The real reasons I believe that Director Dittmer called me into his office in 1986 to review the Novak leak was not only because I had solved the Los Angeles Times leak but also because I had identified the US government employee in 1983 who was leaking department economic reporting by the bagful. Truth be told, I was probably the most successful investigator at the time dealing with purported high crimes and misdemeanors that most senior officials did not really want solved. Every time I managed to pinpoint another perpetrator, I was persona non grata in the office. As they say—“no good deed goes unpunished.”
Well before the Los Angeles Times leak, Director Dittmer had frog marched me into his office to hand me a batch of newspapers, advising that the Black Dragons were again whining and whimpering about unauthorized disclosures of embassy cables in a newspaper. In a series of articles commencing in late 1982, S. Karene Witcher, a staff reporter for theWall Street Journal (WSJ), divulged a significant amount of sensitive foreign financial information provided to our embassies by foreign leaders. A number of US ambassadors were advising the Black Dragons that the articles purloined from their classified cables were adversely affecting US bilateral relations, and they were demanding action. The Black Dragons had contacted Director Dittmer and insisted that an investigation be conducted, and in late 1982, I was directed to initiate a preliminary inquiry into the matter.
After reading several WSJ articles in the department’s reference library, I returned to our classified telegram inventory records center and located the cited embassy cables. I discovered that eight of Witcher’s articles in 1982 contained information derived from classified State Department cables.
The first article of note appeared in the September 13, 1982, edition of the WSJ under the title “Havana’s Efforts to Reschedule Its Debt Meeting Difficulties, U.S. Officials Say.” The Havana US Interests Section’s principal officer, John Ferch, was quoted from a classified cable that the Cuban Foreign Ministry told heads of foreign diplomatic missions in Havana that Cuba “attempted to seek special treatment” in rescheduling its foreign debt because Cuba represents “a special case.” The so-called “U.S. Officials” are never identified further in the WSJ article.
Quoting from department cables, another article noted that US ambassador to France Evan Galbraith reported that the issues surrounding Cuba are “very sticky to sort out for several reasons” and that French financial officials had their own take on the problems. (Galbraith served an interesting tour in France as US ambassador where he was quoted in 1985 as saying “Foreign policy is too important to be left up to Foreign Service Officers,” all the while receiving four separate public reprimands by the French government for his undiplomatic behavior.)
Another article quoted from a US Embassy London cable saying that Raúl León Torras, president of Banco Nacional de Cuba, had hoped “to conclude debt rescheduling agreements with creditor governments and banking institutions within ninety days.” (Luckily for us, Kendall Myers was still working only at FSI at this time.)
Of investigative interest was the WSJ article entitled “U.S. Banks Reportedly Felt Threatened into Joining 4 Billion Credit to France,” in which Witcher quoted extensively from an October 1982 Paris embassy classified cable, which she did again in her December 7, 1982, article “U.S. Preparing a Rescue Package for Yugoslavia.” Three weeks later, Witcher quoted from a classified November US Embassy Ankara cable in her December 27 article entitled “Turkey Asks for More Relaxed IMF Pact; U.K. Faults Cuba’s Plan to Reschedule.” Not only was Witcher obtaining classified cables originating from our embassies in Latin America but also from our embassies in Europe. The compromised cables were being leaked at a frequency and in numbers I had never encountered before. The White House was getting hammered over the head big time.
My initial review of the articles and cables was interesting in that the quoted embassy cables concerned different countries and cut across divisions and bureau jurisdictions within the department. The only common denominator in the department was the Bureau of Economics, Business, and Agricultural Affairs. The bureau had a vested interest in the information, but it seemed an unlikely source. With US embassies around the world reporting on the issue, the agencies most concerned with debt were the International Monetary Fund, the World Bank, and the US Department of the Treasury—and only the latter organization had access to classified State Department cables; the information was generated from these cables by non-State Department US personnel assigned to our embassies primarily for consumption by non-State personnel. My preliminary conclusion was that the culprit was someone working for the Treasury Department or the Federal Reserve.
