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AFIO Weekly Intelligence Notes #39-99, 1 Oct 1999

WINs are produced by Roy Jonkers for AFIO members and subscribers.

Although WINs are protected by copyright laws, WIN #39-99 MAY BE DISSEMINATED for purposes of (1) interesting potential new AFIO members and (2) publicizing the AFIO National Symposium. The editor can be reached at

AFIO SYMPOSIUM "INTELLIGENCE 2000": - - AFIO MEMBERS - - please check your address file --- guests (US citizens) you sponsor can attend the Symposium (and Banquet) at AFIO-member rates. Inform corporate officials and professional colleagues you know of this exceptional opportunity.

"Intelligence 2000" provides a rare unclassified opportunity for US citizens to hear the leaders of the intelligence community discussing the issues -- policy, systems, resources, challenges - - and to ask questions at a rarely available forum, the National Reconnaissance Office (NRO). Last year everyone was pleased -- our line-up is again superb. All speakers are confirmed.

For agenda and registration information, check Section IV below and the AFIO website at

Contact the Symposium Chairman, RADM (ret) Don McDowell or the AFIO office if you need more information or support.


CIA CAPITAL VENTURE TECHNOLOGY FIRM LAUNCHED - - The CIA has created its own venture capital firm, called In-Q-It, an innovative move to improve the agency's ties to the burgeoning technologies of the internet revolution. The intriguing name, In-Q-It, stands for Intelligence (In); Q for a sly reference to Major Boothroyd, a.k.a. "Q", the master British secret service wizard who produced gadgets for James Bond; and the "It" denotes Information Technology.

In-Q-It is to fund promising technologies, like a regular venture capital firm. It will reside in Palo Alto, where the leading venture capitalists of the information age are located. CIA technology needs may well be a factor in the determination of projects In-Q-It will fund as principal or as partner. This may include the need for smarter search engines, better ways to visualize data, and improved security for web surfers.

But the fundamental goal is to link the agency with the cleverest minds of the information age. The Agency apparently realized that it was in danger of losing its technological edge, and that in a world of instant millionaires, some of the best and brightest technical talents would no longer be so interested in working for the Agency. With In-Q-It they have taken the initiative to maintain the connection.

In-Q-It will be headed by Gilman Louie, an executive in the Hasbro Toy Company's Online Business Group. A 39-year-old fourth-generation Chinese-American, son of a WW II Army Air Corps veteran, Louie made his name and money creating video games. He is a genuine Silicon valley entrepreneur, who knows little or nothing about intelligence or its venerable traditions - - probably all to the good. The new company's impressive board of directors includes John Seeley Brown, director of Xerox Corp.'s Palo Alto Research Center; Lee Ault, director of Equifax Alex Brown; Stephen Friedman of Goldman Sachs; Norm Augustine, chairman of Lockheed Martin Corp.; and William Perry, the former Secretary of Defense.

The idea for the CIA venture capital fund is said to have originated from conversations between the DCI, George Tenet, and a former investment banker, A. "Buzzy" Krongard, who became a consultant to the director in 1998. After internal CIA coordination, "The Enterprise" was turned over to Sue Gordon, who, with her colleagues, created the framework for the organization within six months - - not rapid for Silicon valley, but a speeding bullet for Government work. In-Q-It may or may no do the trick - - but it sure seems like a smart and innovative way to latch on to the out-of-control technology revolution. It is risk-taking at its best. ( NOTE: Any questions? Ask the DCI at the AFIO Symposium on 21/22 October!) (Sources - (Wpost 29Sep99, p.A29, Ignatius; Mercury Center 29 Sep99, courtesy R. Sanford; San Jose Mercury, 29Sep, courtesy T. Hart; NYTimes 28Sep99, John Markoff) (RoyJ)

COAST GUARD DRUG INTERDICTION - - The US coast Guard has confiscated a record 56 tons of cocaine in the Caribbean area during the past year as a result of significant investments in intelligence systems and by employing aggressive new tactics.

