Espionage has doubled against US chems, tech firms – agency

28 June 2012 20:41  [Source: ICIS news]

WASHINGTON (ICIS)--Economic espionage against US has doubled in recent years, the Federal Bureau of Investigation (FBI) told Congress on Thursday, and recruitment of American chemical and other technology company employees as foreign spies constitutes a major threat.

In testimony before the House Homeland Security Committee, a top FBI counterintelligence agent cited the recent case of insider-theft of DuPont titanium dioxide (TiO2) technology under the alleged direction of Chinese government officials as “one of the largest economic espionage cases in FBI history”.

Frank Figliuzzi, FBI assistant director for counterintelligence, told a hearing at the Subcommittee on Counterterrorism and Intelligence that “entities owned by the Peoples Republic of China [PRC] ... commissioned five individuals and five companies ... to take DuPont’s technology to the PRC and build competing titanium dioxide plants”.

“Thus far,” said Figliuzzi, “three co-conspirators have been arrested and one additional co-conspirator has pled guilty in federal court.”

In addition to that Beijing-directed espionage plot targeting DuPont and TiO2, at least two other major US chemical firms, Dow Agrosciences and Cargill, were the victims of insider technology theft by employees working on behalf of China, according to US officials.

Without naming the US chemical company involved, Figliuzzi cited a recent case in which “an employee at a Utah company noticed a co-worker download the recipe for manufacturing a proprietary chemical and email it to his personal email account”.

He said the company investigated the matter and “learned that that the employee had shared the manufacturing secret with an individual associated with a foreign chemical company”, and the firm called in the FBI.

“The employee was arrested and charged within ten days,” Figliuzzi said.

In his testimony, Figliuzzi said that the number of espionage cases involving insider threat – in which US company employees provide proprietary information to foreign governments or firms – is growing fast.

“In the current fiscal year so far,” he said, “we have already surpassed the statistics recorded for fiscal year 2011 and expect them to continue to rise.”

He said the insider threat is becoming more prevalent, in part because of “the ease of stealing anything stored electronically, especially when one has legitimate access to it”.

In addition, he said, US employees are facing “increasing exposure to foreign intelligence services presented by the reality of global business, joint ventures and the growing international footprint of American firms”.

Figliuzzi said that in February this year the FBI initiated a campaign to make US technology companies more aware of the insider threat.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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