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Weekly Intelligence Notes
7 April 2000

WINs are produced by Roy Jonkers for AFIO members and subscribers. WINs are protected by copyright laws and may not be reproduced except with the permission of the producer/editor afio@afio.com 

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SECTION I: CURRENT INTELLIGENCE

ARMY DCS/INT CHARGES SEXUAL HARRASSMENT.
Lieutenant General Claudia Kennedy, the highest ranking female general in the Army and the head of Army intelligence, has complained that another general, identified today as Major General Larry G. Smith, harassed her in her office in 1996, allegedly by "inappropriately touching." Kennedy is said to have reported the alleged harrasment at the time (1996) to Smith's chain of command, but when she learned last fall that Smith was to be assigned as the new inspector general, an office in which he might have to investigate possible sexual harrassment cases, she filed a formal complaint. She did not go public with the accusation, but it was leaked and reported by the Washington Times last week. Army investigators are looking into the matter.
Kennedy also announced her retirement this coming summer. LTG Noonan, now at INSCOM, is said to be the prospective new DCSINT. Kennedy had previously been mentioned as a candidate to be Director of NSA (AF general Hayden got that job) or the next Deputy DCI (rumor is that retired AF LtGen Jim Clapper may get that job). She was also said to be in the running for the 4-star slot at Army Training & Doctrine Command but faced opposition--not because she was a woman but because she was an intelligence officer rather than a combat arms type.
Army generals, part of a teamwork culture in which you are trained to take your lumps and bear them stoically, have generally jumped into their foxholes - keeping their heads down and quiet -- a prudent measure in this contemporary US environment where female harrassment charges alone -- no matter their validity, whether true or imagined -- can ruin any man's career. (Wpost 7April2000, p. A20;) (Macartney / Jonkers) <http://www.washtimes.com/national/default-20003302378.htm>
<http://www.washingtonpost.com/wp-dyn/articles/A56241-2000Mar31.html>

STASI FILES - The US has returned to Germany the first batch of more than 1,000 computer discs to be delivered in the next 18 months. The STASI archives, obtained by the CIA in a great coup when the Wall crumbled in 1989, are thought to contain some 300,000 names of contacts and agents worldwide, including particularly in West Germany. (Wpost 7Ap2000) (Jonkers)

FBI OFFICE IN INDIA - FBI Director Louis J. Freeh ended a visit to New Delhi with an agreement signed to open a bureau office in New Delhi to work with the Indian Central Bureau of Investigation to combat terrorism and international organizaed crime. The FBI has offices in 32 countries outside of the US, including in Pakistan, China and Russia. (Wpost 7Ap2000) (Jonkers)

FBI OFFICE IN BUDAPEST. The FBI has announced the opening in March of its first office abroad in which its agents will serve as full-time investigators. The move is a significant departure from the long-time practice of posting agents to American embassies as legal attaches, serving in liaison or training capacities with their local counterparts. "This will be truly a working squad," said Thomas V. Fuentes, chief of the FBI's organized crime division. "They will develop and operate criminal informants. They will gather intelligence. There is no precedent for that."
Budapest is home to many Russian mob leaders who consider Hungary as a convenient entrance to Western Europe and the US. The FBI will have the final say over the hiring and firing of the ten Hungarian agents who will work in the office alongside the five American agents. In seeking the US help in breaking up the Russian gangs, the Hungarian government has given up more sovereignty than most governments would concede. The American agents will have the right to carry guns and, in conjunction with their Hungarian counterparts, to make arrests.
Many officials in Hungary and the US retain concerns at the possible problems the move could create. Despite these worries, it is possible if the office is successful that it could be a model for similar offices in other regions struggling against penetration of Russian organized crime. One of the likely targets in Budapest for the FBI office could be Semyon Y. Mogilevich, a Russian citizen who has operated out of Budapest for a decade. He has been linked to money laundering and financial fraud investigations in New York and Philadelphia and had been reported involved in a wide variety of criminal activities.
( NY Times 21 Feb '00; <http://www.nytimes.com/library/world/global/022100fbi-russia.html>) (Harvey)

