Inside the CIA

by Kessler, Ronald

  “You have to launder your money someplace,” a former CIA operations officer said dryly.

  According to a former staff member involved in the Senate Select Committee on Intelligence’s investigation of the CIA’s use of the bank, “They [the Nugan Hand Bank] performed certain services. If you want to move a little money around, or get some checks certified, you go to a bank to do it. Nugan Hand had a reputation for being very aggressive. They would take your money and wouldn’t ask any questions. What they [the CIA] was taking advantage of was a bank whose employees were willing to extend the full range of services, no questions asked. It was for laundering and concealing money.”

  The fact that the CIA uses a bank for its transactions does not mean that it is a CIA front. Nor did any of the front men know that the CIA was a customer of the bank. In the same way, the CIA used the Bank of Credit and Commerce International, the notorious international bank that regulators closed down in July 1991, to move money for the agency’s clandestine operations. At the same time, as far back as 1986, the CIA began to report to other government agencies on the bank’s criminal activities and secret control of First American Bank of Washington—reports that were ignored. Because the CIA decided the bank was dirty, it had closed all its accounts with BCCI by 1989.272

  The claim that the CIA engages in drug running as a way of generating income goes back to the Vietnam days, when some individual operatives, working with or for the CIA, sold and transported drugs. But that did not mean the agency itself engaged in drug running.

  “The allegation that the CIA engages, as a matter of policy, in drug smuggling is absolute nonsense,” Herbert Saunders, a former CIA officer, said. “This is not to say that a Laotian kicker, employed to kick supplies out of airplanes, working for Air America, a CIA proprietary during the Vietnam era, wasn’t peddling. There may have been bush pilots as well. But we didn’t brand Eastern Airlines a professional drug smuggler every time a passenger or crew member was caught with some drugs in Miami. It’s possible a CIA staffer went wrong along the way as well. It happens occasionally to the police and DEA.”

  The Christic Institute, meanwhile, generated a stream of donations by undertaking litigation claiming that former CIA officers who called themselves the Enterprise had for years operated an assortment of nefarious plots that the CIA could not itself undertake, including a guns-for-drugs scheme to aid the Nicaraguan rebels.273 The institute is a nonprofit, liberal public-interest organization.

  As usual, there was a grain of truth to the allegation. The Enterprise did exist. It was the self-financed clandestine operation developed by White House aide Oliver L. North during the Iran-contra affair. Using its own airplanes, pilots, operatives, airfields, and Swiss bank accounts, the Enterprise helped funnel arms to the Nicaraguan rebels.

  North called the operation Project Democracy. Richard V. Secord, a retired Air Force major general who was one of the participants, and his partner Albert Hakim, dubbed it the Enterprise.274

  But there is no evidence that such an operation began before North came on the scene. U.S. District Court judge Lawrence King in Miami threw out the Christic lawsuit in February 1989. Saying the lawsuit filed on behalf of journalists Tony Avirgan and Martha Honey was based on “unsubstantiated rumor and speculation from unidentified sources with no firsthand knowledge,” the judge ordered the institute to pay the defendants—including Secord and Hakim—$955,000 in legal fees plus $79,500 in court costs.275

  Another well-publicized myth was that the KGB assassinated John A. Paisley, a former officer in the Directorate of Intelligence, and that his body was never found. The fact is the FBI matched Paisley’s fingerprints with those on a body found floating in the Chesapeake Bay on September 25, 1978.276 But that did not prevent some journalists from weaving fantastic tales about the case. Those who knew Paisley said he was depressed about financial problems and undoubtedly committed suicide.

  Often, conspiracy theories are generated by disgruntled former CIA employees, by people who claim to have been employees but never were, or by people who are literally crazy. At any given time, U.S. District Court in Washington has a handful of lawsuits pending against the CIA by people who claim the CIA has bugged their teeth or is following them.

