Paris fires secret service chief for spying on West

THE HEAD of France's secret service has been dismissed following revelations, reported in the Independent last month, that the spy agency has been systematically spying on British and US hi-tech and defence companies as well as banks and financial houses in Wall Street and the City.

Claude Silberzahn was unexpectedly replaced at the weekend after four years in the job, despite earlier indications that the French Minister of Defence, Francois Leotard, wanted him to remain for another 18 months.

His dismissal was precipitated by the industrial spying revelations and by the agency's failure to predict a military coup in the Central African Republic. He was replaced by Jacques Dewatre, 57, France's senior representative in French Guiana until 1988 and Prefect of the Yvelines department near Paris.

The government's embarrassment was acute over the revelations of a concerted long-term policy of directing its spies to steal classified information on everything from the Eurofighter project to research on high-definition television and the takeover plans of large corporations.

Evidence that Paris was directing its spies to steal negotiating secrets from US negotiators at the Gatt (world trade) talks added to the credibility crisis in French intelligence. The leaking of secret instructions to French spies abroad, along with a priority ranking of the type of secrets they were supposed to steal, was considered unforgivable by the new conservative government in Paris. But beyond the humiliation, a stiff economic price has had to be paid.

The Hughes Aircraft corporation decided to pull out of this week's air show at Le Bourget in Paris after a warning from the State Department's Overseas Advisory Council (which advises more than 1,000 US corporations on security threats) about the French government's spying efforts. Hughes, which had just lost a multi- million dollar satellite contract to a French competitor, pulled out of the air show in protest, saying the latest revelations were 'the last straw'.

France was rapped over the knuckles two years ago in private meetings between the Directorate General for External Security (DGSE) and the CIA, but the spying continued. Last month's publication of a 21-page 'shopping list' of the sort of secrets it wanted to steal in the US and a shorter list of British and Swiss industrial and financial targets caused fresh embarrassment. This was compounded by revelations in the Independent that two French undercover agents had been unmasked at Bell Textron, the company developing the V-22 Osprey aircraft and had been asked to leave the US.