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U.S. Probing Illegal Exports to Soviet Union

August 25, 1988|Associated Press

WASHINGTON — U.S. authorities have been deeply involved in investigating illegal high-technology exports to the Soviet Union that rival in dimension the highly publicized wrongdoing by Japan's Toshiba Corp., a Pentagon official said Wednesday.

Stephen D. Bryen, deputy undersecretary of defense for trade security policy, said American investigators are receiving "splendid cooperation" from an unidentified foreign country and that some individuals already have been charged in the case.

Bryen said the case involves illegal exports of high-tech equipment "in the aerospace area" and that there would likely be additional arrests.

He declined to elaborate, but other government sources said Bryen was referring to an investigation involving a French company known as Forest Line that once went by the name of Ratier-Forest.

These sources, who insisted on anonymity, said American intelligence agents were responsible for tipping the French early this year about Forest Line sales of heavy milling equipment to the Soviet Union. The equipment reportedly can be used to fabricate aircraft fuselages and jet engine turbine blades.

"There has been good cooperation," one source said. "We shared information with them, and they moved quickly."

French authorities disclosed last April that four people had been arrested under an anti-espionage law, including Louis Tardy, chairman of Machines Francaises Lourdes, and Jean-Paul Chamouton, president of Forest Line.

Machines Francaises Lourdes, now bankrupt, was the parent company of Forest Line, which specialized in manufacturing heavy tool equipment.

No trials have been held.

A Bigger Case

Bryen, while never naming the company, disclosed the importance of the investigation Wednesday after being asked simply whether the Pentagon had become involved in any other big export probes since Toshiba.

He had earlier described the Toshiba affair as essentially over, saying that the United States has seen a tremendous change in the attitude of the Japanese government toward export controls as a result of American anger.

Then Bryen said: "There's even a bigger one, but it's different. It's a different kind of case because first of all, we've had splendid cooperation on it. There's more, much more involved than the Toshiba case.

"It's certainly serious and it's in a different field; it's in the aerospace area. It's under investigation and there have already been some equivalent of U.S. indictments on the case, in another country. There's going to be some others.

"But I'm going to be real cagey on this because I don't want to spring it yet. But I think in the next few months we should be prepared to describe it in more detail."

Asked then if any American citizens were known to be involved, he replied: "Not that I know of at the moment."

The Toshiba scandal came to a head earlier this year when Toshiba Machine Co., a majority-owned subsidiary, was found guilty in a Japanese court of illegally trading high-tech items with the Soviet Union. The firm was convicted of selling sophisticated milling machines to the Soviet Union in the early 1980s that can be used to fashion quiet submarine propellers.

The incident helped lead to enactment of new trade legislation and sanctions against Toshiba in the United States as well as a Japanese government overhaul of export licensing procedures.

Last fall, when revelations about the Toshiba case were surfacing, a Norwegian police investigation found that several other European companies--including Forest Line--had conspired to divert sensitive technology to the Soviets dating back to the 1970s.

The U.S. sources said Wednesday, however, the current investigation involved equipment sales that continued at least through 1986 and possibly 1987--long after the last Toshiba transaction.

"That's what makes it serious," one source said.

The Forest Line equipment, said to include huge milling machinery that can be used to fabricate aircraft fuselages and jet engine turbine blades, was allegedly sold to the Soviets after corporate executives submitted fraudulent applications for export licenses, the sources said.

Bryen told reporters that the Reagan administration has made great strides in clamping down on the exports of sensitive military technology to the East bloc and in convincing U.S. allies to do the same.

Bryen also told reporters that the United States has managed to re-establish a significant lead over the Soviet Union--in the range of seven to nine years--in developing micro-electronic and computer technology.

In 1981-82, that lead had shrunk to only about 18 months because of Soviet successes in stealing and diverting Western technology, Bryen said. Since then, however, the Soviets have failed to develop the manufacturing facilities and "industrial infrastructure" needed to support those high-tech fields, he said.

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