Foreign intelligence and pharmaceutical industry in Poland

In the years 1971-1975, investment expenditures in R&D submitted to MPCh(iL) (in total, in pharmacy, fertilizers, steroids, plastics, synthetic fibers, paints, varnishes, chemical products for the household, building chemistry, petroleum, rubber industry, chemical reagents, and others) were about 3.7 billion zlotys in total. Prognosis for the next five-year period was: 1976-1980 -- six billion, 1981-1985 -- 6.9 billion, 1986-1990 -- 8.1 billion zlotys. Within 20 years, it gave a total of eight billion USD due to the official rate. However, it was only 250 million USD due to black market rate. Within this budget, there was a plan to assign “Polfa” in subsequently four periods of five years respectively: 250 million zlotys, 600 million zlotys, 700 million zlotys, and 750 million zlotys. It made up within twenty years a total of about 720 million USD officially. This too was only 23 million USD on the black market Investment expenses for rebuilding agencies of scientific-research and development base, and the purchase of scientific research apparatus (assessment) -- appendix no. 1 to the scientific description: prognosis of development of scientific research agencies of chemical industry to the year 1990, n. p. 1975 // AAN, Ministry of Chemical Industry, sign. 22/2 [lacks page number].. What was the average yearly value of the Polish pharmaceutical industry? For example, Central Plan for the Year 1986 expected national production in the range of pharmaceutical products and sanitary articles to be 41 billion zlotys (market prices). This would have been 500 million USD at that time Estimation of supplying the country in medicines and sanitary articles, Warsaw 1986 // AAN, Ministry of Health and Social Care, sign. 19/610. P. 4..

The value of medicines imported from the socialist countries (excluding Yugoslavia) at the beginning of the seventies shaped itself in the following figures: 19714 -- 5 million, 1972 -- 60 million, and 1973 (prognosis) -- 70 million zlotys in foreign currencies (so- called zloty dewizowy, which was a mixed rate of official rates of western currencies: USD, GBP, DM, CHF, etc.) The official, i. e., regulated by the government of the People's Republic of Poland (PRL), exchange rate of the dollar to the so-called “foreign exchange zloty” (in fact zloty was not a convertible currency) in 1970 was 1 to 4. It was reduced in the following years of the decade to the level of about 1:3 in 1980. In the 1970s, however, the price of one USD on the black market was about 100 zloty and was closer to its real value. As a result of economic and social perturbations and the announcement of a moratorium on debt repayment to creditors (mainly from OECD countries), the National Bank of Poland revalorized and made real the dollar exchange rate (the distinction between foreign exchange and circulation zloty was abolished), setting it at 1 USD = 68 zl in 1981. After a short period of stabilization, the value of the zloty against the USD decreased on average by several dozen zloty a year, reaching the level of 1 USD = 500 zl in December 1988.. The value of import from capitalist countries (including Yugoslavia) Yugoslavia played -- apart from Hungary in socialist bloc -- a key part in import of medicines by PPR. For example, only for importing of preparation called nifedipin (for the needs of a cardiology medicine cordafen) and only in the year 1986 Yugoslavia was paid 12 million USD, until this medicine -- at the end of the eighties -- was introduced into production in Polish plants, thanks to R&D in IF. 60 lat Instytutu Farmaceutycznego 1952-2012 / eds W. Szelejewski, T. Paszkowska-Reymer. Warsaw, Studio Bqk, 2012, P. 21. was in the analogical years: 22 million, 32 million, and as a prognosis -- 28 million zlotys in foreign currencies respectively Plan of import of medicines for the year 1974 -- material for council, n. p., 1973. May 12 // AAN, Ministry of Health and Social Care, sign. 15/13. P. 1..

In the year 1973, when WNT clearly involved itself in supplying the country with imported medicines, expenditures amounted to 100 million zlotys in foreign currencies. This was about 30 million USD according to the official exchange rate. In general, the Polish import of medicines from OECD increased three times in the seventies in comparison to the sixties Basic questions of the pharmacy department, n. p., 1973. June 22 // AAN, Ministry of Health and Social Care, sign. 15/15. P. 19.. It was an axiomatic proof of growing dependence on western producers. This trend was maintained in the course of the eighties. Undoubtedly, it was of somewhat natural in the face of the growing global commodities exchange and expansion of international markets. The import of pharmaceutical products and sanitary articles from the countries of the first payment territory (Comecon) designed in 1986 for 1987 was 127 million transfer rubles, which, according to the exchange value of transfer ruble to USD, was equal to almost 70 million USD, and the import from the second payment territory (capitalist countries) was almost 105 million USD. Despite this, the mixed team of representatives of MZiOS and MPCh(iL) demanded an increase of limits of foreign currencies to trade with the OECD of additional 60 million USD (!). They had important trump cards: in 1986, out of almost 380 pharmaceutical intermediates figuring in Official List of Medicines (which included a total of about 1900 positions), 50 were imported from capitalist countries; and out of more than 1050 ready-made medicines (also included in the mentioned list) even 230 were imported from the West (and from the Comecon countries -- only 90) Estimation of supplying the country with medicines and sanitary articles, Warsaw 1986 // AAN, Ministry of Health and Social Care, sign. 19/610. P. 4, 8, 9, Appendix 4..