In recent years the drug smugglers have taken to using an armada of "Go-Fast " small, thin, high-powered, low profile boats, capable of doing 40 - 50 knots, twice the speed of a Coast Guard cutter. The 50 foot open Go-Fast boats carry several extra drums of fuel, a crew of two, and up to a ton of cocaine. They can travel from Colombia to Haiti in just under 20 hours. By day they will just drift in areas the Coast Guard is patrolling, perfectly camouflaged so that "you can fly right over one and not see it." Last year, "about the only way we ever caught a Go-Fast boat was if they blew an engine, but otherwise they could just wave good-bye at us and take off."

The Coast Guard this year responded with aggressive new tactics, including the use of helicopters firing high caliber bullets into the Go-Fast engines or using nausea-inducing stink bombs, and by investing in radar, infrared-sensing and other intelligence systems "that improved our ability to detect where smugglers are departing from, the way points they use, and their destinations." The new operations, along with several seizures that stemmed from an intelligence breakthrough, sharply increased the CG's total contraband seizures in a war that will not cease until the US demand is also controlled. (NOTE: US Counter-narcotics will be discussed by General Gorman at the AFIO Symposium) (Wpost Sep30, p. A6, Suro) (RoyJ)

GERMAN - US INTELLIGENCE RELATIONS - - Germany's main counterintelligence service has been restructured in recent years from its Cold War eastward focus to a new posture addressing all foreign espionage operations in Germany, including US activities. During the past summer several Russian operatives were accused of stealing space technology secrets and expelled. During the same time period three Americans, identified as CIA agents, working under cover out of the US consulate in Munich, were recalled (not expelled - a nicety based on close political relationships) after being accused of recruiting German citizens for unspecified economic espionage. German sources indicated the Americans had violated long-standing practice by not making their activities know to Germany's domestic security intelligence agency. This is the second time the Germans have requested the removal of American agents for economic espionage within the past two years.

The political developments in Europe and German reunification drive differences in foreign policy orientation, impacting on intelligence. As economic rivalry increases, the Germans suspect that the US employs agents and eavesdropping facilities to obtain commercial advantages. The US denies this and has stated that its assets are focused on terrorism, weapons-smuggling and money-laundering by criminal syndicates. In terms of foreign policy toward third parties, Germany takes a more benign position on Iran, for example, believing that it can be encouraged to moderate its attitudes through a broader web of economic ties. The US, however, takes a more dogmatic view, and as a result, a major CIA focus in Germany is said to involve monitoring movements of Iranian intelligence agents in Frankfurt.

German sources report that there currently are about 100 CIA personnel in Germany ( a drastic reduction from the Cold War years) and an estimated 1,000 NSA personnel (mostly at Bad Aibling, near Munich). The Germans believe that the size and resources of American intelligence are overrepresented in their country. And as background, the Germans are also said to be doing a slow burn over the reported US refusal to return the STASI documents acquired by the CIA after the East German collapse. There is cooperation - - and "dynamic tension." (NOTE: Interested in Intelligence and Foreign Policy? Come and listen to Richard Kerr, former DDCI, on this topic at the AFIO National Symposium) (V. Loeb in Wash Post 30 Sep99, pA1) (RoyJ)

CHINESE OFFICERS EXECUTED FOR SPYING - - China has court-martialled and executed a general and a colonel for selling state secrets to Taiwan in its biggest spying scandal of the Communist era. Retired Major General Liu Liankun, 58, former Director of the General Logistics Department, was accused of having sold military secrets to Taiwan intelligence for five years, including information on PLA war games and missile tests near Taiwan in 1996 and on the deployment of troops and weapons. Senior Colonel Shao Zhengzhong, 56, was also court-martialled in the same case and executed in August. In a separate case last month, a Chinese appeals court confirmed a life sentence for government official Xi Shiguo, 45, for spying for Taiwan in the southern island province of Hainan. Said one official "``No wonder Taiwan wasn't too worried during the 1996 military exercises.''

