Hitachi and Mitsubishi fall into a cloak-and-data trap
To all outward appearances, it was a routine business transaction involving a foreign corporation and a Stateside consulting firm. In fact, it turned out to be part of a transcontinental sting operation that snared some of the world's biggest electronics companies.
The climax of the affair came last week after a group of eager, albeit edgy employees of Hitachi Ltd., Japan's fourth largest computer maker, arranged to wire $495,000 into the bank account of Glenmar Associates, a Santa Clara, Calif., electronics consulting firm. The money was actually intended as a clandestine payment for confidential information on some of the newest and most powerful computers made by International Business Machines, Hitachi's chief American rival (Hitachi had $1.4 billion in computer revenues last year, IBM $24 billion). But when Hitachi Senior Engineer Kenji Hayashi and two colleagues showed up at Glenmar's six-room suite in a Santa Clara office building to collect the secret documents, they found themselves surrounded by a squad of FBI agents, who handcuffed them and charged them with conspiracy to transport stolen property in foreign commerce.
Later that day Customs agents, tipped off by the FBI, boarded a Japan Air Lines jumbo jet about to take off for Tokyo from San Francisco and arrested Tomizoh Kimura, an engineer for another Japanese firm, the Mitsubishi Electric Corp. (1981 computer revenues: $350 million). When the agents examined his luggage, they found confidential IBM computer tapes, which had also been provided, courtesy of Glenmar, for some $26,000.
So culminated a cloak-and-data caper extraordinaire, the FBI's most ambitious sting since Operation Abscam netted seven Congressmen for taking bribes two years ago. Glenmar was an FBI front operation set up to deal with the problem of industrial espionage in the fast-track microelectronics industry. Winding up investigations that lasted eight months, the
FBI charged that a total of twelve Hitachi and five Mitsubishi employees took part in separate conspiracies to transport stolen IBM property to Japan. The bureau arrested five of these suspects, but the rest were in Japan last week. Among those accused are several high-ranking officials who allegedly approved the scheme, including Kisaburo Nakazawa, general manager of Hitachi's main computer manufacturing plant at Kanagawa.
In Tokyo, Hitachi and Mitsubishi executives grudgingly admitted that their companies had made payments to FBI agents for IBM documents. They argued, however, that their employees considered Glenmar to be a legitimate research firm, selling information obtained through legal channels. Said a statement from Mitsubishi: "These accusations appear to have arisen out of a terrible mistake by U.S. Government authorities."