(SANITIZED)THE PACEPA INTERVIEW ON TECHNOLOGY TRANSFER APPEARING IN L EXPRESS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86M00886R001200070004-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 21, 2016
• Document Release Date: December 2, 2008
• Sequence Number: 4
• Publication Date: July 31, 1984
• Content Type: CABLE

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R0MAFL. .
INDUSTRIAL ESPIONAGE ACTIVITIES OF SOVI.T BLOC IESCRIBED
Paris L'EXPRESS 6 Jul 84 pp 22-2 8 in French (ctpyright)
[Article by Ion Pacepa:" The Big Reaping"]
(Text]
[ ("How do the Eastern European counties carry on industrial espionage?
Senior fellow at the Center for International And Strategic Studies at
Georgetown University in Washington, Micharel Ledeen has collected the testimony
of Ion Pacepa, deputy director of Romanian counter-espionage and personal counsellor
of President Ceausescu until his defection to the West in 1978.)
In 1952, Lavrenti Beria , chief of Soviet State Security, gave the order to
the Romanian secret services to-engage in industrial espionage. "Ever since WW III
he told them, technological intelligence has proven to be essential fpr, our defense
and for our economy. Such a department would give effective support to our revolutionary
Marxist-Leninist-Stalinist struggle".
Sergei Petrovich, a Soviet general supervised the organization of our industrial
espionage services. He have us an inte4 esting report on the activity of his country.
According to him, the"work"of the Rosenbergs in the United States "was no less
important than the victory over Germany". They brought about the end' of the atonic
moncpp* of the United States and since they did not confess, their death paved the
way for anti-American and anti-imperialist propaganda and for anti-atonic bomb peace
v u
movements` They inagirated an era in which technology became the main support of
A
politics."
At the beginning of the 1950's the Soviets set up a vast organization--
Evaluation, Verification and Naturalization -- which employed more than aj(housand
engineers, translators, and design&s. It continues to draw up the list of needs
of the KGB and the secret services of the other countries of the Warsaw Pact. It
receives technological and technical-military information and transforms what it
considers to be useful into "Soviet projects'.
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Omer the-years, the Ministry of the Interior created its own industry in
Bucharest. In all the hotels in Bucharest, the telephones can have listening
devices activated by pressing a button. Microphones are carefully hidden in
each roan, a closed-circuit television permits the constant surveillance of the
restaurant rooms, the corridors and the bathrooms. Cameras installed putside
hotels such as the Athenee Palace, the Intercont&nental, the Lido and the Nord
monitor the movements of foreigners. In the very best restaurants , agents act
as maitre4'hotel or waiters, providing them with the opportunity to hide micro-
phones under the tables, in the ashtrays, or in the ice buckets. Prostitutes, on
the payroll of the counter-espionage service, stroll around in the bars, in the hotel
corridors, the restaurants, the theaters, the opera House, the concert' halls, the
amphitheaters, the movie houses,. the streets and the ''.z" parks. The results of
this work are distributed as follows: compromising information on foreigners
goes to the security services and the money, the clothing and the gifts go
to the agents.
About 1970-1975, Colonel Christian Scornea was watchaiing a possible informer
on chemical weapnns, Horst von Hajek, a professor of engineering. Hajek'was born
in Germany] During WW II he x served as a commanding officer in the area of chemical
weapons. After the fall of the Third Reich, in order to hide his past he went to
a
Portugal where he became/military adviser and an armaments engineer. Later, he
returned to West Germany and he became a technical advisor for NATO. The Romanian
investigation revealed that H=jek was rich but that he had family problems and that
wa en were his weak point. He was invited to Bucharest and was introduced to Adriana
Oros, a beautiful young lady who was the answer to his dreams. Adriana was only
21 years old, She worked as a prostitute in a night club in a large hote?l. Obviously,
she was collaborating with our intelligence services, Hajek fell in love 'ice hhheerr.
