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Weekly Intelligence Notes
11 February 2000

WINs are covered by copyright laws and may not be reproduced without permission from the Producer / Editor, Roy Jonkers  afio@afio.com. Commentary and opinions included are those of the Editor or the associate editor listed in the byline.

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SECTION I:  CURRENT INTELLIGENCE

FORMER DCI SECURITY VIOLATION -- John Deutch, the former Director of Central Intelligence and Deputy Secretary of Defense, who lost his CIA clearances last summer for violating security rules, volunteered Tuesday to give up his Defense Department industrial security clearances. Pentagon spokesman Kenneth Bacon said the clearances would be withdrawn in line with Deutch's wish.
Dr Deutch has not (yet) been accused of compromising CIA or Pentagon secrets. DCI George Tenet has said that the CIA had found no evidence that national security information was lost due to Deutch's security lapses, but that ``potential for damage to U.S. security existed.'' After a deluge of weekend news reports about Deutch's continued access to Defense Department classified information, the Pentagon's inspector general finally asked the CIA for its evidence on Deutch's security breaches. Defense Secretary William Cohen told reporters. ``I think it should have been done sooner, but it was not."
The Deutch matter is being examined by the House and Senate Intelligence committees, and the controversy has spilled over into the realm of politics and embroiled the current DCI, George Tenet. Chairman Porter Goss, House PSCI, has taken the view that he has been kept informed all along by the DCI, and that there was no "slow-rolling" of the investigation by the Agency. Goss did state that he was concerned about the actions of two former high-ranking CIA officials, Nora Slatkin and Michael O'Neill.
Chairman Richard Shelby, Senate SCI, however, has invoked the possibility of a "cover-up," and has questioned the months of delay in notifying the Department of Justice. Shelby's committee has met behind closed doors with both Tenet and CIA Inspector General Britt Snider, who issued a report that included the conclusion that Tenet "should have involved himself more forcefully to ensure a proper resolution of this matter." Shelby also has invited John Deutch to testify.
Some call the Deutch affair the "intelligence scandal du jour," but for intelligence personnel, the implications for leadership by example remain to be addressed. ""Sloppy" security examples by top leaders is not only dangerous to national security, it is not inspiring, nor does it provide moral support for prosecution of security transgressions by line and staff personnel. (AP and miscel press 10 Feb 00; V Loeb, Wpost 11Feb2000,p. A39) ) (Jonkers)

IRAQ SITREP - Evidence from satellite photographs and other intelligence sources indicates that Iraq is repairing some of the damage done to the one hundred military and industrial sites destroyed by the 1998 US/British air strikes. Of those targets, 12 were missile factories or industrial sites that were defined as involved in Iraq's efforts to produce "weapons of mass destruction." Some intelligence sources are said to be concerned about the reconstruction. Others are of the opinion that the reconstruction of walls and roofs is not necessarily dangerous.
The production of nuclear, chemical or biological weapons is a non-trivial exercise and expensive. But Iraq is earning dollars by smuggling oil, evading the sanctions. Last month, Iraq's illicit trade reached the highest levels since the Persian Gulf war. More than 130 ships left Basra and skirted the Iranian coast, staying in Iranian territorial waters to evade the US Navy ships trying to intercept them. The Navy nevertheless boarded 36 ships, and seized four. One of those involved a Russian ship that caused a minor diplomatic dust-up; the oil cargo was confiscated and is being off-loaded in Oman. At full market prices the oil smuggled in this month alone could be worth as much as $60M to Iraq. Such income decreases the leverage the US has to force inspectors on Iraq.
To place all this in context, US officials say that there are three Red Lines that the Iraqis will not be permitted to cross: a threat against a neighboring country like Kuwait or Saudi Arabia, an attack on the Kurdish minority in the north, or a reconstitution of nuclear, chemical or biological weapons programs. It is no secret that Iraq remains under intense US and allied intelligence surveillance. (NT Times, p. A1, 1 Feb 2000) (Jonkers)

