SA Intelligencer Number 81
25 July 2010 Editor: Dalene Duvenage
From the editor …
Contributions and enquiries dalene@4knowledge.co.za
Reports from 13 June – 25 July 2010 (Click on links to access reports) The Washington Post investigation Editorial
…..……..1
Ten blockbuster revelations from the Washington Post’s intelligence complex exposé ………… 2 The timing is interesting…. Intelligence nominee vows to take on CIA ………….3 Bond: John Brennan is the real DNI ………… 4 The importance and value of an independent press Foreign policy: America is no longer “Top Secret” ………….5 Security implications of the report… The disturbing value of the Washington Post’s work …………7 Maybe we can learn from the Post how to produce and distribute intelligence reports? …………7 It makes a nice case study for organizational experts A leaner & meaner intelligence system ………… 9
Pelosi faces pressure to end standoff over intelligence bill ……….. 9 US intelligence spending – value for money? …..10 Retired spy hired to run CIA clandestine service ………..11 Scientist charged with economic espionage …...12 CIA applicant’s arrest tops wave of China spy cases ……….. 13 Iran’s scientist was part of larger CIA mole operation, officials say ……….. 14 Former State Department official sentenced to life in prison for nearly 30 year espionage conspiracy ………. 16
This edition of SA Intelligencer is dedicated to recent developments in the US Intelligence Community. The content of the Washington Post exposé this last week is not new: the bloated US Intel community (IC), fed by billions of dollars for the “war against terror”, the thousands of private organisations and contractors involved in that war, the incapacity to manage the information and intelligence tsunami, the fact that there is little collaboration/coordination and ineffective leadership. The US Intelligence community is not the only intelligence apparatus facing these problems – all over the world intelligence officers find it more difficult to cope with the challenges of the multiple threats we have to understand and forewarn our politically-threatened decision-makers. And our organizations are not equipped to deal with it. Ten years ago, Berkowitz and Goodman stated categorically that the intelligence organisation is “illsuited” for the Information Age in their book Best Truth: Intelligence and Security in the Information Age. Amy Zegart reaffirmed this in her 2009 book Spying blind: The CIA, the FBI and the origins of 9/11 when she discussed the organisational obstacles in the US IC. There are numerous other articles and books written on this topic. In my own thesis (2010) on intelligence analysis in the Knowledge Age, I pose that perpetual organisational restructuring, also in South Africa, has been more about political tampering and grandstanding than streamlining effectiveness and adapting to challenges set by the new world. The management structure has resultantly become heavier, with more layers of control and review than ever before. Organisational change in intelligence will always be subject to political pandering, and as of yet, none of the critics could recommend feasible options. (Continued on page 2)
25 July 2010
SA Intelligencer
Number 81
2
(editorial continued from page 1)
There has, for instance, been limited research on feasible organisational structures where the premium on timely decision-making, sometimes based on secret and deception-prone information, is as high The intelligence community suffers from the same organisational, power, leadership and cultural challenges that ordinary companies struggle with. What should make us different? The fact that we work with secrets and defend a country? In an ideal world, maybe… Will the Post’s investigation have any lasting impact? I doubt it… Yes, it might influence public opinion in the US, especially since we might head for a double dip recession. It surely gives more ammunition to the Congress in its bid to control the IC. It might even harm Pres Obama’s falling popularity and further demoralize the US intelligence machinery. But the core problems i.e. power struggles, self-interest, bureaucratic structuring and inability to adapt will continue to hamper any effort to revolutionize intelligence – in the US, and all over the world.
United States of America Top 10 blockbuster revelations from the Washington Post’s intelligence complex exposé Wed Jul 21By Liz Goodwin
1. The U.S. intelligence system has exploded in size since the Sept. 11 attacks. Its budget was $75 billion last year, 2.5 times what it was before the attacks, and more than 850,000 people hold top-secret security clearances. More than 30 top-secret intelligence complexes have been built or are being built in the D.C. area since 2001, and at least 263 government intelligence organizations have been created or reorganized since 9/11. 2. Only a few officials in the Department of Defense have access to all of the top-secret activities and information. Two "super users" in the department told the Post that it's impossible for them to keep track of the mountains of top-secret info they're exposed to. "I'm not going to live long enough to be briefed on everything," one said. 3. Agencies are collecting so much data that they don't have enough translators or researchers to analyze it. Every day, the National Security Agency's systems "intercept and store 1.7 billion emails, phone calls and other types of communications." 4. Turf wars among agencies can prevent the sharing of information. Congress created the Office of the Director of National Intelligence in 2004 so that someone would be in charge of the sprawling national intelligence apparatus. But Congress didn't give the director clear legal or budgetary control over all the agencies. As a result, the office, the Defense Department and the CIA have engaged in counterproductive power struggles. 5. This confusion has had real consequences. The reporters say secrecy and lack of coordination prevented intelligence workers from stopping an Army major's attack on Ft. Hood and Umar Farouk Abdulmutallab's alleged attempted bombing of a Detroit-bound airplane last fall. 6. Contractors are not supposed to perform what federal rules define as "inherently government functions," but they do. In every single intelligence agency, contractors are performing the same functions as federal employees, and often for higher pay. Contractors for the CIA "have recruited spies in Iraq, paid bribes for information in Afghanistan and protected CIA directors visiting world capitals."
