AFIO Intelligence Notes Issue 37
29 September 1998


RUSSIA - Using private as well as government statistics, political economist Stephen D., Shenfield of Brown University documents Russia's has calamitous social and economic decline since the collapse of the Soviet regime. Russian gross domestic product has fallen 45% from 1989 to 1997. Real capital investment has decreased by 92% during the same period. Net productive investment has turned negative as equipment has become obsolete and unusable. Output of oil, for example, is down 50% from its peak, and continues to fall. The nation's infrastructure - from power generation to railroads to sewage systems - is deteriorating, while two-thirds of the federal budget in the mid-1998 was dedicated to debt service.

Real wages fell 78% from 1991 to 1997. Demographic and health statistics paint a bleak picture. He estimates that 40% of the population is in serious distress and suffers from malnutrition.Some 40% of the children suffer from chronic illness and vitamin deficiency. The number of "officially recorded" cases of tuberculosis has increased to 100,000. Syphillis has increaed from 8,000 cases in 1990 to 450,000 in 1997. Life expectancy for adult men has fallen below what is was a hundred years ago. Births have decreased 50%.

What all this means, says Shenfield, is a" huge socioeconomic disaster . . . Russia's crisis in human terms resembles that experienced by the American people during the Great Depression, and is likely to give rise to a similar period of state-led economic experimentation to bring it to an end."

What is also means is that the recent Russian financial and market collapse was not a cause but a symptom of another epic event in our time - not only the defeat and dismemberment of the Soviet empire, but the potential implosion of Russia itself.

Inflation is again skyrocketing - some 200 - 300 percent in recent months. Banks, markets and insurance industries are listing to port. Modern ecomic life is coming to a standstill. Russian reserves stand at $17billion, but Russia has more than $17 billion in debt service falling due next year, including $7billion to the IMF, $5.1 billion on Eurobonds, and $5 billion to others. Russia's total foreign currency debt is an estimated $155 billion, in addition to Russian bank debts of $30 billion and company debts of $25 billion. Russian creditors stand to lose as much as $100 billion.

The Yeltsin Government is dithering and tottering. Czar Yeltsin himself is in poor condition and, by focusing predominantly on maintaining his power during the past years, has not effectively addressed underlying problems or the misery of the people.

Regional bosses and governors in Krasnoyarsk, Sakha, the Maritime Provinces (Vladivostok), Sakhalin, Sverdlovsk, Saratov, Omsk, Kaliningrad, and Dagestan are flexing their muscle. They are taking charge of economic policy and demanding wider automomy. Some sound mutinous. Some are imposing regional price controls. Others are refusing to transfer funds to the center, and are paying local generals and the military themselves. At the minimum there will be more power sharing, by the regionals with the tycoons at the center; at the maximum, Russia will dissolve further.

We are witnessing a preeminent saga of epic proportions and implications - - - the disintegration of a state with tens of thousands of nuclear warheads. Of the greatest interest to intelligence. (Bsnss Wk 5 Oct 98, p30, based on Internet publicity; Economist 12 Sep 98, p 55 ff; Wpost 13Sep 98 p A37)) (RoyJ)

- RUSSIAN ARMAMENTS - The House increased FY99 funding authorization to assist with dismantling and destruction of Russian strategic weapons systems. Some $142 million are allocated to destroying ICBM's, bombers and submarines, in addition to $440 million to reduce the threat posed by the nuclear arsenal. The Pentagon also received new authority to purchase weapons from former Soviet countries to prevent them being shipped to rogue states. Last November, for example, the Pentagon bought 21 MIG-29's from Moldavia for $80million to prevent them from being sold to Iran.( Wpost 25 Sep 98, pA6) (RoyJ)

- ANTI-TERRORISM - Since 1995 both the CIA and FBI have seen substantial funding increases for fighting terrorismn. The FY99 budget of $6.7 billion is to go to dozens of agencies across the government, including $725 million to the Justice Department, which includes the FBI, according to the Congressional Budget Office. When FBI Director Louis Freeh briefed the Senate Judiciary Committee last week he stated that the FBI budget and the number of FBI employees devoted to anti-terrorism have more than doubled - to more than $285 million and 2600 employees respectively.

