AEROSPACE : CIA Chief Urges Firms to Sell Spy Photos

South Bay aerospace companies could weather cutbacks in U.S. defense spending by selling some spy satellite technology to commercial customers around the world, the top U.S. intelligence official says.

CIA Director James Woolsey told a gathering of South Bay aerospace executives in Torrance on Friday that they would benefit from a new policy that allows companies to sell highly detailed satellite photos to other countries.

“That is going to be essential with a reduced-size intelligence community,” Woolsey said.

Business leaders and politicians say the new policy, announced in March, will help aerospace companies diversify their operations. Spy satellite technology that was once top secret can now be used to provide detailed photos for geological firms, map makers, news organizations, mining companies and oil exploration firms.

“The CIA is realizing that there has to be commercial and civilian applications for some of the technology that they will be using now and in the future,” said Alan Schwartz, president of the South Bay Assn. of Chambers of Commerce. “It’s always been, ‘We need this for national security. We want it for this, and that’s it.’ . . . Now, it’s a whole different tune. And that is a good tune for the South Bay.”

Three companies--World View Inc. in Livermore, Lockheed Corp. in Calabasas and Litton Industries’ Itek Optical Systems in Lexington, Mass.--plan to market the high-resolution images. (Lockheed’s plans were made before it announced its merger this week with Martin Marietta Corp.)

But as yet, the South Bay’s two largest satellite firms--including TRW Space and Electronics Group in Redondo Beach and Hughes Aircraft Co. in El Segundo--have not announced plans to market the sophisticated photos.

Business leaders and politicians said that it would make sense for South Bay companies to do so, as intelligence and defense budgets decline.

“As the market develops, the sophisticated producers (of satellite systems) in the South Bay will figure out how to be major players,” said Rep. Jane Harman (D-Rolling Hills), who is a member of the House Science, Space and Technology Committee.

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According to industry experts, a customer would call a satellite service, specify the geographic coordinates, and the satellite would be positioned to take a photo. Customers could get quality photos of objects on the ground that are a square meter or more in size, which is precise enough to show buildings, cars and trees.

Companies were once prohibited from selling images of that quality.

According to the Commerce Department, the market for satellite images is expected to grow from $400 million worldwide this year to $2 billion by 2000.

Some industry experts, however, have doubts about how lucrative it will be for a company if a satellite costs hundreds of millions of dollars and the photos cost thousands of dollars each.

“Outside of foreign countries, (the market) is not large,” said John Pike, a space expert at the American Federation of Scientists in Washington.

Pike fears that the new policy will enable intelligence agencies in hostile foreign countries to gain access to America’s spy technology and use it against the United States or its allies.

“My basic objection is that in addition to the American military, they will be selling to everyone else,” Pike said.

But the new policy includes a host of safeguards, Woolsey said. The Commerce Department has to approve each application to operate a satellite surveillance service or market it worldwide. The State Department must approve the sale or the export of spy satellite hardware. The U.S. government also could shut down the system in the name of national security--for instance, during a war or foreign policy crisis.

If the Clinton Administration had not changed policy, industry officials feared the United States would lose out to France or Russia, which are pursuing the market for the sophisticated satellite images.

The Administration believed “it was a bad idea for us just to sit here and watch Russian and and French imagery appear on the international market and not make it possible for American companies to compete,” Woolsey said after addressing the aerospace executives.

“The people in this room are the 800-pound gorillas of space reconnaissance. They know more about it. They are better at it than anyone in the world.”