12 July 2010
SA Intelligencer
Number 80
3
7. Out of the 854,000 people who have top-secret clearances, 265,000 are contractors. That's about a third of the total workforce in the nation's intelligence agencies. About 2,000 small to midsize private companies do top-secret work. 8. The booming corporate intelligence industry is siphoning off the most skilled workers from the government with better pay and shiny bonuses. Contractors can offer twice as much money to experienced federal employees as the government can, and at least one corporate executive was spotted recruiting in the CIA's cafeteria during working hours. 9. Hiring contractors is also really expensive for the government, despite the Bush administration's hopes it would be cheaper than hiring more federal employees. "Contractors made up 29 percent of the workforce in the intelligence agencies but cost the equivalent of 49 percent of their personnel budgets," the Post says. Defense Secretary Robert Gates said that federal workers are 25 percent cheaper than contractors. 10. Employees with top-secret clearance who work in a cluster of ordinary-looking office building outside of Washington must submit to strict rules. They take multiple lie-detector tests, are coached to avoid questions from neighbors and friends, and can lose their jobs for borrowing too much money or having friends from certain countries. Some assume false identities. http://news.yahoo.com/s/yblog_upshot/20100721/pl_yblog_upshot/top-10-blockbusterrevelations-from-the-washington-posts-intellegence-complex-expose Read the original Washington Post articles at http://projects.washingtonpost.com/top-secretamerica/ The timing is very interesting… Ed: After it became known that the Post will publish the damaging report, The Senate Committee on on Intelligence quickly scheduled James Clapper’s confirmation hearing in a day’s time and filed a revised intelligence authorization bill after approving it the week before. Can Clapper be the person to do what his post requires? Centralising budget, and coordinate intelligence activities? What makes him different than his predecessors? His Defense background and support from Defense Secretary Gates and Assistant to the President and Deputy National Security Adviser for Homeland Security and Counterterrorism John Brennan…
Intelligence nominee vows to take on CIA The Hill: Susan Crabtree - 07/20/10 (Ed: excerpted)
President Obama’s nominee for director of national intelligence promised not to be a “hood ornament” and said he would overrule the CIA director when necessary. James Clapper, in his confirmation hearing before the Senate Intelligence Committee, repeatedly pledged to protect his turf and overrule CIA Director Leon Panetta in any potential conflict between the two agencies. The two organizations have dueled for control in the past, with the CIA often winning the arguments in disputes brokered by the White House. “I would not have agreed to take this on if I was going to be a James J. Clapper Jr titular head or a hood ornament,” Clapper said Tuesday. “There needs to be a clear, defined, identifiable leader of the intelligence community to exert direction and control over the entire intelligence community.” Later, when Sen. Ron Wyden (D-Ore.) directly
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
4
asked him if he believed he had the authority to overrule the CIA director, Clapper didn’t hesitate. Yes, senator, I do,” he replied. Clapper’s hearing could not be more timely, coming on the heels of a sweeping Washington Post investigation into the secretive, mammoth intelligence community that has grown so quickly since Sept. 11, 2001, that it defies effective oversight. The series has stimulated public scrutiny of the overlapping intelligence webs and their heavy reliance on private contractors to perform tasks at dramatically inflated prices compared to what their government counterparts are paid for roughly the same type of work. In the wake of these disputes and others, Congress expressed frustration that DNI does not have the power provided in the legislation it passed creating the position and has called on Obama to clearly delineate the position’s authority within the intelligence community, especially when it comes to budget and personnel matters. Obama has not done so publicly, and his choice of Clapper, a veteran intelligence official who previously served as the undersecretary of Defense for intelligence, initially only served to roil intelligence leaders on Capitol Hill. Prior to his selection, Sen. Dianne Feinstein (D-Calif.), chairwoman of the committee, had warned against naming someone who had too many ties and too much loyalty to the Pentagon. After Obama announced Clapper’s selection, Sen. Kit Bond (R-Mo.), the ranking member of the Intelligence panel, criticized him for lacking the clout needed to win in turf wars with the White House, the Justice Department and the CIA. He also accused Clapper of being “less than forthcoming with Congress” and said he had recently blocked Congress’s efforts to empower the DNI. Rep. Pete Hoekstra (R-Mich.) went even further, calling Clapper “exactly the wrong person” for the job because of his resistance to keeping Congress informed. During the hearing, Clapper assured Bond and others that he would not hesitate to share information with the congressional intelligence committees and would let the panels know if he disagreed with a policy decision by someone else in the intelligence community or among other decisionmakers. In response to questions, he also took issue with some elements of the Washington Post series, specifically the line that no one knows how much money the intelligence system costs, how many people it employs, how many programs exist and how many agencies perform the same work. But Clapper said he was committed to reducing the size of the community, just liked he was tasked to do after the fall of the Berlin Wall and the post-Cold War years in the 1990s. When asked by Feinstein whether a 5 percent or a 10 percent reduction in the size of the community and its budget was reasonable, Clapper would not commit. “The article is a testament to the ingenuity of our contractor base,” he said. “That’s not to say it’s all efficient. I think this is a great area in which to work with the oversight committees. There should be limits on the number of full-time equivalent contractors embedded in the intelligence community.” http://thehill.com/homenews/administration/109973-intelligence-nominee-vows-to-take-on-cia
Bond: John Brennan is the real DNI Foreig Policy, Josh Rogin , July 21, 2010
It's not top-secret information that John Brennan plays a huge role in intelligence policy in the Obama administration. But according to the top Republican on the Senate Intelligence Committee, he's now the de-facto Director of National Intelligence, and that's a problem. In his opening statement at Tuesday's confirmation for Lt. Gen. James Clapper to become the next DNI, Sen. Kit Bond, R-MO, Editor: Dalene Duvenage
Click on hyperlinks to open documents
John Brennan
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
5
said that the consolidation of intelligence community leadership inside the National Security Council was undermining the Office of the Director of National Intelligence. "We have a staffer on the National Security Council, who most people in the intelligence community believe acts as the DNI," Bond said, not naming Brennan directly. "He calls the shots and even goes on national television to pitch the administration's viewpoint ... This is not good for the country and is contrary to Congress's intent for the [intelligence community]." Bond referenced a June 6 Washington Post article highlighting Brennan's role, such as when he was put in charge of the investigation into intelligence failures leading up to the Christmas Day bombing attempt. The story suggests that Brennan's report contributed to the ouster of the last DNI, Adm. Dennis Blair. "Brennan is really doing the job of the DNI," one senior intelligence official told the Post's Anne Kornblut. The article also said Brennan's dominance complicated efforts to find a new director of intelligence. "Who would want the job if Brennan is already doing it?," Kornblut asked. Bond's criticism is part in parcel of his overall drive to give Clapper, as the next DNI, more power than previous holders of the position have had. His belief that Clapper might not have the clout to go