The Secrets of the FBI

by Ronald Kessler

  In 1990, Wauck spent two weeks attending a State Department seminar in Washington on the Soviet Union and Eastern Europe.

  “When we got home, my wife, Mary Ellen, told me that my sister Jeanne Beglis had told her that Bonnie had come ‘running up the street’—the two sisters live only a block apart—to tell her that she had found five thousand dollars in Bob’s sock drawer.”

  That was equal to $8,340 in today’s dollars. Wauck had never heard of an FBI agent having that much cash, let alone keeping it in a dresser drawer.

  After Hanssen’s arrest, Bonnie—who is still married to Hanssen—admitted to the FBI that she learned around 1980 that her husband was having unauthorized dealings with the Soviets. In 1980, she walked in on him in the basement of their Scarsdale, New York, home when Hanssen was writing a note to the GRU, Soviet military intelligence.

  Hanssen tried to conceal the note from her, and she suspected he had a girlfriend. To allay her fears, he admitted that he had been providing the Soviets information in return for thousands in cash. He said the information was of no value and he promised to break off the relationship, consult a priest, and give the money to charities of Mother Teresa.

  Bonnie denied to the FBI finding any large sums of money. But Wauck’s sister Jeanne told the same story about finding cash to their older brother Greg, who also relayed it back to Wauck. Wauck’s concerns were heightened by his awareness—through a colleague who had talked to an FBI supervisor in headquarters—of the FBI’s hunt for a mole within the intelligence community.

  After hearing of the unexplained cash, Wauck discussed the issue with his wife. If he told the FBI what he had learned, he could face repercussions, both within his family and within the FBI. To suggest that another agent was a spy might reflect on his judgment, he thought. Up to that point, only one other FBI agent—Richard W. Miller—had ever been arrested for espionage, and the material he gave up was minor.

  “The FBI’s mentality at that time was that treason and espionage were things that pointy-heads at the CIA did, but not the FBI’s straight shooters,” Wauck says.

  Ironically, while the FBI was in charge of investigating espionage, it did not then have a unit in charge of internal security where such concerns could be reported. Nor did Wauck know anyone at headquarters to whom he would feel comfortable imparting such sensitive information.

  Wauck’s wife urged him to do what he thought was right. He decided to report to Lyle what he had learned. Back in New York, they had worked on the same squad and had commuted to work together. Moreover, Wauck assumed Hanssen must be spying for the Soviets rather than another country. Lyle had just come out to Chicago from headquarters to supervise Soviet matters, so he would be the best person to transmit Wauck’s report to headquarters.

  As Wauck recalls it, he approached Lyle and said he had something to tell him that was so sensitive that he didn’t want to discuss it in his office. He insisted that they go to the floor above to sit in a windowless interview room.

  “I told him of the cash, the mole hunt, and the comment about retiring to Poland,” Wauck says. “We went back and forth for at least a half hour, maybe more, discussing the merits of what I had to say. At one point he said to me, ‘Do you realize what you’re talking about?’ And I responded, ‘Yes, espionage.’ ”

  While Wauck was not certain Hanssen was a spy, he believed all three points he brought up with Lyle should have triggered a preliminary inquiry.

  “I’ll take care of it,” Lyle said, according to Wauck.

  After that, Wauck assumed the matter was being investigated. Per bureau policy, information about the investigation would be shared only on a need-to-know basis.

  “I felt that I’d done what I could and, in my position, had to trust the bureau to follow up,” he says. “I understood that espionage investigations can run for many years and that a mole might not be continuously active, which turned out to be the case with Hanssen.”

  Normally, Wauck spent little time with Hanssen beyond seeing him at family weddings. Like everyone else, he considered him an oddball.

  “My parents and the Hanssens and about half of the rest of my family all belonged to Opus Dei,” Wauck says. “I resisted their urgings to join, and Hanssen was always being held up to me by my parents as a paragon. He belonged to Opus Dei and had a perfect marriage, or so they thought.”