  Journalists tend to form an unfavorable impression of CIA operatives because they never meet real CIA officers. Generally, the people they meet had only tangential involvement with the agency as contract employees. In some cases, they are pathological liars and never worked for the agency at all.

  Sometimes, the stories on their face don’t make sense. The Houston Post ran a series in 1990 claiming a “possible link between the CIA and organized crime in the failure of at least 22 thrifts, including 16 in Texas.” The rest of the press dismissed the Houston stories because they lacked documentation and were so murky that it was difficult to understand what they were saying.277 After an investigation, the House Permanent Select Committee on Intelligence concluded that the CIA had briefly used the services of four of the institutions mentioned by the newspaper, but “those relationships were consistent with routine agency financial practices.”278

  Other stories are so lacking in credibility that one wonders why any paper would run them. For example, an unemployed oil-equipment salesman held a press conference in Dallas in August 1990 to say his father, Roscoe White, joined the Dallas Police Department on orders of the CIA so he could shoot John F. Kennedy. His son, Ricky White, said he based this on his father’s diary, which disappeared after he told the FBI the story in 1988.279

  If they can show any tangential connection to the CIA, accused criminals often use the “CIA defense” to try to get off. When Ronald Rewald was accused of bilking investors out of millions of dollars through a pyramid scheme in Honolulu, he claimed he was only following CIA instructions. In fact, the CIA admitted that it had used the firm as a “drop” for mail and phone calls. Rewald was convicted and is serving time. But stories persist that the CIA was more involved in the Rewald scheme than it admitted.280

  Finally, the fact that the CIA has done something right is sometimes turned around to show that it has done something wrong. For example, Mark Hosenball, a producer with NBC-TV’s “Exposé,” claimed in the Outlook section of the Washington Post that the CIA had launched a public relations campaign to put its own “spin” on the scandal involving the Bank of Credit and Commerce International.

  “Through a campaign of hints, leaks, and unusual public pronouncements, the agency appears to be trying to keep ahead of the scandal by admitting a certain range of knowledge and involvement [in BCCI],” according to the article, headlined “The CIA’s BCCI Laundry.”

  “The agency’s tactic has been to admit that it was aware of the bank’s involvement with criminals, and that it used the bank to move money around the world. But the agency has insisted that its own involvement with the bank was entirely legal,” the article said.281

  Thus by acknowledging that it warned other government agencies as early as 1986 that BCCI was crooked, the CIA was engaging in some kind of cover-up of its involvement with the bank, or so Hosenball seemed to be saying. When the agency declines to comment, it gets criticized, and when it comments, it gets criticized for commenting.

  The Outlook article went on to assert that the CIA did not provide enough support to back up its early warnings to the U.S. government’s law enforcement agencies that the bank was crooked—as if the CIA’s job was to regulate banks and prosecute criminals rather than to gather intelligence overseas.

  In what sounds like a Harvard Lampoon satire on media treatment of the CIA, the article said of one CIA warning about BCCI, “In reality, apart from references to ‘unorthodox and unconventional practices,’ ‘money laundering,’ and ‘narcofinance’ . . . the five-page document is matter-of-fact in tone and hardly a call to action for American law enforcement agencies.”

  Over the years, the CIA has learned to take it, just as CIA officers have learned to lie as part of their cover. />
  “It’s no fun to see things in the papers that are not right,” retired CIA officer David Whipple said. “But the policy has been take it on the chin. If you are criticized for something unfairly, shut up, take it. Part of the penalty for being in the intelligence service is to take the fall. We’re the scapegoats. This is something others in the Foreign Service applaud us for. We often take the blame when we are not responsible. We don’t comment on our successes or our failures. When failures are ascribed to us unfairly, we don’t comment on that. When we succeed, we never take credit, lest we give away how we accomplished the success.”

  Even those who know from the inside that the modern CIA does not engage in illegal activities sometimes find it hard to keep from believing some of the stories.