up against Brennan was one of his initial objections to Clapper's nomination. Part of Congress's frustration over Brennan's role is that Senator Bond his activities fall largely outside of congressional scrutiny, whereas the DNI is somewhat more accountable to lawmakers. "Something the George W. Bush administration got right in this area was placing key people in the jobs who were responsible to the Congress," Bond said at the hearing. "The next DNI must have the political clout, the willpower to ensure that our intelligence agencies are able to get their vital work done without being micromanaged by the Department of Justice or the National Security Council." Bond was clear that his objections to the consolidation of power inside the White House and NSC are not based on criticisms of Brennan personally, but rather on what he sees as a distortion of the traditional role the NSC plays in intelligence policymaking and implementation. "If the president would like him to act as his principal intelligence advisor and head of the intelligence community, then I'll be happy to co-host his confirmation hearing with the chair," Bond said. "But if not, then this template needs to change." http://thecable.foreignpolicy.com/posts/2010/07/21/bond_john_brennan_is_the_real_dni Read Bond’s blog: http://bond.senate.gov/public/index.cfm?FuseAction=PressRoom.FloorStatements&ContentRecor d_id=f14c21db-9d65-bfe9-8571-81455346db0d&Region_id=&Issue_id= It again showed the importance and value of an independent press… Ed: When experts wrote about issues plaguing the US IC, no-one took notice. But when The Post published their findings, albeit sensationally, everyone sat up and listened… “The Washington Post did its "Top Secret America" investigation using old-fashioned, patient journalistic footwork, reviewing "government documents and contracts, job descriptions, property records, corporate and social networking Web sites, additional records, and hundreds of interviews with intelligence, military and corporate officials and former officials" -- entirely in the public domain. It is itself a testimony to the value of big journalism with big resources.” Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
6
http://www.realclearpolitics.com/articles/2010/07/21/lacking_in_intelligence_106409.html Ed: But the press sword has 2 sides‌.Critique on the investigation and reports
Foreign Policy: America Is No Longer "Top Secret"
by Thomas G. Mahnken July 22, 2010 (Ed: Excerpted) (Mahnken is a Visiting Scholar at the Philip Merrill Center for Strategic Studies at The Johns Hopkins University's Paul H. Nitze School of Advanced International Studies. Between 2006 and 2009, he served as the deputy assistant secretary of defense for policy planning).
I've just finished Dana Priest and William Arkin's "Top Secret America," The Washington Post's twoyear, three-part "investigation" into U.S. classified activities. If one of my graduate students handed this in as a term paper, I'd have a hard time giving it a passing grade. Now, I can be a tough grader, but I'm also a fair one, and I always explain why I give the grades that I do, so here goes: First, the authors have, at best, a weak thesis. That's actually giving them the benefit of the doubt, because the series as a whole doesn't really have a thesis. Instead, it is a series of strung-together facts and assertions. Many of these facts are misleading. For example, the authors point to the fact that large numbers of Americans hold top-secret security clearances, but fail to distinguish between those who are genuinely involved in intelligence work and those who require the clearances for other reasons — such as maintaining classified computer equipment or, for that matter, serving as janitors or food service workers in organizations that do classified work. Similarly, they point to the large number of contractors involved in top-secret work without differentiating those who actually perform analysis and those who develop hardware and software. Second, the authors fail to provide context. They make much of the fact that the U.S. intelligence community consists of many organizations with overlapping jurisdiction. True enough. But what they fail to point out is that this has been a key design feature of the U.S. intelligence community since its founding in the wake of World War II. The architects of the U.S. intelligence system wanted different eyes to look at the same data from diverse perspectives because they wanted to avoid another surprise attack like Pearl Harbor. It is worth remembering that intelligence is not primarily about efficiency, but effectiveness. It can be expensive, even wasteful; the real criterion for judging it is its track record. In emphasizing the growth of the intelligence community since the Sept. 11, 2001 terrorist attacks, the authors are at the same time accurate and misleading. They accurately note that the size of intelligence agencies grew rapidly after 9/11, but that's like saying that the scale of U.S. warship construction ballooned in the months after Pearl Harbor. It's true but misses the larger point: Islamist extremist terrorists have killed thousands of Americans and would like nothing better than to kill thousands more. Intelligence provides both the first line of defense and a powerful offensive weapon against our enemies. Although beginning the story with 9/11 makes a certain amount of sense, in doing so Priest and Arkin miss an important dimension of the story. During the 1990s the size of the U.S. intelligence community declined significantly because both the Clinton administration and leaders in Congress believed that we were headed for a more peaceful world. Indeed, the Clinton administration made trimming the size of the intelligence community a priority through its Reinventing Government initiative. Many intelligence analysts took offers of early retirement and became contractors — contractors that the U.S. government hired back after 9/11. A good deal of the post-9/11 intelligence buildup thus involved trying to buy back capacity and capability that had been eliminated during the 1990s. Third, the authors haven't familiarized themselves with the relevant literature, particularly that on surprise attack. The closest the series comes to having a thesis comes in part one, in which
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
7
Priest and Arkin assert that the growth of the U.S. intelligence community led to the Fort Hood shootings and the so-called underwear bomber. However, their own evidence undercuts their assertion. In the case of Fort Hood, they note that the commander of the Army unit that was supposed to be monitoring threats within the service unilaterally decided to turn the unit's attention to other topics. In the case of the underwear bomber, Priest and Arkin string together facts with retrospective clarity in a way that rarely happens in intelligence organizations large or small. Surprise attacks happen when intelligence organizations fail to detect, in the words of the intelligence historian Roberta Wohlstetter, the signals of attack against the noise of irrelevant or misleading information. To do so, it pays to have an organization that is large and diverse. Of course, this isn't a graduate school term paper. It is a work of journalism. And that leads me to what is for me the most damning indictment of all. Priest and Arkin have spent two years trying to expose all manner of classified government activities. Arkin has in fact made a career of it. The database they have assembled details not only organizations involved in counterterrorism work, but also those working in unrelated fields such as Air Force technical intelligence. In so doing, they have made it easier for America's enemies to defeat U.S. efforts to ferret out their secrets and have thereby made it more rather than less likely that the United States will be surprised by a future adversary. Openness has its place, but so does secrecy. http://www.npr.org/templates/story/story.php?storyId=128688013&ft=1&f=1057 Security implications of the report:
The Disturbing Value of the Washington Post’s Work July 21st, 2010, Rich Cooper Shining a light on those actions and raising the questions of why we are doing the same thing multiple times over is certainly of value. But Priest and Arkin and their employer, the Washington Post, have also done something of disturbing value that benefits no one but those persons foreign or domestic that wish to do us harm. By identifying the geographic locations of some of our country’s top secret facilities (government and private sector) and surmising who does what and where at those spots, the Post reporters created an operative target list that is literally synthesized and ready for use by people whose allegiances are not in American’s best interest. While they used publicly available sources and had the cooperation of the public affairs offices of many of the federal intelligence pieces highlighted in the article, the authors seem to have taken the extra mile to share things that frankly need not be shared. http://securitydebrief.adfero.com/2010/07/21/the-disturbing-value-of-the-washingtonpost%e2%80%99s-work/#ixzz0uhGNSgWo Maybe we can learn from the Washington Post how to produce and distribute intelligence reports? “It's too much, he complained. The inbox on his desk was full, too. He threw up his arms, picked up a thick, glossy intelligence report and waved it around, yelling "Jesus! Why does it take so long to produce?" "Why does it have to be so bulky?" "Why isn't it online?" The overload of hourly, daily, weekly, monthly and annual reports is actually counterproductive, say people who receive them. Some policymakers and senior officials don't dare delve into the backup clogging their computers. They rely instead on personal briefers, and those briefers usually rely on their own agency's analysis, re-creating the very problem identified as a main cause of the failure to thwart the
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
8
attacks: a lack of information-sharing.� http://projects.washingtonpost.com/top-secretamerica/articles/a-hidden-world-growing-beyond-control/ Ed: The use of text, maps, and charts makes this the new standard on how to compile a report with a lot of content in a reader-friendly way. Play around at their website.
The place to start: An interactive Flash wheel on the 45 organisations and what type of work they do
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
9
It makes a nice case study for organizational experts… Many scholars and intelligence professionals have already studied the management and organizational aspects of the US intelligence community, made recommendations ranging from evolutionary changes to revolutionary changes…
A Leaner & Meaner Intelligence System By David Ignatius July 21, 2010 (Ed: Excerpted)
WASHINGTON- The Obama administration, rather than reacting defensively, should seize the initiative by trying to control this behemoth. The paradox here is that a smaller, better-controlled intelligence community will actually make the country safer than the unmanaged sprawl we have now. This is the real mission for the star-crossed Office of the Director of National Intelligence, which was created in 2005 to bring order out of the intelligence chaos. By picking the wrong fights and conducting its own turf wars, the DNI has made some of these problems worse. The right model is the Office of Management and Budget -- a coordinating staff of experts that can monitor budgets, personnel and performance. "There needs to be a revolution in the intelligence community, not an evolution," says Henry Crumpton, a former top CIA counterterrorism officer who now runs a consulting company. "You need to cut back in dramatic ways, and empower people in the field," he says. "We've just been throwing money at the problem," producing a "breathtaking lack of coordination." The result has been a bloated "community" that combines secrecy and bureaucracy in a ruinous mix, as described by reporters Dana Priest and William Arkin. A few years ago I wrote that the problem was so bad that perhaps we should blow up the existing structure and start over. Maybe that's extreme, but the watchword for James Clapper, nominated to become the new DNI, should be: Less is more. The Post series dramatized a system that doesn't work, and in this case, leaner will be meaner -- and cheaper too. http://www.realclearpolitics.com/articles/2010/07/21/try_leaner_and_meaner_106392.html
Pelosi faces pressure to end standoff over intelligence bill The Hill, Susan Crabtree -19 July 2010 (Ed: excerpted)
Speaker Nancy Pelosi (D-Calif.) is under increasing pressure to end her standoff with the White House on Congressional oversight of the intelligence community. The Senate Intelligence Committee on Monday formally filed a revised intelligence authorization bill after approving it last week in an impromptu meeting held off the Senate floor. That move demonstrates Dianne Feinstein’s (D-Calif.) resolve to deliver an intelligence authorization bill to the president’s US Speaker Nancy Pelosi desk for the first time in five years. Pelosi has been in talks with the Obama administration to allow Congress to have stronger oversight of the intelligence community, but has refused to name a conference committee for the authorization bill, a move that needs to take place so the measure can move to the House and Senate floors for final passage. Feinstein had stood firm with Pelosi for weeks and was refusing to schedule a nomination hearing for James Clapper, Obama’s nominee for national intelligence director. Last week, however,
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
10
Feinstein shifted her stance and set a hearing on Tuesday for Clapper after deciding she could not risk delaying Clapper’s nomination any longer because the acting national intelligence director, David Gompert, will be leaving after August regardless of whether the Senate approves a new director by then. The additional move to pass the revised version of the bill is a sign that Feinstein wants to end the stalemate between Congress and the White House and move the authorization bill as soon as possible. The new pressure comes in the wake of a wide-ranging Washington Post investigation of intelligence agencies and their contractors. In their release, Feinstein and Bond said the bill would amend the National Security Act to require notifications to Congress in writing – ensuring that the Intelligence community would explain the legal basis for the actions it is taking or intends to take and providing more clarity on when the intelligence community must provide additional information about “significant undertakings” under existing covert action programs. It would also require “proper” record keeping in cases of briefings provided only to House and Senate leadership and their respective intelligence committees; require each intelligence agency head to provide certification that the agency has fully complied with its obligations to keep Congress informed; and requires the DNI to report how the intelligence community complies with laws, international obligations and executive orders on the detention and interrogation activities of the intelligence community. In addition it would strengthen and expand the responsibilities for the inspector generals in the Office of Director of National Intelligence and the CIA and adds inspector generals at the Defense Intelligence Agency, National Geospatial Intelligence Agency, National Reconnaissance Office, and National Security Agency. http://thehill.com/homenews/house/109683-pelosi-faces-pressure-to-end-standoff-overintelligence
US intelligence spending – value for money? Reuters: Jul 16, 2010 (ed: Excerpted)
America’s spy agencies are spending more money on obtaining intelligence than the rest of the world put together. Considerably more. To what extent they are providing value for money is an open question. “Sometimes we are getting our money’s worth,” says John Pike, director of GlobalSecurity.org, a Washington think tank. “Sometimes I think it would be better to truck the money we spend to a large parking lot and set fire to it.” The biggest post-Cold War miss of the sprawling intelligence community was its failure to connect the dots of separate warnings about the impending attack on New York and Washington on September 11, 2001. It also laid bare a persistent flaw in a system swamped by a tsunami of data collected through high-tech electronic means: not enough linguists to analyse information. The overall amount of money spent on the collection and analysis of intelligence as well as on covert actions and counter-intelligence by civilian agencies and the military was long shrouded in secrecy. It was disclosed last September by Dennis Blair, then President Barack Obama’s director of national intelligence: $75 billion a year.
