AFIO Intelligence Notes Issue 26

13 July 1998


AFIO Weekly Intelligence Notes (WINs) are a 1998 initiative to enhance services to AFIO members and to encourage them to recruit new members. We need new members!

WINs are produced by Editor Roy Jonkers, and includes adaptations of articles produced by RADM Don Harvey (USN ret) and AFIO members. WIN re-transmission is not permitted except without concurrence of the WIN Editor.

See the AFIO Homepage <www.afio.com> for back issues.

EVERY MEMBER GET A MEMBER - keep AFIO strong!


AFIO SPECIAL Luncheon - 21 July 1998 - 12:30 - 2:30
at Fort George G.Meade, Maryland, O'Club.
Tour of National Cryptologic Museum follows.
Send check for $22 (AFIO members and guests), or $29 (non-members)


SECTION I - INTELLIGENCE COMMENTARIES & BRIEFS

DCI'S VIEWS ON CIA SHORTCOMINGS - One week before the surprise of the Indian nuclear tests DCI George Tenet spoke to CIA employees in a closed auditorium, laying out his five-to-ten year strategic plan. According to leaks of his speech, he noted that the agency's networks of human sources were "spread too thin" and that other nations were developing techniques to undermine technical collection ( IMINT & SIGINT). He commented on the recent loss of many experienced case officers who were taking advantage of early-out packages, and dedicated himself to a sustained commitment to recruitment and training of personnel to operate on hard targets worldwide. He was quoted as saying that fixing human intelligence collection problems "will take five to seven years," at least.

The DCI further characterized CIA analysts as being "overwhelmed" by a flood of data from technical, open source and human sources that he estimated as 10 times the volume of a decade ago. He is asking Los Alamos and Sandia labs to use their advanced computer skills for new research and development tools. The observation that there is more data than available analytical talent can handle certainly is not new in the intelligence world, but the situation appears to be worsening. (Harvey)

CIA HEADQUARTERS NAME CHANGE? - Following the recent name change of Washington National airport to the "Ronald Reagan National Airport, " CIA headquarters in Langley may soon become the "George H. W. Bush Center for Central Intelligence." The Senate included the name change in the intelligence reauthorization bill that was passed unanimously on June 26. Said Senator Shelby, Chairman of the SSCI, who inserted the provision in the bill, " I am very pleased that the Senate has approved this fitting tribute. The high esteem in which former President Bush is held in the intelligence community is evidence of his commitment and dedication to the nation as well as the diligence he showed to the protection and care of the American people." The proposal is now being considered by the HPSCI. (WT 8 July 98, pg A8) (RJ)

ECONOMIC INTELLIGENCE - The financial crisis in Asia is continuing, including a banking crisis in Japan, and now spreading - - mostly due to collapsing oil, gas and gold commodity prices -- to South Africa and Russia. Some of the best minds in various US Departments and Congress are engaged in vigorous debates on developing policy to maintain international stability. The State Department criticizes the Treasury for focusing on reforming banking systems, but paying little attention to broader strategic interests. The IMF is criticized for insisting on recipient nation's budget austerity and higher interest rates to lure back foreign investors - - but thereby hurting businesses and shrinking national economies. The IMF is critical for lack of requested funding by Congress and is running out of money. A senior intelligence official was quoted as saying that CIA "hasn't a clue how to deal with this kind of crisis, where the enemy is the markets or a finance ministry that lies about a country's foreign reserves."

The Russian situation reached a critical point during the past week. The stability of the ruble was under attack, social unrest caused by unpaid workers demanding pay was escalating. An IMF loan was needed to pay foreign creditors and to redeem domestic bonds paying interest at rates of 100%. President Yeltsin telephoned President Clinton, apparently citing a danger of a "fascist" coup, and this stimulated Big Power pressure on the IMF to be accommodating. One may expect this crisis to be surmounted - and essentially postponed - but the Russian economic and socio-political future remains troubling. Whether the Russian Federation will fall apart into further pieces (a geopolitical judgment put forward by thinkers such of Mr Brezhinsky, President Carter's national security advisor), regress to government by a "strong man" to put it's house in order (the "Pinochet solution") , or keep muddling through on the way to democracy and a free market economy, incurring great social costs and tensions along the way - all the while holding 10,000 nuclear warheads - remains an open question, to be avidly monitored and influenced by US intelligence and policy. (WP 9 July pg A 26, and 11 July p. A13; Economist 11 July p 19) (RJ)

ENCRYPTION TECHNOLOGY EXPORT PROPOSAL - There has been controversy between industry and law enforcement about Government restrictions on the export of sophisticated data-scrambling technology. The worry is that the codes might be widely used by international criminals and terrorists. A coalition of high-tech companies has now put forward a solution keying on routers - the equipment that "oversees" internet traffic. Either just before outgoing mail is scrambled or after incoming mail is deciphered, a router could pull out messages that law enforcement officers would specify in a warrant. This solution is advanced as a "market solution" to replace the current regulations, which require companies wanting to export powerful encryption products to place a "spare key" into their systems to be stored by a "trusted party." (WP July 12, p. A8) (RJ)

