REMARKS OF WILLIAM J. CASEY BEFORE THE AMERICAN BUSINESS CONFERENCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00364R002204220043-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: January 16, 2008
• Sequence Number: 43
• Publication Date: March 9, 1983
• Content Type: REPORT

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REMARKS OF WILLIAM J. CASEY
DIRECTOR OF CENTRAL INTELLIGENCE
before
THE AMERICAN BUSINESS CONFERENCE
Wednesday, 9 March 1983
8:00 a.m.
The Four Seasons Hotel
.Washington, D.C.
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Introduction
Good morning. I am very happy to be meeting with
you today. We in the Intelligence Community favor these
dialogues with the business community for while there are
those who believe intelligence operates in its own world,
actually our efforts and yours are mutually reinforcing.
Whether you are Director of Central Intelligence or a Chief
Executive Officer of a corporation, particularly one with
international operations, accurate assessments of,political
and economic trends are essential to protecting--and
promoting national or corporate interests.
CIA regularly receives valuable help from patriotic
individuals in private industry, research and academic
institutions who volunteer their knowledge on foreign
political, military, or economic matters.
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I would like to open our discussions today with some
remarks on two issues of growing importance to intelligence.
which also significantly affect U.S. businesses--Soviet
illegal acquisition of our technology and international
terrorism. I would also like to briefly bring you up-to-
date on some of the changes underway in intelligence as we
rebuild our resources.
Technology Transfer
It was Lenin who first said, "The capitalists will
sell us the rope we need to hang them." His remarks ring
true today. Only about a year ago were we able to
establish the degree to which the accuracy, the precision,
and the power of Soviet weapons, which we are now required
to counter with budget-busting appropriations, are based
on our own R&D and Western technology in general.
Soviet. troops were carried into Afghanistan by trucks
constructed at the Kama Truck Plant which is outfitted
with $1.5 billion of modern American and European
automotive production machinery. The newest Soviet ICBMs
contain precision components, gyros and accelerometers,
manufactured with U.S. equipment.
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The Soviet economy is plagued by inefficiencies caused
by overcentralization, lack of creativity, alcoholism,
and low morale. To sustain their massive military build-up,
the Soviet Union turns to our businesses for proven, state-
of-the-art technology.
Soviet defense plants routinely use Western R&D
approaches, and our blueprints to shorten weapon leadtimes,
and even to develop countermeasures before we develop the
weapons to which the countermeasures apply. They satisfy
about 30 percent of their technology requirements by legal,
open means; but for about 70 percent they turn,to their
intelligence services. Former KGB officers have_told us
that clandestine acquisition of Western technology is the
highest collection priority for the KGB and its military
counterpart the GRU.
How is this done? Well for some 15 years Soviet
intelligence organizations have recruited hundreds of
young scientific and technically trained people to target
and acquire shopping lists. They hide behind dummy
trading companies or sometimes they engaqe bona fide
European firms as middlemen to obscure the ultimate
destination of restricted equipment. They may deal with
European subsidiaries of U.S. companies believing security
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controls may be more relaxed. There are more than 30
Communist country owned-U.S. chartered firms in the U.S.;
in Western Europe, however, there are more than 300. A
common technique is to use East Europeans--Poles,
Hungarians, and, in one case, a Belgian--as front men.
A hostile intelligence officer may even misrepresent
himself. as a citizen of a country friendly to the United
States and a targeted American may be duped into handing
over sensitive information believing he is aiding an ally.
Foreign intelligence officers exploit traditional American
beliefs, such as freedom of speech or the conviction that
scientific advancements should be allowed to benefit all
mankind, in an attempt to elicit information. In the
interests of scholarship and science, an American is
encouraged to exchange results of his research with a
'colleague" of the international community of scientists.
And, of course, hostile intelligence operatives capitalize
on human weaknesses, such as greed. Appealing to an.
American's material needs is perhaps the most common and
effective technique.
Soviet acquisition efforts are increasing. Although
no business is risk free, small companies involved with
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rapidly developing technologies are particularly vulnerable
since they may believe their work, more theoretical and
undefined, is of little concern to our adversaries.