Beijing and Taipei have been spying on each other since the Communists won a civil war and drove the defeated Nationalists into exile in 1949. (Reuters Beijing, 13 Sep 99, Benjamin Kang Lim) (courtesy RHeibel) (RoyJ)


ITALIAN OFFICERS INDICTED FOR COVER-UP OF 1980 SHOOTDOWN OF LIBYAN JET - - In the summer of 1980 a Libyan MIG-23 crashed in the Calabrian mountains of southern Italy, reportedly full of bullet holes. Simultaneously an Italian DC-9 jetliner crashed in the sea in the same area. One of the eight Libyan C-130's that were being "militarized" in Italy flew in the area on its way back to Libya. There were also reports about a French jetliner carrying nuclear fuel from France to Iraq - also in the area at the same time. And Italian air defense radar coverage was found to have an unaccountable 20-minute gap in the records.

The Italian Government also apparently fudged on the date the Libyan jet crashed - and no one objected. CIA Station Chief "Dewey" Clarridge was invited by Italian Air Force Intelligence on July 14, 1980, to inspect the wreckage of the Libyan MIG-23 , and CIA was reported to have removed some of the wreckage. When Italian officials later announced the crash of the jet, they said it occurred on July 18 - four days after the CIA visit.

These ingredients constituted an unexplained mystery that has grown over the years, and caused several investigations by Italian magistrates. The latest to investigate, Justice Rosario Priore, has just issued a 5,000 page report that concludes that the US and Italy covered up the shootdown of the Libyan MIG-23 and the Italian DC-9 commercial jetliner with 81 passengers and crew in June 1980. The report speculated that NATO aircraft - - most likely US - - engaged in a dogfight with the Libyan jet and caused it - - as well as the DC-9 - - to crash, with the DC-9 perhaps hit by an errant missile.

Justice Rosario Priore, who investigated the matter for nine years, surmises that the MIG was shot down on June 27, the same date as the DC-9 crash. The MIG crashed in the Calabrian mountainside, just a few minutes flying time from where the DC-9 went down. The report is interesting and convoluted. It is drawn against a background of US and Italian Government differences over relationships with Libya at the time, the refurbishment in Italy of eight Libyan C-130 planes for military use, with the MIG-23 being a possible escort for one of the C-130's returning to Libya, and the C-130 in turn using the DC-9 as radar cover on its route south. The magistrate discovered a mysterious 22 minute gap in radar coverage records, and other "more than casual" disappearance or destruction of evidence. As a result of all this, on August 31, Magistrate Prior indicted some of Italy's most respected military officers for treason and obstruction of his investigation.

And as a last sidenote on this convoluted and intriguing affair, Duane R "Dewey" Clarridge, then CIA station chief in Rome, was reported as saying that he suspects the airliner was shot down by Israel, which wanted to stop a scheduled flight of nuclear fuel from France to Iraq along the Italian coastline that day, and attacked the DC-9 in error. Magistrate Priore notes that French, Iraqi and Atomic Energy Agency officials all refused to comment on such a flight. Conspiracy theorists, man your battle stations! (Wpost Sep 26, 99, p. A31, J. Smith) (RoyJ)

IMPROVED RESOLUTION US SPACE PHOTOS FOR SALE - - In a giant step toward "global transparency," a US-led joint venture firm, Space Imaging Inc., will offer 'one-meter resolution' overhead imagery from space for sale to the public. This one-meter resolution is said to be better than anything now commercially available from US, French, Russian or Indian companies, and, in military applications, is sufficient to tell a jeep from a tank.

US intelligence agencies may become one of the largest clients, since the imagery is unclassified - - and therefore very useful for general military troop support as well as for support of allied operations. The National Imagery and Mapping Agency has set aside some $580 million to buy and process commercial imagery over the next six years, to eliminate gaps in mapping of the world, and to fill gaps in coverage left by National Reconnaissance systems. The latter are reputed to have even higher resolution capabilities.

Space Imaging's Ikonos satellite, built by Lockheed Martin, was successfully launched last week from Vandenberg Air Force Base. It will orbit the earth 14 times a day, capable of covering any spot on earth every third day. But even if anyone who has a credit card can now buy a "photo" from space, the Government still exercises some control. Imagery may not be sold to countries that are on the US list as sponsoring terrorism, or to countries subject to trade embargoes. The US Government retains "shutter control" - - picture-taking may be stopped during a national crisis. And Israel has used its lobbying clout in Congress to prohibit images of its territory - - the only exception of the US policy of "open skies." But otherwise, an image of one square mile will sell for $20 - $300, depending on whether it contains precise coordinates, with a minimum order of $1,000, at least initially.

