| 1 | Electronic theft by foreign and industrial spies and disgruntled employees is costing U.S. companies billions and eroding their international competitive advantage. |
| 2 | That was the message delivered by government and private security experts at an all-day conference on corporate electronic espionage. |
| 3 | “Hostile and even friendly nations routinely steal information from U.S. companies and share it with their own companies,” said Noel D. Matchett, a former staffer at the federal National Security Agency and now president of Information Security Inc., Silver Spring, Md. |
| 4 | It “may well be” that theft of business data is “as serious a strategic threat to national security” as it is a threat to the survival of victimized U.S. firms, said Michelle Van Cleave, the White House's assistant director for National Security Affairs. |
| 5 | The conference was jointly sponsored by the New York Institute of Technology School of Management and the Armed Forces Communications and Electronics Association, a joint industry - government trade group. |
| 6 | Any secret can be pirated, the experts said, if it is transmitted over the air. |
| 7 | Even rank amateurs can do it if they spend a few thousand dollars for a commercially available microwave receiver with amplifier and a VCR recorder. |
| 8 | They need only position themselves near a company's satellite dish and wait. |
| 9 | “You can have a dozen competitors stealing your secrets at the same time,” Mr. Matchett said, adding: “It's a pretty good bet they won't get caught.” |
| 10 | The only way to catch an electronic thief, he said, is to set him up with erroneous information. |
| 11 | Even though electronic espionage may cost U.S. firms billions of dollars a year, most aren't yet taking precautions, the experts said. |
| 12 | By contrast, European firms will spend <dollar> 150 million this year on electronic security, and are expected to spend <dollar> 1 billion by 1992. |
| 13 | Already many foreign firms, especially banks, have their own cryptographers, conference speakers reported. |
| 14 | Still, encrypting corporate communications is only a partial remedy. |
| 15 | One expert, whose job is so politically sensitive that he spoke on condition that he wouldn't be named or quoted, said the expected influx of East European refugees over the next few years will greatly increase the chances of computer - maintenance workers, for example, doubling as foreign spies. |
| 16 | Moreover, he said, technology now exists for stealing corporate secrets after they've been “erased” from a computer's memory. |
| 17 | He said that Oliver North of Iran-Contra notoriety thought he had erased his computer but that the information was later retrieved for congressional committees to read. |
| 18 | No personal computer, not even the one on a chief executive's desk, is safe, this speaker noted. |
| 19 | W. Mark Goode, president of Micronyx Inc., a Richardson, Texas, firm that makes computer - security products, provided a new definition for Mikhail Gorbachev's campaign for greater openness, known commonly as glasnost. |
| 20 | Under Mr. Gorbachev, Mr. Goode said, the Soviets are openly stealing Western corporate communications. |
| 21 | He cited the case of a Swiss oil trader who recently put out bids via telex for an oil tanker to pick up a cargo of crude in the Middle East. |
| 22 | Among the responses the Swiss trader got was one from the Soviet national shipping company, which hadn't been invited to submit a bid. |
| 23 | The Soviets' eavesdropping paid off, however, because they got the contract. |