Most Promising U.S. Technology Still Kept Secret

Back in 1968, a defense industry engineer pleaded that he should not be branded a Communist simply because he had purchased the “Death House Letters of Julius and Ethel Rosenberg,” a book about the celebrated spies who had been executed 15 years earlier.

But a federal administrative judge in Santa Monica ruled that the worker--a U.S. military veteran whose name later was deleted from court records--indeed was tainted by Communist connections, both from the book and his political activities. The judge denied him a defense security clearance. Case closed.

In the Cold War, the Pentagon’s industrial security system operated with a single focus, a clear mandate and tough rules to protect U.S. defense technology from the threat of Communist espionage.

The simple days of the Red Peril have passed, however, triggering new questions about how much of the $13.8-billion security Establishment still is justified and how to respond to new espionage threats that have grown along with the intensity of global economic competition.

Critics say the moment has arrived to decommission much of the security apparatus and thereby free U.S. industry from an entrenched Cold War mind-set.

If the military services continue to classify industry’s most promising technology, they risk posing a formidable obstacle to President Clinton’s proposed $20-billion effort to help the defense industry convert to commercial enterprises, the critics argue.

“Considering that we spend nearly $10 billion a year on classified research and development, it is important to make that work available to the civil technology base or it is as good as wasted,” said Steven Aftergood, senior analyst at the Federation of American Scientists. “Now is the right time to do it.”

The Pentagon and major intelligence agencies hold secret a broad base of U.S. technology: exotic materials, highly specialized software, video display technology, space photography, industrial plating and advanced sensors, among much else.

Lockheed, for example, believes its spy satellite technology could enable the firm to dominate the industrial and commercial market for Earth observation--including the $8-billion market for aerial photography and terrain mapping.

So far, however, intelligence officials are leery of permitting the export of U.S. satellites or even the commercial marketing of photographs taken with those satellites, which in some cases can depict objects as small as about six inches. Indeed, Lockheed is not even allowed to say it builds such spacecraft. Meanwhile, Russia and France have moved aggressively into the new market.

Although the full extent of government secrecy and its effects on industry are difficult to measure, the government maintains billions of secret documents, some dating back to World War I, Aftergood said. Only last year, another 19 million pages of documents were classified--roughly a mile-high stack--much of it involving the most advanced U.S. industrial technology.

But protecting industrial technology is an even more complex task than it was during the superpower standoff, and the threat is no less great, say advocates for preserving the substance of the Cold War security system. They hold the dominant position in the debate and are in charge of creating the federal security system that will succeed the one created by President Dwight D. Eisenhower in the 1950s.

“I think that a broad relaxation of security would be a mistake,” said Lawrence Howe, security chief for Science Applications International Corp., a San Diego defense firm. “I think we’re probably going to be looking at some increased security, because we’re just facing up to some of our vulnerabilities, such as . . . the transmission of data.”

Howe is a member of a joint government/industry committee working on a major reform effort, known as the National Industrial Security Program. The panel hopes to streamline what even many senior government officials recognize is a cumbersome bureaucracy that throttles major corporations.

World events today are moving fast. Though the Communist threat as it was known in the Cold War days is dead, the security community is growing increasingly concerned about new military and commercial espionage that could come from any direction--France, China, Japan, Israel, Iraq, Russia or elsewhere.

The retired deputy director of the French intelligence agency, GSE, has admitted that France routinely spies on U.S. business to gain commercial technology. Israel paid $50,000 to Jonathan Pollard, a Navy intelligence worker, for U.S. military secrets.

Earlier this year, the Russian Parliament passed a law on foreign intelligence that makes collection of economic intelligence a top priority, according to the National Security Institute, a private group in Washington. The SVR, the successor agency to the KGB, has an estimated 10,000 intelligence officers posted abroad.

Many in U.S. industry want to free domestic intelligence organizations to spy on behalf of American companies. “We get little support from our government,” said Lynn Mattice, the former Northrop security chief who had the Pentagon’s Stealth technology to protect. “Absolutely, it is a proper role for the U.S. government to support business by collecting information and sharing it.”

That’s unlikely to happen, since Congress has balked at the idea. The security community, however, has had more success with its argument that the United States should not let down its guard.

“The threat to the defense community hasn’t reduced any,” Mattice said. “We haven’t seen any significant change in the former Soviet Union. Their intelligence collecting organization is everywhere.”