  “I am amazed that sometimes I fall into the trap myself,” said Russell Bruemmer, Webster’s former general counsel, who is now a partner with Wilmer, Cutler & Pickering in Washington. “I know mistakes get made, and I read things I don’t know about, and I say, ‘My God! How could they have done this?’ Then I catch myself and say, ‘There must be another side to this.’”282

  To be sure, the CIA has had its share of rogues. Edwin Wilson, an officer assigned to special operations within the Directorate of Operations, is a prime example. After leaving the CIA, he became involved in smuggling weapons and explosives to Libya. He was then convicted of plotting to murder the government prosecutors who lad brought a case against him. Wilson is serving a twenty-six-year prison term.283

  But for all the aberrations, CIA officers tend to be at least as law-abiding as any other citizens. Baker, who came from an agency that had traditionally been rivals with the CIA, came to be impressed by its employees. Because their mission was not as well defined as the FBI’s, they sometimes got themselves into more difficulties. But the CIA was not doing crazy things; it was performing a vital mission.

  Webster took the allegations personally. If the CIA was covering up or engaging in illegalities, then that meant he was, and he could not stand the thought. Overall, he admired the press, but some reporters simply were not fair. He particularly resented the items about the agency that appeared in newsmagazine gossip columns; it seemed to him that by and large, they were pure fiction.

  It was Webster’s policy to try to deal with the unfair stories head-on—to issue denials where possible, and in other cases to present the facts on a background basis. Only once did a CIA official ask Baker to issue a denial that was deceptive. Baker refused, explaining that the effectiveness of the press office depended on his maintaining his credibility.

  Early on, Webster asked for a check of CIA indexes to see if the agency had any record of dealings with a Greek banker said by some press stories to be a CIA agent. Based on the negative response, Baker issued a denial that the man had ever been a CIA agent. But later, another index was checked, and Webster found out that the man did show up in CIA files—not as an agent but as someone who had had covert dealings with the agency.

  Webster was furious. Even though the denial was technically accurate, he did not want ever to be in the position of making a public statement and then having to retract it because he had not been apprised of the facts.

  “I don’t understand how this could happen,” he said.

  Both Webster and Baker were used to the FBI’s system, where matters as disparate as a letter from the director to an investigation into drug dealing all appeared in the FBI’s files under an individual’s name. Because of the need to compartment information, the CIA has many indexes.

  Webster issued orders to engage in more extensive checking before such statements were made in the future. He wanted to be right the first time. As Baker would later crack, “I want to have full information so that when I say ‘no comment,’ I can say it with authority.”

  Ironically, while Casey tightened access to the CIA through his press office and fulminated about supposed leaks by congressional committees, most reporters who covered intelligence found the executive branch was the greatest source of leaks. Indeed, it was Casey’s reckless boasting about Vitaly Yurchenko’s defection from the USSR that spawned so many stories about his case, leading in part to Yurchenko’s decision to redefect.

  “I always thought the allegation that the Hill leaks was a lot of bullshit,” Engelberg of the New York Times said. “If you go and look at the universe of secrets that the Hill is told about, and you look at the percentage that gets into print—which is a very low percentage—then I think you have to come to the conclusion that finding out intelligence secrets is not as simple as calling the head of the intelligence committees and stopping in for lunch.”

  According to Engelberg, Casey and his aides often leaked material about Central America to bolster their case for whatever policy agenda they were pushing.284

  Even when stories had already run on a particular case—such as the fact that Edward Lee Howard had begun working for the Soviets—the congressional committees were often close-lipped, Engelberg said.

  “You’d bump into a member of the committee on the Hill the next day [after the story ran], and he would say, ‘That was a really good story.’” Engelberg said.

  “What else can you tell me about it?” Engelberg would ask.

  “Well, I can’t say anything, but if I were you, I would keep on going. I’d really keep on going.”

  “Well, like what?”

  “Well, I would just look at the CIA if I were you.”