We, in the Intelligence Community, are redoubling
our efforts to learn as accurately as possible what items
are on the Soviets' shopping list. In CIA, we have
established a new analytical center, the Technology Transfer
Assessment Center to facilitate political, economic, and
military analysis. We then pass our intelligence to the
Justice Department, the FBI, Commerce, and other government
components responsible for domestic law enforcement.
In the policy arena, the government is also taking such
measures as strengthening COCOM--the Coordinating Committee
for Multilateral Export Control--and tightening restrictions
on activities of Soviet and East European nationals in. the
United States. But the real defense barriers, the front
lines, are in businesses' shops, offices, and laboratories.
International Terrorism
Last spring, while both U.S. and European news broadcasts
focused on the daily meetings of the Versailles Economic
Summit, bombs in Paris ripped apart the offices of the
American Express, the Bank of America, and the American
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School of Paris. These incidents and an increasing number
of others demonstrate that international terrorism not only
disrupts the functioning of the international system but
also directly threatens U.S. economic interests abroad. The
pervasive threat of terrorism has affected the conduct: of
diplomacy, travel and commerce.
If cleverly exploited, terrorism can gain relatively
impotent, subnational groups international attention and,
perhaps, strategic leverage. The cumulative impact of
Palestinian terrorist acts in the 1970s was to keep
Palestinian interest at the forefront of the world community.
U.S. citizens are the primary targets of terrorists
followed by those of the UK, USSR, France, Israel, Turkey
and Iraq. Almost 200 Americans have been killed by such
attacks. While about one-half of tnese were victims of
indiscriminate acts, the number of Americans purposely
singled out for assassination has steadily increased.
Although diplomats are the frequent victims, American
businesses remain the next likeliest mark.
Since 1968, we have recorded 719 bombings, 63
kidnappings, 29 assassination attempts, and 23 armed attacks
directed against U.S. business interests. Bombings are the
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most common type of attack because explosives are relatively
easy to obtain but hard to trace. Bombings also normally
involve little personal risk to the perpetrators.
In 1982, over a hundred attacks were carried out against
U.S. businesses; 30 businessmen were wounded--luckily none
were.killed--and fifty-six percent of the recorded attacks,
resulted in significant damage to property. Over the years,
U.S. companies that have been the target of terrorists run
the gamut from well-known giants of world business to small,
privately-owned, companies. Frequent victims are companies
such as Coca-Cola, Ford, Chrysler, Colgate-Palmalive, and
Sears which are symbolic of?the "American way of life." Oil
firms and large financial enterprises can also be attacked
for symbolic as well as practical reasons.
Terrorists often attack or threaten companies for
financial gain. Extortion payments for a kidnapped
executive can be millions of dollars. Terrorists then use
this money to buy arms, transport, and expand their
operations. It is estimated that U.S. firms paid-about . $125
million in ransoms over the past ten years.
About a hundred terrorist groups have claimed credit
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years. Although Latin America is still considered a high-risk
area due to the number and frequency of hostage takings and
assassinations, last year the highest number of attacks
occurred in West Germany, followed by Italy and Greece.
Help is Available
Help is available to,U.S. businesses. The CIA has a
center devoted to tracking terrorist groups. We have
strengthened our ability to collect and analyze intelligence
on terrorism and we have taken steps to improve the
exchange of information with our friends and allies.
American. embassies and consulates will advise any American
citizen or business representative on terrorist threats in
any foreign country and can also provide security suggestions.
The State Department, with whom we work closely, has an
Office for Combatting Terrorism in operation 24 hours a day
to coordinate the U.S. government responses to any terrorist
incident.
National Security Concerns
The challenges which the United States and we in
intelligence face are, of course, much more varied than
Soviet illegal acquisition of our technology and international
terrorism. These challenges are many, of broad variety, and
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worldwide: they include such problems as present serious
West European-U.S. frictions, a very troubled international
financial scene, and the Third World's countless
vulnerabilities and volatile situations.
But the challenges to which we in intelligence have to
devote most of our resources arise primarily from the growing
i3 tilitary capabilities and political aggressiveness of the
USSR. The Soviet military buildup continues relentlessly
and is sustained by a growing defense industry. The USSR's
military-industrial base includes several hundred major R&D
facilities and final assembly plants as well as thousands
of defense-related R&D, component or support facilities.