Why did my investigative instincts lean this way? As in the case of BA 2888, I was initially convinced that the leak originated outside the State Department because, once again, it made absolutely no sense for a department employee to make life difficult for his or her colleagues serving overseas by leaking sensitive bilateral negotiations. Leaks destroy trust; only someone not involved in the sensitive negotiations would have so recklessly endangered the embassies’ success. I was not looking for a department employee; however, I lacked investigative authority to conduct an inquiry at the Federal Reserve or the Treasury Department. Previous experience told me that any request for investigative assistance to any other federal agency normally was passed to the inspector general’s office, which lacked the experience or resources, or frankly the interest, to assist. I informally alerted my FBI colleagues of my findings.
I continued to monitor the WSJ for future articles under the Witcher byline and discovered a March 11, 1983, WSJ article by her entitled “Jamaica Reportedly at Odds With the IMF; Economic Growth Could be Depressed” that quoted extensively from another classified embassy cable. I also discovered a January 1, 1982, WSJ Witcher article entitled “Mexico’s Belt Tightening Could Cause Social Unrest, U.S. Diplomats Are Told,” which lifted classified quotes from another department cable.
My inquiry resided in the freezer until Director Dittmer called me up to his office (again with serious knots in my stomach) in early 1983. He thrust the latest Witcher missive into my hands. The April 15, 1983, WSJ headline read, “Venezuela Seen About to Seek IMF Loan As Oil Price Decline Buffets Its Economy.” Over 40 percent of the article contained quotes from two classified Caracas embassy cables. Unusually candid in describing economic conditions in Venezuela, the cables’ contents were supported by comments made in confidence by Venezuela’s finance minister, Arturo Sosa, to senior US embassy officials. After the article had been published, Sosa had summoned US ambassador George W. Landau to his office and in an agitated manner lectured the ambassador about how such WSJ stories endangered bilateral diplomatic relations. Leaks have serious consequences.
Sosa made clear that he was speaking to the US ambassador at the personal direction of President Herrera. He stated further that the Venezuelan government was now unwilling to share confidences with the United States on these issues until it was assured that the leaks would stop. He concluded by saying that prior to the leaked story his government was willing to share confidential information with the United States, but now his standing with certain international bankers to refinance his country’s debt had been undermined. Ambassador Landau sent a cable asking that the department undertake whatever measures it could to ensure the protection of its classified messages.
“Robert,” Director Dittmer asked, “what is the status of your WSJ investigation?”
“Zero, sir,” I meekly replied. “No suspects, no trail, nothing. The distribution of the leaked cables both inside and outside the department makes it impossible for me to conduct an investigation. This case is not going to move forward unless the FBI gets involved.”
At the mention of the FBI, Director Dittmer rolled his eyes and grimaced. He was no fan of the FBI.
“Sir,” I went on, “I don’t think the culprit is a State Department employee, and therefore I lack jurisdiction or professional weight to pursue my leads or to get
any other agency to help me investigate these leaks, and—”
“The problem, Robert,” Director Dittmer interrupted, “is that the seventh floor is complaining about the State Department’s lack of credibility in safeguarding sensitive foreign government information.”
I was curtly dismissed. Back to my cubicle.
Fortunately another case was dropped on my desk that would eventually help me discover the most likely source for Witcher’s articles. In May 1983, the Atlantic magazine published an article titled “Embassy cables—How the U.S. Embassy Reported an Economic Crisis in Kuwait to the State Department,” in which the author, Edward Jay Epstein, quoted liberally from five classified US Embassy Kuwait cables that described in unflattering terms the country’s leaders and certain social and economic conditions in Kuwait City. Epstein wrote, “A secret cable sent on October 10 states, ‘The stock market . . . so enveloped Kuwaiti society that one could not sit down with a Kuwaiti for more than 30 seconds without the subject being raised. Cabinet meetings were disrupted as ministers excused themselves to call their brokers. . . . Young aggressive Kuwaitis . . . became billionaires in a matter of months; Kuwaiti women found an activity they could profit at and enjoy. . . . Kuwaiti society—with the perceived blessing of the government—indulged in an orgy of greed that knew no bounds.’”