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
11
No other country comes even close and no other country has as many people working in the intelligence industry — at least 200,000, counting private contractors. (Ed: According to the Washington Post: 850 000!) Russia and China lag behind. There are few public estimates of its global size but a recent study by Christian Hippner for the Department of Intelligence Studies at Mercyhurst College in Pennsylvania estimated global spending on intelligence at $106 billion a year and the number of people (working for 246 different agencies around the world) at 1.13 million. Put into context: The United States, with around five percent of the world’s population and 23 percent of its economic output accounts for almost two thirds of global spending on intelligence. This is more than at the height of the Cold War, when annual spending, a closely held secret at the time, was estimated at around $15 billion a year in today’s dollars. America’s Soviet superpower rival roughly matched U.S. spending, according to estimates at the time, and had more spies, counter-spies and analysts than the Americans. Oleg Kalugin, a former KGB general and head of foreign counter-intelligence, said in a radio interview this month the KGB had employed 496,000 people before the 1991 collapse of the Soviet Union. http://blogs.reuters.com/great-debate/2010/07/16/us-intelligence-spending-value-for-money/ Ed: read Chris Hippner’s interesting and exhaustive thesis titled, A Study Into The Size Of The World's Intelligence Industry.
Retired spy hired to run CIA clandestine service Associated Press, 23 July 2010
WASHINGTON —The CIA brought one of its most experienced spies out of retirement to run the nation's far-flung intelligence network, the National Clandestine Service. John D. Bennett witnessed the emergence of alQaida in Africa in the 1990s and was on the front lines of the war on terrorism as the station chief in Pakistan. From his seat in Islamabad, he oversaw the unmanned Predator drone program, which has become the agency's most successful weapon against terrorism. "John has impeccable credentials at the very core of intelligence operations - espionage, covert action, and liaison," CIA Director Leon Panetta said. "He has been at the forefront of the fight against al-Qaida and its violent allies." Until his retirement in May, Bennett, 58, was the agency's most senior station chief, having served four tours in that position, including in Pretoria, South Africa. In taking this new post, he leapfrogged several other senior CIA officials who had been angling for the coveted job. Bennett joined the agency in 1981 after graduating from Harvard and serving in the Marine Corps. He became known as one of its premier Africa experts. In the 1990s, al-Qaida began gravitating toward African nations. The terrorist organization launched some of its most high-profile attacks there, including the 1998 bombings of U.S. embassies. Because of his experience, the agency called Bennett back to headquarters after the terrorist attacks of Sept. 11, 2001. He later ran the agency's Special Activities Division, an outfit responsible for paramilitary operations.
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
12
In Pakistan, the CIA scored a number of successes on Bennett's watch. The agency's drones killed a number of high-level targets, including Baitullah Mehsud, a longtime leader of the Pakistani Taliban. Also, the CIA, working with the FBI, uncovered a plot in August 2009 to bomb the New York subway system. Bennett replaces Michael J. Sulick as head of the National Clandestine Service. Sulick is the second top CIA official to retire in recent months. Former CIA deputy director Stephen Kappes stepped down in May. Both men were at the helm when a double agent blew himself up last year in Khost, Afghanistan, killing seven CIA employees and injuring another six. http://seattletimes.nwsource.com/html/politics/2012411015_apusciaappointment.html Critique against Bennet’s appointment: Kerry Patton: 23 July 2010 His inabilities to understand, identify, and formulate strategic plans of covert and clandestine activities destroying our adversaries networks throughout the region have led to an increase in loss of coalition lives in recent years. He played a devastating political game. It is evident that the current Obama administration selected Bennett to serve as a puppet in this prominent position considering he failed in Pakistan. http://dailycaller.com/2010/07/23/john-bennett-cia-appointment-is-a-mistake/#ixzz0ug9bxDiT
Scientist charged with economic espionage Scott J. Croteau TELEGRAM & GAZETTE STAFF Tuesday, July 20, 2010. (Ed: Excerpted)
WORCESTER — A scientific researcher from Westboro is one of a handful of people to be charged in federal court with foreign economic espionage after he allegedly stole information about an organic insecticide developed by Dow Chemical Co. and gave it to a university in China. Kexue Huang, 45, was arrested July 13 on a federal indictment from the Southern District of Indiana accusing him of 12 counts of theft and attempted theft of trade secrets to benefit a foreign government and instrumentality, and five counts of foreign or interstate transportation of stolen property. The alleged charges, which are still under seal in Indiana where Dow has an agrochemical and biotechnology company, stem from the alleged stealing of information from January 2005 to earlier this year. Mr. Huang worked for Dow from January 2003 and was fired in February 2008, according to authorities. In testimony yesterday, authorities allege Mr. Huang stole information on the insecticide and co-published research articles about it through the Hunan Normal University in China. Mr. Arnett estimated the value of the information to be in the hundreds of millions of dollars, according to his testimony. During and after his employment for Dow, Mr. Huang allegedly emailed information to the university and traveled several times to China, according to court testimony. Mr. Huang could face up to 15 years in prison on each of the theft and attempted theft of trade secrets charges, and up to 10 years each on the foreign or interstate transportation of stolen property charges. http://www.telegram.com/article/20100720/NEWS/7200413/1116
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
13
