Weekly Intelligence Notes #09-01
5 March 2001

09-01 dated 5 March 2001

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THE TUNNEL SAGA -- The latest development in the Hanssen spy case, reported in the New York Times on Sunday, is that Hanssen allegedly provided information to the Soviets in 1985 about a special US signals intelligence collection effort against the Soviet Embassy in Washington, using a secret tunnel under their building. The unconfirmed press reports indicate that planning for the tunnel began in the 1970s when the Soviets began building their new complex on Mount Alto, north of Georgetown. The entrance to the tunnel was hidden in a townhouse near the Soviet compound. The project was an FBI/NSA enterprise, ultra-secret, and never, at least to our knowledge, leaked. Washington, the leak capital of the world, kept this secret -- not knowing that the KGB apparently knew of it (and thus could manipulate it) from 1985 on -- thanks to their spy within the FBI, Robert Hanssen.
                  Over the years, numerous reports have been published about 'silent war' intelligence operations by the parties in the Cold War against the premises of their adversaries. Reciprocal allegations of embassy-bugging went public in 1980 when the Soviets charged that the US had planted eavesdropping devices in apartments and buildings within their 12.5 acre embassy compound. In 1985 the US suspended construction of its new embassy in Moscow after charging that the Soviets had filled the walls with listening devices. It was also reported that an NSA "tiger team" in 1978 had discovered that the Soviets had a tunnel filled with intercept equipment underneath the old US Embassy in Moscow as well.
                  By alerting the Soviets to the 'eavesdropping' tunnel under their Embassy, Hanssen may have joined the ranks of other Cold War traitors inflicting serious damage on US intelligence operations and security, including the Navy's John Walker who told the Soviets about US Naval codes; NSA's Ronald Pelton, who divulged that US submarines tapped Soviet undersea cables; and the CIA's Edward Lee Howard, who informed the KGB that the US had access to their communications lines through the Moscow sewer system.
                  We are only seeing the tip of the iceberg thus far. What games are, and have been played in the 'silent war' by the FBI, NSA and CIA, and the KGB and the SVR , await future disclosures - years or even decades from now, if ever. Meanwhile we can speculate on the rest of the iceberg -- what, for example, did the KGB do with their knowledge of the tunnel's existence from 1985 onward -- which they did not publicize or use for diplomatic protests or in the propaganda war? (NYT 4 March p.1; Wpost 5 March p. A1 // Loeb/Wise) (Jonkers)

THE FBI & CONGRESS -- Over the years the FBI has attracted its share of admirers, but also of detractors who have accused it of institutional arrogance, among other things. Thus the current case of a spy (mole) within the FBI, operating undetected for fifteen years and reportedly costing the country more than $200 million in compromised intelligence programs, has received a certain resonance in some quarters. The FBI stands accused of laxity in internal checks and security procedures, and there are calls for the FBI director's resignation.
                  But unlike the CIA, the FBI has built up a stronghold in Congress over many decades during the past century. By the time Director Freeh was done testifying on the Hill last Wednesday, the Senators were jockeying to throw money at him. Before they could focus on any problems, the FBI director was successfully 'selling' them his solution: more polygraphs, compartmentalization and -- of course -- money. Disappointing for the detractors, but arguably good for the country. (Time, 12 March 2001, p.18 /Calabresi & Shannon) (Jonkers)

RUSSIA REOPENING EDMUND POPE CASE -- Russia's Federal Security Service (FSB) has reopened a high treason investigation of the professor at the center of last year's spying case against U.S. businessman Edmond Pope. Anatoly Babkin, of Moscow's prestigious Bauman Technical University, was called in for questioning more than two months after President Vladimir Putin pardoned Pope.
http://www.russiatoday.com/news.php3?id=295597&section=default   (Macartney)

INTELLIGENCE ROUNDABOUT -- A German Court told an ex-spy on Thursday to return 300,000 DM ($138,000) that he earned by selling "secrets" to the German intelligence agency (BND) that actually came from their own files. Presiding judge Ursula Lewenton told the Munich court the information "Source Albert" was selling was anything but new. It had been gathered by an accomplice working in the BND's archives..
http://www.abcnews.go.com/wire/World/reuters20010222_2819.htm   (Macartney)