More detailed structure of foreign purchases of the Polish government shows interesting trends. In the “plan of import of medicines from capitalist countries in the year 1974”, 40 million zlotys in foreign currencies (zloty dewizowy) was to be divided within eighteen therapeutic groups. The -- most 4.5 million -- was spent on a group of antibiotics (mainly ampicillin, colimycin, keflin, lincocin, and rovamycine). Almost the same price had to be paid for a group of antimycobacterial, which included mainly ethambutol, rifampicin, and capreomycin (4.5 million). Another important position, though very far from both previous ones, as far as expenses are concerned, was occupied by such therapeutic groups as psychiatry and neurology (2.5 million), and serums, vaccines, and diagnostic specimens (2.1 million) Plan of import of medicines for the year 1974 -- material for council, n. p., 1973. May 12 // AAN, Ministry of Health and Social Care, sign. 15/13. P. 9-11.. These statistics help us to understand the interest of Polish intelligence in antibiotics (two first groups). The Ministries of Health and Chemistry simply needed stronger financial support from the government in this particular sphere. The government itself, out of insufficient funds, decided to take advantage of the clandestine undertakings. Moreover, possible profits for the national treasury flowing from the export of pharmaceutical products captured thanks to the intelligence's service, were tempting for the government.

It is unfortunately extremely difficult to estimate intelligence's contribution to trade capacity of PPR in the area of pharmaceutical commodities. As a bare outline of a range of that phenomenon, it can be mentioned that only in 1973 the value of “Polfa's” export to the socialist countries was over 360 million zlotys in foreign currencies (about 110 million USD due to official rate), and to the capitalist countries -- 84 million zlotys in foreign currencies (about 26 million USD due to official rate) The value of total production of “Polfa” in 1973 was 6.6 billion zlotys (market prices). See: Basic questions of the department of pharmacy, n.p., 1973. June 22 // AAN, Ministry of Health and Social Care, sign 15/15. P 10, 12.. Those were certainly vital sums for the country's treasury.

There were of course costs involved related to maintenance of infrastructure in Division Il/since 1977 V of the Department I, its staff and outlay. Operating expenses (travel, meetings with agents, keeping secret communications) accounted for approximately 50 % of the department's expenses. The rest consisted of officers' salaries, social welfare and other typical personnel expenses.

During the years 1960-1990 there were two peaks of the chemical division's activity (compare the section on operations in the area of pharmacy earlier in this article) -- one in mid-70s and the second one in mid 80s, which are quite well reflected in the budget statistics. Normal annual operating costs amounted from half a million to one million zloty (see chart). However, an accelerating inflation in the late 80s has to be taken into consideration when analyzing and comparing those two peaks.

Conclusion and Research Prospects

In conclusion, it can be carefully stated that the role of intelligence in supplying the sector of public healthcare in PPR with various kinds of medicines, especially antibiotics, beginning from the second half of the seventies was non-trivial. The aid from intelligence brought about measurable economic effects, which is at least in some areas possible to be quantified in the present times. Secret and illegal gaining of the medical products were done according to a pattern worked out in the sixties and taught to future officers of Division II/V of WNT at the Center for Training of the Intelligence Staff (OKKW) in the seventies. It did not vary much from the methods used by other divisions of scientific-technical intelligence. It is doubtless that a proper definition of tasks for Division II/V and a successful implementation of the technology obtained was each time an effect of cooperation between many people, including not only those who were connected with intelligence directly (officers in covert and secret job positions) and indirectly (co-operating people/so called TW, consultants, etc.) but also a whole mass of specialists and clerks who did not realize they were involved in covert operations. The ingenious machines of technology which stole, although quite efficiently, in the end signified an economic and general system crisis for countries of the socialist bloc. The gap in technological development became evident in the period of the so-called political dйtente, which was accompanied by an unprecedented technological advance in the West. The reason and circumstances of the collapse of the Comecon were aptly expressed by Francis Fukuyama. “While centrally planned economies could follow their capitalist counterparts into the age of coal, steel, and heavy manufacturing, they were much less able to cope with the requirements of the information age. In fact, it was in the highly complex and dynamic `post-industrial' economic world that Marxism-Leninism as an economic system met its Waterloo” Fukuyama F. Koniec Historii / trans. by T. Bieron and M. Wichrowski. Poznan, 1996. P. 141..