CIA applicant's arrest tops wave of China spy cases Jeff Stein, Spyblog, Washington Post ,July 20, 2010(Ed: excerpted)
A young Michigan man was quietly arrested last month and charged with lying on a CIA job application about his connection with Chinese intelligence, a case that drew virtually no attention outside his home state. Glenn Duffie Shriver, 28, of Georgetown Township, Mich., tried to conceal $70,000 in payments from the Beijing government and denied his “numerous” meetings with Chinese intelligence officials, according to the government’s indictment. The indictment doesn’t say what kind of work he was seeking at the CIA. It could not be learned if Shriver had yet entered a plea. "We thought he was applying for a job to help and use his skills for the United States. He hasn't had any contact back with China for at least five years, maybe six." Shriver’s arrest on June 22 is just the latest in a virtual tsunami of prosecutions against suspected Chinese agents in the past two years. Many cases are hidden and ongoing. But more than 40 Chinese and American citizens have been quietly prosecuted -- most of them successfully -- on espionage-related charges in just a little over two years, according to information supplied by the Justice Department. The figure dwarfs the number of Russian spies expelled earlier this month, creating an international sensation. Lacking a glamorous Mata Hari like the curvaceous Russian spy Anna Chapman, however, almost all the Chinese cases were prosecuted with little fanfare, one at a time, over a period of 28 months. Also, unlike the spectacular arrests of Russian moles inside the CIA and FBI during the Cold War, the Chinese cases reveal a long-term, even plodding drive by Beijing to acquire U.S. technical and economic -- more than political -- secrets by any means necessary. “In recent years, the Justice Department has handled an increasing number of prosecutions involving sensitive American weapons technology, trade secrets and other restricted information bound for China,” said Dean Boyd, a spokesman for the Justice Department's National Security Division. “Some of these cases have involved individuals operating on behalf of the Chinese government or intelligence. Many others have involved private-sector businessmen, scientists, students, or others collecting sensitive U.S. technology or data that is routed to China.” Requests for comment from Chinese officials were not immediately answered. At SpyTalk's request, Boyd supplied a compendium of successful federal prosecutions involving espionage and espionage-related charges against Chinese agents, which he cautioned may not be complete. The list revealed that the Justice Department had convicted 44 individuals in 26 cases since March 2008, almost all of whom are now serving time in federal prisons. http://blog.washingtonpost.com/spy-talk/2010/07/cia_applicants_arrest_tops_wav.html
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
14
US/Iran Murky Spy Glass…
Iranian Scientist Was Part of Larger CIA Mole Operation, Officials Say Intelligence Quarterly, 20 July, 2010 (Ed: excerpted)
Amiri at his arrival in Tehran on 15 July 2010 Photo: CNN
The CIA in 2009 removed Iranian scientist Shahram Amiri and another intelligence source from Iran over fears that Tehran had discovered the individuals were U.S. informants, the Washington Post reported Saturday (see GSN, July 16). Amiri disappeared in May of last year during a trip to Saudi Arabia. News reports in the United States said he had defected and was supporting CIA activities against Tehran’s nuclear program, which Washington suspects is geared toward weapons development. Tehran maintained Amiri was abducted; the government has denied harboring any military ambitions for its atomic activities. The scientist returned to Iran
this month, contending he had been kidnapped. The scientist was one of six CIA moles inside Iran’s nuclear program who defected to the United States and received monetary rewards from the spy agency, according to officials. Although some of the informants left Iran willingly, Amiri and one other source were pressured to leave their country amid concerns that they were drawing scrutiny from the Iranian Intelligence and Security Ministry, current and former U.S. government personnel said. “There was fear of exposure,” said one former high-level U.S. intelligence official with knowledge of the matter. One of the informants had become “sloppy” in contacts with the CIA, and stayed in Iran “longer than we thought prudent” after learning of the danger, the official said. Once in the United States, Amiri opted against seeking to relocate his family, U.S. officials said. The CIA was set to investigate how Amiri’s return to Iran could expose the agency’s informants or procedures. “They have to go over everything he did provide and put a big caveat on it,” one former high-level CIA official said (Greg Miller, Washington Post, July 17). The agency was also looking into whether Amiri was acting as a double agent, a former CIA official told the London Telegraph(Sherwell/Lowther, London Telegraph, July 17). Amiri’s uncertain loyalties could further delay completion of a long-awaited update to a 2007 National Intelligence Estimate on the Middle Eastern nation’s nuclear program, government sources added. The report asserted with “high confidence” that Tehran halted its formal nuclear weapons program in late 2003 and with “moderate confidence” that the effort had not been resumed (Miller, Washington Post). “This is clearly one that went bad,” a high-level Obama administration official said of the case Friday. “I don’t know whether that’s because the agency mishandled it, or whether it’s because the guy was a bit unstable,” the official told the New York Times (David Sanger, New York Times, July 16). Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
15
