While some prior attempts had been made to determine what was wrong, it was not until late October 1986 that the first organized efforts were undertaken. Jeanne returned from her tour in Libreville to work for Gus Hathaway, then-chief of the CI staff. Hathaway was in charge of the investigation and he appointed Jeanne as chief of the small group that would be carrying out the analytical work. The unit was entitled the Special Task Force, CI/STF for short.
Gus chose Ben Pepper, a retired SE operations officer who had been chief of SE’s counterintelligence component in the late 1970s; Dan N, another retired officer, who had vast experience in the CI staff; and Fran Smith, who transferred from her job as chief of the branch in SE Division that ran our operations inside the Soviet Union. Ben had a wealth of historical knowledge of SE operations and their counterintelligence ramifications but he was somewhat out of date and had to do some extensive reading to become current. The same was true for Dan, whose area of expertise was China. Fran was the best prepared, possessing up-to-date and in-depth familiarity with the operations that SE had been running in recent years.
When Jeanne arrived in the CI staff, she was shown to her office, just a few doors away from where Gus sat. The office contained an empty safe, a desk and chair, and a manual typewriter. The manual typewriter was explained by the fact that David Blee, the previous chief of the CI staff, had disliked and distrusted computers, and did not want them around. (Blee also had a problem dealing with women, and never gave them an even break. Among a number of others, Jeanne and Sandy were subjected to his discriminatory treatment. Both took it with amusement or a shrug of the shoulders because by the 1980s it was obvious he was out of step with the times.) Gus was a more open-minded person and, when asked, readily agreed to provide a stand-alone computer for the unit. Thanks to him, we were able to carry out the first computer-assisted counterintelligence investigation in CIA history.
The first order of business was a review of the files on the cases that had been, or at least might have been, compromised. This was a labor-intensive process, for two reasons. First, it was SE’s policy to document its cases in minute detail. This meant that there could be ten, fifteen, or more thickly packed file folders for each case. Secondly, we did not know what we were looking for. We took copious notes, and prepared individual chronologies, including every fact that we thought might be useful in an investigation.
Jeanne’s job was to enter all of this material into a computer database. She devised one that eventually had some forty-eight fields, including the obvious ones such as name of the asset, date the case began, date it ended (insofar as we could determine it), places where operational activity took place, names of case officers involved, units providing technical support, whether the case was known to other organizations in the intelligence community, whether it was known to any friendly liaison services, whether any compromising materials had passed through our pouch system, and so forth. Deliberately, we made this database as broad-ranging as possible. Thus we also included cases that, as far as we knew, were experiencing no problems.
While we tried to cover everything, we made at least one error of omission—we did not enter the type of currency used to pay each asset. Only later did it occur to us that rubles were not a convertible currency, and had to be obtained clandestinely. It was possible that the rubles could be tagged in some way and the chain of acquisition contaminated. Once we realized this, we had to go back through all the files to determine who had been paid in rubles and who had not. This was of no investigative use in the long run, but it is an example of how our time was consumed.
In the meantime, Ray Reardon’s group in the Office of Security was starting some investigative work. First they compiled a list of every CIA employee who had resigned, retired, or died in the 1985–86 period. This was in support of the theory that the KGB would not have been so quick to roll up the compromised cases if they had a goose who was continuing to lay golden eggs for them. On the other hand, if they had received their information as a one-time shot, perhaps from someone who was no longer in a position of access, they would be less hesitant. The list was scoured in an effort to determine if any of the individuals on it were likely to have been in positions that would have given them access to the compromised cases. This venture did not lead to any useful outcome. It was just one of those things that had to be done.
Even at this early date, Moscow Station was believed to be germane to any investigation. We knew that the internal KGB had considered us the main enemy since 1945 and that they had dedicated a large percentage of their manpower and expertise to uncovering our operations, by either surveillance, technical operations, or attempts to subvert our personnel. As far as we could tell, they had had little success, which was quite worrying in itself. We wondered what was out there that we were not seeing.
With this in mind, the Office of Security started a program to interview CIA personnel who had been stationed in Moscow, or had undertaken official travel there, in 1985 and 1986. Dan Payne was the officer responsible for this program and he continued it for a year or two. Like many of the other endeavors undertaken in this period, his efforts did not lead to any breakthroughs. However, it was useful in that it increased our understanding of what was what, and who was who, in Moscow at the time.
At this same time we initiated a re-review of some CI leads received in the 1973–75 period, both by CI/STF and the Office of Security. The leads, which pointed to a possible penetration of CIA, had never been resolved, and it was thought that the information covering this earlier period might somehow be connected with the 1985–86 compromises. Although we could not know it at this juncture, this was another chimera that wasted our time.
Meanwhile, the FBI had become energized when it learned of the loss of its two most important cases—Martynov and Motorin. In the fall of 1986, they set up a unit entitled the ANLACE Task Force, headed by Tim Caruso. Caruso was a gray man who always wore a gray suit. It was obvious that he was no friend of the CIA but had been told to cooperate with us, probably by Don Stuckey, his FBI supervisor and a positive force in the search for what had gone wrong. Caruso worked with us to a sufficient extent, although it was noticeably painful for him and he did not go beyond what he thought necessary.
