FRENCH HAVE BEEN SPYING ON U.S. BUSINESSES, NBC SAYS

Published: Saturday, Sept. 14 1991 12:00 a.m. MDT

France's government has set up an elaborate covert operation to go after U.S. business secrets, with spies posing as employees and bugging phones to give French industry an edge, a television report said Friday.

The NBC "Expose" news show quoted industrial espionage experts as warning American businessmen not to fly Air France, the state-owned carrier, because the government spies use it as a base."Along with the champagne, the caviar and the chateaubriand on these flights, there may be microphones hidden in the seats and French government spies posing as passengers or flight attendants," the report said.

Targets of the spy network have included IBM, Corning Glass and Texas Instruments, NBC said. It quoted a former Justice Department prosecutor as saying the espionage may have cost U.S. firms billions of dollars.

NBC released advance transcripts of the documentary, which was airing at 8:30 p.m. EDT.

Asked about the report in Paris, French Foreign Ministry spokesman Daniel Bernard said, "I'm not in the habit of commenting on television entertainment programs." Air France released a statement denying it was involved in any spying on its passengers.

The television documentary includes an interview with Pierre Marion, the former chief of the French secret service, describing how he set up a network in 1981 to spy on U.S. companies and American businessmen in France.

Marion, now retired, told NBC he personally made the decision to set up a special industrial espionage branch in 1981, assigning 20 agents to the French secret service to go after confidential U.S. business plans.

He said he had no regrets.

Marion said his network succeeded in securing a billion-dollar sale of France's Mirage warplanes to India after obtaining plans of rival U.S. and Soviet planes.

According to the report, International Business Machines Corp. fired at least six employees in 1989 in its Paris office after IBM gathered evidence showing the employees were working for the French secret service and stealing trade secrets.

IBM spokesman Brian Doyle told The Associated Press in a telephone interview the information cited in the report had been previously reported and was "essentially accurate."

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