(NOTE: Space reconnaissance challenges will be addressed at the AFIO National Symposium on 21/22 October. Both NRO Director Keith Hall and former NRO Director Jeffrey Harris, now President of Space Imaging, Inc., will speak at the AFIO Symposium at the NRO facilities in Chantilly - See Section IV below) (Source V. Loeb in WashPost 25Sep99, p. A3) (RoyJ)


INSIDE STALIN'S KREMLIN: An Eyewitness Account of Brutality, Duplicity and Intrigue, by (the late) Peter S. Deriabin with Joseph C. Evans, Brassey's, Washington & London, 1998, ISBN 1-57488-174-4. Deriabin, a member of the KGB's Kremlin Guards Directorate, escaped in 1954 and lived under cover in the US under CIA care until the fall of the Soviet Union. The publication of this book was delayed many years to protect associates in the Soviet Union from retribution. The author died in 1992, and his son edited his manuscript.

Inside Stalin's Kremlin recounts the story of the early postwar (WWII) years, of the murderous intrigues within the Kremlin and its psychopathic ruler. Inevitably, anti-semitism plays a role, for Stalin was an anti-semite - - a factor that has been relatively unexplored in terms of the Hitler-Stalin pact. In the book it plays out in the conflict between Beria and Stalin. But generally this is a personal view of events at the Soviet center, of sudden arrests and coups, of clashes between leaders such as Zhdanov and Malenkov, and of trials of state security chiefs and Stalin's mysterious death. The book concludes with the author's defection.

Much has been written about the general subject of Stalin's regime and its internal power struggles, but nevertheless this is a very readable and credible snapshot of a small but important piece of history. Some of the "cultural" mindsets may still be alive among the old guard former communists who are still leading Russia, and where the interaction between Security intelligence and the political leadership remains relevant as ever. Recommended reading for Russian and Intelligence history buffs and students. (RoyJ)

RED FILES -- PBS -- Red Files, a four-part documentary series from PBS, utilizes previously unavailable archival sources and interviews to present a fascinating look at the Soviet Union and its Cold War rivalry with the US in four episodes: Secret Victories of the KGB, Soviet Sports Wars, Secret Soviet Moon Mission, and Soviet Propaganda.

PBS also offers an attractive companion site at including a number of resources related to each of the four episodes. For each installment, users will find a story synopsis, the Producer's script, theme music, updates on related events, human interest stories, complete interview transcripts, video clips, a reference section, access to related sections of Russian Archives Online, maps, a timeline, lesson plans, and more. Additional offerings include a collection of links mentioned in the series and an internal search engine. This site joins an already strong tradition at PBS of creating sites that are actual companions to the program, offering new and expanded content for interested users. [Michael de Nie, Editor] [If used, must include following copyright line] From The Scout Report, Copyright Internet Scout Project 1994-1999. (courtesy Elizabeth Bancroft, AFIO Surveillant editor)


AFIO NATIONAL SYMPOSIUM "INTELLIGENCE 2000, 21-23 OCTOBER 1999 - - McLean & Chantilly (NRO) , Virginia.

1. The AFIO NATIONAL SYMPOSIUM " INTELLIGENCE 2000," will be held on Thursday 21 October 12:30 until 4 pm at the Marriott Hotel at Tysons Corner, Virginia, and continue on Friday 22 October, hosted by the Honorable Keith Hall, Director national Reconnaissance Office, at the NRO facility in Chantilly, Virginia from 0800 until 1700 hrs, followed by a " rush hour traffic abatement" Social Hour until 1800. The sessions will be conducted at the "UNCLASSIFIED, Background Use Only, Not For Attribution, US Citizen Only" level. As we all know and have experienced - MUCH of great interest can be said at this level.