  The only time Wauck was alone with Hanssen was in the early 1990s, when Wauck, a lawyer, spent time at Quantico training as a legal instructor. He visited with the Hanssens at their home. When they were in a car together, he remembers Bob Hanssen complaining bitterly that he was being transferred from headquarters to the Washington field office.

  “I recall being very quiet and circumspect while he spoke, because what was going through my mind was, ‘Holy cow, maybe they’re investigating him and trying to isolate him from sensitive material,’ ” Wauck says.

  In 1997, after he had set up his first email account on Juno.com, Wauck turned to Hanssen for advice on installing the Linux operating system on his computer, and they would email each other. If Wauck thought Hanssen was a spy, why would he email him on a friendly basis? It’s a question asked by FBI agents who would like to think that Wauck made up the story about delivering a warning to Lyle.

  “By that time my attitude was, it looks like they didn’t find anything,” Wauck says. “I realized that, in my position as a field agent in Chicago, I couldn’t expect to be briefed on what was done.”

  Aside from the corroboration offered by Walt Stowe, Lyle’s version of the conversation back in 1990 doesn’t make sense. Why would anyone mention that his sister had found some cash in her husband’s drawer without providing some context and giving a reason for bringing it up?

  Stowe says that as soon as Wauck began talking on the night of Hanssen’s arrest about his conversation with Lyle, “It was clear to me that something was missed ten years ago. I would hate to have to explain why I did not report that information up the line.”

  18

  “MUELLER, HOMICIDE”

  AT EIGHT FORTY-FIVE ON THE MORNING OF SEPTEMBER 11, 2001, Robert S. Mueller III was planning a brown-bag lunch with reporters when his secretary told him to turn on the TV.

  The new director of the FBI rushed down the stark white corridors of headquarters from his seventh-floor office to the Strategic Information Operations Center (SIOC). It was a $20 million, twenty-room complex of phones, secure computers, and video screens used to monitor and coordinate major breaking cases. He had just moved into his office the week before, and now Mueller was hit with the double whammy of dealing with the attacks and trying to uncover plans for possible new attacks while learning what his job was all about.

  Nominated by President George W. Bush, Mueller was a graduate of Princeton. He had served in the Vietnam War and was awarded the Bronze Star and the Purple Heart. After the Marines, Mueller thought he would like to become an FBI agent. With that in mind, he obtained a J.D. degree from the University of Virginia Law School in 1973. But instead of joining the FBI, Mueller became a prosecutor, first in the U.S. attorney’s office in San Francisco and then in Boston. Along the way, Mueller married his high school sweetheart, Ann Standish.

  In 1990, Mueller was appointed assistant attorney general in charge of the Criminal Division of the Justice Department. In that position, he supervised prosecutions of John Gotti, the Libyan suspects indicted in the Pan Am Flight 103 bombing, and Panamanian leader Manuel Noriega.

  Mueller left Justice in 1993 to become a partner in the Boston law firm of Hale and Dorr. But Mueller hated private practice. One day, he called Eric H. Holder Jr., the U.S. attorney in Washington. When Mueller headed the Criminal Division, Holder had reported to him. Now Mueller was calling him to apply for a job.

  “He called up out of the blue and said he wanted to try murder cases,” Holder says. “I was like, ‘What?’ Here’s this guy who was the former assistant attorney general, the head of the Criminal Division. He came to the
U.S. attorney’s office and tried cases as a line guy.”

  Having tossed aside his $400,000-a-year partnership for a government salary in May 1995, Mueller began prosecuting knifings and shootings. He answered the phone, “Mueller, Homicide.”

  In 1996, Mueller became chief of the Homicide Section in the U.S. attorney’s office. He went on to become U.S. attorney in San Francisco. After President Bush took office, Mueller became acting deputy attorney general, and Bush later appointed Mueller, fifty-six, FBI director.

  At his confirmation hearing, Mueller was asked if he would take a polygraph test. In contrast to Freeh, who said he would take a polygraph test but never actually did, Mueller replied, “This may be my training from the Marine Corps, but you don’t ask people to do that which you’re unwilling to do yourself. I have already taken the polygraph.”