PRESIDENT'S FY 2001 BUDGET - President Clinton's proposed $1.84 trillion budget includes millions of dollars in new spending on technology and law enforcement programs. The record budget request for the 2001 fiscal year, which begins 1 October, asks Congress for more money for wiretapping, police databases, antitrust enforcement, and computer crime forensics. One of the heftiest increases, from $15 million to $240 million, will pay telephone companies to rewire their networks to facilitate federal and state wiretapping. Under the 1994 Communications Assistance to Law Enforcement Act (CALEA), Congress may "reimburse" phone companies for their efforts, but the controversial process is the subject of a lawsuit currently before a federal appeals court.
The administration's final budget is also laced with information technology proposals. Many of them focus on information security and electronic government initiatives. The most obvious addition to the list is IT security. "Protecting information systems that the federal government depends on and that are critical to the. economy is growing in importance as society's use of technology and reliance on interconnected computer systems increases," the budget said. "Government agencies must follow the Y2K
example in reaching out to private industry to assist and encourage sensible infrastructure protection efforts." http://www.gcn.com/vol1_no1/daily-updates/1297-1.html 
http://www.wired.com/news/politics/0%2C1283%2C34164%2C00.html  (Sulc)

GOVERNMENT INTERNET SITES HACKED - The hackers behind a recent series of invasions of government-run Web sites may have gained access to the sites by stealing the user names and passwords belonging to the engineers operating the systems, according to investigation sources. The hackers may have replaced the user names and passwords with new ones after illegally entering computer servers that operate the Web sites. The hackers are also suspected of erasing communications records -- known as logs -- in an attempt to remove information that could help trace them. Currently, specialists and investigators are trying to work out how hackers gained access to the Web site servers. The sites broken into include those run by the Science and Technology Agency and the National Institute for Research and Advancement (NIRA), an affiliate of the Economic Planning Agency.
http://www.yomiuri.co.jp/newse/0208cr21.htm  (L. Sulc)

INTERNET VIRUS ATTACKS - The FBI is investigating massive "attacks" on major Internet Portal routers, knocking them out of action for hours at a time. Yahoo, the world's most frequently visited Internet Web Portal, which was knocked out of service for a number of hours on Monday, attributed it to being the victim of the equivalent of a phone prank. The site was hit by a so-called denial-of-service attack. A person or machine was sending packets of data in such volume that it prevented users from accessing parts of the site. The attack originated from 50 different Internet Protocol addresses, according to the company. Up to 1GB of requests per second flooded Yahoo's routers.During succeeding days other Internet providers experienced similar attacks
It appears that the attack involved a new software virus strategy called "tribe flood," or "tribal flood," that has recently arrived on the scene. Tribe flood goes out and infects many computers at once - typically computers at a university or government
installation that have broadband Internet access and are constantly powered up. It drops software into the computers that causes them, on command, to start calling up a particular site and flooding the access to it. (http://www.newsbytes.com/pubNews/00/143526.html)
(L. Sulc)

NEW DCI COLLECTION CONCEPT CENTER -- The intelligence game is never dull. As expertise in Information Systems becomes global, and knowledge about intelligence system capabilities widens, actual or potential adversaries are becoming increasingly adept at denial and deception. They hide projects from reconnaissance satellites, use sophisticated encryption for communications, find new ways to launder funds, etc. To deal with this phenomenon, a DCI Collection Concept Development Center has been created under Charles Allen, Assistant Director of Central Intelligence for collection. This year it plans to focus on three hard target problems, bringing together analysts and collection officers from the CIA, FBI, NSA, DIA, and NIMA to focus on each problem intensively. (WPost 11Feb00, p.A39, Loeb) (Jonkers)

NRO EVALUATION COMMISSION MEETS - The new commission to review the operation of the National Reconnaissance Office (NRO) held its first meeting yesterday. The 11-member panel was chartered by Congress. Senator Bob Kerrey, who wrote the enabling legislation, announced the ingoing bias: "I think the NRO has serious problems." It appears that the problems involve the old Washington funding game. Billions are being invested in a new generation of stealthier space reconnaissance platforms, but the funding for the necessary computer processing and communications systems is probably lagging behind. As noted before, getting a new system funded often involves containing the announced cost by budgeting for the collection system first, then letting this approved investment later drive the funding for the processing and dissemination. Commission members include former NRO Director Marty Faga and Lt General Patrick Hughes, USA (ret), former director of DIA, among others, including Rep. Porter Goss (R-Fla.),
Eli Jacobs and Larry Cox. (Wpost, 11Feb00, Loeb) (Jonkers)