In an Iranian state television interview aired Saturday, the scientist asserted that U.S. officials had pressured him to confess to spying on the United States so he could be exchanged for three hikers held in Iran. “They (U.S. agents) wanted me to say that ‘I was an Iranian intelligence agent infiltrating the CIA,’” Agence France-Presse quoted him as saying. “If I said this, they said I could be part of a spy exchange program, whereby I could be handed over to Iran in return for the three American spies arrested near the Iraqi border.” Amiri said he was a specialist in health physics and that his U.S. questioners “reached wrong conclusions” about his experience in nuclear matters. “They wanted to see if the university was conducting nuclear research. They kept asking irrelevant questions and wanted to link Iran’s peaceful nuclear work to that of weaponization,” he said, referring to the Malek Ashtar University of Technology where he had been employed. “A lie detection machine was attached to me when they thought I was dodging their questions,” Amiri said. “In the end they realized that it was worthless intelligence-wise and that their scheme to abduct me had been defeated.” He said U.S. officials provided him with records “explaining the process of making nuclear weapons which they wanted me to say I had brought to America.” Amiri recounted communicating while in the United States with Iranian authorities who used “methods and codes” to identify themselves. “These are issues which I can’t talk about as they could hurt national interests,” he said. U.S. officials “reached a conclusion that they wanted to close the case and wanted to send me back to Iran,” Amiri said. “I did not go to the [Pakistani Embassy's Iranian interests section] on my own … it is better to say I did not enter the interests section but was handed over. They ordered a taxi for me and in reality escorted this taxi” (Farhad Pouladi, Agence France-Presse I/Google News, July 18). The CIA was “disinclined” to allow the Iranian account to prevail without publicizing its own take on Amiri’s disappearance, said an agency analyst with direct information on the affair. “It might look as if the CIA is taking revenge on Amiri for returning to Iran and that by telling the US media about his cooperation and long record as an agent they are simply signing his death warrant and ensuring that the Iranian authorities would eventually execute him,” the analyst told the Telegraph. “But in reality, whatever the CIA says at this point will have little impact on Amiri’s fate.” If Amiri was a double agent who gave Washington inaccurate information on Iran’s nuclear program with the ultimate intention of returning, “he will become an Iranian hero and the CIA’s charges will do him no harm,” he said. “If, on the other hand, he was a genuine defector who returned because he had a change of heart, there is nothing the CIA can do to protect him,” the official said. “Amiri will be subjected to intense interrogations that will quickly break his cover story about being drugged and kidnapped.” “When that happens, the Iranians will have to decide if they want to hang him as a traitor or carry on the fiction — for propaganda purposes — that he was the victim of a CIA plot,” the analyst said (Sherwell/Lowther, London Telegraph). “They will keep him in fear and in doubt as to what his eventual fate will be,” former CIA analyst Paul Pillar told the Associated Press. “From the private, official Iranian point of view, this guy is an awful traitor. If it weren’t for the public relations aspect, he might have been strung up yesterday already or shot.”
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
16
“It’s unlikely that the Iranians believe his current cover story about being kidnapped,” he said. “There are numerous holes in it. The people in Tehran are not dumb, and they can see through that just as you and I can.” The scientist is likely to be confined to his home and remain subject to tough interrogation, former CIA officials said, adding that the presence of his wife and child would limit his future options. “He will be in huge trouble, and he will be in confinement, of some form, for a very long time,” said Charles Faddis, former head of the CIA Counterterrorism Center’s WMD unit. “I assume they are going to be a little restrained for public relation reasons because this thing has become such a highprofile incident.” “Could they walk back activities and learn about our activities inside?” he added. “Yes, if we were not careful about what we said, what questions we asked, how we asked them, etc. Every time you ask a question it says something about what you already know, what you do not know, what access you have, what access you do not have, what you consider important, what you consider unimportant. We will hope that the debriefing was conducted with all this in mind and an understanding that he might start talking one day” (Adam Goldman, Associated Press I/Google News, July 17). “I think [the Iranians] have a Soviet approach — they will want to make propaganda use of him,” Council on Foreign Relations scholar Ray Takeyh told the Times. “My impression is that he will be around for a year or so.” Still, “I don’t think it’s going to turn out well for him. They have to establish to other potential defectors that there is a cost to be paid” (Sanger, New York Times). http://www.intelligencequarterly.com/2010/07/iranian-scientist-was-part-of-larger-cia-moleoperation-officials-say/
Former State Department Official Sentenced to Life in Prison for Nearly 30-year Espionage Conspiracy DOJ 16 July 2010 (Ed: Excerpted)
WASHINGTON -- Walter Kendall Myers, a former State Department official, and his wife, Gwendolyn Steingraber Myers, have been sentenced to life in prison without the possibility of parole and 81 months in prison, respectively, for their roles in a nearly 30-year conspiracy to provide highly-classified U.S. national defense information to the Republic of Cuba. The sentences, handed down today by Judge Reggie B. Walton in U.S. District Court for the District of Columbia, were announced by David Kris, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Shawn Henry, Assistant Director for the FBI’s Washington Field The Myers couple Office; and Ambassador Eric J. Boswell, Assistant Secretary of State for Diplomatic Security. On Nov. 20, 2009, defendant Kendall Myers, 73, aka “Agent 202,” pleaded guilty to a three-count criminal information charging him with conspiracy to commit espionage and two counts of wire fraud. His wife, Gwendolyn Myers, 72, aka “Agent 123,” and “Agent E-634,” pleaded guilty to a one-count criminal information charging her with conspiracy to gather and transmit national defense information. The defendants, both residents of Washington, D.C., were arrested on June 4, 2009, by FBI agents and have remained in custody ever since.