COMPUTER NETWORKS ATTACKS - DCI George Tenet, in testifying before Congress, drew attention to the cyberwar threat, saying that " an adversary capable of implanting the right virus or accessing the right terminal can cause massive damage." CIA was cited as the source of information that at least a dozen countries are setting up programs to deal with cyberwar, including attacking foreign (e.g. US) computer systems. China's People's Liberation Daily, displaying the worldwide awareness of cyber facts, recently contained an article stating that an enemy of the US "only has to mess up the computer systems of its banks by high-tech means . . . to disrupt and destroy the US economy." Intrusion into US computer networks may be a foreign threat potential, but the threat by domestic elements is already real enough. According to the FBI the number of unsolved cases of computer hacking intrusions rose from 126 in 1996 to 550 in 1997 (US Nws &Wrld Rpt, 5 Jul 98) (RJ)


SECTION II - INTELLIGENCE HISTORY

SOVIET SPY - A retired Russian military intelligence officer recently stated that Dmitry Polyakov, recruited by the US in 1961, betrayed two dozen Soviet agents working in the United States along with more than a hundred others recruited in the US. An article in the Rossiiskiye Vesti reported that few spies had done more sustained damage to Soviet intelligence, particularly military intelligence (GRU). Retired Lt General Leonid Gulyev pronounced Polyakov - whose code name was TOP HAT - as the "jewel in the crown" of US Cold War secret agents. Polyakov was recruited in 1961 when he was attached to the Soviet Mission to the United Nations. He later passed information to his US handlers from assignments in Moscow, Burma and India. He operated successfully for over 25 years before being snared, tried and executed in 1986. Reuters cites US intelligence as doubting whether he was executed and that he was suspected of having been a double agent. (Balt Sun, 3 Jul98, p 14) (RJ)

NEW RELEASE OF ULTRA DECRYPTED MESSAGES - Study of newly released documents by the National Archives has shown for the first time how specific, detailed and timely the intelligence was that the Allies had on the German defenses along the Atlantic coast in the critical months leading up to the Normandy landings. Hiroshi Oshima, Japan's ambassador to Berlin and a confidant of Nazi leaders with access to German war plans, dutifully telegraphed his reports to the Foreign Office in Tokyo -- reports that were intercepted, decoded, translated and delivered to US military leaders within hours. For instance, after a four-day tour of Germany's Atlantic fortifications in late 1943, the former Japanese army general who had served in Berlin as an attache in 1934 accounted for every German division's location, manpower and weaponry. He described tank ditches in detail, armament of turrets located close to the shore, and available mobile forces. A letter from GEN. George C. Marshall of September 1944 said, " Our main basis of information regarding Hitler's intentions in Europe was obtained from Baron Oshima's messages from Berlin."

Americans often read the messages before the Japanese did, as transmission problems between Germany and Japan could hold up the cables for hours. The messages were distributed to the President and ten other officials, all in the military except for the Secretary of State. There were no leaks. In today's environment, the ability to keep the distribution list so limited, and especially, to prevent leaks so consistently, is enviable. (Harvey)


SECTION III - BOOKS & PUBLICATIONS

- PHOENIX AND THE BIRDS OF PREY: THE CIA's SECRET CAMPAIGN TO DESTROY THE VIET CONG, by Mark Moyar, Naval Institute Press, 1997. Unexpectedly, an evenhanded account of the Phoenix campaign - refreshingly different than the propaganda by the likes of Dan Rather interviewing a demented veteran claiming he was trained to skin infants alive. All of us who served in Vietnam are more than familiar with the slanted and distorted propaganda put forth by our mainstream media during later stages (1966 onward) of the Vietnam War. Phoenix was a program to neutralize the communist infrastructure in the midst of a brutal war, in which communist atrocities abounded along with harsh countermeasures. Phoenix was a secret program, which added to the wilder claims of atrocities committed under its auspices. The author does not engage in moralizing, provides a clear-eyed account and thereby contributes to understanding of the facts. The author is a Harvard graduate, leading one to note with pleasure - although not with surprise - that students emerge from institutions like Harvard with their common sense intact and their minds open in spite of the revisionist and other trendy cants prevailing in those institutions. Highly recommended. (RJ)

-SISTERHOOD OF SPIES: WOMEN OF THE OSS, by Elizabeth P. McIntosh, The Naval Institute Press, Annapolis, Md, 1998 (ISBN 1-55750-598-5) Twenty percent of the OSS staff were women. this is their story, ranging from spies (e.g."Cynthia," who seduced a Vichy French official and stole naval codes from the French Embassy), saboteurs, cryptographers, analysts and propaganda specialists to clerks, drivers and secretaries. The author joined OSS in 1943 and was part of operations against the Japanese in Burma. After postwar assignments with VOA and the State Department she joined CIA in 1958 and remained there until her retirement in 1973. An entertaining book, with many photos. (RJ)