The members of the ANLACE Task Force varied both in their CI abilities and their personal qualities. Barbara Campbell, Art McLendon, and Jim Holt, of whom more will be told later, were helpful additions. Caruso and Bob Wade proudly told us that all the members of ANLACE were special agents, not analysts. Obviously, they thought that this was a good thing; we did not, although we did not voice our opinion. Their statement was not quite true—although analyst Jim Milburn was associated with ANLACE, he was not allowed to join in the inter-Agency discussions. Milburn, like Holt, would play a prominent part in a later stage of the investigation.
The ANLACE Task Force interacted with CI/STF almost daily. CI/STF provided chronologies of all of the compromised cases, and answered numerous FBI requests for information. There were at least two overnight offsite conferences. The first was held at “the Farm” in December 1986, just as we were beginning to feel our way. The second was held at the Xerox training site near Leesburg in Virginia. There were also a couple of all-day conferences at our respective headquarters. NSA representatives attended at least one of these conferences, because of the continuing theory that our communications had been compromised.
Unfortunately, despite the efforts to coordinate our activities, there were barriers to full cooperation. First of all, we were not co-located. The FBI was carrying out its research at FBI headquarters, and we were doing the same in Langley. More important, the FBI’s mandate was to search for a possible mole in the FBI while we were taking a broader look for an explanation regarding what had gone wrong in 1985–86. A mole, whether in the CIA or FBI, was only one of the possible solutions.
The ANLACE Task Force did not come up with any leads to a current penetration as far as we know, although we were not privy to th
eir final report. They did develop information on an old case, designated “unsub Dick.”1 They also produced a subsidiary report on the subject of FBI compartmentation of sensitive information, or lack thereof. Alas, the Hanssen case shows that management took little note of their recommendations.
In one area there was full cooperation between the FBI and the CIA. Someone had a smart idea that became known at the CIA as the RACKETEER program. The FBI had a more appropriate cryptonym: BUCKLURE. The idea was to use the lure of bucks to recruit a knowledgeable KGB officer. One million dollars was to be used in approaches to those KGB officers who might be aware of penetrations of the U.S. intelligence community. This program lasted for several years. The FBI approached KGB officers in the United States and the CIA approached their counterparts abroad. We realized that we were dealing with a subgroup of KGB officers who were probably the most dedicated and least likely to be suborned. However, we wanted to disseminate as broadly as possible the idea of a million dollars being available for the right person. Our hope was that there was someone out there who would want to take us up on our offer.
December 1986 saw the beginning of the Lonetree case, which was to have a major impact on the investigation of the 1985 compromises.2 Sergeant Clayton Lonetree, a U.S. Marine guard who had been stationed in Moscow, walked in to our chief in Vienna, and confessed that he had been in unreported contact with a KGB officer. Lonetree explained that, while in Moscow, he became acquainted with a Russian woman named Violetta Seina, who worked at the U.S. embassy. They had fallen in love, but Lonetree knew this meant trouble because he was bound by antifraternization regulations. Violetta had suggested that perhaps her “Uncle Sasha” could help them, and introduced him to Lonetree at the end of 1985 or the beginning of 1986. Uncle Sasha in reality was a KGB officer named Aleksey Yegorov, who operated under the operational alias of Aleksey Yefimov. He pretended to sympathize with the young couple but soon directed the conversation to the organizational makeup and personnel of the U.S. embassy. Lonetree, who had only limited access to Embassy secrets, provided what he knew in response to Uncle Sasha’s questions.
Lonetree’s love life and his relationship with Uncle Sasha was still inconclusive when he was transferred to Vienna. At that point the KGB made the mistake of trying to turn the case over to a KGB officer stationed in Austria named Yuriy Lysov. It was this attempted turnover, which seems to have been handled in a hamhanded manner, which made Lonetree recognize that he had no option but to turn himself in.
The investigation of the Lonetree case was handled by the Naval Investigative Service (NIS), which immediately pressed a large number of its personnel into service. Many U.S. Marine guards were interviewed in an attempt to determine the nature and scope of the security breach. Unfortunately, a large number of the interviewers were specialists in criminal cases and knew little about espionage in general, and nothing about the U.S. embassy in Moscow and how the KGB would go about penetrating it. Thus the interview reports left significant questions unanswered.
Our little task force in the CI staff immediately turned our attention to the Lonetree case, to the exclusion of almost everything else. We had always felt that Moscow Station might be the key to the problem of the 1985 losses, and our belief in this possibility was now strengthened. Our computer database had included a field that indicated whether Moscow was aware of each of the compromised cases. The initial Lonetree debriefings caused us to examine this question in more depth. Once again we checked the files on the compromised cases to determine just how much Moscow had been told, and when. This effort was somewhat duplicative of the SE Division research, described below, but the emphasis was different. We were trying to ascertain what Moscow Station personnel could have known, and when they learned it, while the SE Division task force was geared to investigating paper holdings.
