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AFIO Weekly Intelligence Notes #25-99, June 25, 1999

WINs are commentaries on intelligence-related events produced by Roy Jonkers for AFIO members and subscribers, with contributions by associate editors RADM (ret) Don Harvey and Dr. John Macartney.

WINs are protected by copyright laws and re-transmission is not permitted without specific AFIO concurrence (


FIRST CORPORATE SPONSOR - AFIO is delighted to announce the enrollment of its first Corporate Sponsor, Dupont Investment Bankers of Arlington, Massachussetts.

We welcome Dupont Investment Bankers as a sponsor and supporter of our educational objective of building a public constituency for a sound and healthy US intelligence system.

We thank and express our appreciation to AFIO member Albano Ponte, Dupont's President of Project Finance (tel 781 648 6630) -- who is also our dynamic Fundraising Chairman -- for his intiative.

We are looking for 29 other corporations or professional offices to join Dupont Bankers and support us and our objective this year! The cause is right, the time is now! We solicit the help of all members.

Inquiries - Jim Boginis (703 293 4233) or AFIO (


ISRAELI-IRAN BACKCHANNEL NEGOTIATIONS On June 20 the Israeli newspaper Haaretz reported that Iranian President Mohammad Khatami had sought the help of the UK in mediating disarmament talks between Iran and Israel. Unnamed British officials were quoted to the effect that Khatami had offered a plan calling on both Israel and Iran to renounce surface to surface missile first strike options, and to disarm long range missiles with nuclear or other unconventional warheads.

Britain's Foreign Office as well as the Iranian Foreign Office denied any knowledge of or participation in such negotiations. The pro-Khatami newspaper Hamshahri called the article "a filthy move to ruin the reputation and image of President Khatami."

On the face of it, the report appears to play the hands of Iranian hardliners, damage President Khatami, and to doom the 13 Iranian jews accused of spying for the US and Israel. But in the convoluted Middle Eastern politics and intelligence worlds, the Haaretz article may also be seen as something quite different -- a warning shot at Iran's hard-liners. Visceral oppositon to Iraq, not Israel, is the real lithmus test of hard-liner positions, and secret backchannel collaboration wsith Israel has taken place over the past twenty years. In this context, the published article may remind some of the hardliners that their fates may be tied to that of the 13 accused spies -- more secrets could be published by Israel. Figuratively at least, more than 13 jews could hang if more stories were published. ( STRATFOR, June 22, 1999) (RoyJ)

RUSSIAN AND AUSTRALIAN SPIES CAUGHT ---. An officer of the Russian foreign intelligence service, SVR, was caught trying to recruit an American agent by the FBI late in April and allowed to leave the country quietly 1 May. He had been working at the Russian Mission to the UN in New York before the sting in which he was caught receiving a document classified at the "confidential" level. Although the State Department, the Russian embassy and the FBI will not comment on the case, "senior U.S. officials" said this was the second case in six months that FBI agents caught an SVR officer spying in the U.S. In the earlier case, the SVR officer was barred from returning to the U.S. after a short visit to Moscow. According to the reporter's story, State Department officials did not want to highlight spying at the UN or upset relations with Russia. The second incident took place days before NATO leaders gathered in Washington to celebrate the alliance's 50th anniversary; Moscow had severed all ties to the alliance in March because of the bombing campaign in Yugoslavia.

The administration's secrecy in handling the two recent Russian spying cases contrasts markedly with the recent spying case of a former Australian military intelligence official accused of selling classified U.S. documents to undercover FBI agents. Source: Washington Times 21 May '99, p.A1. (DonH)

YUGOSLAVIA - The public media have reported that a "Presidential Finding" was the basis for CIA and DoD special clandestine operations measures to support the KLA and de-stabilize Yugoslavia, reportedly well prior to the Rambouillet ultimatum and the resultant NATO terror bombing campaign. Other media reports indicate that the KLA, which the US considered as late as 1998 as terrorists and drug-kingpins, but were embraced by us in 1999 - are currently again killing and terrorizing Serbs in Kosovo, as they have been doing for 10 years. Some 70,000 Serbs and gypsies are said to have been ethnic-cleansed from Kosovo while under NATO "protection." Not a murmur of "holocaust" this time. The present affair is a re-run of the Croat ethnic cleansing operation the Administration supported a few years ago.

