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FOR JAPANESE BUSINESS, IT’S SPYING AS USUAL

SHARE FOR JAPANESE BUSINESS, IT’S SPYING AS USUAL

During his stint as a U.S. Commerce Department trade negotiator during the mid-1980s, Clyde Prestowitz wondered why the Japanese side seemed to know about the divisions within the American team over semiconductor talks and about the contents of his briefing book.

Prestowitz never learned how Japanese officials acquired their knowledge. But he and other U.S. officials assumed they were being bugged and took care to make important calls only over secure lines in the U.S. Embassy in Tokyo.For one U.S. businessman here, the case was clear-cut. During a recent high-profile trade negotiation, his company's security team insisted on sweeping his hotel room - and discovered a listening device in an electrical outlet.

"I was pretty naive," the businessman said. "The security people said they needed to sweep the room, and I thought, `What is this? The Cold War?' But they were right."

Amid recent reports that the Central Intelligence Agency bugged Japanese officials during auto trade talks, U.S. business executives say that wiretapping, spying and other forms of economic espionage are a daily fact of life in Japan and elsewhere.

Officials here say they routinely avoid making important phone calls in Japanese hotels, and they assume that fax transmissions are monitored by the public telephone system. They also assume that local cleaning staff and other employees could be pilfering information. The careful companies lock up sensitive documents at night.

Japan is believed to possess one of the most comprehensive business intelligence-gathering operations in the world, although France, Israel and South Korea have mounted more extensive efforts, experts say.

As economic competition heats up amid the Cold War's end, business espionage is said to be on the rise.

U.S. business - still seen as the world's leaders in cutting-edge technology - may be losing as much as $100 billion annually in pilfered information, according to an estimate by the White House Office of Science and Technology.

"There is generally more bugging out there than the average businessman realizes," said David Bong, managing director of the Tokyo office of Kroll Associates, an international investigative and crisis management consulting company.