Their liaison was recorded on film and magnetic tape. Hajek spent 40,000~for
a house for Adriana and her mother. He could not get along without this young woman
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and he used to spend one week each month in Bucharest. In 1977 he was recruited
as an agent.Hajek contributed greatly to the modernization of our chemical industry.
Thanks to him, an enormous napalm plant was built in Bucharest, under the cover of
a detergent manufaacturing factory. Napalm boobs were manufactured on the basic of
plans transmitted illegally, via Africa, fran Portugal to Romania. A secret
exhibit and experiments were organized for the president.
Cultural and scientific agreements
In 1978, more than 98 percent of the engineers, physicians, economists and
professors who went abroad were secret agents. Some of them were even intelligence
officers. When the secret service (the CIE) - .was reorganized in 1972, President
Ceausescu decreed that each citizen who would be going abroad, as a diplomat or
on the basis of a bilateral agreement, must be an intelligence officer or a CIE
collaborator. "Only those individuals deserve to work abroad", he said.
An old case illustrates very well the dimensions of this espionage enterprise.
A little before 1960, Alexandru Moghioros, at that time minister of agriculture,
was crazy about an American hybrid corn which was characterized by its resistance
to climate changes and by its productivity. After five years of drought, hybridization
was the only hope of Romanian agriculture; it did not have any credits for the
import of genetic materials.
Moghicros turned to the intelligence services. They took the project in hand
and, during the next five years, several dozen agronomists left for the United
States. They were all intelligence officers or agents. They visited federal
research institutes, private organizations, agricultural facilities. In five years,
they collected the genetic materials necessary for the development of the hybrid
corn in RomanianA special diplomatic pouch was prepared for transporting them to
Bucharest without damage. The Romanians recruited several talented American spec-
ialists, including one at the researf center of the Department of Agriculture in
Beltsville, laryland. He alone provided them with a collection of American hybrids.
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0
After seven years of intensive repduction, Romania is becoming a significant producer
of genetic materials and one of the largest producers of hybrid corn in Europe.
In 1978, the operation made it possible for Romania to save about 300 billion dol'ars.
In 1978, about 70 per cent of the Romanians assigned abroad were dealing with
foreign trade and were intelligence officers. In Romania, the first deputy minister
of foreign trade and 11 directors in the ministry were''CIE'agents. The same held
true for 38 of the 41 heads of foreign trade enterprises.
In every meeting with the directors of Western f?rms, espeonage was the most
1SfS
important element. All foreign specials contacted became the subject of a report
and each transaction was evaluated on the basis of the technological information
which it might provide.
One of the most spectacular' operations was targeted against the West German
tank, th8 Leopard II. Our intelligence service obtained a model, thanks to an
agent who worked for the Kirschfield A,s. firm in Dusseldorf. However, the
manufacture of the engine was too complicated for our specialists. So they sought
-r: v
assista nce from the manufacturer and the distributor of the tank, the M. . group.
This operation was entrusted to be. I received my instructions only
7.v.
from Ceausescu. I established contact with one of the M.Ataaa. officials. who had
the code name of "Leonard". He wa1l aid to have sympathy for the iddepkdence of
Romania in foreign policy.
Leonard had me visit the military sections of his plant in Augsburg and
}ze'authorized me to examine the tank in detail. a few days later , we arrived in
To U.
Bucharest, on board an M.brn. jet, where he was to join Helmut Schmidt
on an official visit. We were alone. Leonard explained to me that the Leopards I
and II were intended for NATO and that, without the full agreement of Bonn, it
OR 777(1,
would be very difficult to export all eC part of the tanks. However, the M. iea.
had just set up plans for a Diesel engine based, almost entirely, on those of
-r. U
the Leopard II. This engine belonged to the M.t . which was ready to sell a
license to Romania.