NATIONAL SECURITY COUNCIL REORGANZED -- President Bush has revamped the NSC. National Security Presidential Directive 1 was signed sometime in mid- February, replacing a host of prior presidential decisions. The Directive is unclassified but has not been officially released by the White House -- but was leaked. It is now posted on the website of the Federation of American Scientists. The document revises the structure of national security decision-making in the new administration and lays out the areas of particular importance to the president, including homeland defense and proliferation and counter-proliferation.
                  The NSC Principal's Committee, the senior interagency forum for national security policy discussions, is retained. This panel includes the Secretary of Defense , the DCI, and the Chairman of the Joint Chiefs of Staff. Also maintained is the NSC deputies committee, the sub-Cabinet forum for national security. Top Pentagon military and civilian officials are among its members.
                  Gone, however, are the Clinton era interagency working groups. In their place are eleven policy coordination committees, which "shall provide policy analysis for consideration by the more senior committees of the NSC system and ensure timely responses to decisions made by the president."

                  The committees will be focused on the following topics:

        • Counter-terrorism and national preparedness.

        • Defense strategy, force structure and planning.

        • Arms control.

        • Proliferation, counter-proliferation and homeland defense.

        • Intelligence and counterintelligence.

        • Records access and information security.

        • International finance.

        • Transnational economic issues

        • Democracy, human rights and international operations.

        • International development and humanitarian assistance.

        • Global environment.

                  In addition, the NSC will feature six policy coordination committees for specific regions: Europe and Eurasia, the Western Hemisphere, East Asia, South Asia, Near East and North Africa, and Africa.

THE MOLES WILL ALWAYS BE WITH US -- Former DCI, Robert M. Gates, recently wrote a short op-ed piece about our most recent spy, Robert Hanssen, taking a longer view of the treachery than the flood of writing on the affair of late. Extracts include:

    • "The question (of how could it have gone on for 15 undiscovered years) will undoubtedly be investigated by a number of panels and Congressional committees. And, with the clarity of perfect hindsight, if past experience is any guide, previously unnoticed clues will be found that if detected earlier might have led to a more timely identification and arrest."

    • "A careful spy who knows all of the tricks of the counterintelligence world can be very difficult to identify."

    • "...we must be realistic. In any democratic society, counterintelligence is decidedly difficult and will never be perfect. It wasn't perfect in the totalitarian Soviet Union, and it certainly won't be in America."

    • "As Richard Helms, the former CIA director, told me when I became director, "Never go home at night without wondering where the mole is."

    • "Espionage did not begin or end with the cold war. There will always be moles because governments will always want to know what other governments are up to."

    • "While our national existence is no longer at risk, as during the cold war, the government's ability to protect us and our interests around the world is always at risk. Intelligence about those risks will always be a priority for the government, just as it will be for most other governments."

    • "However, those other governments face an interesting paradox....in a new global environment, in which the American government ever more widely shares its intelligence and its military technologies, foreign governments may find that at times their right hands are paying spies for stealing what their left hands are receiving openly and officially from Washington."
      (NY York Times 23 Feb '01 from College Station, Texas) (Harvey)

DCI REPORT ON ARMS PROLIFERATION -- The DCI's semi-annual, required report to Congress on arms proliferation covering the first six months of last year (2000) cited numerous violations or possible violations of various international agreements aimed at reducing arms proliferation. As usual, the activities undercutting efforts to combat the spread of 'weapons of mass destruction' and missiles seem to have principally involved China, Russia and North Korea as the major arms suppliers to states we do not favor. A summary of the press version of the report includes:

-- Russia sold ballistic-missile goods and technology to China, Iran, India and Libya.

--"Russian entities...have provided substantial missile-related technology, training and expertise to Iran..."

-- Moscow is a major supplier of conventional arms to China, India, Iran, Syria, Libya and North Korea.

-- "Chinese missile-related technical assistance to Pakistan continued to be substantial..."

-- Chinese assistance is helping Pakistan move rapidly toward full-scale production of solid-fueled, short-range ballistic missiles.

-- "Firms in China provided missile-related items, raw materials, and/or assistance to... Iran, North Korea and Libya.[NOTE: the report was published at a time when the US had publicly asserted that Chinese fiber-optic cable installation assistance had figured in the decision to bomb the Iraqi air defense network].

-- US intelligence agencies "cannot rule out" reports that China is continuing to assist Pakistan's nuclear-weapons programs

-- North Korea is continuing to buy material for its missile program and also sought to buy technology with nuclear weapons applications.

-- Iraq is developing an unmanned aerial vehicle (UAV) by converting Czech L-29 trainers into pilotless jets.

