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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: synchro who wrote (6639)	12/19/1997 9:10:00 PM
From: Caxton Rhodes	Respond to of 152472

Qualcomm reportedly warned on Russia job Ex-manager terms spy case no surprise <Picture> By Thomas Kupper STAFF WRITER December 19, 1997 A former Qualcomm manager who helped plan the company's Russian venture says he warned as early as this summer that the project could run into trouble. Months before the public heard of Richard Bliss, the Qualcomm field technician who now faces espionage charges in Russia, manager Donald La Foy warned executives they were sending the company's people into a "bandit city." La Foy, the San Diego company's director of deployment until Qualcomm let him go in August, said he also insisted that the company recall a female field manager it sent to do advance work. He says he was then fired for protesting too loudly that the company wasn't adequately protecting its employees -- a charge Qualcomm disputes. La Foy, who described himself as a 30-year veteran of the telecommunications business, left Qualcomm months before the Russians arrested Bliss in the southern city of Rostov-on-Don, so he lacks direct knowledge of the case. But he said in phone interviews this week that the company took risks from the beginning of the project that left its team vulnerable. Qualcomm disputes La Foy's arguments and says it eliminated his job for reasons unrelated to the Rostov project, though the company declined to be more specific. Spokesman Dan Pegg said the company's procedures in Russia were safe and within the law, adding that the company used similar procedures on other Russian projects that it completed without incident. "I just don't want to see his grudge keep Bliss in a day longer than he has to stay," Pegg said. Russian authorities released Bliss from custody more than a week ago on the condition that he not leave Rostov-on-Don. While American diplomats are working to get the charges dropped, however, the Russians continue to maintain that Bliss is guilty. The primary charge is that he used equipment that was more accurate than Russian laws allow. Bliss' team was installing a wireless network under a $5.8 million contract with a Russian partner. The Russians also allege, however, that Bliss brought the equipment, a global positioning system, or GPS, into the country without proper clearance. The equipment enables technicians to pinpoint their location using satellites. Though some argue that this is a technicality not clearly related to the charge of espionage, La Foy says it is an area where Qualcomm risked problems. "It doesn't surprise me," he said of Bliss' predicament. "I kept hoping that something like this wouldn't happen." Most equipment for an operation like the Rostov one is shipped into the country and subjected to detailed inspections. Qualcomm sent several GPS kits in that way before Bliss arrived, and the company said that shows the Russians knew the equipment was there. But Qualcomm employees sometimes also carried equipment in their luggage when they entered the country, as Qualcomm acknowledges Bliss did with a "test kit" that included GPS components. La Foy said the company did that to avoid delays -- and because equipment shipped into Russia would occasionally disappear. Though the items still went through customs, he said, there was less bureaucracy to contend with -- but also less protection. La Foy said the company would have covered itself better by shipping the material separately from Bliss and subjecting it to a full inspection. At issue in the Bliss case is what happened when the components entered the country. Pegg said Bliss declared them as part of the "test kit," but the Russians maintain he didn't properly spell out what the kit contained. "Certainly with the stuff that is shipped in, the paperwork and protocols and insurance and shipping are more formal than with a customs declaration," Pegg said. "But a customs declaration is sufficient if it's properly filled out." Experts don't dispute La Foy's account of the difficulties of doing business in Russia. Indeed, many agree that Western companies that want to do business in Russia must sometimes go to extreme lengths to protect employees. Mob intimidation is common, and some deals are closed with bribes or even bullets. William Green, president of the Washington consulting firm Parvus International, says he advises clients to have contingency plans that include bringing in armed guards with substantial firepower. "If you have not taken adequate steps to protect yourself, they see you as weak and they will prey on you," Green said. La Foy, who is now on a consulting assignment in Virginia, says he was concerned early on about whether Qualcomm was prepared to operate in such a hostile environment. Before Bliss and the rest of the team arrived, the company sent a field manager named Mary Toberman to Rostov-on-Don to make advance arrangements. She spoke Russian and had been to Moscow before. But La Foy protested that Toberman, whom he had hired to work domestically, didn't have the experience needed. He told executives it was unsafe to send a woman to Rostov alone. "The former Soviet Union is like the Wild West, except instead of horses and six-shooters they have Mercedes and AK-47s," he said. Toberman, who returned to the United States ahead of schedule at La Foy's insistence, says he exaggerated the dangers. She says she had a driver to take her to meetings and didn't receive any threats. Though she acknowledged that Rostov "wasn't the safest place" and said she chose to stay in her hotel in the evenings and not go out alone, she said she might have done the same in New York or other U.S. cities. <Picture> Copyright 1997 Union-Tribune Publishing Co.