Inside the CIA

by Kessler, Ronald

  These attitudes contributed to the agency’s involvement in the Iran-contra affair.

  “Agency people . . . from the director on down, actively shunned information,” Robert Gates, then the deputy director for Central Intelligence, later told the Senate Select Committee on Intelligence. “We didn’t want to know how the contras were being funded ... we actively discouraged people from telling us things.”217

  Webster decided that the CIA’s inspector general was not tough enough to do the job of policing the agency, a fact underscored by what happened during the Iran-contra affair. Historically, the office was the domain of amiable CIA officers who were at the end of their careers and did not want to rock the boat. If a CIA director did not like the inspector general’s criticisms, he could remove him. Back in 1960, after a review of the Office of Security, the inspector general recommended that the CIA prepare a “cover story” if the agency’s mail-opening program were ever uncovered. The report made no mention of the fact the program was illegal.

  According to Tom Gilligan, a former CIA operations officer, “Operations officers seldom suffered permanent career damage for poor performance or incompetence, even when agents were killed or compromised.” Yet when Gilligan appealed a decision not to give his station more officers, he found his performance was down-rated because of it. He felt he could not bring the problem to the attention of the CIA’s inspector general because of the inspector general’s lack of independence. What is needed, Gilligan said, is inspectors general who “come from outside the organization.”218

  Before Congress created an office of inspector general, Webster elevated the importance of the job. He appointed William F. Donnelly, a tough, respected officer who acted as one of Webster’s advisers, to the position. At the same time, Webster did not favor the approach proposed by Congress. In response to the Iran-contra affair, the oversight committees decided that the inspector general should be appointed by the president with confirmation by the Senate. Then only the president could fire him. Congress also wanted access to the inspector general’s reports, which generally went only to the director and the affected departments within the CIA. Even though nineteen other federal agencies had independent watchdogs approved by Congress, Webster saw the proposal as a reflection on his own performance. He was the director of Central Intelligence, and he was charged with making sure the CIA conformed to the laws. It was a question of accountability. If he failed, he should be replaced. But he insisted the inspector general should answer to him, not to Congress or to the president.

  What most troubled Rep. Dave McCurdy, an Oklahoma Democrat who led the fight for the bill, was Congress’s lack of access to reports prepared by the inspector general.

  “I wanted to find out how effective they were, how much support they had,” said McCurdy, who later became chairman of the House Permanent Select Committee on Intelligence. “The more I got into it, the more I was concerned. There was no way for us to find out. ‘Let me see some of your reports.’ ‘You can’t have them.’ ‘Can I have an index so I can pick a couple?’ ‘No.’

  “I think Webster totally mishandled the whole situation,” McCurdy said. “I said I believe we have a right to see the reports, not as to individuals, but on general policy considerations and how the Soviet division is doing. He said you are not entitled to it, kind of exerting executive privilege. The reason was more micromanagement. He didn’t want us to invade his executive turf.”219

  Webster lost the battle, and Congress passed a law establishing an independent inspector general at the CIA. Frederick P. Hitz, a lawyer and former CIA officer who was Webster’s choice, got the job and took office in November 1990.

  Besides investigating allegations of wrongdoing or mismanagement, Hitz continued the practice of examining each office and station every five years to determine if they are doing their job. That entails reading reports and cable traffic to see how agents are being handled, whether good judgment is being exercised in recruiting agents, and whether resources are being used wisely.

  The complaints examined by the office ranged from allegations of defalcations to matters of taste. Just before Hitz took over as inspector general, the office had received a complaint by some female employees that the unisex barbershop in the old building provided copies of Playboy and Penthouse for customers to read while waiting. Without issuing a formal ruling, the office quietly resolved the matter by telling the barbers to drop the offending magazines.

  If Webster lost the battle over an independent inspector general, he won on most issues requiring congressional approval. While his credibility and cooperative approach contributed to that record, it was also a result of good staff work. In that arena, Webster had a secret weapon—his special assistants.

  23

  The Munchkins

  IT WAS THE JOB OF WILLIAM WEBSTER’S SPECIAL ASSISTANTS to clone themselves, to find similarly qualified and brilliant lawyers to replace them after their two-year stints were up. So in July 1986, Howard W. Gutman and William T. Hassler, then Webster’s assistants at the FBI, began calling friends and contacts at prestigious law firms to find a good candidate to replace Gutman.

  Like the rest of Webster’s assistants, both men had dream résumés. Gutman, for example, had graduated fifth in a class of 650 from Columbia University. He had graduated magna cum laude from Harvard Law School. He was a member of Phi Beta Kappa. He had been a law clerk to Supreme Court justice Potter Stewart. Later, he joined Williams & Connolly, eventually becoming a partner.

  The two assistants knew that Webster favored Ivy League graduates, particularly from Harvard or Yale. After extensive inquiries, Gutman called Nancy D McGregor, a twenty-eight-year-old lawyer who had graduated from Barnard College and Harvard Law School.