In mid-March our investigation reached a new level of intensity. Corporal Arnold Bracy, a Marine guard who had served with Lonetree in Moscow, reportedly stated to an NIS interviewer that Lonetree had told him about having let the KGB into our embassy, including the CIA Station and the communications area. While Bracy soon recanted his confession, there was a good level of detail in it, and it was generally felt that the recantation could not be relied on.
The first question we in the CI staff asked ourselves was: If the KGB were going to mount a technical penetration of our embassy, how would they go about it? Dan N was given the unenviable task of obtaining copies of the duty schedules of the Marine guard detachment in Moscow, the hour-by-hour logs of the Marines who covered the various guard posts, and incident reports for the period that Lonetree was assigned there. This was an immense amount of material and Dan soon was surrounded by mounds of paper he untiringly shuffled as he tried to determine which Marine was on duty with which other Marine, at one of the posts that would give access to classified areas, late at night, or on a Sunday or holiday. We also consulted our in-house experts to get an idea of how long it might take to defeat alarms and combination locks, and how much time would be needed to photograph classified documents and return them to their original positions.
As it turned out, Dan’s months of research did not produce any startling conclusions. He found a couple of instances where it just might have been possible for a disaffected Marine to allow the KGB entrance, but these instances were not very convincing. As he worked, Dan began drawing up a memorandum outlining what he had found. This memorandum went through many drafts. The first few stated our belief that the KGB had gotten into our premises. Later drafts increasingly hedged this conclusion. In the end, the memorandum was abandoned without being presented in final form.
The Bracy revelations, uncorroborated as they were, brought about a volcanic reaction in SE Division. When he heard the news, Redmond burst into Sandy’s office, closed the door, and announced that we had a potential disaster of enormous proportions. He told her that as of that moment she was no longer chief of her branch, but was reporting to him. He then briefly described the situation and said that CIA had to assume a worst-case scenario. Sandy’s job was to identify and inventory all official traffic that had Moscow as an addressee, digest its contents, and notify all affected CIA and other U.S. government organizations of the potential compromise of the contents. As an aside, the DDO, the DCI, the Director of NSA, and every other high-ranking government official wanted the information yesterday. Redmond left as quickly as he had arrived. Sandy took a deep breath, told members of her branch she had been reassigned effective immediately, picked up the “back room” files and a few personal belongings, and left.
The new SE Division project was officially known as the Moscow Task Force. Leningrad was later added to the title as the investigation expanded. As had been her habit when in trouble, the next morning Sandy asked for and received the assistance of Worthen. Within five days the two had located office space; staffed the task force with three additional officers; had desks, computers, and other necessary equipment installed; and were producing the infamous worst-case scenario memos.
Redmond and Sandy initially assumed that the task force would complete its review in four months. Six months was considered an unacceptable outside possibility. However, everyone was aghast to discover that Moscow Station paper holdings were enormous and the volume of daily electronic correspondence from the CIA and other U.S. government components was staggering. It took one year to collect, inventory, read, disseminate, and file over 60,000 pages of material sent to Moscow, approximately half of which they had retained. Gerber initially disputed the numbers in Sandy’s final report on the conclusions and recommendations of the task force. The Moscow Station he had run in the early 1980s contained minimal files. However, the figures were clear-cut. Gerber ordered changes and Sandy finally completed the worst assignment of her career.
In August 1987, Lonetree was court-martialed in Quantico, Virginia. He was found guilty and sentenced to thirty-five years in prison. (His sentence was twice reduced. He received time off for good behavior and
was released in 1996.) After the court-martial, Lonetree underwent a series of debriefings combined with frequent polygraphs. Most fortunately the debriefings were videotaped. We received copies of the tapes and were able to observe Lonetree’s body language as he reacted to the questions posed to him while at the same time hearing his answers. After watching the tapes for several hours, we all became convinced that, as he had consistently maintained, he had never let the KGB into our embassy. Alas, this meant that we had spent almost an entire year following a path that led nowhere.
CIC FORMATION
AT THE BEGINNING OF 1988, plans for the reorganization of the CIA’s CI staff began to move into high gear. Various permutations and combinations were proposed and, as part of the front office, CI/STF inevitably became enmeshed in the lengthy discussions. The formal reorganization took place in April, when the old CI staff metamorphosed into the new Counterintelligence Center with the accompanying set of logistic and bureaucratic upheavals unavoidable in any large organization.
A certain amount of controversy surrounded the transformation. The preference was to have the center directly under the CIA director. However, the FBI protested that this would erode the FBI’s charter for domestic counterintelligence. In the end the center was subordinated to the Directorate of Operations—a strange solution because it implied that the other CIA directorates had no counterintelligence problems and no need for counterintelligence awareness. It thus perpetuated one of the weakest aspects of the CI staff, even though the reorganization had been meant to overcome this shortcoming. Furthermore, although the FBI was invited to send a representative to the center, it declined.
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