Steven Garfinkel, director of the Information Security Oversight Office, an arm of the General Services Administration, said declassification of leading-edge technology--the realm that most affects industry’s effort to find new commercial markets--is going slowly.

“A few agencies have started to examine this,” he said. “But there hasn’t been a government-wide effort. If somebody asked me what we will be keeping secret in the future, I would say the same information. There is less of it, but the same information.”

Technology is changing more rapidly than the government’s rules. The biggest problem confronting the Pentagon is that an increasing share of its technology--particularly complex electronics, software and new exotic materials--can no longer be regarded as exclusively military.

Fiber-reinforced plastic composites, pioneered for aircraft, moved rapidly into the sporting goods industry. Ceramic coatings for commercial jet engine parts came out of the military space market. Environmental researchers last year used a classified infrared reconnaissance system to identify sandhill crane roosting areas along the Platte River in Nebraska.

Controlling such dual-use technology will pose a difficult dilemma for the Clinton Administration.

“The United States wants to retain a significant share in the world market, and our main thing to sell is high-tech,” Howe said. “But by the same token, you’re saying high-tech is important to our national security, so don’t expose it in the foreign environment. You are going to have to decide how to balance that.”

Critics of the U.S. security system say continued government secrecy is not an effective barrier to foreign rivals.

Unlike the old Soviet nemesis, such nations as Iran and Iraq lack the sophisticated spy satellites capable of listening into telephone conversations or photographing important U.S. military installations. Meanwhile, the security rules do little to help U.S. industry in its economic rivalry with France or Japan.

“We have succeeded in keeping secrets from our people but failed to keep secrets from our competitors,” said Edward Teller, a senior research fellow at the conservative Hoover Institution in Palo Alto who often is called the father of the U.S. hydrogen bomb. “Long-term secrecy in the scientific field is a real mistake. From every point of view, we would be better off opening up and persuading other countries to open up.”

Saddam Hussein’s effort to develop an atomic bomb, for example, was not hindered by a lack of information about how to build a bomb but by a lack of qualified workers and industrial equipment, Teller said.

Building a bomb “is not one secret. It is a composition of many skills. Many people know it. What kind of secret is that? It accomplishes nothing.”

To critics such as Teller, the $13.8-billion annual cost for defense industrial security may be just the tip of the iceberg in terms of the economic cost to the nation. The system, they argue, impedes the exchange of scientific information and puts U.S. industry at a disadvantage.

Ironically, the defense Establishment has been busier than ever lately attempting to suppress public disclosure of new discoveries.

Under the Invention Secrecy Act, the Pentagon is allowed to impose secrecy orders on sensitive patent applications, regardless of whether the inventor received federal funding. In the most severe cases, inventors can be restricted to licensing such technology only to U.S. government agencies.

The number of secrecy orders nearly doubled to 5,893 from 3,600 between 1991 and 1979, according to the Federation of American Scientists. Amid rising complaints from industry, the Pentagon is looking into reducing the orders.

“We are saying if we behave more wisely in how we operate, we will have a lot of money left to spend on a better basis,” said Harry Volz, the security chief at Grumman Corp. “Right now, we spend a lot of money on protecting nuts-and-bolts technology.”

Moreover, the strict secrecy in which military research is conducted shields it from peer review, a process that helps weed out bad science, according to Keith W. Brendley, a RAND Corp. researcher. “It creates many inefficiencies within the system,” he said.

Science depends on the free exchange of ideas, but the most secret defense programs create so-called “compartments” for the explicit purpose of blocking the flow of information.

More broadly, tight security has fostered deep suspicion--even paranoia--in the industry. In interviews over the past decade, scores of defense workers, including several senior executive officers, have said their home telephones were being monitored by security agencies.

If the U.S. were to dramatically cut security and reallocate the money to additional scientific research, potential losses of technology to espionage might be outweighed by new developments, others note.

That’s the approach used by commercial high-technology companies that have not erected massive security systems and recently have scored important gains against European and Japanese competitors. “This industrial security system is an outmoded relic of the Cold War that should have been fixed years ago,” said Donald Fuqua, president of the Aerospace Industries Assn., a trade group.

The Enemy Within

Sunday: Thousands of Americans lose defense jobs every year, having been denied clearances by an industrial security system that critics contend is capricious and unfair.

Monday: U.S. defense contractors say the $13.8 billion spent each year for security at weapon plants is a wasteful anachronism of the arms race.

Today: In the aftermath of the Cold War, U.S. officials are struggling to balance defense conversion efforts and the preservation of needed secrecy.