  “How did you do?” Senator Orrin Hatch asked.

  “I’m sitting here; that’s all I’ve got to say,” Mueller answered to laughs from the senators.

  In contrast to Freeh, Mueller was a proponent of new technology. In 1989, he bought a Gateway computer for his home so he could tally items for taxes more easily with a Quicken program. When he was U.S. attorney in San Francisco, he tasked a talented computer programmer to create new software for tracking cases. The program—called Alcatraz—was adopted by U.S. attorney offices throughout the country.

  Several weeks before taking over as director, Mueller met with Bob Dies, the FBI’s new computer guru. Mueller ticked off the standard software such as Microsoft Office he wanted on his computer. Dies told him he could have it installed, but none of it would work with anything else in the bureau. Mueller was flabbergasted.

  Just before 9/11, Mueller began ordering thousands of new Dell computers. But the bureau’s mainframe computer system was so flawed that memos sent to agents never arrived, and there was no way for the sender to know if a memo had been received. To store a single document on the FBI’s Automated Case Support System required twelve separate computer commands. On these green-screen terminals, the FBI could search for the word “flight” or the word “schools”—retrieving millions of documents each time—but searching for “flight schools” was so complicated that almost no one in the FBI could do it. The CIA, in contrast, had been able to perform searches for terms such as “flight schools” on its computers since 1958.

  Because flight attendants on the doomed planes had called in the seat numbers of some of the hijackers, FBI agents began matching seat assignments to the hijackers’ names on flight manifests. Agents ran out leads from credit card and telephone records. Anyone who had ever shared a residence or a hotel room with a hijacker was immediately placed on a growing watch list.

  Within days of the 9/11 attack, Attorney General John Ashcroft asked the FBI for a list of terrorist suspects who might be under surveillance. He was told the FBI had no such list. The files were spread over the country, and they were all paper records. When Ashcroft asked why the FBI did not have such information in computers, he was told the bureau had at least forty computer systems, but most of them could not talk to each other.

  With the Automated Case Support System so primitive, agents had designed Rapid Start. This makeshift computer program kept track of investigative reports for agents working a breaking case but was never intended to manage a big case. Still, because of Freeh’s contempt for technology, that was all the bureau had. As reports and leads poured in about the attacks, Rapid Start became so overloaded that documents could not be retrieved. This led to more delays.

  Even worse, because Rapid Start did not connect to field offices, reports had to be downloaded and transmitted to the Automated Case Support System in each field office. Aside from the time involved, the process was unreliable, so agents at the SIOC would often call and fax leads to the field. Dozens of fax machines lined the walls, flooding SIOC with paper.

  “Sometimes three teams of agents were dispatched to one house when only one team should have been sent, because we had three duplicative leads being sent out,” Dies says. “Meanwhile, we needed those extra agents to work other leads.”

  In some cases, because the downloaded material never showed up, no follow-up calls were made or faxes sent. Leads were not covered for days.

  Robert M. Blitzer, who was in charge of counterterrorism at headquarters prior to the attacks, says the bureau simply did not have the resources to deal with terrorism. Bureau officials such as Buck Revell and Bill Baker, who early on recognized terrorism as a problem, had since left the bureau. Many who remained did not have the intellect to devise new strategies for dealing with the threat. If they did, they found Freeh would not listen.

  “I don’t think Freeh ever trusted any of us,” Blitzer says.

  Before 9/11, Blitzer recalls being inundated by threats and leads coming in from the CIA, State Department, NSA, and Defense Intelligence Agency (DIA). The FBI could not analyze it all, much less follow each lead to its logical conclusion.

  “The FBI, because of lack of resources, was not able to analyze and exploit all of the intelligence on Osama bin Laden,” Blitzer says. “I would have reams of stuff on my desk. It was frantic. I came in on weekends. There was an ocean of work. We got thousands of threats every year. I would ask myself, ‘What should we do with this? Is it real or not? Where should I send it?’ We were trying to make sense of it. I don’t think we ever came to grips with it.”