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On the basis of a confidential agreement which Leonard signed, a &-iss firm
specializing in this type of contract, whose personnel were M.tPw. retirees, would
deliver: . us the necessary compon ts for transforming the M.hv,;?u. e
A ngine into a
tank engine. I informed Ceausescu. The President thanked Leonard. Later, after'
the contracts were signed, Leonard went to the Romanian Embassy on Cologne with
some very heavy suitcases which contained the lubrication system as vetl as
2
the original parts of thr Leopard II engine and their diagrams. This "gesture of
confidence" inaugurated the transfer of a NATO defense system to a Communist country
under the cover of "drilling units".
The Leopard TI operation showed us that retired foreign specialists were a
/
good source of technological intpllcgence. In 1977, the CIE complied a list of
these retired specialists in Western countries. Later on we learned that they
1 - '
were no longer held to secrecy, even if they had worked for national defense.
International cooperation
The CIE utilized, little by little, every contract for cooperation with firms
v d to take
in capitalist countries to place intelligence officers .- agents and/photographs.
/W
Thus, in the framework of French-Romanian cooperation# an the production of
a compact Renault car, the Dacia, more than 100 French technicians werein-Romania.
(the technical level of]
They brought with them abundant documentatuon which supplied information exceeding/
the equipment which we had bought legally. Al]. this was photographed secretly.
Later on, the photographs permitted us to mate many modifications to the Dacia
without spending a cent. --
Toward the end of the 1970's a new joint project was launched with Citroen.
More than 150 Romanian engineers and technicians went to France to study a new
compact car. Several pf them, intelligence officers or agents, were equipped with
S
minuscule cameras, of the latest model, and ultra-sensitive film. After-their
return to Romania, the films were developed and we learned some manufacturing
secrets that Citroen did ntt want to include in the contract.
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Third countries and fictitious companies
direct
When the/import of technology was prohibited by regular legislation or by an
extraordinary embargo, we had recourse to firms created to perfo ansfers
illegally. In most cases, it was a question of a technology with military application.
In 1975, we recruited a businessman in Tokyo. He established a fictitious
company for the purpose of sending us sophisticated micro-electric equipment
from Japan the,United States, West Germany, Great Britain and Italy.
HigbrProes hydraulic presses, wiry sophisticated and with very high performance,
were imported from Sweden and South Africa through the intermediary of a company
registered in Helsinki, by another one of our agents, this time a citizen of the
Federal Republic of Germany.
t - '
An export-import firm was established in Vienna by a Romanian intelligence.
officer, for the purpose of the illegal transfer of highly-sophisticated optical
equipment, via Austria.
A British export company was conceived by one of our agents in London for
the acquisition of a radar and different types of military equipment and some
computers. Thy were sent to Romania after having passed through a number . 0 F
third countries.
Illegal intelligence
t. have.
Many CIF/officers-changed their identity completely. They have become West German
citizens, Greeks, Turks, Israelis, French or Italians, thanks to false birth
, Pertificates, false university diplomas and other falsified documents. As a rule,
they left Rumania illegally because, in their newly-adopted country, they could
not have any rapprochement with us. Ceausescu gave us instructions:" Every illegal
intelligence officer, sent abroad during peacetime,must kearn how to set up cells
in research institutes and important industrial firms and to supply us with tech-
nological information. Each one should be better than the best of the foreign agents.
Some will have to create foreign firms for the wide-scale transfer into Romania of
peak technologies under embargo and even weapons technologies." Thanks to our
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strong German-speaking minority, it was easy to lace a large number oft illegal
officers in Germany, in Austria and even in Switzerland. In Austria, most of the
nationalized industries were infiltrated: Voest and its technical department Linz
Donauwitz; Alpine, with its nuclear energy sector and its foundry; the headquarters
of Elin Union, another famous metallurgy company; the Stickstoffwerke chemical
products company; the prestigious Wagner-Biro engiineering company. There were also
officers in the private companies, such as the Siemens. -Austria electricity company and
the Norma microprocessors company.
