Date: Sun, 15 Feb 1998 16:40:04 -0500 Frankfurt, Germany (AP) -- Germany's spy chief has denied U.S. allegations that his agents spy on American companies, but he warned German firms that such economic espionage is soaring internationally. Bernd Schmidbauer said in comments published Saturday that, in contrast to most countries' spy agencies, Germany's is not involved in any economic espionage. The Frankfurter Allgemeine daily reported that the FBI last month accused Germany of running a post near Frankfurt that eavesdrops on U.S. phones and tries to break into American computer systems. "We're astounded about those reports from the FBI," the newspaper quoted Schmidbauer as saying. He said the post is involved only in trying to prevent the spread of weapons of mass destruction. The FBI does not normally identify governments it suspects of economic spying. But an article last month, written by an FBI agent for the industry magazine Public Administration Review, lists Germany along with France, Israel, China and South Korea as major offenders. The article said more than 700 investigations involving economic espionage by foreign governments are pending before the bureau. The FBI confirmed that figure last month. The American Society for Industrial Security estimated that American businesses lost $300 billion in intellectual property to foreign and domestic spies last year. Schmidbauer said German companies also are increasingly targeted, and warned that any conversations, faxes or computer information carried over phone lines or mobile phones could be eavesdropped. "A lot of money is being lost through this form of espionage," Schmidbauer said, without giving a figure. "And it's not only east European spies that are snapping up know-how from German companies." "Our companies are relatively naive," he said. "Concrete steps must be taken ... including encoding techniques." [End] Thanks to DN.