  While the terrorists communicated by code on the Internet, agents had computers that lacked CD-ROM drives. Because of the lack of analysts and computers, “we didn’t know what we had,” Bear Bryant, the former deputy director, says. “We didn’t know what we knew.”

  While Mueller never publicly criticized Louis Freeh, an aide says that when Mueller took over, he expressed “shock” that Freeh had left the technological and administrative sides of the FBI in a “shambles.” Mueller was dismayed by how little the FBI knew about possible terrorists in the country.

  As the new director, Mueller began restructuring the bureau, emphasizing technology, analysis, and the centralization of terrorism investigations at headquarters. The changes made it clear what Mueller thought of Freeh and some of his policies. Freeh spent much of his time acting as the case agent on the bombing of the dormitory for U.S. military personnel in Dharan, Saudi Arabia, on June 25, 1996. In his last year in office just before 9/11, Freeh gave eight interviews to Elsa Walsh of the New Yorker portraying his starring role in the FBI’s investigation of the Khobar Towers bombing and his meetings with Saudi officials to obtain their cooperation.

  In contrast to Freeh, Mueller saw himself as an administrator rather than a case agent. He read books on management and consulted business leaders such as IBM’s Lou Gerstner. He brought in Harvard Business School faculty and students to do a case study of the FBI and the changes he initiated. Unlike Freeh, Mueller would not promote himself. In interviews with me, he refused to describe what he had done to earn the Bronze Star and the Purple Heart. He would say only that he “got into some firefights.” He added, “You never get the medals for that which you probably deserve them. You always get the medals for that which you don’t even think about doing.”

  However, from the Marine Corps, I obtained the citation that went with the Bronze Star. It says that on December 11, 1968, the platoon that Mueller commanded came under a heavy volume of small arms, automatic weapons, and grenade launcher fire from a North Vietnamese Army company.

  “Quietly establishing a defensive perimeter, Second Lieutenant Mueller fearlessly moved from one position to another, directing the accurate counterfire of his men and shouting words of encouragement to them,” the citation says.

  Disregarding his own safety, Mueller then “skillfully supervised the evacuation of casualties from the hazardous area and, on one occasion, personally led a fire team across the fire-swept terrain to recover a mortally wounded Marine who had fallen in a position forward of the friendly lines,” it adds.

  It was a real trial by f
ire that steeled him for the challenges he would face as FBI director.

  “I think he recognized that being the head of the FBI in many ways is more like being the CEO of a big company than being the biggest case agent in the FBI, because much of what you need to do is make sure the organization has all the tools it needs to do the investigative work,” says Daniel Levin, Mueller’s chief of staff during his first year in office. “A lot of that is not exciting, sexy work, but it’s extremely important, in terms of technological, record management, and personnel systems and recruiting the right people and having incentives to keep them on board and develop their careers. He took all that extremely seriously.”

  Like a giant ocean liner, the FBI does not change course quickly. Mueller had to deal with a bureaucracy that often resisted change and did not always give him straight answers. Early on, Mueller removed Sheila Horan as acting director of the Counterintelligence Division. Besides finding that she was generally not on top of the subject, he felt she did not appropriately brief him on a Chinese counterintelligence case involving FBI agent James J. Smith in Los Angeles and had failed to warn him of problems with the case. Smith eventually pleaded guilty to a charge of lying to the FBI to conceal his affair with Katrina Leung, an FBI informant. Justice Department officials said they believed that Leung was a double agent for China and that she passed classified documents to that country, but she was not charged with engaging in espionage.

  Perhaps more than anything else, Mueller’s removal of Horan defined the difference between the new director and Freeh. Freeh had the habit of punishing anyone who disagreed with him or brought him bad news. In contrast, Mueller banished those who failed to give him the facts.

  Mueller was not a diplomat. Back when he headed the Justice Department’s Criminal Division, Mueller would throw office parties at his home. He would signal that the festivities were over by flicking the lights off and on. As a former Marine, Mueller expected his orders to be carried out as given. There would be no hand-holding. At the same time, he would go out of his way to offer condolences to FBI officials when they lost loved ones.