Floyd Purvis, manager of security for Texas Instruments, laughs at the notion that someone may be out to bug his boss' office-or his drink. Such espionage exotics might have a place in spy novels and Hollywood's imagination, but in the real world, says Purvis, corporate secrets are more often given away than stolen.
Most of the time, company leaks trickle from unsuspecting sources: casual sales talk at a convention, a published jorurnal article or the proud boasting by a spouse of a husband's or wife's latest accomplishmnet. Workers who talk too much, who change jobs or who get pirated by another company-these are the everyday worries of corporate security directors.
"Industrial espionage is the most overrated topic of conversation since Breathing Bras," Purvis quipped. "It's rather mundane, really. I'm much less concerned with the olive being bugged than I am with the gin loosening a guy's lip."
It all sounds like pretty tame stuff. So why all the guards, the internal TV monitors, the secured doors, combination locks and sealed rooms along the high-technology corridors at Texas Instruments or wherever else in corporate America there is inventive, competitive work under way? Because every now and then, a real spy shows up and blows everyone's cool.
Court records are full of instances which suggest that nefarious forces frequently poke around the business world. Tales abound of spies in the sky, bugs in the boardroom, secret agents in the trash and hidden cameras everywhere. His snooping is carried out by noth amateurs and professionals for enticing fees. It is motivated by the hope of finding a shortcut to the end of the other guy's rainbow.
Corporate espionage has always been a more thriving business than companies care to acknowledge. And today it is as widespread, sophisticated and lucrative as ever.
"It's a very active field," said Timothy Walsh, a top consultant on security matters who lists as clients a number of blue-chip coprorations. "And the level of awareness that such activity goes on is currently up."
Accurate figures on losses to U.S. industry caused by espionage are, of course, hard to come by. It's a subject few businesses care to talk about. The Commerce Department, pursuing an ambitious study on business crime, has been unsuccessful at compiling spy data. "It's become more of an important discussion item with us in recent months." said Sharon Roach, a government researcher. "But we have an information gap."
Even the American Society for Industrial Security in Washington, which holds seminars on all sorts of security issues from stringing barb eire to fending off the mafia, has never devoted a session to industrial spying. "Our members don't seem to want to discuss it," said E.J. Criscuoli Jr., the society's executive director. "I imagine it's too sensitive a subject.
But there is no question that the damage done by a secret exposed can be considerable. In one case several years ago, Monsanto valued a simple set of stolen financial plans at $1 million. In another celebrated case, IBM estimated it lost $160 million in sales as a result of designs for a new piece of computer equipment that ended up in the hands of competitors before the equipment even appeared on the market.
The costs and chances of espionage have only been compounded by the multiplication of items worth stealing, from pricing plans and strategy papers to research and development schemes. A number of other developments have been conspiring to keep spying on rise. Among them:
The hectic scramble for profits, making some managements more willing to stoop to unsavory methods.
A high degree of executive mobility, causing a corresponding decline in loyalty to a given corporation.
The mounting value of products and processes developed in U.S. research labs, giving the corporate spy more valuable things to steal.
The reluctance of companies to patent certain secrets, given the weakened state of the U.S. patent system.
The widespread tendency for otherwise alert companies to put all their corporate secrets into a computer-and then fail to guard that computer carefully enough.
Also, industrial espionage has taken on an international character lately, reflecting the more competitive nature of world markets. Leaders of the several U.S. semiconductor compainies recently complained about suspicious snooping by the Japanese, who have been scurrying frantically to gain a technological edge in the field.
The allegations have been directed at so-called "liaison" offices set up by such companies as Fujitsu and Hitachi, two of Japan's top semiconductor and computer manufacturers. These offices, which serve as bases for Japanese engineers visiting and studying in the U.S., are located on the San Francisco peninsula in the heart of the American electronics community.
The Japanese say all their information-gathering efforts are above-board, such as attending conferences and courses or commissionin technical and market studies from local data houses. But U.S. competitors have charged that the liaison men cultivate secret personal contacts within local companies, track down executives and engineers who change jobs to pump then for information, and engage in further questionable surveillance.
The American concede that much of their concern is based more on a general suspicion than any spefific proof of illegality. They have yet to produce evidence solid enough to convict a Japanese company. "It's just a feeling," said John Oloughlin, director or security for Intel, a leading semiconductor company. "We haven't really uncovered anything. It's like grasping for smoke."
