$13 Billion Lost
Protect America's Trade Secrets
Chances are you missed the FBI billboards running the message above. They ran for just two weeks and only in the nine areas that the agency pegged as leading national research centers. But in their brief stay they raised a question that concerns all of us in the U.S.: Just how do the nation's top law enforcers decide what constitutes "America's trade secrets" in the era of multinational corporations?
Should you go to the FBI website as the
billboards suggested, you can read the story the agency posted on the ad
campaign's first day, entitled "Economic Espionage: How to Spot a Possible
Insider Threat." It opens with a tale of five "companies controlled by the
government of the People's Republic of China" charged with stealing trade
secrets from "DuPont, a company based in Wilmington, Delaware," the location
presumably being the basis for the FBI's interest in protecting the secrecy of
its manufacturing processes. But does being based in Delaware automatically
make DuPont an American company and its trade secrets, therefore, America's
There appears to be an internal difference of opinion as to
exactly how many people DuPont employs. The company's website says 58,000 at
more than 210 sites, while its Securities and Exchange Commission filing says
70,000, but both agree that they work "in more than 90 countries." What
neither says, however, is how many of them actually work in the U.S. And in
this DuPont is not unusual -- about eighty percent of U.S.-based multinationals
fail to provide a domestic/foreign employment breakdown. This lack of
information may no big deal to the FBI; they do, after all, have their ways of
finding things out. But it does make it hard for the rest of us to judge just
in whose interest the agency operates here.
Frank Figliuzzi, Assistant
Director of the FBI's Counterintelligence Division, told the Subcommittee on
Counterterrorism and Intelligence of the House Committee on Homeland Security
that theft of its secrets "would undercut DuPont revenues and business"
currently constituting "the largest share of a $12 billion annual market." The
profits from those revenues would undoubtedly return to the U.S., but what about
the wages? General Electric, for instance, has now exported 54 percent of its
jobs. Is it still an American company? How many of DuPont's jobs would have to
go abroad before the American taxpayer would be relieved of the obligation to
fund a government agency to protect its secrets?
A bill filed by Representative Gary Peters (D-MI) would shed some light on this question by requiring all U.S.-based firms with revenues over $1 billion to disclose what portion of its employees work abroad. In the meantime, we can rule out protection of government tax revenues as a motive for the FBI's solicitousness on behalf of DuPont, anyhow. Last December, the campaign finance reform organization, Public Campaign, reported that not only did DuPont pay no federal income taxes while making a profit of $2.1 billion during 2008--2010, but it actually netted $72 million in tax rebates. (DuPont did contribute to the economy, however, by spending $13.75 million on lobbying and increasing the pay of its top five executives by 188%, to $27.4 million in 2010.)