An important element in the success of this "war" is the increased cooperation between the FBI and CIA. At the CIA Counter Terrorist Center (CTC), one of the two deputies is from the FBI, and a CIA official plays the same role at the FBI center. Their complementary roles are integrated and focused on the mission.

CTC's Operations group includes two sets of skills - a "tool box" group of scientists and engineers, who design and assemble special devices, and a group of case officers familiar with running agents. The CTC also brings together - working cheek to jowl - case officers from the Directorate of Operations with analysts from the Directorate of Intelligence. Other agencies are represented as well, including NSA and NIMA (National Imagery and Mapping Agency) personnel who also support the center and assure rapid responsiveness from their respective SIGINT and IMINT resources.

CIA Director George Tenet told Congress last year that the Counterterrorist Center helped foil two bombings planned against US embassies. The most dangerous recent plot was the conspiracy to bomb the US Embassy in Uganda. The CIA was able to alert local Ugandan authorities, and more than a dozen FBI agents worked with the Ugandan anti-terrorism squad to unravel the plot and arrest more than a dozen suspets, including two ringleaders. (Vernon Loeb in the WPost 9Sep98, Michael Grunwald in Wpost 25 Sep 98, A27 (Roy J)

-NORTH KOREA MISSILE LAUNCH ANALYSIS - Further intelligence analysis of the North Korean missile launch on 31 August has evolved. First thought to have been a two-stage medium-range Taepo Dong I missile test, it is now believed to have been a three-stage rocket with a satellite payload that was destroyed in flight. The use of a Taepo Dong missile as a space launch vehicle was not expected, according to CIA's senior intelligence officer for strategic programs, Robert Walpole. North Korea has the most advanced program among potentially hostile states.

The question of the accuracy of intelligence evaluations of foreign ballistic missile development is crucial to an intense Washington debate on the need for a speedier anti-missile development. A US anti-missile defense system is in development, but the technology remains untested and deployment some years away. US intelligence takes the position that the threat of a potential third world adversary's intercontinental ballistic missile capability is at least ten years away, and in any case believes it can give at least five years warning of any indigenous long-range missile development. The Rumsfeld Commission questions this claim.The debate is ongoing. (WP 25 Sep 98 p A31)


- SPY BOOK: The Encyclopedia of Espionage, by Norman Polmar and Thomas B. Allen, Random House, NY 1998 (paperback) ISBN 0-375-70249-0, $18.00. An essential reference tool for writers and students of clandestine espionage, containing nuggets of information on the language and principals of international espionage, ranging from the plots of a John Carre novel to details on the Cambridge Spy Ring, from AFIO to recommended reading. An updated and revised edition, published in August. (RoyJ)

- STASI - The Untold Story of the East German Secret Police, by John O. Koehler, Westview Press, Boulder, CO, 1998, $24.00. John Koehler, a US Army veteran and AFIO Life Member who served as a foreign correspondent for the Associated Press for 28 years, reviews Stasi activities within East Germany and abroad. Potentially interesting book, not yet reviewed. To order call (303) 444 3541. (RoyJ)

- THE TAO OF SPYCRAFT: Intelligence Theory and Practice in Traditional China, by Ralph D. Sawyer, Westview Press, 1998, (ISBN 0-8133-3303-2) , 645 pages $35 hardcover. Covers writings from 2855 BC to 1910 AD. Clearly a book for the student of China and Chinese history,. providing a history of spies in China, including the development and expansion of arts and crafts, agent recruitment and control, covert practices such as assassination, subversion, sexual entrapment and exploitation. Also explored are counterintelligence and military intelligence, including translations of portions of military manuals previously unknown in the West. Scanned, not read (RoyJ)

- Tragic Mountains: The Hmong, The Americans, and the Secret Wars for Laos, 1942 - 1992, by Dr. Jane Hamilton-Merritt (a Pulitzer Prize nominee), Indiana University Press, Bloomington, 1993 . (ISBN 0-253-32731-8). The late Ray S. Cline former Deputy Director for Intelligence, CIA, endorsed this book as depicting a "classical tragdy of heroic proportions will encourage more thoughtful strategic planning and more compassionate govenment policy for protecting foreign ethnic groups who perform great service for the United States. " The Hmong battled against the Japanese and against the Viet Minh for independence, and were America's foot soldiers in the covert Lao theater of the Vietnam War, rescuing downed American aircrews. After the US withdrew they were subjected to various forms of genocide by the North Vietnamese, including biological toxin warfare. Highly recommended for students of clandestine operations and its consequences. (RoyJ)

