Spying Disclosures Seen Undermining U.S. Technology Sales

The disclosure of U.S. spying on allies may temporarily undercut efforts by American companies to sell technology overseas, according to a former official with the Department of Homeland Security.

“We are going to go through a period of substantial skepticism abroad about any technology we’re selling people,” Stewart Baker, a Washington lawyer who headed the department’s policy directorate, said today at a forum on cybersecurity hosted by Bloomberg Government and Symantec Corp.

German Chancellor Angela Merkel dispatched a team to the White House today to seek a new intelligence-sharing agreement with the U.S. after reports that her mobile phone may have been tapped. Those reports are among a stream of disclosures based on top-secret documents provided to media outlets by Edward Snowden, a former National Security Agency contractor.

Distrust by allies may make it more difficult for U.S. firms seeking to export their technology Baker said.

While Baker said “we’re going to see an effort to push this issue for some period of time,” he predicted the issue would be short-lived.

“In the end, it’s just a headwind,” said Baker, a partner with Steptoe & Johnson LLP. “Often you end up trusting the person with the best technology who has the best deal.”

General Keith Alexander, the NSA director, said at the forum that he’s open to considering alternative methods of intelligence collection, while stopping short of confirming spying on allies.

Important Partnerships

“Is there a better way to move forward?” Alexander asked. “I think there is. I think the partnerships in some cases are more important. I think this partnership with Europe is absolutely important.”

Alexander said government must work with private industry to find ways to improve cybersecurity. President Barack Obama met with chief executives of consumer, utility and defense companies yesterday to discuss proposed voluntary security standards for computer networks.

“There’s an obvious need for sharing information,” said Charlie Croom, vice president for cybersecurity solutions at Lockheed Martin Corp. “What type of information and how is always the question.” Bethesda, Maryland-based Lockheed is the world’s largest defense contractor.

The Pentagon is trying to motivate companies to come up with new solutions to cybersecurity by offering $3.5 million in prizes to spur new thinking, said Daniel Kaufman, director of the Information Innovation Office at the Defense Advanced Research Projects Agency.

“Things are going to change a lot,” Kaufman said, describing a future in which much of cybersecurity is automated, without requiring a person to monitor for viruses or make fixes manually.

“Driverless cars are pretty fun,” he said. “We did that. This is next.”

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