  “Well, what else?”

  “I can’t say.”

  “The majority of leaks came from the administration,” Engelberg said. “But I don’t think there are too many to begin with, in the sense that someone sits down and says, ‘We’re going to give the New York Times a piece of intelligence information.’ It’s much more likely to be the case that on any given day, you have a lot of reporters working hard. They’ll hear something from someone who doesn’t understand what it is—a piece of information that is only valuable and comprehensible to people who understand the business. You go around, you check it out.”285

  John McMahon, the former deputy director of Central Intelligence under Casey, said, “I witnessed more leaks coming out of the administration than out of Congress. I felt Congress was always fairly responsible.

  “The only time in my experience when they really began to leak was when the Nicaragua program became so controversial,” McMahon said. “Literally, we would give a presentation to Congress, and before we could get downstairs, there was a press conference where it was being passed out what we were doing.”286

  Baker would later say that while he was director of public affairs, no U.S. reporter double-crossed or misquoted him. Often, he found, it was the CIA’s own carelessness with information that led to the stories that CIA people so detested. Or the administration had leaked a story in order to push its own agenda.

  “Baker’s approach was to get out in front of the news, to know the reporters, to have some idea of what they were working on, and to be helpful when possible,” Engelberg of the New York Times said. “On several occasions, he said we would rather you thought hard before you printed that. It was a very different kind of relationship [than with Casey’s public affairs office].”

  As a result, Engelberg said, “There were stories where we treaded initially more softly than we otherwise would have because we were presented with what we considered to be reasonable objections. I would have to say that because of the way Webster dealt with the press—which is with a more open manner—we were more likely to give them the benefit of the doubt.”287

  Eventually, FBI director William S. Sessions offered Baker the job of assistant FBI director for criminal investigations. For an FBI agent, this was like offering a Supreme Court judgeship to a lawyer. Baker left the CIA and rejoined the FBI in May 1989.

  Still not sure he could be comfortable with a CIA officer in the job, Webster replaced Baker with James W. Greenleaf, another FBI executive. Greenleaf had been assistant FBI director for t
raining, which meant he headed the FBI’s training center at Quantico, Virginia. Before that, he had headed the laboratory division.

  Like Baker, Greenleaf had a hard time adjusting to the special characteristics of the CIA. Each year, the agency holds a family day to commemorate the September 18 founding of the agency, a day when husbands, wives, and children can come to see where their parents or spouses work. Greenleaf got the idea that the agency could pass out CIA T-shirts, shorts, and caps. At Quantico, anyone could buy FBI shirts, shorts, or running outfits. But the Office of Security vetoed the idea. It was the same old problem that later led to Webster’s rejection of the CIA employee association’s plan to sell CIA mugs. What if the children of covert employees call attention to their parents’ employment by wearing the garb?288

  Unlike Baker, Greenleaf had no qualms about playing tennis with the boss. After Webster’s first wife died and George Bush invited him to his Kennebunkport home, Greenleaf went along and played doubles with the then vice president, Webster, and a neighbor.

  Greenleaf, like Baker, came away impressed by the CIA. He felt the agency was one of the most misunderstood agencies in the government.

  When Greenleaf left in May 1990 to become the FBI’s associate deputy director for administration, Webster felt comfortable enough with the CIA and its people to give the job to a CIA officer. He chose Joseph R. DeTrani, who had headed the CIA’s Office of Technical Service, the unit that makes the tools of the spy trade. DeTrani was smart, witty, and direct. Before he left, Baker had recommended him as his replacement.

  “They all seem to have the same style: smooth in the good sense of the word, quick-witted, able to take a jab and keep rolling,” Russell Bruemmer said of Webster’s choices as public affairs directors.

  DeTrani came into the job joking that public relations within the CIA is an oxymoron. After a year, he was saying that he had been wrong: the concept of public relations did not conflict with the CIA’s mission.