-- Syria is seeking to purchase nuclear material from Russia that could help Damascus develop nuclear weapons.

-- Libya is expanding its missile program since sanctions were lifted last year and is seeking a medium-range missile capability. Tripoli is also seeking to acquire material and equipment for biological weapons.

                  It is disheartening that the report appears to have been treated as a "ho hum" item by the press and given minimum coverage even at a time when the media says reporting should leave off salacious activities to better cover substantial matters.(WTimes 27Feb01,p. 10, B. Gertz) (Harvey) See also http://www.cia.gov/cia/publications/bian/bian_feb_2001.htm


INFORMATION SECURITY SCHOLARSHIP PROGRAM -- The Federal Scholarship for Service program, an initiative to get new information security professionals to work for the government in return for scholarships, is on schedule at the National Science Foundation. NSF heads up the first step of the SFS program, awarding grants to colleges and universities that teach information security students. The proposals from the institutions were due to NSF Jan. 24, and now the agency has brought in a panel to review the proposals; the grants should be awarded by June, officials said. http://www.fcw.com/fcw/articles/2001/0226/web-sfs-02-27-01.asp
(Levine's Newbits, 2 March01)

HACKER GETS TOP SECRET US SPACE CODES -- An unidentified computer hacker has got hold of top secret U.S. computer system codes for guiding space ships, rockets and satellites, a lawyer in Sweden said on Friday. Computer experts raided the offices of an information technology company in Stockholm last month and found a copy of the source codes for the software program OS/COMET developed by U.S. firm Exigent Software Technology. A source code contains full details of how a software program works. OS/COMET has been deployed by the U.S. Air Force on the NAVSTAR Global Positioning System (GPS) Colorado Springs Monitor Station, Exigent said in a statement in December.
http://www.zdnet.com/zdnn/stories/news/0,4586,2692296,00.html   (Levine 2 March01)


TRUST BUT VERIFY: IMAGERY ANALYSIS IN THE COLD WAR, by DAVID LINDGREN, Naval Inst Press, Nov 2000, 222pp. "In documenting the role played by imagery analysis during the Cold War, this book documents how information derived from imagery came to influence U.S. policy. It focuses on America's efforts to assess the Soviet Union's strategic economic and military capabilities in the aftermath of World War II when American leaders realized the limits of their knowledge. Initial efforts to photograph Soviet territory using converted bombers proved unsuccessful and highly provocative and prompted the United States to develop specialized reconnaissance systems. Beginning with the U-2 in the mid-1950s and continuing with a series of increasingly sophisticated imaging satellites, this study demonstrates how the US eventually was able to accurately appraise the military forces of the Soviet Union and its Warsaw Pact allies. The author argues that these more accurate assessments helped stabilize relations between the two adversaries while the imaging systems' monitoring capabilities led directly to arms control and ultimately arms reduction agreements. He concludes that imagery analysis not only played a critical role in resolving the Cold War but it also helped prevent another Pearl Harbor. His analysis will appeal to everyone with an interest in foreign affairs, intelligence, the Cold War, and space applications." --Amazon.com
http://www.usni.org/webstore/databaseform.asp?bookisbn=1557505187&cartid=bdpd8140ff4c554c   (Macartney)

"SPOOKED: ESPIONAGE IN CORPORATE AMERICA," by ADAM PENENBERG & MARC BARRY, Perseus, Dec 2000, 188 pp. "Strange as it may sound, companies and consultants will lie, bribe and steal just to obtain new glue formulas for diaper fasteners and adhesive labels. A new book tells us how. Despite its sensational title, Spooked is an admirably well-crafted and informed book on the subject of corporate espionage. This should not be a surprise given the background of its authors: Penenberg is an investigative journalist -- which is just another name for a media spy -- while Barry is a practitioner, a corporate spy for hire." --from review below

NATIONAL INTELLIGENCE COUNCIL WEBSITE -- The NIC is an Intelligence Community (as opposed to CIA) group, located at Langley (CIA Hq), which houses the NIO's, the National Intelligence Officers. The NIO's are 12 senior intelligence analysts from different parts of the IC (and sometimes from academe or elsewhere) who interface with policymakers in the White House supervised NSC system and also author or supervise the writing of NIE's and SNIE's. This new NIC website (Feb 2001) is well done and provides very useful and interesting documents on-line. HIGHLY RECOMMENDED! --(dmac --thanks, Jeremy) http://www.cia.gov/nic/


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