary missions of the CIA. It goes on to propose guidelines for this new mission that would continue a longtime prohibition on handing out U.S. intelligence directly to U.S. companies, but would establish few limitations on the collecting of proprietary business information from foreign companies.

Beyond this, little more is known outside the government about the details of the proposed tilt toward economic espionage.

Officials who favor it say that it has long been a minor part of the CIA's activities and has mostly involved the analysis of open sources of information - foreign newspapers, speeches, scientific meetings and the like. They say it has been overwhelmingly "defensive," to counter economic espionage by France, Japan, China, South Korea and other countries.

But as the CIA seeks an outlet for the covert and illegal tools (including bribery and break-ins) used in the past to combat the Soviet Union and other Cold War adversaries, one question is whether these tools will become a common part of the CIA's proposed new mission.

While some goals of this new mission may be uncontroversial - uncovering commercial bribery or government corruption overseas, for example - the national interests of the United States in some cases may not be clear.

For example, as many traditional U.S. companies move manufacturing overseas and more foreign companies build plants in the United States, deciding which should be the targets of U.S. spying and which should be the indirect beneficiaries may be more of a political decision than the architects of the new mission have admitted. In the "global economy" often referred to by Mr. Clinton, where a company in Nashville depends on the health of another in Osaka, the effects of this espionage may be harder to predict. (Story, Page 8A)

In the meantime, the CIA has already mounted a new operation - to win the hearts and minds of those politicians, bureaucrats and captains of industry who will decide whether its vision of "economic intelligence" justifies maintaining current funding for the agency now eyed by budget-cutters in government.

Part of that campaign was seen last week, when the White House released an expurgated version of a report to Congress on economic espionage directed against the United States by foreign governments.

Even with the omission of the names of the countries and companies involved, for a business executive the report is a frightening compendium of threats. The 20 different kinds of intelligence-gathering named, from ''classic agent recruitment" to bugging to bribery, make it clear that every scheme used for spying during the Cold War is now being used to steal the secrets of U.S. industry.

Neither the classified nor the public version of the report tries to judge how common this economic spying is, nor what its effects are on the U.S. economy, but the overall impression it leaves is that U.S. companies are under a substantial threat from abroad of which business executives have largely been ignorant.

Beyond these two reports, perhaps the most important component of the CIA's campaign to secure a new mission is its careful cultivation of new "clients" - the top economic officers of the Clinton administration.

"The intelligence community is very eager to obtain support for economic and trade operations, and they are trying to earn their spurs," said Richard Zelikow, a Harvard University professor who has written a book supporting the new focus on economic espionage. "They are working assiduously to cultivate people in the administration."

Among these officials, one of the best customers for the CIA has been U.S. Trade Representative Mickey Kantor, according to several U.S. officials. From the moment he joined the government in 1993, Mr. Kantor has displayed an insatiable appetite for intelligence supplied by the CIA.

Unlike Mr. Kantor, Carla Hills, President Bush's trade representative, was little interested in CIA reports about trade disputes and seldom took CIA information into account when facing off against foreign governments in a negotiation.

That changed when Mr. Kantor took office. Almost immediately, CIA intelligence began to play a much larger role in trade negotiations. In the Uruguay Round of world trade talks, extensive spying on the European Union helped U.S. officials decide how much to demand of EU officials in the end- game of the negotiations. After the deal was reached on Dec. 15, 1993, one of the first things that Mr. Kantor did was to send a letter thanking CIA officials for their help in providing information and analysis about the negotiating positions of other governments.

The most recent example of this assistance, according to U.S. officials, was the extensive use of the CIA in obtaining information from Japanese industry and government during a high-stakes confrontation this past spring over automotive trade.

Traditionally, according to former U.S. trade officials, U.S. intelligence on trade negotiations was inadvertent, fished from the river of telecommunications signals and other information that the CIA processes every day.

Increasingly under the Clinton administration, however, and in the auto talks in particular, the agency has been involved in organizing operations specifically targeting foreigners in a trade negotiation.

According to U.S. officials, the spying in the auto talks extended to the Japanese auto industry. Intelligence provided and analyzed by the CIA was instrumental in telling U.S. officials last April that auto manufacturers were not taking the U.S. threat of trade retaliation seriously. U.S. officials redoubled their efforts to get the message across to these executives that they were serious, and this was a turning point in the talks, according to one of those officials.

The increased reliance on intelligence information has not been without costs for the administration. Last February, France expelled five U.S. embassy employees allegedly for attempting to bribe French officials to obtain secrets on trade negotiations covering movies and telecommunications. Among the five were the former CIA station chief in France and his deputy.

The embarrassing incident, which may have been encouraged by the French to rally patriotic sentiment in advance of national elections, is under investigation by the CIA's inspector general.

The French incident drew an attack from Sen. Daniel Patrick Moynihan, D- N.Y., the ranking Democrat on the trade-regulating Finance Committee. Sen. Moynihan, who has led a crusade against government secrecy and the CIA, reportedly was assured by Mr. Kantor that the kind of spying that came to light in the French case was not common and was unlikely to be repeated.

SPY SPEAK

"Defensive" Measures

-- Otherwise known as counterintilligence. Intended to blunt foreign spying on U.S. companies or trade negotiators. Could involve disinformation or law inforcement to discover the source of the theft or trade secrets.

"Offensive" Measures

-- Directly obtaining secrets from foreign companies and governments targeted for that purpose. Long-practiced by the CIA in the economic area,

from bugging trade officials to paying informants in foreign finance ministries. It is seldom discussed openly.

Bag Ops

-- Rifling luggage during surreptitious break-ins. Useful documents copied or simply stolen.

Classic Agent Recruitment

-- Paying informants in foreign companies and governments. Top officials may be good candidates, but so are secretaries, computer operators and janitors.