  Then at Steptoe & Johnson, McGregor was not only a very good lawyer but extremely personable and attractive. With green eyes and brown hair, she had a direct approach that allowed her to say exactly what she wanted without creating bad feelings. She could be persistent in her questioning, yet tactful. When she decided to do something, she pursued it relentlessly and courageously. Yet she could be disarmingly charming.

  Born in Pittsburgh, McGregor was the daughter of Jack McGregor, a lawyer and former Pennsylvania state senator. Her father had treated her like a friend and colleague, keeping her informed on what he was doing and asking her advice. When McGregor was six, her family became worried when they couldn’t find her one afternoon. It later turned out she had been canvassing the street, asking neighbors to vote for her father.

  McGregor had been working for Steptoe & Johnson for two years, handling white-collar criminal cases, when a partner in the firm said Gutman had approached him asking for recommendations on candidates for Webster’s special assistant. Within Washington legal circles, the job was a plum. Not only did it give lawyers access to government at the highest levels, it was also a stepping-stone to a partnership in one of the top law firms.

  “We decided you are the person we would like to propose for this,” the partner said.

  Everything she had heard about the job made it sound very desirable—a chance to participate in the investigation rather than the defense of white-collar crimes, to see a lot of secret information very few people ever see, and to work for what she felt was a great institution with a lot of commitment. Yet she would not be leaving the career track.

  McGregor said she would like to be considered. Besides Gutman and Hassler, John Hotis, Webster’s third special assistant who stayed on as a superclerk, interviewed her at the FBI. Three weeks later, Gutman called her to say the judge would like to see her for breakfast.

  McGregor attended the breakfast in the FBI’s executive dining room hours after she learned she was pregnant with her first child. One of Webster’s assistants had told her she was one of a number of attorneys being considered for the job, and that Webster still had others to interview. She had no idea Webster would offer her the job on the spot.

  Webster explained the purpose of
the special assistants. They were to be outsiders who would take a fresh look at the bureau’s activities—a new set of eyes that would judge issues by the standards of the public and the community. As lawyers, Webster wanted them to measure proposals against guidelines and statutes. But he also wanted the assistants to look at the FBI like John Q. Public to see if things made sense.

  At the end of the breakfast, Webster looked at her and said, “Well, I think I’m ready to make this decision. I’d like you to come and work for me.”

  McGregor had planned to inform Webster that she was pregnant before he offered her the job. Now that that was no longer possible, she wanted to tell him before she accepted. McGregor wanted to tell Webster in private, so that he could quietly withdraw the offer, if he chose to do so, without any embarrassment. She was aware that Webster employed two assistants, and if she were on maternity leave, he would be left stranded. Not only would she be the first woman in the job, but McGregor would be pregnant in a sea of macho FBI agents. * But both Gutman and Hassler were at the breakfast, and McGregor said she would have to think about it.

  Webster was furious with his two assistants. He had understood that they would bring him only a candidate who wanted the job. He hated rejection, and after the breakfast, he raked them over the coals for not doing their homework.220

  When she got back to her office, McGregor called Gutman.

  “There is something I have to discuss personally with the judge,” she said.

  “Well, what is it?” he asked.

  “Something personal,” she said, cringing.

  Webster was on a flight to Atlanta. When he called back, McGregor was in a meeting of partners working on a federal criminal case. They did not know of her application to the FBI.

  “Nancy, the director of the FBI is calling,” a secretary announced.

  The others at the table looked shocked.

  McGregor excused herself and took the call in another office. She explained the problem, and Webster took it in stride.

  “What a relief,” he said. “I was afraid you were going to tell me that you were a drug addict. That would have caused a problem.”

  At the FBI, McGregor had to change from being a lawyer who kept a pile of papers on her desk to someone who locked up all her papers at night in a safe. She visited the FBI’s shooting range at Quantico, Virginia, and rode with the director to conferences. She would wander into the executive dining room and munch on the superb chocolate chip cookies made by Ray, the chef. When she found the dining room served Webster eggs and bacon or sausages every morning, she got the chief to vary the menu with healthier food such as fruit and cereal.

  McGregor reviewed such sensitive matters as requests for wiretaps in counterintelligence cases and proposals to arrest spies. Webster wanted every question answered before he signed off on such matters, and if all the material had not been presented, she sent the memos back for more work. If something went wrong, she was often the first person to tell Webster. Her rapport with him was so good that FBI executives joked that if they wanted to break any bad news to the director, they would do it either through her or with her present.

  On the other hand, even though Webster had been using them ever since he came to the FBI, some of the more seasoned FBI executives questioned Webster’s use of assistants. They had spent their careers building enough trust so they would be allowed to see the most sensitive secrets in the government. Now young lawyers with no experience in FBI work were being allowed to see even more than they were.

  Phillip Parker, the deputy assistant FBI director for operations in the counterintelligence division, was one of the FBI executives who came to call the assistants “munchkins.” It was not that he questioned their loyalty or trustworthiness; it was just that he found the thought of entrusting so much to inexperienced people unnerving.

  On the other hand, James E. Nolan, who preceded Parker in the same job, saw no problem with them.

  “It gave him a sounding board when he thought maybe the career people were stacking the deck on him. He could get somebody else to look at it,” Nolan said.