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
17
Background According to the sentencing memorandum, plea agreements and other documents filed in court by the United States: Kendall Myers began working at the State Department in 1977 as a contract instructor at the Department’s Foreign Service Institute (FSI) in Arlington, Va. After living briefly with Gwendolyn in South Dakota, he returned to Washington, D.C., and resumed employment as an instructor with FSI. From 1988 to 1999, in addition to his FSI duties, he performed work for the State Department’s Bureau of Intelligence and Research (INR). He later worked full-time in INR and, from July 2001 until his retirement in October 2007, was an intelligence analyst for Europe in INR where he specialized on European matters and had daily access to classified information through computer databases and otherwise. He received a “Top Secret” security clearance in 1985 and, in 1999, received access to “Sensitive Compartmental Information.” Gwendolyn Myers moved to Washington, D.C., in 1980 and married Kendall Myers in May 1982. She later obtained employment with a local bank as an administrative analyst and later as a special assistant. Gwendolyn Myers was never granted a security clearance by the U.S. government. Recruitment In December 1978, while an employee of the State Department’s FSI, Kendall Myers traveled to Cuba after being invited by a Cuban government official who had made a presentation at FSI. That Cuban official was an intelligence officer for the Cuban Intelligence Service (CuIS). This trip provided CuIS with the opportunity to assess or develop Myers as a Cuban agent. Myers kept a diary of his two-week trip to Cuba in which he explicitly declared his affinity for Fidel Castro and the Cuban government. The diary was recovered by the FBI in the investigation. In 1979, Kendall and Gwendolyn Myers were visited in South Dakota by the same Cuban intelligence officer who had invited Kendall Myers to Cuba. During the visit, the Cuban intelligence officer recruited both of them to be clandestine agents for Cuba, a role in which they served for the next 30 years. Their recruitment by CuIS as “paired” agents is consistent with CuIS’s past practice in the United States. Afterwards, CuIS directed Kendall Myers to pursue a job at the State Department or the CIA to gain access to classified information. Kendall Myers, accompanied by his wife, returned to Washington, D.C., where he pursued a position at the State Department. During the time frame in which Kendall and Gwendolyn Myers were serving as clandestine agents for Cuba, the CuIS often communicated with its clandestine agents in the United States by broadcasting encrypted radio messages from Cuba on shortwave radio frequencies. Clandestine agents in the United States monitoring the frequency on shortwave radio could decode the messages using a decryption program provided by CuIS. Kendall and Gwendolyn Myers communicated with CuIS by this method. The shortwave radio they used to receive clandestine communications was purchased with money provided by CuIS. The shortwave radio was later recovered by the FBI. Undercover Operation According to the court documents, in April 2009, the FBI launched an undercover operation against the pair. Kendall and Gwendolyn Myers met four times with an undercover FBI source, on April 15th, 16th and 30th, and on June 4, 2009. The meetings were all video- and audio-taped. During the meetings, Kendall and Gwendolyn Myers made a series of statements about their past activities on behalf of CuIS, including how they used code names and how they had transmitted information to their CuIS handlers through personal meetings, “dead drops,” “hand-to-hand” passes, and in at least one case, the exchange of shopping carts in a grocery store. The couple also stated that they had traveled to meet Cuban agents in Trinidad and Tobago, Jamaica, Mexico, Brazil, Ecuador, Argentina and other locations. Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
18
When asked by the undercover FBI agent if he had ever transmitted information to CuIS that was classified higher than “Secret,” Kendall Myers replied, “oh yeah…oh yeah.” He said he typically removed information from the State Department by memory or by taking notes, although he did take some classified documents home. Gwendolyn Myers admitted she would process the classified documents at home for delivery to their CuIS handlers. In the final meeting with the FBI source, Kendall Myers disclosed “Top Secret” national defense information related to sources and methods of gathering intelligence. He also admitted that he had previously disclosed the information to CuIS.
Corroboration The admissions by Kendall and Gwendolyn Myers were corroborated by other evidence collected in the investigation. The FBI seized a shortwave radio in their apartment and confirmed overseas trips by the couple that corresponded to statements they made. The FBI also identified encrypted shortwave radio messages between CuIS and a handler for the couple that were broadcast in 1996 and 1997. Furthermore, an analysis of Kendall Myers’ State Department computer revealed that, from August 22, 2006, until his retirement on Oct. 31, 2007, he viewed more than 200 intelligence reports concerning the subject of Cuba. Of these reports concerning Cuba, the majority was classified and marked “Secret” or “Top Secret.” The FBI also located handwritten notes by Kendall Myers reflecting the gathering and retention of “Top Secret” information which he intended to provide the CuIS, but never did.
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za
12 July 2010
SA Intelligencer
Number 80
19
Finally, since at least 1983 and until 2007, Kendall Myers made repeated false statements to government investigators responsible for conducting background investigations which determined his continued suitability for a “Top Secret” security clearance. By not disclosing his and his wife’s clandestine activity on behalf of CuIS and by making false statements to the State Department about their status as clandestine Cuban agents, he defrauded the United States whenever he received his government salary. Based on these false representations and promises, Kendall Myers obtained at least $1,735,054 in salary from the U.S. government for the benefit of him and his wife. This investigation was conducted jointly by the FBI’s Washington Field Office and the State Department’s Bureau of Diplomatic Security. The prosecution was handled by Assistant U.S. Attorney G. Michael Harvey, from the U.S. Attorney’s Office for the District of Columbia, and Senior Trial Attorney Clifford I. Rones, from the Counterespionage Section of the Justice Department’s National Security Division. http://www.justice.gov/opa/pr/2010/July/10-ag-825.html Go to http://4knowledge-za.blogspot.com/ for Intelligence related events around the world and copies of previous SA Intelligencers. • • • • • • •
July 27-29: Intelligence – The Next Domino? Australian Institute of Professional Intelligence Officers (AIPIO) Annual Conference: Melbourne, Australia August 09-11: International Symposium on Open Source Intelligence & Web Mining 2010 (OSINT-WM 2010) Odense, Denmark September 10: Netherlands Intelligence Studies Association: Ethics & Effectivity of Intelligence in the times of Counter terrorism September 28-30: Geospatial Defence and Intelligence Asia, Kuala Lumpur, Malaysia September 28-30: Geospatial Intelligence Summit, Vienna Austria October 14-15: CASIS International conference, Ottawa, Canada May 2011: Future of Intelligence and Counter Intelligence: Threats, Challenges, Opportunities, Amsterdam, Netherlands
Publishing the Intelligencer is a labour of love, an awareness campaign, and an educational vehicle. It will not be used for commercial purposes and email addresses are confidential. Previous editions can be found at http://4knowledge-za.blogspot.com/ Notice: The SA Intelligencer does not confirm the correctness of the information carried in the media, neither does it analyse the agendas or political affiliations of such media. The SA Intelligencer’s purpose is informing our readers of the developments in the world of intelligence for research and environmental scanning purposes. We only use OSINT from free open sources and not those from fee-based sources. The SA Intelligencer contains copyrighted material - the use of which has not been specifically authorized by the copyright owner. The content has been harvested from various news aggregators, web alerts, lists etc. Further reproduction or redistribution is subject to original copyright restrictions. 4Kowledge provides no warranty of ownership of the copyright, or accuracy with respect to the original source material. Contact Dalene Duvenage at dalene@4knowledge.co.za should you wish to subscribe or unsubscribe.
Editor: Dalene Duvenage
Click on hyperlinks to open documents
dalene@4knowledge.co.za