However, there is some precedent to support the belief that military secrets aren't the only kind of secrets foreigners go after. In the early 1960s, Japan was reported to have established in Tokyo a training school for industrial spies. Several years ago, the FBI broke a Romanian spy ring which had tried to steal from the Ford Motor Co. the plans for a special glass-making process. And last summer, the U.S. Attorney's Office in South Carolina announced a new indictment against Mitsubishi Plastic Industries and Mitsubishi Chemical Industries, along with several others, in an alleged conspiracy to bribe a plant manager and buy secrets belonging to Celanese Corp. pertaining to the manufacture of a high-quality polyseter film.
As might be expected, top officials at major U.S. firms deny they ever initiate spy probes against either their domestic or foreign competition. The chances of getting caught are too great, they say, and the stigma of being branded a secret-stealer is not worth the effort. Companies, it seems, are less benign about countenancing espionage than are foreign governments.
"That doesn't mean an individual might not elect to find out something on his own," said Texas Instrument's Purvis. "Individuals may do some of that stupid stuff, but corporations wouldn't tolerate it. They have too much to lose."
Stiff laws against use of trade secrets also have discouraged some companies from using information stolen from a competitor by a third party. In a case about to go to trial in California's Santa Clara County, National Semiconductor, an electronics company, alledgedly was offered copies of designs belonging to Intel, a competitor, by the owner of a local computer design firm. The scheme was foild because National Semiconductor, in a not-so-uncommon display of we-want-nothing-to-do-with-this-sort-of-thing, notified Intel and the local police, and strung the consultant along into a trap.
Those who make a living in the spy and counterspy business insist that the James Bond aspects of their trade have been overplayed because these are the most dramatic. But there is a variety of technically advanced paraphernalia on the market for the resourceful spy.
The well-equipped spy now has at his disposal microphones no bigger than a shirt button, amplifiers the size of a fingernail, fountain pens that contain sophisticated listening devices and tiny tape recorders that easily can be hidden amid the clutter of an executive's desk drawer.
He has plenty of other electronic aids as well: parabolic microphones that can pick up a conversation in ordinary tones 100 yards away, infrared snooper-scopes that can read small print at the same distance-and in the dark. "spike" mikes that resemble nails and which can be driven into a wall and will detect conversations within 100 yards.
Even the tales of the bugged olive in the martini are no exaggeration. Robert Rosberg, an official of Mosler Electornic Systems (now a subsidiary of American Standard), described a device smaller than a cube of sugar that contains its own transmitter and batteries. "You can put it in an olive, drop it in a glass and use the toothpick as an antenna," said Rossberg.
To block the electronic snoop, companies have invested in an equally exotic-and expensive-array of counterespionage equipment. Many firms own a set of wiretap-detection machines, which alone can cost $10,000. It has become standard procedure in many instances to "sweep" meeting rooms just prior to important conferences.
Many companies also are likely to have invested in sophisticated scrambling devices to protect computer microwave transmissions. "At one time, these devices were considered exotic by industry," said Walsh, the consultant. "Now they are less expensive and more exotic."
In the long run, though, the outside spy makes the minimum use of equipment and the maximum use of people: disgruntled researches whose projects have been shelved, lowly paid employes squeezed for cash, embittered executives passed over for promotion. He also may wear any of several guises: a curious stockholder, a disguised fire inspector, a writer, a job applicant, a business feigning interest in a potential merger.
Umont O. Cumming, who used to operate a security consulting firm in midtown New York and was reputed to be America's top industrial spy-for-hire, once boasted he had never used a bugging device in his life. "I don't need to," he claimed. "There is no plant I can't get into, one way or another."
Security experts offer a list of protective techniques to keep company secrets safe. They include careful screening of applicants, advising all employes to be mindful of what thye say to whom, stringently controlling access to sensitive information, shredding important papers and an assortment of physical security measures. Plus a few stock warnings of the trade: "no bright people in the mailroom" and "beware of executive secretaries with expensive tastes!"
As a sign of the times, the Industrial Security Manual for Safeguarding Classified Information-the set of requirements with which all private firms who do sensitive government work must comply-was 49 pages went first issued in 1949. It now runs 284 pages.