US clandestine destabilization efforts are said to be continuing against Yugoslavia. The next targets are to foster a breakaway by Montenegro, and the overthrow of Yugoslav Federal President Milosevic. A system-wide US effort is underway to identify and freeze Milosevic's bank accounts worldwide. His Swiss accounts have already been frozen. (Press and TV/radio reporting June 1999) (RoyJ)

CHINESE THREAT TO DOE LABS DETAILED IN 1998. In light of all the charges, counter-charges, hand-wringing, blame-shifting and attempted spinning that has recently ensued in Washington on the successful Chinese penetration of DOE labs, it may be clarifying to review a 1998 secret report distributed to the National Security Adviser, the Secretary of Energy, the Secretary of Defense, the Attorney General and three dozen other senior officials at law enforcement, defense and intelligence agencies.

The report, the first comprehensive review of its kind, was prepared by U.S. counterintelligence offficals throughout the Government. It confirmed and elaborated on long-standing concerns about the vulnerability of the weapons laboratories to espionage. It was leaked to the press in May. A too-cursory summary of the lengthy press account includes:

-- DOE recorded 324 attacks on its unclassified computer systems from outside the U.S. between October 1997 and June 1998, including instances when outsiders successfully gained "complete access and total control..." of all information stored on the system.

-- Many examples of lax security and serious intelligence breaches at the labs that have not been previously disclosed, involving more than a dozen foreign countries.

-- Foreign spies "rightly view DOE as an inviting, diverse and soft target that is easy to access and that employs many who are willing to share information."

-- China is cited as the most serious threat to the U.S. weapons labs. It conducts 'a full court press' consisting of massive numbers of collectors of all kinds, in the U.S., in China, and elsewhere abroad." The maintenance of nuclear weapons, so-called "stockpile stewardship," is the area of most intense interest to China. Wen Ho Lee was at the center of the Los Alamos' stewardship program for years.

-- Russia and India are also singled out as immediate threats. Russian intelligence intercepted communications from Los Alamos concerning nuclear power plants used for military purposes. An unknown individual sent 38 faxes to India from inside a sensitive area of the Oak Ridge Laboratory during a 30-day period in 1995 and 1996.

The Secretary of Energy has alluded several times, in the course of his recitation of security measures he has ordered, to the possible firing of DOE people who allowed such laxity to exist once his internal investigation is completed. As of this writing, however, the only tangible DOE action has been to put the Department's top internal critic of security deficiencies on leave and to ask the FBI to investigate him for allegedly leaking secret information. (NY Times 2 May '99, p. A1) (DonH)

THREAT TO US COMMERCIAL SATELLITES. Military space officials have repeatedly warned of the near-term threat to oribiting spacecraft worth billions of dollars, but these warnings have been disregarded by commercial operators. A recent National Defense Industrial Association study revealed a relatively naive, short-term philosophy among commercial space companies. They see no business case for protection of their satellites now and see no threats on the horizon, assuming the multinational aspect of space provides its own protection -- a sort of virtual neutrality. General Richard B. Myers characterized the commercial attitude in a recent speech to industry as, "space as a peaceful medium -- an international sanctuary for generating revenue."