RUSSIA - ARREST OF SPIES - Moscow detained an unidentified American and a Russia on charges of spying involving nuclear submarine designs. Spying charges, arrests and expulsions are fairly routine between Russia and Western countries, but this is the first case since Vladimir Putin, former spymaster, became Prime Minister. The Russian security service claimed that the US citizen had "intentionally developed contaccts with Russian scientists in Moscow, Novosibirsk and other cities . . with the goal of gathering state secrets of Russia." The service said it had confiscated a "large number of documents."
As a side-note, Russia has also accused its own environmentalists and foreign ecology groups of spying. The Russians are sensitive to the environmental disaster that is their heritage from the Soviet days, and that they continue unsafe nuclear waste practices. Putin has claimed that environmental groups are serving as cover for foreign spies. (Wpost 6Ap00, p. A18) (Jonkers)

DIGITAL STORM AT FBI -- In response to growing concerns about terrorism, hackers
and other high-tech criminals, the Federal Bureau of Investigation is planning a series of sophisticated
computer systems that would sharply increase agents' ability to gather and analyze information. The FBI is seeking more than $75 million in budget appropriations to continue a massive information technology expansion, which includes a system dubbed "Digital Storm" that eases the court-sanctioned collection and electronic sifting of traffic on telephones and cellular phones. A second system would provide a "foundation for an up-to-date flexible digital collection infrastructure " for wiretapping under the Foreign Intelligence surveillance Act. A third initiative would develop an "enterprise data base" enabling agents to analyze huge amounts of data, and share the results via the internet. In a speech to a Senate Appropriations subcommittee in February, FBI Director Louis J. Freeh warned of a coming wave of Internet crime and terrorism, and saying the we must meet the problem head-on. "Our economy and public safety depend on it." The proposals have inevitably also aroused legitimate fears for privacy. Recognizing the danger, the FBI has formed a privacy council to protect against unwarranted intrusion into innocent American lives. Civil liberties activists, legislators and legal specialists are alarmed that the proposals could erode consitututional protections and citizen liberties and privacy. (WPost 6Ap200, pA1) (Jonkers)
http://www.newsbytes.com/pubNews/00/146997.html?&_ref=831320112 

SECTION II:  CONTEXT AND PRECEDENCE

WHAT NATION WORKS HARDEST TO STOP THE FLOW OF DRUGS? Well, everyone can guess that is the United States with its expenditure of billions and the efforts of tens of thousands of people to interdict drugs coming from Latin America.
Now, what nation is second in people working on the problem, monies expended, men killed in the resistance to the drug flow? Hints: [1] This nation has lost more than 2,500 police officers and soldiers in the war against the drug traffickers during the past 15 years; [2] More than 100 died in 1999 alone, 36 of whom were captured by the traffickers and tortured before they were murdered; [3] The nation's prisons are bulging with about 9,000 drug-related prisoners apprehended since the early 1980s; [4] About 90 percent of all opium and 10 percent of all heroin confiscated worldwide by law enforcement is seized by this country; [5] In addition to constructing along its border 80 miles of embankments, 22 walls sealing valleys, hundreds of miles of 15 feet deep trenches, 12 miles of barbed wire, 100 military outposts, and 16 border stations, this nation has deployed 30,000 police officers on its border.
It may come as a suprise to learn the country involved is Iran. Its efforts to check the drug flow over its eastern border from Afghanistan have been obscured in the eyes of the rest of the world by its suppport of Islamic terrorists, its efforts to obtain nuclear technology, and its campaign to spread its Shiite version of Islam. While Iran has been able to largely stamp out opium production within Iran, it acknowledges over one million of its own drug addicts, and the head of its anti-drug war doubts that his officers get even half of the contraband flowing across the border. The region on Iran's east is among the most brutal terrains on Earth, barren mountains and parched desert with temperatures ranging from below zero in winter to well over 120 degrees in summer. The traffickers are a mixture of men from Afghanistan, Iran and Pakistan operating in an area never completely controlled by any national authorities and well equipped with modern weapons including machine guns, rocket-propelled grenades, and Stingers.
Since the Iranians blocked the ravines, four-wheeled vehicles can no longer be used to get across the desert so the smugglers have reverted to camels. One encounter involved a caravan of 60 camels, over three tons of opium and 3,300 pounds of morphine. Afghanistan accounts for three-quarters of the world's annual production of opium, estimated last year at a record 4,600 tons. As much as 90 percent of the heroin consumed in Europe comes from Afghanistan; US officials fear more of it is crossing the Atlantic to North America. A small amount of donated equipment from European nations has come to the Iranian anti-drug effort in the last several years, but the struggle has overwhelmingly been Iran alone.(LA Times 21 Mar '00, p.A1) (Harvey)