- DECISION FOR DISASTER: BETRAYAL AT THE BAY OF PIGS, by Grayston L. Lynch, 1998. The author was the CIA case officer on the command ship, leading the first combat team ashore. He is also the only surviving American of the operation, and from his perspective the operation was betrayed by the Kennedy administration and the follow-on cover-up. The book incorporates recently declassified information, and is, in the words of Seymour Hersh, "not a book for those who love Camelot." Much, perhaps too much, has already been written about the Bay of pigs. Most charitably it can be said that no field operative can ever know all the elements upon which top command decisions are based. It has been written that the President may well have expected that Castro would have been assassinated at the time of the invasion - he had approved the attempt - but the assassin did not succeed, and the invaders paid the price. For clandestine operations history buffs, an action-packed story by a field operative. (RJ)


SECTION IV - BULLETIN BOARD

TAPS - Carl Segal sent us some further words on the late Frank Rowlett, premier American cryptologist, who died in Gaithersburg, Md., on 29 June 1998 at the age of 90.

Rowlett supervised the half dozen Army code breakers who cracked the chief Japanese diplomatic machine code, called PURPLE by Americans, in September 1940. It did not avert Pearl Harbor, but saved thousands of American lives and decisively influenced command decisions during the course of the war. Rowlett's cryptanalytic section cracked the codes of dozens of nations. In later years he served as a special assistant to the Director of NSA and also with CIA. His memoir, "The Story of Magic" (cover name for PURPLE solutions) is scheduled for publication in September. We honor this soft-spoken, courteous genius for his exceptional contribution to the nation.(RJ)

MIDWEST CHAPTER CANADIAN INTELLIGENCE VISIT - A working tour of the Canadian Military Intelligence and Security School at Camp Borden, Ontario, Canada, is set for October 16 and 17. All AFIO members and guests are invited to attend. Contact Midwest Chapter president Angelo DiLiberti or Don Clark at <diaboliq@home.com> or tel (630) 834 2032.

JOB OPPORTUNITY - CIA's Clandestine Service Trainee Program is looking for US citizen applicants, age 35 or below, college graduates, preferably with foreign language skills and experience in international economics or business. Extensive background investigation required. Check <www.odci.gov/cia> for more information. (RJ)

JOB OPPORTUNITY - Associate Director - Employee Safety and Facility Security National Association of Securities Dealers (NASD). This new position, based in Rockville, MD, would develop coordinated strategies and policies for all NASD locations addressing general and site specific requirements.

Requirements: College degree and minimum of 10 years experience in management level organization/corporate security, access control and physical surveillance administration. AFIO members interested send email for further information. (RJ)

ANNOUNCEMENT: EUGENE TIGHE MEMORIAL SCHOLARSHIP - The San Diego Chapter has decided on a topic for the 1999 Tighe Memorial Scholarship and will begin application packages to students in August. The 1999 topic is: How should US intelligence assets be used to fight illegal drug trafficking within, or into the US?

Since there are stipulations on essay format and an application to complete, interested students at the post-secondary or graduate level should write for a Tighe Scholarship package. A self-addressed stamped envelope must accompany the request. Write to: Scholarship Administrator, 1142 Miramonte Glen, Escondido, CA 92026. For further info <www.fastweb.com> ref. scholarship ID#13999. (RJ)


ADDENDUM TO WIN #26 - AFIO SCHEDULE

1. AFIO CONVENTION: - NOTE -- The date and location have been changed. The AFIO Convention will beconducted on 12, 13, 14 November at the Fairlington Marriott, Fairfax County, Virginia (same place as last year).

The topic will be : Intelligence Problems - Futuristic Solutions. The AFIO Convention in Miami has been canceled. See next item.

2. CORPORATE INTELLIGENCE CONFERENCE OF THE AMERICAS - 19 -21 November, Miami Beach Convention Center.

Topics include: Gaining a Competitive Edge, Piracy Abroad, the Craft of Corporate Intelligence, Economic Espionage, Counterintelligence vs Industrial Espionage, Intellectual Property Theft, Cybercrime, Corporate Intelligence around the World, Actual Case Studies etc. Conference Chairman is Malcolm Wallop, US Senator (retired).

Speakers include George Tenet, Steve Forces, Caspar Weinberger, James Chandler, Winston Wiley, Theodore Shackley and many others.

Check <www.intelconference.com> for more information and updates on agenda and speakers.

NOTE: AFIO MEMBERS RECEIVE A - 50% -DISCOUNT OFF REGULAR CONFERENCE FEES IF REGISTERING BY 15

Fax your registration in (305) 233 5737 - provide name and address and mention AFIO membership and Number.


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