In West Germany, some well-trained officers, with false identification papers,
have made a way for themselves and occupy important positions in Siemens, Exelanged
and its nuclear sector at Karlsruhe, AEG in Dusseldorf, Hoechst in Frankfurt, and
Thyssen. They use universities,such as those in Karlsruhe and Giessen, as
springboards for getting the best positions in Canada and the United States. Although
it was limited in quantity the industrial intelligence supplied by the. illegal
division in 1977-1978 was of very high quality. It consisted, in particular, of
very secret original projects, copies identical to the original, kept in the
most secure ttrongboxes of the companies. Here are some examples:
- a complete design for the Linz Donauwitz technology, which was immediately
integrated into the Romanian mettalurgical plants; this saved ttme and several
millions xf dollars production costs.
- various designs of nuclear reactors and their security systems;
- the complete design for the construction of a heavy water installation for a
nuclear power plant.
- the design for a shell factory drawn up by West Germany and intended for Egypt.
Clandestine photography
Clandestine photography is often used in the pursuit of intelligence and
is still one of the most effective espionage techniques. This method permitted
us not only to steal foreign secrets but also to learn the real cost of the
products which they offered for our purchase. One can imagine our advantage in
the negotiations"
often
The documents which we copied were/so detailed that we could simply cancel
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the contracts; all we had to do was to reproduce the system described, by our
own means. This was, in part, the situation in regard to the enormous rolling mills
ordered Pram France and from the Federal Republic of Germany for the Galati
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metallurgical combine. We were able to construct tntire installations on the basis
of documents photographed clandestinely. When an industrial ministry had problems
the
in/researching , studying or engineering of a project, it would try , first of all,
to reserve them by means of clandestine photography.
When the Ministry of the Chemical Industry- ran aground in drawing up plans
for a large polystyrene industrial installation, it sent fake letters to the
largest chemical products companies in the Federal Republic of Germany, Great
Britain, France and Italy. It ipdicated that it wanted to acquire a license for
the installation of a polystyrene plant. Six Western ccmapnies cane to Bucharest
to offer theft services. In order to prove its superiority a French firm sent a
mission with a detailed design of an ultra-modern installation. Very much aware
of the importance of this file and, justifiably, cautious, the French demanded
that their documents be locked up each night in the hotel safe. These valuable
documents were more than sufficient for finding a "R. manian solution to the
problem"; they rapidly began to construct an immense polystyrene plant in the
Borzesti petrochemical complex!
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The United States and Europe
The Romanian secret services have rarely succeeded in directly obtaining
intelligence information in the United States/ But, on the other hand,
f
the "tapping" of European branches working under American licence proved
to be far more "profitable."
The technology of silicon production - an essential "raw material" in
electronics - was one of the priority targets of our secret services.
This is even more important considering Vftt thmsntnahnmlmgynmamnmtmimM1*
?
mmbangma,~rzian~emcwmamnaehm?mmnn~ama the strict embargo of this technology with
regard to communist countries. bur repeated efforts to obtain such technology in
remained
the United States zmamimad fruitless. However, in 1970 an American branch
operating in France that-formerly sold Romania two production lines
for semi-conductors of German origin made it possible for us to obtain what we wanted.
A French citizen,( whom we had successfully recruited, was providing us
regularly the technological documentation from the American parent enterprises
indeed the office in which I was holding my business meetings was quite
rapidly overstuffed with piles of documents. Shortly afterward a special
installation, well disguised, at the very heart of an electronics plant situated
between Bucarest and the.Otopeni International Airport, began the production
of high-quality industrial semi-conductors.
T)te?production technology of silicone cristals, which is strictly controlled in the
was
United States, 160JO handed over to us by an electronics company in Milan
thanks to a special contract providing for the delivery of part of the equipment
necessary for the production process.
We used similar methods to obtain information about integrated circuits. Since
obtain
we were unable to the necessary information from Texas Instruments in the United
States, we undertook to cooperate with a well-known British firm which was
producin under a exas Instruments license micro-electronic equipment.)