I checked for the cable in question and, yes, the quotes were accurate. Epstein continued his unauthorized disclosures: “An Embassy cable said that ‘those who stayed out of the market were ridiculed for their conservatism and backwardness, and young Kuwaitis found new heroes in the high-rolling nouveau riche traders from lesser known families.’” This too was an accurate quote. He continued, “The U.S. Embassy, basing its reports on sources within the government, reported, ‘Keeping the populace at ease, and preserving local liquidity were two priorities satisfied beyond the government’s expectations by the stock market rise. Government leaders and the Sabahs, of course, also found enjoyment in making huge gains from their own activities in the market.’” But he did not stop there; the article went on to quote from another cable: “‘The banks in Bahrain,’ the Embassy said, ‘including several of American ownership, such as Chase Manhattan and American Express, found that they had lent money on worthless bits of paper. An impending real-estate bubble, furthermore, threatened the banks’ solvency. . . .’” And finally, “another U.S. Embassy Kuwait cable reported that ‘Jassim al-Marzouk is one of the more active market players, and is regarded as one of the more corrupt and influence-peddling prone high officials.’”
It was clear to me that Epstein had photocopies of four separate classified cables originating in 1982 from our embassy in Kuwait City and one sent from the department and that he selectively quoted from several sections of those documents. A quick check revealed that he had written an article for the Atlantic just two months previously in which he revealed sensitive OPEC policy deliberations, but, upon additional checks, these were his only articles talking about Middle East financial issues. I was convinced, just as I was regarding the leaks in the Witcher articles, that no department officer would leak the cables quoted in the Atlantic because of the inevitable backlash his or her Kuwaiti embassy colleagues would suffer from Kuwaiti government officials and their sources, just like the BA 2888 case. Department professionals would not subject their own kind to such diplomatic unpleasantness—a Schedule C employee, perhaps, but not a fellow FSO.
Out of nowhere, Epstein and Witcher were suddenly reading 1982/1983 department cables. Could the US government source for Witcher and Epstein be the same person? I was intrigued by the possibility, and after many hours of research, the potential answer pointed north. After traveling to Boston and toiling away anonymously in the archival records at Harvard University, I believed that I found a strong paper connection between Witcher, Epstein, and a current employee of the Treasury Department—my number one suspect agency. In fact, the Treasury Department, which is normally on distribution for any department cable that analyzes international economic or financial issues that affect the United States, had for some years assigned a small number of its officers to serve at US embassies to report independently on economic issues of specific interest to the Treasury Department. In diplomatic jargon, they were titled as financial attachés. I had another undiplomatic word to describe my suspect.
Subsequent to my Harvard University discovery, my Witcher/Epstein inquiry led me to Sy Oglesby of the Treasury Department’s Inspector General Staff. On May 17, 1983, we sat down and reviewed my preliminary findings. Following our session, we agreed to contact the FBI—I did not inform Director Dittmer of my bold decision—to ask my FBI colleagues if they wished to assign a liaison agent to our investigation in case the list of suspects included individuals working for other US agencies besides the state or treasury departments. We were pleased when the FBI readily agreed to participate. At the first joint DS/FBI/Treasury meeting held in my office, many investigative options were offered and debated. At one point, I suggested that a possible method of identifying the leaker would be to install a “tap and trace” device on Epstein’s and/or Witcher’s office and/or home telephone lines. Prior to our meeting, Bernard Johnson, a special agent assigned to our New York field office, had provided me with the New York City telephone listings in question. While the tap and trace devices would not capture any conversations, they would record all the telephone numbers to and from Witcher’s and Epstein’s office and home telephone numbers.
