S.D. Contractors Get Tips to Foil Red Spies

About 300 representatives of local defense contractors met in San Diego Wednesday at a first-of-its-kind meeting where a Soviet defector and U.S. intelligence experts instructed them on how to stop Eastern Bloc nations from stealing their companies’ high-technology secrets.

Although the daylong briefing, at the Navy’s Anti-Submarine Warfare Training Center, was not classified, attendance was by invitation only, and the press was barred. Officials were secretive about what was discussed at the conference except to say that it was designed to help stop the transfer of high technology to the Soviets.

Roger S. Young, retired assistant director of the FBI and executive director of the San Diego Crime Commission, said the conference was the “first of this nature where we focus on our vulnerabilities in the high-tech area.” The conference, which featured a speaker from the National Security Council, was organized by the commission with the assistance of local FBI officials.

Representatives of some of the biggest American defense contractors with facilities in San Diego, including General Dynamics, Rohr Industries and Teledyne Ryan, were at the conference, along with officers from some of the smaller high-technology companies that manufacture microchips and computers.

At a noontime press briefing, David G. Major, director of intelligence programs for the National Security Council, said the Reagan Administration agreed to participate in the meeting because U.S. officials “are greatly concerned” about this country’s intelligence losses.

“In the wake of the Walker spy case, the concern was, what should the government be doing to counter the hostile intelligence threat,” said Major. He was referring to a family spy ring run by former Navy man John A. Walker. Arthur Walker was found guilty last week of helping his brother spy for the Soviet Union and is facing life in prison.

Stanlislav A. Levchenko, a major in the Soviet KGB before his defection in October, 1979, said Soviet intelligence agents and their counterparts in other Eastern Bloc nations will go to any lengths to obtain U.S. technology.

“The money and manpower they spend on the acquisition of high technology is enormous . . . They need many things that are produced here for (their) military purposes,” Levchenko said. “Without these acquisitions it’s very difficult for them to get updated on development of new weapons systems.”

Gary Penrith, special agent in charge of the FBI’s San Diego office, said the emergence of San Diego over the last decade as a growing center of high-technology companies has made the area ripe for Communist intelligence agents. He said the problem is compounded by Mexico’s open border, which allows Soviet agents quick and easy passage into and out of the United States.

Because of the open border, Mexico is one of two countries in the world where the Soviets train KGB agents and where they keep a large contingent of intelligence agents, according to the officials at the conference. Levchenko said that Mexico is “one of the few countries in the world” where KGB agents feel they can meet without danger.

Penrith said representatives from the various companies, which he declined to identify, were being instructed on how to detect a possible solicitation from foreign agents. He said representatives have been warned to be especially watchful at trade shows and high-technology conferences, where Soviet agents work on cultivating sources and gathering information on the latest technological advances.

But Levchenko said the KGB also likes to target American businessmen who are traveling abroad. He said unsuspecting Americans are often lured into helping the Soviets by entering into business agreements with representatives of companies set up by the KGB.

“It’s the duty of every KGB man to work on American businessmen who are involved in the high-technology business,” said Levchenko.

Reader’s Digest senior editor John Barron, author of two books on Soviet intelligence operations, was the keynote speaker. Barron said that Soviet and Eastern Bloc agents sometimes get U.S. high-technology secrets through the skillful manipulation of U.S. companies that sell their products abroad.

“We have information from the former deputy director of the Rumanian intelligence service who said that hordes (of high-tech secrets) have been obtained by the artifice of seeking bids,” Barron said. “They request the bids, then request more and more information about the product until they reach the point where they think they have enough and seize the information without buying anything.”

Levchenko, whose cover was a job as a correspondent for the Soviet magazine New Times in Japan, said that as many as 45% of all Soviet citizens in the United States are intelligence agents. Majors agreed with Levchenko’s estimate and said the same figure can be applied to representatives of the People’s Republic of China and the Eastern Bloc nations who are assigned to the United States.