- Communism, the Cold War and the FBI Connection, by Herman Bly, Huntinton House Publishers, PO Box 53788, Lafayette, LA 70505, $12.99. Herman Bly is a retired 23 veteran of the FBI (and an AFO member). He is an 'insider' in the battle the US waged against communism. He was assigned to supervise COINTELPRO, the controversial counterintelligence program aimed at the Communist party USA. Bly describes the rise of communism worldwide and then the work of the Communist Party USA. He outlines the goals of the party's leadership and describes what the FBI did to foil the spread of communism in this country. This reviewer would have liked to hear more of Bly's personal involvement and contribution to the battle, including interesting anecdotes and character studies. But Bly focuses on what in effect is a mini-history, taking its place with many other historical texts. The book may be of interest to the historian and the student of American communism. (Reviewed by Northeast Florida Chapter Chaplain Bishop Richard Melli, a retired intelligence professional)


On 5 and 6 November 1998 AFIO will conduct a symposium on national intelligence (including counterintelligence) and technology at the Tysons Corner Marriott Hotel, Vienna Virginia, and at CIA Headquarters. US citizens who are members of AFIO, AEP, and other intelligence associations, as well as members of corporations, and guests, are invited to attend. The Symposium agenda follows below.

In conjunction with this Symposium AFIO also conduct its National Convention and Awards Banquet on 5 November at the Marriott Hotel. Members, Associate Membersguests are invited. The Convention agenda is reflected below.



THURSDAY 5 Nov. - at Tysons Corner Marriott Hotel, Vienna,Va. - 1230 - 1600

Chairman Ted Shackley (CIA ret) -- COUNTERINTELLIGENCE and counter-terrorism

Taylor Lawrence - US Senate SSCI Staff Director - Counterintelligence, Counter-terrorism

Thomas Levering - Corporate Security Director - Executive Kidnapping Protection

John Dziak - Professor - Russian Organized Crime

FRIDAY 6 Nov. at CIA HEADQUARTERS, McLean, Va. 0700 - 1830 -

Chairman Peter Earnest (CIA ret) - - INTELLIGENCE STRATEGY

Hon. George Tenet - DCI - CIA and Intelligence Community Future Strategies

Hon. Porter Goss - US Congress, HPSCI Chairman - Blueprint for Intelligence

Hon. Phyllis Oakley - Director INR - US Department of State - Intelligence & Diplomacy

Chairman LTG James Williams (USA ret) -- INTELLIGENCE TECHNOLOGY

Hon. Keith Hall - Director NRO - Future of US Overhead Reconnaissance Intelligence

LGEN Kenneth Minihan - Director NSA - Cyber War Trends and Issues

Mr. David Nokes - Director Sandia Laboratories/SARC - Emerging Technologies

Dr. John Wagner - Sandia National Laboratories - Breakthroughs in Security Analysis

Dr. H. T. Hawkins - Program Director, Los Alamos Laboratories - Nuclear Intelligence

Mr Gary Peters, Esq.- Dept Justice/ FINCEN - Int'l Financial Crime Detection

1700 - 1800 - Social Hour. DCI invited to attend.

NOTE: All speakers are confirmed. CIA requires time to process Social Security Numbers for admission - Please register early.


The Convention starts Thursday 5 November at 4 pm with a General Membership Meeting at the Tysons Corner MARRIOTT Hotel for members and associate members.


Thursday 5 November 1600 - 2200

General Membership Meeting - AFIO President Peter Earnest

Briefing by Executive Director Roy Jonkers on the status and progress of the Association.

Discussion with Members - President Peter Earnest

Board Meeting with Chapter Presidents - AFIO Board Chairman Bill Kvetkas

Reception - Chairman and President

AFIO Awards Banquet. - Chairman: AFIO President Peter Earnest.

Master of Ceremonies: Roy Jonkers


David Atlee Phillips Award Presentation

Journalism Award Presentation

Honoring Life Members

Eminent Keynote Speaker

Dress - coat and tie.

