Daily Telegraph
Brussels to check US-British 'trade spy network'

By Ambrose Evans-Pritchard

Tuesday 22 February 2000

The European Commission is examining allegations that Britain and America are engaged in economic espionage against EU targets from listening posts in England.

Romano Prodi, commission president, has risked a clash with Downing Street by instructing his staff to follow up a European Parliament report which claims that secret data is passed to the US Commerce Department for use by American firms. The study alleges that Britain and America intercept communications by a joint global network - Echelon. Ricardo Levi, Mr Prodi's spokesman, said: "It is a serious and thorough report and we have to look at it."

The allegations will be aired in public hearings this week in the European Parliament's Committee on Citizens' Freedoms and Rights. Echelon is already under scrutiny in the French courts and in both the Italian and Danish parliaments. "A number of companies have told me that they are worried, especially in the defence sector," said Graham Watson, Liberal-Democrat committee chairman. "They're afraid it's affecting deals when they're bidding against US concerns."

The alleged espionage is said to be orchestrated by the US National Security Agency, a vast eavesdropping network at Fort Meade, Maryland. It operates jointly with Britain's GCHQ through an intelligence alliance dating back to 1947. The American agency's biggest global listening post is at Menwith Hill, Yorkshire, where it operates 250 classified projects. It uses a post at Morwenstow, Cornwall, to intercept satellite signals.

Britain's GCHQ is required by law to intercept foreign communications "in the interests of the economic well-being of the United Kingdom", according to the report. Commercial targets can be picked by the Treasury, the Bank of England, the Joint Intelligence Committee and the Economic Intelligence Committee.

The study for the European Parliament's Scientic and Technical Options Assessment Office was by Duncan Campbell, a Guardian journalist. His role has led to complaints that the allegations are being made to damage the US-British-link. "People are trying to drive a wedge between Britain and the United States," said Timothy Kirkhope, the Tory chief whip in Brussels. "The same is happening with the European defence force, which is undoubtedly going to undermine Nato."

Echelon allegedly blocked a £3.9 billion deal between the European Airbus consortium and the Saudi national airline by alerting the Saudi government that Airbus agents had offered bribes. Boeing and McDonnell Douglas won the contract. The US National Security Agency helped to secure a £840 million contract for Raytheon after alleging that Thomson-CSF of France was bribing Brazilian officials.

The report also claims that France and Germany co-operate to eavesdrop on North and South America.

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