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As a result we obtained thousands of photocopies of technical documents
under embargo in the United States; these documents were v4rA& delivered to us
by a wellrpaid Briton we recruited and, thus, for the first lAMm time
Romania had access to the world of integrated circuits. This "hit" ["coup"]
paved the way, for
an institute for secret research -established not
P r duc d under n American lice oe
too far from Bucarest, equiped with materials~iM6MrAm,eQmuemmMmnnnmamnpamdma,ean
1
in Europe and Japan and which were il~icitly imported through a third country.
Manea Manescu who, at that that time) was prime minister, said: "If Texas Instruments
did not sell its technology Europe we would have never managed to obtain it.
Within a short time we will,produce an increasing amount of integrated circuits.
I would not be surprised to se in the near futur Western firms in trouble "
The Price of Industrial 8spion age
In 1978 the C.t.E prepared the balance-sheet of industrial espionage. Its
conclusions were indeed impressive: more than 351 of the industrial inventory
was based, in part at least, on intelligence operations. Bose-a .the chemical
industry with complete plants built in Borzesti (polystyrene)/Iasi (synthetic
leather and polyurethane), Brasov (melamine and photosensitive materials),
Transylvania (color film and photographic paper), Codlea (coloring agents),
All
Victoria (plastic explosives), Bucarest (radial tires)...
The pharmaceutical industry was in second position followed-by metallurgy (with
.an impressive number of new technologies for special steels, carbide and non-metall
alloys as well as the steel plants, modernized rolling mills, and a new aluminum
factory). The silicone semi-conductors and the integrated circuits were among the
most important contributions to the electronics industry. New digital machine tools,
Diesel engines, and Bosch injector pumps were the result of intelligence
operations. In the sphere of nuclear energy Romania had received enough information
to be able to build industrial) installations for heavy waters 301 of the
components for nuclear reactors and 407. of the safety systems. Those are merely a
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few examples. From the end of the 1960's to the end of the 1970's we managed to
nearly
save M44t 800 million dollars by replacing legal but costly imports with
illegal products thanks to'espionage.
Obviously military technology was very important to Romania, especially after
the decision in 1972 to modernise the armed forces of the country and to build a
new tank (on the model of Leopard II), new fighter airplanes (produced in
cooperation with Yugoslavia), bomber planes and parachute jump planes (based on
the West German Fokker 614), napalm bombs and other materiel for biological and
chemical warfare, as well as launching systems. In addition to technical
intelligence Romanians were seeking of information on military technology
by studying even small models" bought at toy,$ stores in NATO countries:
The instruction and maintenace manuals were taken over, legitimately, by the
Soviet Ministry of Defense. A W',st German citizen , of Romanian origin, who
worked for a numbef of years as a guard in a military base near Munich, was
recruited mainly for the purpose of supplying us with copies Sf such manuals.
Several years went by.
He had won the confidence of the Americans and he was charged with "burning" secret
military documents; he arranged to bring to his handler sacks filled with this
valuable "waste", an abundant harvest of "Secret Defense" manuals dealing with
items
various PWU of American military equipment.
The weapons samples were almost as important as the documents. The specimen '
could be tested, analyzed, re-drawn and compared. Models of different types of NATO
'eapons were obtained by ccsmnercial contacts or agents sympathetic to the cause
who worked in Europe in factories dealing with military productbon, especially
I
in Germany and Austria. Among our big "suppliers" , one could also frond the Palestinian
and Druze militias who gave us, through their contacts with the CIE, many weapons
taken from their adversaries. I remember a very good catch : a Renault tank,
captured by the Druze and transported to Romania in a refrigerator truck.
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Israel also gave us technical intelligence and military samples. This is
why: Romania exchanged Romanian Jews:. f*rr valuable intelligence, a type of
in
exchange tm which the Israelis often engaged. The methods of these exchanges
wsrre very delicate because they involved the esj)bonage services of the two
countries.