SECTION II:  CONTEXT AND PRECEDENCE

KOSOVO ASSESSMENT UPDATE -
Two Serbs, a man and a woman, were killed and five others injured on Feb. 2 when a UN refugee bus was hit by a terrorist rocket between the Serb village of Banja and the divided northern town of Kosovska Mitrovica. The bus, leased by the United Nations High Commissioner for Refugees (UNHCR) and protected by an escort of French soldiers from the NATO-led Kosovo Force (KFOR), was carrying 49 Serb men, women and children. The bus convoys are the UNHCR's latest attempt at providing some measure of freedom for Serb peasants remaining in Kosovo.
The Kosovo Liberation Army (KLA) has continued and stepped up its campaign of murder and intimidation against Serb and other non-Albanian men and women under the US/NATO occupation, continuing its twenty-year old effort to gain control of the province. Nearly 250,000 non-Albanian Kosovars (including not only Serbs, but Turks, Gypsies, Jews and other minorities) have fled the province in the wake of NATO's bombing campaign last June and the subsequent KLA terror campaign. It constitutes a notable, if unlamented (by the US) and under-reported ethnic cleansing. It may be recalled that the KLA was considered a criminal narcotics-trading terrorist organization before being suddenly publicly embraced by the Administration last year.
There are indications that the deteriorating situation on the ground is stimulating the Administration to redefine its policy in Kosovo. When the United States and NATO ultimately engineered a "victory" (by blowing the civic infrastructure of Yugoslavia apart) last June, they expected to bring closure by occupation of Kosovo. This has not happened. The alliance began an open-ended occupation in which the mission did not correspond to the reality on the ground. The avowed mission of NATO forces was to ensure the security of all residents. The reality has been that NATO forces have been, quite against their stated intentions, acting as the agents of the Kosovo Liberation Army (KLA). The KLA used the NATO occupation as a means for institutionalizing KLA rule in the province. The effect was to turn the presumed victims into victimizers and NATO peacekeepers into their unwitting tools.
It is therefore no surprise that SecDef Cohen recently said that military commanders were " concerned about the possibility of mission creep - that the military is being called upon to engage in police functions for which they are not properly trained and we don't want them to carry out." The administration has acknowledged that the situation is getting out of hand. The solution that is evolving in Washington is to blame the Europeans and demand that they shoulder more of the burden. But the Europeans are not eager to undertake full responsibility for KFOR. Except for the British government, the rest of Europe was more than a little restrained in their enthusiasm for the war.
European governments also regard the ramifications of the end game of Kosovo, in which the Russians were arrogantly humiliated, as a Pyrrhic victory. After needlessly pushing the Russians into an increasingly wary posture, we must now deal with the inevitable corollaries -- including a potential Russian-Chinese rapprochement. Whether our strategic interests and national security are served by these developments is highly questionable. Henry Kissinger is calling for a return to historical perspective and a course correction on emotional moral crusades.
U.S. troops are now caught in the crossfire between Kosovo factions, and the apparent irrationality of the operation will require political action in this election year. It is possible that the assassinations of several Serb leaders recently ( including Arkan, accused of warcrimes), and the ongoing covert and overt efforts to stimulate the secession of Montenegro from Yugoslavia, as well as recent further strengthening of economic sanctions on Yugoslavia/Serbia (a form of mass punishment of questionable effectiveness in terms of its goal, the overthrow of Milosevic) are all expressions of the Administration's increased priority on pulling out of this quagmire - without throwing the baby out with the bathwater. (Ref. miscellaneous, including: Sources, Feb 00, Stratfor Weekly /global Intelligence Update 7 Feb 00; and AP, Robert Burns; miscellaneous press reports; Kissinger in Wpost 10 Jan2000, p.A19) (Jonkers)

WHOSE MAIL SHOULD WE READ?
It was in 1923 that Secretary Daniels directed the Army to close its signals intercept operations, saying "Gentlemen do not read other gentlemen's mail." A December 1999 letter to the editor of a Washington paper illustrates that such high-minded (and a touch naive) sentiments still bedevil hard-working intelligence officers. The Director of the Center for National Security Studies wrote a letter to the editor informing the paper that the NSA's regulations for intercept of overseas Americans' communications do not meet constitutional standards -- such as "requiring a warrant prior to any surveillance." The letter continued: "Equally troubling is the fact that no law prevents the agency from targeting overseas communications from non-Americans, whether they be Russian or Egyptian human rights activists labeled terrorists by their governments or individuals suspected, rightly or wrongly, of criminal activity. Such surveillance, conducted in secret and without probable cause, is wholly unrestricted under existing law. Unlike Cold War surveillance of the Soviet Union, NSA eavesdropping on such individuals violates their universally guaranteed human rights to privacy and due process of law."
The difference between intercepting Libyan communications related to the bombing of American servicemen in a Berlin nightclub or "Cold War surveillance of the Soviet Union" is not readily apparent. The electronic surveillance of Saddam Hussein's communications to his terrorist groups is something most Americans would hope the NSA is doing, even if done in secret and without "probable cause." Since Americans and American interests abroad are the largest target of a variety of terrorist groups and a number of international criminal rings, it seems grotesque to be greatly concerned about violation of their "universally" (whose universe?) guaranteed human rights. (Wash. Post 16 Dec '99, p. A38 ) (Harvey)