  When Webster moved to the CIA, McGregor went with him. By then, Hassler had been replaced by Mark E. Matthews, a magna cum laude graduate of Harvard College. McGregor’s son, Ben, had just been born. McGregor took the required polygraph test at CIA headquarters. Since she was still nursing at the time, she had to leave the baby with a relative who lived near the compound so she could race back in time to feed him.

  McGregor regarded the CIA with a healthy skepticism. In part because of turf battles, FBI agents often derided the CIA in private. They questioned its competence and its adherence to the law. She came to the new job with similar questions.

  In turn, CIA officials treated McGregor and the other assistants with suspicion. She was the only woman among the top twenty CIA officials and aides who met with Webster every Tuesday morning. Early on, at one of the Tuesday meetings, Bill Baker turned to her and cracked, “You could be the answer to one of those ‘What’s Wrong with This Picture?’ shows.”

  The assistants did not know the difference between an “agent” and an “officer.” Yet in some cases, it seemed to operations officers that the assistants felt they knew more than the officers did about intelligence.

  For the assistants, extracting information was like pulling teeth.

  “When we first came to the agency, it was clear that we would have to fight for our jobs,” McGregor recalled. “So many of the employees were just unwilling to share information with anyone other than the director, and I’m not sure at the beginning they were always willing to share with the director. They are so used to compartmenting everything. We often got the impression that we had to ask precisely the right question to get the information we were looking for. But they were not going to help find the right one. That sort of attitude makes you uncertain whether you have ever gotten the whole story.”

  John Bellinger, who replaced McGregor as an assistant at the CIA, sensed alarm bells going off every time he called someone in the Directorate of Operations. Usually, a higher-level official called him back with the answer to his question, rather than the person he had called.

  The assistants found they had to fight to get parking near the building and to be allowed to eat in the executive dining room, a prime perquisite. The food was prepared by graduates of the Culinary Institute of America. When members of Congress or heads of foreign intelligence services came to dine, Webster would joke that the CIA ran the dining room. The chefs served salmon fillet with béarnaise sauce and pork chops with caramelized apples and angel-hair pasta for just $4 to $5.50.

  To the people around Webster, it seemed they had been tossed into a sea of Casey lovers. By its very nature, the CIA seemed less hospitable than the FBI, which was populated by garrulous agents. McGregor found the CIA types to be more intellectual, more book smart than FBI agents, who tended to be down-to-earth, unaffected people.

  “I found the CIA people reticent and not very easy to socialize with,” McGregor said. “There were few people who opened up. That’s probably due to their training and the nature of the spy business. My guess is we were extremely unpopular, coming in as we did with the director and immediately having access to people and information that took others years to acquire. We bent over backwards to blend in, though, not to interject our personalities.”

  When Webster first came to the CIA, he visited each of the agencies in the intelligence community. Often, he took McGregor along. During a briefing at the Defense Intelligence Agency, a military man looked her over, looked at Webster, and said, “Judge, you got a real pretty one here.”

  Webster stared back at him and said icily, “Yes, and she’s smart as a whip.”

  McGregor could tell Webster was annoyed. McGregor was impressed by the way Webster handled it.

  It was McGregor’s mission to set up a system so that the paper that flowed to Webster was written in a format with which he was comfortable. It seemed to her
that the quality of the internal paperwork was not as polished as that of the FBI. While the CIA did a magnificent job at writing reports and estimates for the policymakers, the agency was not used to writing papers and reports as logically and clearly for internal use. Moreover, everything was presented in jargon and acronyms. The special assistants could not figure them out. As a lawyer, Webster wanted everything presented in a clear, coherent, and cohesive way. McGregor began sending papers back with requests for more information, more clarity, and fewer acronyms.

  “At first, I found it a somewhat confusing place,” said Bruemmer, who had been Webster’s assistant at the FBI and later became his chief counsel at the CIA. “There are a number of things that agency officers, particularly operations officers, view as second nature—living cover, compartmentation, the inscrutability. The notion of not talking to reporters and wondering why reporters quote things that give the Soviets a leg up.”

  Despite the problems, McGregor was uncomfortable with only one covert action proposal that came before the CARG committee. It seemed to her that the proposed action was a little risky. But it appeared the CIA was adhering strictly to the Constitution and the law.

  As John Hotis, Webster’s superclerk, would observe, many of the decisions at the CIA required a theologian rather than a lawyer, particularly when it came to the question of assassinations. Assassinations had long been banned, but not everyone was sure why.

  “I never understood why bombing innocent people is more morally permissible than the assassination of a single one.” said Thomas Polgar, a former CIA station chief, citing such situations as the bombing of Iraq.

  But what if a group supported by the CIA decides to assassinate someone? Does that mean the CIA has violated the executive order? If so, the CIA would probably have to withdraw its support from dozens of groups around the world. At Webster’s request, the Justice Department issued a legal opinion that said that under existing executive orders, the CIA is not precluded from supporting people who engage in violence that leads to the killing of a foreign leader, so long as the CIA does not support the plans and is not aware of them. In practice, the CIA warns such groups that it will not condone assassination and will cut off support if one occurs.