In 1978, I was able to organize xx a national exhibit of military technology
Western military roc equipment and weapons could Fie found there, alongside our
own products. Set up at Baneasa, it showed an almost complete range of materials
being used in the armies and the police forces in Western Europe, a large selectiL
of NATO infantry equipment and various models of mines and shells. Inside, we
exhibited different lasers"'used by the military, computers and other microelectror
I
equipment, used mainly by the air force and the artillery. outside, miles around,
there was other equipment as well as the chief attraction of the exhibit: a Briti;
Centurion tank. There was also a new attraction, a smaller Renault tahk, which hay
arrived the night before rth, to our great fright, a live shell in the cannon.
The laser-guided artillery pieces were tested by pulling on hundreds of balloons.
In "our" section, out in the open, there was a new tank which resembled the Leopar
brand new --~~'' V
It was equipped with a/Diesel engine which came from the German'M.~.ji. company.
All these exapples illustrate very well the enormous consequences of
Communist intellligence activity, without the direct intervention of the KGB.
I remember very well the wards said to me by General Zakarov, head of the Soviet
foreign intelligence service:"When it is a question of agents, we need your
assistance and the assistance of the other fraternal countries. Taken together,
they and you have much more important and more diversified trade with the West
than we do. You have more recent emigres and a richer manuring base for
recruiting new agents (...). Together and only together can we change the balance
of military forces and acquire a decisive socialist superiority. And only togethe.
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 can we make technological espionage one of the most effective and most productive
operations in our history." I have no reason to think that this vast enterprise
lost its importance aftermy departure from Romania.
he threat
In 1978, when he returned from Moscow, Ceausescu told me that Brezhnev had
him visit, secretly, a "micro-electronics city". I had announced to him, proudly,
that it had been set up by the KGR on the basis of the most recent technological
"Technological cities,(of this type employ more than 20,000 engineers and
technicians. Most of them work in our nuclear installations, but now that we can
destroy the West several times, our priority is to construct missiles capable of
striking at American missiles even before they are launched, of paralyzing NATO
before it strikes first, of'hitting, with precision, not only all possible targets
(the automotive-]
in Western Europe but also the White House, Wall Street and/industry in Detroit."
Ceausescu was very much impressed, both by the size of this "city" and by
the uR
zxpixx almost complete secrecy which sounded it. Such operations clearly
.illustrate he need for the Western countries to put an end to the industrial
espionage of the communist bloc. This is not easy but it is possible to limit
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intelligence and that its personnel includes several thousand KGB and army employee:
Ceausescu had never seen such a collection of micro-electronic equipment. Brezhnev
said to himt
and to discourage the efforts of the Warsaw Pact countries.-These countries have
indescribable economic problems which have as their direct cause the economic and
political structure of the communist societies and cannot be resolved in a socialist
system. In ordet to survive and to develop, the socialist countries need real
money, real markets, and only the capitalist world can supply these things to them.
Poland
R [d and Romania alone have: borrowed 40 billion dollars to survive and they are
making enormous sacrifices to repay these debts. Some Americans, like Senator
I? S
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Jackson , have discovered how to use this economic reality as a lever, in order to
improve human rights in the communist countries, linking the obtaining of the
'most favored nation" clause to the right to emigrate. It would be very useful
if it were possible to find a :ca.y to grant most favored nation treatment in
exchange for giving up industrial espionage.
For the communist countries, the American law-on export control is a
"dreaded" enemy; they try, with all their might, to distort it by presenting it
as an attack on the fundamental principles of democracy or as an attempt by the
United States to impose its policies on Its allies. In reality, this law is,
for the free world, a powerfl means of protecting a-scientific and technological
asset which is our pride and our strength.
Most of the successful I thefts of Western secrets have taken place in Western
Europe and in Japan and not in the United States. These serious matters should he
brought before public opinion in these countries so that-they can better evaluate
the policies of their leaders.
Copyright 1984 L'EXPRESS
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