SECTION III:  BOOKS and REFERENCES

VINCE CANNISTRARO LETTER. The Feb 9 Washington Post carries a letter from former senior CIA official (and AFIO Member), Cannistraro. The letter takes issue with a Jim Hoagland column that appeared in the Post on Jan 16. In his Post column, Hoagland had blamed CIA, in part, for recent Islamic terrorist activity because of CIA aid to the Afghan mujahadin in the 1980's. In response, Cannistraro points out the CIA did not recruit the "Arab zealots" who came to join the Afghan resistance, and, moreover, most of those Arab fighters came later, after the Soviets had pulled out of Afghanistan and US support had been withdrawn.(Macartney)
http://www.washingtonpost.com/wp-srv/WPlate/2000-02/09/014l-020900-idx.html 

SECDEF ANNUAL REPORT ON NATIONAL SECURITY. Annual Report to the President and Congress (part of the FY2001 budget documents) is available in pdf format (2193K, 351 pages). http://www.dtic.mil/execsec/adr2000/adr2000.pdf 

HOME COMPUTER RISK FROM HACKERS. Home computer users who believe hacking is a threat only to government and corporate networks need to realize that the Internet puts them at risk of being invaded by computer predators, too.
http://www.msnbc.com/news/366221.asp  (Macartney)

FLAWED BY DESIGN: THE EVOLUTION OF THE CIA, JCS, and NSC, by Amy Zegart, Stanford U Press, Nov 1999, 342 pages. This book was the winner of the American Political Science Association's White award, the highest honor for a public administration doctoral dissertation.
"The NSC was established by accident, the byproduct of political compromise; Navy opposition crippled the JCS from the outset; and the CIA emerged without the statutory authority to fulfill its assigned analysis role, thanks to rival intelligence organizations. Not surprisingly, the new agencies performed poorly as they struggled to overcome their initial handicaps. Only the NSC overcame its institutional origins as presidents exploited several loopholes in the National Security Act to reinvent the NSC staff. The JCS, by contrast, remained mired in its ineffective design for nearly 40 years, throughout the Cold War, and the CIA's pivotal analysis branch has never recovered from its origins. In sum, the agencies Americans count on most to protect them from enemies abroad are, by design, largely incapable of doing so. " (Macartney)

TRAPPED IN THE COLD WAR, by Hermann Field, Stanford U Press, 1999, 345pp. The author is Noel FIELD's brother. Noel, an avid Communist, was recruited for the NKVD/GRU by Hede MASSING when he was in the State Department in the mid-1930s. After going to Switzerland, he worked for KRIVITSKY in Europe before the war and DULLES/OSS in Berne during the war as an agent of sorts. He refused to return to the USA after the war because he knew the truth about HISS and didn't want to testify. He and his wife went instead behind the Iron Curtain where they were imprisoned as a CIA spies. His brother (Hermann) went after him and was himself imprisoned. Then Noel's "adopted" daughter went after both, and she too was imprisoned in the Soviet GULAG for 5 years and then sent home. Hermann, who was eventually released and returned to the States, is the only one left.
(Hayden Peake)

OPERATION ROLLBACK: AMERICA'S SECRET WAR BEHIND THE IRON CURTAIN, forthcoming in May by Peter Grose, tells of the CIA's early Cold War attempts (mostly unsuccessful) to insert resistance fighters into Eastern Europe. Book reveals that George Kennan, usually known as an apostle of moderation, was chief architect and advocate in the late 40's and early 50's of these covert action programs.
http://www.washingtonpost.com/wp-srv/WPlate/2000-01/31/016l-013100-idx.html 

INFO WAR.COM. Web site focusing on IW has, among other things, a page devoted to intelligence matters. http://www.infowar.com/class_2/class_2.shtml 
WHAT DO INTELLIGENCE ANALYSTS DO?
http://www.infowar.com/class_2/00/class2_012700a_j.shtml 

NEW ON-LINE INTELLIGENCE FORUM. There is a new "forum dedicated to the scholarly study of intelligence and national security." (free) http://www.intelforum.org/ 
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