AGENDA - - A STELLAR CAST OF SPEAKERS has agreed (CONFIRMED) to participate in the "Intelligence 2000" symposium, including, (in alphabetic order):

General Paul Gorman (USA), former Commander, US Southern Command;

The Honorable Keith Hall, Director NRO, the Host of "Intelligence 2000."

Mr Jeffrey Harris, former Director NRO and currently President, Space Imaging, Inc.;

Lieutenant General Patrick Hughes, USA, former Director DIA;

Mr. Richard Kerr, former Deputy Director of Central Intelligence

Mr. John Lauder, Director of the DCI Nonproliferation Center;

The Hon. Ted Stevens, US Senator and Chairman of the Senate Appropriations Committee;

Colonel Richard Stotts, Commander of the USAF Information Warfare Center;

The Honorable George Tenet, Director of Central Intelligence

Mr. Michael A. Vatis, Director of the National Infrastructure Protection Center, FBI

Check the AFIO website at for full agenda and registration information.

REGISTRATION AFIO NATIONAL SYMPOSIUM only - 21 Oct at Marriott HOTEL & 22 Oct at NRO - for AFIO members and their US citizen guests, and for selected other categories of US citizens, including Corporate and Government personnel and fellow professionals (see note below*) - - a donation of $165 (75% tax-deductible) .

The Symposium-only non-member donation required is (see note below*) = $215

NOTE * - The following may atttend the Symposium (and Convention as well) at AFIO member rates, other than invited guests - - US /State/local Government personnel (active and reserve), and members of NMIA, DOCA, SASA, NIP, CIN, PCIC, OPSEC, SCIP and Natl Security Com of ABA. AFIO is a tax exempt educational association. Fees are 75% tax-deductible.

REGISTRATION: Provide Name, Social security number (for Government security check for Symposium), Title, Organization, Mailing & email and tel address, plus a CHECK made out to "AFIO" and mail to: AFIO, 6723 Whittier Ave, Ste 303A, McLean, VA 22101-4533. You may also pre-register by email to Registration is complete when check is received.

2. The AFIO NATIONAL CONVENTION will be held in conjunction with the AFIO National Symposium, at the Tysons Marriott Hotel on Thursday 21 October at 4 pm.

It will include a

(1) GENERAL MEMBERSHIP MEETING (no fee for members) , (2) a RECEPTION and cocktail hour, and an (3) AWARDS BANQUET (three course dinner, music, awards to an outstanding media representative and to exceptional AFIO members, and with a distinguished keynote speaker and invited eminent dignitaries).

On Saturday morning follow-on meetings will be held, primarily with chapters members and the AFIO Board of Directors.

NOTE: The AFIO Honorary Board and a number of notables will be invited to attend the Reception and Banquet as guests of AFIO.

RATE for AFIO CONVENTION RECEPTION AND AWARDS BANQUET only - 21 /23 October / Mariott Hotel - donation of $105

Package donation for BOTH Convention and Symposium = $239.

Programs and full information for the "Intelligence 2000" Symposium, and for the National Convention, have been mailed out to AFIO members. Help spread the word! Guests are welcome!

For agenda information, Symposium Chairman RADM (ret) Don McDowell,

or the AFIO Executive Director, Roy Jonkers

For REGISTRATION information, contact Mrs Gretchen Campbell, AFIO Dir. of Administration, tel (703) 790-0320, or email

REGISTRATION: Provide Name, Social security number (for Government security check for Symposium), Title, Organization, Mailing & email and tel address, plus a check made out to "AFIO" and mail to: AFIO, 6723 Whittier Ave, Ste 303A, McLean, VA 22101-4533.

LODGING - - For out-of-towners, suggest you register to get a hotel room soonest. Arrangements for lodging may be made with the Tysons Corner Marriott hotel. To qualify for the SPECIAL RATE of $84 per night (good ONLY for Thursday, Friday and Saturday nights ) you MUST mention ASSOCIATION OF FORMER INTELLIGENCE OFFICERS.

If you include Wednesday night, they may not extend the special rate (although we have now been promised a few rooms at the discounted rate for Wednesday also).

Early hotel reservations are recommended (soonest), as the Marriott is expected to fill rapidly and early due to other events in the area.

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