Saturday 7 November 98 - 0830 at Tysons corner Marriott Hotel

Informal pay-as-you-go Breakfast with members of the AFIO Board of Directors and Executive Officers. Out-of-town members are particularly invited. Let us know if you plan to attend this informal Breakfast social meeeting.


1) SYMPOSIUM ONLY contribution/donation (Thursday 5 Nov 1 - 4pm, Friday 6 Nov 8am - 6:30 pm) - (includes Fri. lunch and social hour) - $145.

2) CONVENTION ONLY contribution (Thursday 4 PM - 10 PM), including General Membership Meeting, Reception, Awards Banquet - -- $100.

3) CONVENTION AND SYMPOSIUM combined package contribution/donation -(including all Symposium sessions, General Membership meeting, Reception, Banquet, Friday lunch and Social Hour at CIA). - - - - - $225

Send check, with name, organization, address, tel number and SSN (for CIA entry) to AFIO , 6723 Whittier Avenue, Suite 303A, McLean, Virgnia 22101-4533

HOTEL - Tysons Corner Marriott Hotel - 8028 Leesburg Pike, Vienna Va - Ask for weekend rate. No bloc of rooms has been set aside or reserved. RESERVE early!

CALL the front-desk - 703 734 3200 - the rate quoted was $ 84 per night.


- AFIO MAIL ANNOUNCEMENT - AFIO members will receive a ballot for Board of Directors and the new Bylaws, along with the Symposium Agenda in the mail shortly. It is important for the association that members return their ballot and VOTE for both the slate of Directors and the Bylaws.

The next edition of the INTELLIGENCER is ready for mailing in early October. You'll like it.

- TAPS - Jim Quesada, former President of the Bay Area Chapter of AFIO, recently passed away. He was a primary force in the development of the membership of the Bay Area Chapter and encouraged its expanded educational activities. Jim was a veteran of the US Army, with service in Airborne and Special Force, retiring in 1968 with over 20 years of service, serving both as an NCO and as an Officer. In addition he served with the CIA from 1968 until he again retired in 1982. Jim's activities with the Agency and many of his activities with the military remain classified, but he received numerous decorations. His life was dedicated to family and country and he served as a constant reminder of what honor and duty is all about. He will be missed by his family, friends, and the nation. We bid farewell to a valued colleague. (ref. Peter Kassebaum)

- JOB WANTED - Former Career Special Operations Officer, with twelve years experience as industry Systems Analyst, BS Engineering, MS System Management, current TS/SCI clearances, member ARPA senior working group, with recent experience with USSOCOM SOF baseline master plan, counternarcotics stratergy, and low intensity conflict logistics, available near-term. Tel 703 824 3271

- JOB WANTED: Retired professor seeking part time work, preferably related to intelligence and security research. Contact <>

- JOB WANTED - Army Special Forces (Airborne) veteran, with experience in counter drug and counterinsurgency operations in Latin America and as an intelligence analyst (12 years) and counterintelligence agent (5 years), currently a counterintelligence agent (Warrant Officer) with the National Guard, is looking for work in related fields. Contact <>.

- JOB WANTED - Former Army Warrant Officer, currently LAN security administrator for over 900 users at large US government agency, familiar with designing, configuring, troubleshooting and monitoring NT Server and with KANE security software for NT and Novell, with College major in computer information sytems and business management, is looking for technical or managerial position in corporate MIS department. Contact <>.

- WIN commentaries are produced by the WIN Editor and AFIO Executive Director, Roy Jonkers, as a service to the members in support of AFIO's educational objectives. Contributions by others, notably by RADM Don Harvey and Dr. John Macartney, are highly valued and always acknowledged.

- NOTE - WIN re-transmission is not permitted without specific concurrence by the WIN Editor, EXCEPT for individual single instances for recruiting a new AFIO member.

- NOTE - Recruit a "buddy" campaign - you are invited to support AFIO and its objectives by finding new members. AFIO Associate Membership is open to US citizens, whether in government or members of the public, who subscribe to AFIO's principles and objectives.

- NOTE - The Symposium and Convention sessions on 5 and 6 November are worthy of your attendance and support. Attendance is encouraged. Assistance with publicizing the conference among "like-minded" assocations is appreciated.

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