IRAQ - UN weapons inspectors will be required to undergo training in Iraqi cultural sensitivities and must vow not to reveal the agency's secrets to their own governments. These requirements of the new UN Monitoring Verification and Inspection Committee (UNMOVIC) are designed to prevent a country from using UNMOVIC to spy on Iraq, as the US did with the previous agency (UNSCOM)
The only other news from Iraq is routine - daily bombing attacks by US and British aircraft, with reported civilian casualties. (Wpost 5 Ap 2000 & April 7) (Jonkers)

ENCRYPTION EXPORT BAN MAY VIOLATE CONSTITUTION -- A US federal appeals court has raised a question mark over whether current restrictions on the export of encryption software violate the country's Constitution. A three-judge panel of the US Court of Appeals for the Sixth Circuit based in Ohio ruled yesterday that documents written in computer programming languages are constitutionally protected by First Amendment rights to free speech. The panel said in a unanimous decision: "Because computer source code is an expressive means for the exchange of
information and ideas about computer programming, we hold that it is protected by the First Amendment."(<http://www.vnunet.com/News/601779?>) (R. Levine <rlevine@ix.netcom.com>)

INTERNET INFORMATION BEATS INTELLIGENCE - The Internet challenges old assumptions about spying. When Russian tanks unexpectedly rolled into Kosovo last summer - preempting and embarrassing NATO troops - George Friedman said he was among the first Americans to know. Friedman, who runs a private intelligence company in Texas, received an e-mail almost
immediately from one of his sources in Kosovo. "We knew before the government knew," he says.
http://www.nandotimes.com/technology/story/0,1643,500189518-500255032-501300835-0,00.html  (Levine rlevine@ix.netcom.com)