Moreover, floor space at weapon production facilities.is
expanding more rapidly than at anytime since the mid 1960s.
The threat from the Soviet Union is, however, much
broader than the direct military threat. The Soviets view
the East-West relationship as a total, all-encompassing
struggle involving economic, social, and ideological factors
which they call "the correlation of forces."
For discussion sake, we can divide this sweeping
challenge to our national interests into. five major threats.
The first of these are the.USSR's intercontinental missiles.
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which can shower destruction on our country in 30 minutes
and other strategic systems on which, together, the Soviets
have been spending far more than we have.
The second is their conventional forces. The Soviets
already have three times as many men in their land forces
as we have, four.times as many tanks, four times as much
artillery, and three times as many armed personnel carriers.
The third threat comes from the Soviets' ability to
project their military power over long distances to support
actual and potential pro-Soviet factions in troubled
countries. We have seen them use their transport planes
and cargo ships to carry sophisticated weapons thousands
of miles to meet up with Cuban troops in Angola and
Ethiopia. In the Christmas season of 1979, we also saw
them send their own combat units into Afghanistan.
Currently the Soviets are boldly stationing lonq range
SA-5s in Syria. These weapons with a range of 150 miles,
enough to threaten reconnaissance and transport planes over.
Lebanon and Israel, are being installed at two locations
in Syria. Soviets in some numbers are at the construction
sites. It will require experienced Soviets to operate these
sites, and should the Soviets choose to train Syrians, this
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would take many months. The Soviet SA-5 move suggests a
more assertive policy in the Near East.
The fourth threat comes from what I call the Soviets'
creeping imperialism. The Soviets have successfully
constructed an array of associates of varying kinds to
front for the USSR and do some of its dirty work in the
world. The USSR and its associates use a mix of tactics--
political, diplomatic, subversion, terrorism, and
insurgency--to expand their influence and to destabilize
governments. Cuban support of subversion and insurgency now
occurrinq in Central America could help divide our own
hemisphere, and threaten the rich Mexican oilfields and
control of the canal passage in Panama. Cuba A w maintains a
firm base of operations on the Caribbean island of Grenada--
with an airfield, training. site, intelligence center, and
propaganda facilities there--and a similar process has
begun in Suriname, the former Dutch Guiana.
There is an ever expanding partnership between Cuba
and Nicaragua in exploiting subversion in Central America
and the Caribbean region. Deliveries of Soviet bloc
weaponry to Nicaragua and of Soviet military equipment to
Cuba continued at a high level in 1982. From headquarters
in Nicaragua, Cuban and Nicaraguan officers command and
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control guerrilla units widely spread throughout El Salvador.
Cuba and Nicaragua also back subversion and revolutionary
violence in Costa Rica and Honduras. All this requires us
to worry that the Castroization of Central America would
bring the same kind of capability to subvert, destabilize,
and promote insurgency to the borders of an already
distressed Mexico.
Cuban troops fortify the regimes in Ethiopia, Angola,
and South Yemen. Libya is supporting insurgents in many
African countries, colluding with Ethiopia to support an
insurgency in Sudan and Somalia and meddling again with
dissidents in Chad. Soviet equipped Polisario fighters are
still fighting Morocco over the Western Sahara. Also, the
Soviets show no sign of being prepared to see their influence
diminished in Angola, where Cuban troops are. still stationed.
The fifth threat is the combined Soviet diplomatic,
political, and propaganda initiatives designed to confuse
and divide our friends from us. The principal such effort
is the current Soviet campaign to exploit the universal fear
of nuclear weapons and the political risk which European
governments perceive in the deployment of Pershings and
guided missiles in NATO countries. The Soviets and their
associates are appealing over the heads of governments to
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the electorates, playing on the fear among many Europeans
that rejecting the Soviet position that no U.S. missiles
can be deployed will make nuclear war more likely.
The Soviets meanwhile gain influence with certain Third
World countries not only through arms sales but also by
developing and intensifying conflict between such social
and other groups as the rich and poor, the black and the
white, and the Arabs and the Jews. The Soviets also use
international broadcasting resources heavily.