After I offered my tap and trace suggestion, I was politely informed by the FBI agent that I was out of my mind. Technical operations were reserved for espionage cases—such as Myers and Keyser—and NSA metadata operations, not unauthorized disclosure investigations. There were no other technical options available to our team. Oglesby and the FBI representative told me that they hoped that future interviews would help identify a suspect and that I was to remain the “lead agent” in the ongoing investigation because only State Department information had been leaked to this point. Lucky me!
I continued to work with Oglesby until we jointly reached the conclusion that there were only two possible suspects—both Treasury officials. One of the suspects was a Treasury official assigned to the National Security Council at the White House, the other a Treasury attaché assigned to a US embassy in the Middle East. At this juncture, all possible investigative leads had been exhausted, and there was nothing left for me to do as the two suspects were beyond my investigative reach. Director Dittmer was not pleased, but this time I had cover. Just before I had informed Director Dittmer of the status of my inquiry, the FBI agent assigned to our mini-task force stated that he was satisfied with the conclusions of my investigation and the bureau would assume control of the case.
Some months later, an FBI agent assigned to the case advised me he had reached the same conclusions concerning the two Treasury officials and that he had been authorized by FBI headquarters to ask both employees if they would submit to a polygraph examination. In early spring, during the course of the first polygraph examination, the Treasury official reassigned to the NSC denied having provided classified department documents to any US or foreign journalist. According to the FBI’s report, the Treasury official indicated “no deception” to the relevant questions during the interview. This Treasury official quietly continued with his career without any adverse consequences.
The FBI also informed me that a decision had been reached not to send a polygraph team to the Middle East for the examination of the second Treasury official but rather to wait for his expected return to Washington, DC, in late 1983. Shortly after his arrival in DC, the Treasury official/financial attaché was contacted by the FBI and, without knowing the substance of the investigation, agreed to be interviewed. During the interview he was asked if he had disclosed classified department secrets to either foreign or US journalists. While denying he had been the source of the Epstein or Witcher stories, he declined to submit to a polygraph examination. Some weeks later, he unexpectedly
resigned from the US Treasury Department.
Was this Treasury official the source of the leaks? He certainly denied leaking classified department cables to Epstein or Witcher. My belief in his culpability was based on facts lying somewhere between “reasonable suspicion” and a “balance of probabilities” but nothing approaching a “beyond a reasonable doubt” standard. However, I was never called upon again to investigate any articles authored by Witcher or Epstein that quoted from classified department cables after the Treasury official’s resignation. Maybe the Treasury official detailed to the National Security Council who had passed the polygraph examination had decided that one close call was enough. Regardless, the news disclosures stopped. In one fashion or another, I had helped to close another leaking faucet.
A unique case started in 1985 when an IC representative telephoned me, while I was the acting chief of the Special Investigations Branch, to advise that the IC had recently “processed” information that had to be reviewed immediately by my office. During the early 1980s, our office, due to its small size and lack of recognition, investigative jurisdiction, and, I must admit, credibility, had minimal contact with the IC. I was intrigued that an IC entity would call us directly. I immediately arranged for a meeting the following day.
Two IC security officials arrived as scheduled and provided me with documentation indicating that one of their officers reported he had overheard a State Department employee telling a Japanese diplomat, during the course of a Washington social function, the bottom line figures for the upcoming Reagan-Japanese prime minister trade negotiations. While the IC source was uncertain as to the identity of the department employee, the documented conversation revealed the beliefs, opinions, and attitudes of the department officer in regards to the upcoming negotiations. The phrases attributed to the unidentified department official were indicative of an individual with an axe to grind. Comments were highlighted in the IC document, such as “the lions have been put back in their cages,” referring to those US officials wanting tough negotiations with their Japanese counterparts. The department officer was certainly not in favor of President Reagan’s public policy on trade talks with Tokyo. Given the size of the department’s cadre of Japanese specialists, especially the small number of those calling on their Japanese embassy counterparts, my suspect pool was tiny. Following my discussion with the IC representatives, I briefed Director Dittmer about my meeting with the IC officials.
State Department Counterintelligence: Leaks, Spies, and Lies Page 23