Operating expenses of Division II/V (chemistry and biotechnology) of Department I in 1974-1988 (Polish Zloty -- zl)

Financial reports and analysis of Department I: AIPN, sign. 01741/52. P. 22; sign. 01741/54. P. 20; sign. 01741/56. P. 16; sign. 01741/58. P. 17; sign. 01741/60. Vol. 1. P. 18; sign. 01741/62. Vol. 1. P. 20; sign. 01741/64. Vol. 1. P. 17; sign. 01741/66. Vol. 1. P. 21; sign. 01741/68. Vol. 1. P. 18; sign. 01741/70. Vol. 1. P. 17; sign. 01741/74. Vol. 1. P. 18; sign. 01741/76. Vol. 1. P. 18; sign. 01741/78. Vol. 1. P. 19; sign. 01741/80. Vol. 1. P. 19; sign. 01741/83. Vol. 1. P. 21; sign. 01741/85. Vol. 1. P. 21]

It would be an interesting postulate for the future research to recognize the Polish WNT's cooperation with its counterparts in other Comecon countries. Could there be a possible division of tasks within the socialist intelligence community in the sphere of the clandestine acquisition of medicines, as it happened in the legal sphere of R&D The official works were coordinated in areas such as antibiotics, steroids, antimycobacterials, anticancer medicines, circulatory system medicines, and psychotropic medicines. See: Report of Polish delegation on XI session of Work Group of pharmaceutical industry of Comecon countries -- Budapest 11-17 November 1969, n. p., n. d. // AAN, Ministry of Health and Social Care, sign. 19/1198. P 48-58; Report on delegation to Romania -- XV conference of Group of Pharmaceutical Industry of Comecon countries and Yugoslavia in 1973 with the appendix -- propositions of specialization of certain socialist countries in the area of ready-made medicines, n. p., n. d. // AAN, Ministry of Health and Social Care, sign. 19/1198. P 64-71.? It seems that specializing in infiltration of certain countries and companies or in reaching certain people in those countries and companies could result in measurable profits for the whole Warsaw Pact (Comecon). In this area questions also remain on details of refinancing intelligence's expenses to buy medicines on the “black market.” It is now known that the compensation of operational expenditures was settled in a form of a foreign currency transfer done by a proper ministry official (the Chemical Industry, possibly of Health) from one of the secret accounts of Department I opened in Bank Handlowy SA. Such accounts were set up based on the demands of each separate task See financial records of Division V, for example: Deputy chief of Division [V] to chief of Division XIX of Department I of Ministry of Internal Affairs, Warsaw, 1989. February 20 // AIPN, sign. 02271/23. P. 43.. Funds for covert operations were probably coming from the ministerial (MPCh(iL) respectively MZiOS) budget assigned for supporting research and development works. It is also not known how Department I received money. There was, for sure, an opportunity for a quasi-legal acquisition of some additional funds from industry and R&D for often political or military goals of the Polish intelligence's community on occasion of STI's activity.

Perhaps in the future the image of the Security Service, of which civil intelligence was a part, transferred to the modern society and subsequent generations will yield some corrections. As a result, Sluzba Bezpieczenstwa (SB), previously perceived from a point of view of the society's interests only as a counter-productive institution, bolstered the communist party by resisting democratic liberties and the market economy. It harassed opposition leaders, invigilated the Catholic church and even ordinary citizens. It could show its different side of a Janus face, more “productive” from the point of view of the public interest. Studies on selective aspects of the involvement of MSW in fighting various categories of economic crimes in state companies, joint-ventures, and in banking institutions during the seventies and eighties of the twentieth century, have been already published For the results of preliminary researches on the meaning of Security Service for protection of interest of the treasury of Poland and on the part of Security Service in fighting financial abuse, embezzlements and corruption in national companies and administration, see: Sikora M. Sluzba Bezpieczenstwa wobec przeksztalcen ekonomicznych w Polsce 1980-1989. Przyczynek do badan nad ingeren j polskich sluzb specjalnych w gospodarkз // Pamiзc i Sprawiedliwosc. 2012. Vol. 20. P. 359-410. -- On the subject of interaction between Security Service and private sector with participation of foreign capital in PPR, see also: Sikora M. Koncesjonowany kapitalizm. Sluzba Bezpieczenstwa MSW a „spolki polonijne” w PRL (1976-1989) // Dzieje Najnowsze PAN. 2012. Vol. 45, no. 2. P. 125-146..

Perspectives of policy making, macro-economy, military affairs, or social science are standard components of classical approach in history. It has to be stressed that research led by historians in such remote areas of science as engineering, mathematics, or chemistry, could easily cause mistakes. It is obvious because of the limited capabilities of the human mind that it is not possible to cover details of several disciplines of science at the same time. But interdisciplinary studies are inevitable regarding the topic of intelligence in the area of science and technology. They are the only tool that enable to explain this “missing dimension” Black I., Morris B. Israel's Secret Wars: A History of Israel's Intelligence Services. New York, 1991.

P. XI. of the modernization process in the socialistic block. By this statement, this paper tries to follow the call of the renowned explorer of the interaction between science, technology, and society Paul Edwards who claims: “...multiscalar analysis holds the key to an understanding of technology and modernity, we must at least make the attempt” Edwards P N. Infrastructure and Modernity: Force, Time, and Social Organization in the History of Sociotechnical Systems // Modernity and Technology. Cambridge, 2003. P. 224..

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