In sum, the United States faces numerous and complex
threats in the world, but at. the same time we have a lot
of things going for us. The Soviets do face constraints
such as declining economic growth. Soviet agriculture
has suffered four successive crop failures, and there is
a growing sense of malaise over the quality of life.. Soviet
society suffers from declining health. It is the only
industrialized nation where the life expectancy for men
is actually declining. Corruption and alcohol addiction
are rampant. The Soviet government does not seem to know
how to deal with these problems, beyond trying to improve
discipline through strong-arm tactics. At best, we believe
that real Soviet G4P growth will average less than 2 percent
in the 1980s.
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Moreover, Moscow faces an aroused United States.
Soviet forces are bogged down in Afghanistan, and East
European states such as Poland and Rumania are experiencing
severe economic and political trouble. Other client states
are an economic drain, the Kremlin has made little progress
with Japan in East Asia, and the USSR faces a huge, armed
and nationalistic China along its borders.
We in intelligence. will continue doing our best to
keep alert to these dangers and opportunities. I would
accordingly like to turn now to the changes underway in
intelligence today as we rebuild.
Progress in Intelligence
During the 1970s our intelligence gathering capabilities
were drained substantially with a 40 percent cut in funds
and a 50 percent slash in personnel; and we have been very
busy for the past two years rebuilding these resources.
More analysts are being hired to address areas of new
interest--the Third World, nuclear proliferation,
international terrorism, insurgency, instability, and global
resources. We are also taking advantage of the expertise of
outside scholars and researchers. We recognize that our own
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people have no monopoly on the truth. More and more, we
reach into the think tanks, the colleges and universities,
and the business community for different perceptions and new
approaches.
The drawdowns in funding and personnel in the 70s
showed up most vividly in the national estimates, our
primary Intelligence Community product to the President,
which dwindled from an annual average of 50 in the late
60s, to 33 in the early 70s, and even further down to a
yearly average of 12 from 1975 through 1980. This has been
restored as it has to be to cover the ever growing threats
and challenges to which policymakers must address themselves.
During 1981 we did 38 national estimates and we finished more
than 60 last year.
Even more importantly, we have started a new fast. track
system that has drastically reduced the amount of time
necessary to place an estimate on the President's desk.
have also taken steps to assure the integrity and objectivity
of our analysis. The chiefs of the various components of the
Intelligence Community sit on the National Foreign Intelligence
Board and function as a Board of Estimates. Each chief at
the table must see that the judgments of his organization
are clearly spelled out in the estimate. This way instead
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of giving the policymaker some compromised conclusions, the
estimate fully reflects all viewpoints within the Community.
The practice has reduced the time necessary to coordinate
an estimate and has helped to develop a new spirit of
constructive collaboration in the Intelligence Community.
Recently we finished an extensive review of the
intelligence challenges ahead, as well as the adequacy of
our current collection and analytical capabilities. The
challenges and demands keep multiplyinq. We believe,
however, that with our recent reforms, additional analysts,
and new technical collection methods, we are moving in
the right direction.
FOIA
One final thought, we sometimes have a propensity
in this country to shoot ourselves in the foot. It is
ridiculous for us to be the only country in the world
which because of the Freedom of Information Act gives
anyone license to poke into our intelligence files. The
press gets annoyed whenever I talk about poking,into files
but that is what it amounts to. We are not calling for
total repeal of the Act,.nor are we asking for exemption
from the Privacy Act which gives all Americans the right
to get information about themselves. But we should not
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be compelled to search thousands of documents, at great
expense.and loss of time, for materials that we know in
advance are not releasable. The law creates a perception
which prevails around the world, with other intelligence
services or people who want to help us, that we cannot
assure them confidentiality.
Let me give an example of the absurd situations we
face. The Iranian regime--the same government that held.
our people hostage--has recently filed an FOIA request
for all information in CIA on the late Shah. This is a
perfectly legal request and we have to take it seriously
and respond. We need to reform the law. As Justice
Goldberg once said, "While the Constitution protects against
invasion of individual rights, it is not a suicide pact."
Thank you for asking me to meet with you today. I am
looking forward to our discussions and your thoughts on our
efforts.
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