DOD SECURITY INVESTIGATIONS -- Last year, the General Accounting Office (GAO) surveyed 530 personnel investigations by the Defense Security Service (DSS) from 1996 to 1998, and found 92 percent of them defective. "Our detailed analysis of 530 personnel security investigations showed that the vast majority did not comply with federal standards for conducting such investigations. All of the individuals investigated were granted top secret security clearances even though Defense Security Service investigators had not always verified such basic information as residency, citizenship or employment ." In a recent survey of more than 1,500 cases, security clearances were found to have been regularly granted to defense-industry employees with long histories of financial problems, drug abuse, alcoholism, sexual misconduct or criminal activity.
From 1982 through September 1999, 80 individuals were convicted of committing espionage against the United States; 68 of whom were DoD employees, and had undergone personnel security investigations and held security clearances. In addition, "hundreds of other potential instances have been detected," the GAO found, but no convictions were obtained because "individuals defected or committed suicide or the cases were settled in other ways."
The GAO found that the DSS "investigations have not been completed in a timely manner and that there is a current backlog of over 600,000 cases for reinvestigation." New background investigations, which are supposed to take 90 days, typically now take 204 days, the GAO found. Less than 1 percent of the investigations are completed within the 90-day time frame, and almost 10 percent take more than a year, the GAO reported.
The Defense Security Service (DSS) is the key investigative agency
responsible for conducting investigations of DoD's civilian and military personnel, consultants and contractors. The GAO's revelations reflect discontent within and without the DSS, where problems have been exacerbated by a new computer system that was supposed to reduce the amount of tedious tasks, but ultimately has crashed and been down for days at a time. The new computer system has "not operated as intended, [was] not year 2000 compliant, and may cost about an additional $100 million to stabilize," according to the GAO. The culprits were a lack of proper testing, inadequate design and the absence of in-house expertise. An additional $47 million has been programmed to "stabilize" the computer system, and additional funding will be necessary.
Other DSS problems include poor congressional and OSD oversight, inadequate funding, and years of internal strife over the management practices of ousted DSS director Steven Schanzer and his predecessor, Margaret Munson. GAO asserted that the DSS, "in an effort to streamline operations and improve efficiency, relaxed its investigative guidance, eliminated key quality control mechanisms, inadequately trained its investigators, and ineffectively managed automation of its case processing system."
Retired Lt. Gen. Charles J. Cunningham Jr., the current head of the DSS, told lawmakers this week that delays in providing security clearances have cost defense contractors $143 million. He said the Pentagon will begin using computer sampling to decide which people to investigate first. He stated the DSS would randomly sample some of the thousands of investigations performed during the period of the GAO's earlier survey
"to determine any risk associated with the conduct of those investigations."
In 1994 a Joint Security Commission had recommended that the Secretary of Defense and the Director of Central Intelligence establish a joint investigative service.
to standardize background investigations, reduce costs and improve timeliness. It also reported that contracting for investigations in special circumstances, such as priority cases, could enhance competitiveness, lower costs and prevent backlogs and delays.One reason cited for Schanzer's ousting is that he opposed the Secretary of Defense Office's intent to hire private investigative firms to conduct some background checks.
As usual there is plenty of blame to share. One trigger for the current disaster was that DoD wanted to have their cake and eat it too -- former Deputy Defense Secretary John Hamre conceded that he was among Pentagon officials who pushed for cutting jobs and funding for DSS in recent years. Do more with less is a seductive slogan for the high rollers, but the costs are inevitable. 
Sources http://www.dso.com/newsletter.html (Jonkers)

SECTION III:  BOOKS AND SOURCES

US SIGINT & IMAGERY SATELLITES (More than you ever wanted to know). The first URL below is a 1993 article, "American Geosynchronous SIGINT Satellites", was written by a Russian, Lt Col A Andronov, and published in a Russian defense
journal, "Zarubezhnoye Voyennoye Obozreniye" [Foreign Military Review]. It
contains more detail, indeed excruciating detail, about US SIGINT satellites
than I have ever seen. The second URL takes you to the same author's 1995
article on imaging satellites, "American Overhead Visual Reconnaissance Systems"
http://www.fas.org/spp/military/program/sigint/androart.htm 
http://www.fas.org/spp/military/program/imint/andronov.htm 
http://www.fas.org/spp/military/program/surveill/noss_andronov.htm 
http://www.fas.org/spp/military/program/warning/941208-andronov.htm 
(Macartney

"THE CULTURAL COLD WAR: The CIA and the World of Arts and Letters," by Frances Stonor Saunders, New Press, 2000. 509 pp. $29.95 Reviewed by Michael Dirda in the Washington Post April 2. "Saunders has latched onto a good topic -- the CIA's covert funding of cultural magazines and conferences, mainly during the 1950s -- and she has spoken with many of the survivors and relicts of that era. To some degree, she has tried to understand the mentality of the times,.... But she makes clear, through her tone and
attendant commentary, that she views with loathing the intelligence community's attempt to wage a cultural offensive against the Soviet Union. As a result, one reads her book with interest and shock, but also with nagging reservations. Saunders is hardly an unbiased historian..." (Macartney)
http://www.washingtonpost.com/wp-dyn/articles/A59899-2000Apr1.html 

MY SPY: MEMOIR OF A CIA WIFE, by Bina Cady Kiyonaga, Avon Books, March 2000. Although she knew her husband was in the CIA, she didn't know what he did. On his deathbed, however, he told his story and asked her to write this memoir.

"REAL" LESSONS OF VIETNAM WAR. Conference at the University of Virginia Law School in Charlottesville, April 28-29, with a star studded list of participants--several speakers and panels about or related to intelligence. http://wwwvirginia.edu/cnsl

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