High cost orbiting resources have become critical to national and economic security and are "too tempting a target for terrorism or adversarial military operations." Russia has tried to sell a GPS jamming system. The General pointed out several countries already have the capability to "dazzle" satellite optical systems with directed-energy devices, and many could use radio frequency jammers to disrupt command and data links. Ideally, spacecraft operators and manufacturers would at least install special sensors to detect quickly and report an interference attempt. Since about 60 percent of the military's satellite communications now travel over commercial systems, DoD is considering an approach in which service and lease contracts could have an insurance-like provision built in, paying a premium to operators who take risk-mitigating steps. Those could include carrying interference detectors, hardening payloads, adding maneuvering capability or designing in-system redundancy. (Av. Week.. 12 Apr '99) (DonH)


GLOBAL TERRORISM 1998 - ANNUAL REPORT - The annual State Department report on global terrorism, mandated by Congress, indicates a record number of victims even as the number of terrorist attacks fell to the lowest level since 1971. The bombings of the two U.S. embassies in Africa accounted for the high death and injury tolls, 741 killed and 5,952 injured. The number of incidents dropped from 304 to 273. About 40 percent of the attacks in 1998 --111 in all-- were directed against U.S. targets. Most of those, 77, were bombings of a multinational oil pipeline in Columbia.

There was no change in list of seven nations designated as state sponsors: Cuba, Iran, Iraq, North Korea, Syria, Sudan and Libya. Afghanistan would have been included if it had a government widely recognized by other nations. Apparently as a gesture to recognize a slight improvement in the performance of Iran and the terrorist groups it supports, Iran was not designated in the report as "the most active state sponsor" as it had been last year. Four countries on the list--Cuba, Libya, North Korea and Syria--are not accused of involvement in any recent acts of international terrorism but remain on the list because they provide sanctuary for terrorist fugitives or provide other support. Apparently Pakistan narrowly missed being on the list since the authors of the report said they had seen credible evidence of official support in Pakistan for terrorist groups fighting India in Kashmir. (WTimes 1 May '99, p. A6; NY Times 1 May '99, p. A4; WPost 1 May '99, p. A10 (DonH)


The Crown Jewels: The British Secrets at the Heart of the KGB Archives, by Nigel West and Oleg Tsarev, (New Haven, Yale University Press, 1999) . Crown Jewels is not a continuous narrative but a series of essays covering Soviet foreign intelligence activity in the United Kingdom from the early 20s up throught the Cold War. The authors have sought to present cases that are either new or could be looked at in a new light. The first chapter covers the earliest efforts by the new Soviet service, to establish itself in Great Britain following British recognition of the USSR. While the British establishment was receiving disinformation on conditions in Soviet Russia from SIS sources in Russia controlled by the OGPU (Operation Trust), it was amazing that even at this early period, the London residency was obtaining "large numbers of documents" from the Foreign Office on areas abroad,, scuh as China, where Soviet and British interests clashed in the 20s. Also, Crown Jewels describes for the first time actions by the London residency to frustrate continued efforts by sympathewtic British officials and members of the former Imperial Russian family to re-activate elements of the defeated White Russian Army. These operations paralleled the "Trust" decep[tion operation run by Moscow Center against White Russian emigrees. (excerpted from review by David Murphy - full review will be in next Intelligencer) (RoyJ)


IN MEMORIAM - Colonel Otto F. Scholz jr. USA (ret), longtime AFIO member, died May 24th, 1999 of heart failure. He served for 23 years in military intelligence, and two years in the USMC during WWII. He attended CIC school in Baltimore and served with Army counterintelligence units in Europe and Washington DC.He retired, after some years as a civil servant, in 1982. Rest in peace.


POSITION WANTED - Former Intelligence Officer with experience as a U.S. Army helicopter pilot with combat experience in Vietnam seeks new challenges and opportunities. Degrees in Business Administration and Aeronautical Science. Completed the U.S. Army Military Intelligence Officers Advanced Course as well as the CIA DDO/CT course and the SOG Paramilitary course. Served in the CIA as a NOC as well as a declared CIA Intelligence Officer with the Domestic Collection Division. Ref File# ________________

WWII / JAPANESE WARCRIMES - The California Legislature is taking the lead in addressing the crimes against humanity committed by Japan in WWII. California Assembly Joint Resolution AJR 27 introduced by Assemblyman Mike Honda focuses on all the various victim's groups.

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