The New Spies Read online

  The New Spies

  James Adams

  © James Adams 1994, 1995.

  James Adams has asserted his rights under the Copyright, Design and Patents Act, 1988, to be identified as the author of this work.

  First published in 1994 by Hutchinson.

  This edition published in 2018 by Endeavour Media Ltd.

  Table of Contents

  PREFACE TO THE PIMLICO EDITION

  Acknowledgements

  Glossary

  Author’s Note

  INTRODUCTION - DEFINING INTELLIGENCE

  CHAPTER ONE - THE BELLY OF THE BEAST

  THE NEW WORLD: AMERICA

  CHAPTER TWO - CHASING THE TIGER

  CHAPTER THREE - THE GUESSING GAME

  CHAPTER FOUR - CIRCLING THE WAGONS

  THE NEW WORLD: RUSSIA

  CHAPTER FIVE - DRAWING THE CLAWS

  CHAPTER SIX - REAPING THE HARVEST

  THE NEW WORLD: BRITAIN

  CHAPTER SEVEN - OUT OF THE SHADOWS

  CHAPTER EIGHT - SAME OLD STUFF

  THE CHALLENGES: ECONOMIC ESPIONAGE

  CHAPTER NINE - WITH FRIENDS LIKE THESE

  CHAPTER TEN - THE ENEMY WITHIN

  THE CHALLENGES: TERRORISM

  CHAPTER ELEVEN - SUPPING WITH THE DEVIL

  CHAPTER TWELVE - THE BAGHDAD BOMBERS

  CHAPTER THIRTEEN - THE IBRAHIM LINCOLN BRIGADE

  CHAPTER FOURTEEN - THE AMATEURS GROW UP

  CHAPTER FIFTEEN - ATTACKING HOME BASE

  CHAPTER SIXTEEN - GADAFFI AT BAY

  CHAPTER SEVENTEEN - MEETING THE CHALLENGE

  THE CHALLENGES: PROLIFERATION

  CHAPTER EIGHTEEN - CRYING WOLF

  CHAPTER NINETEEN - A FINGER IN THE DAM

  CHAPTER TWENTY - THE WEAPON OF SPECIAL DESIGNATION

  CHAPTER TWENTY-ONE - KILLING THE GOOSE

  THE CHALLENGES: DRUGS

  CHAPTER TWENTY-TWO - THE SPREADING PLAGUE

  CONCLUSION: THE NEW SPY

  CHAPTER TWENTY-THREE - WELCOME BACK, MR BOND

  CONCLUSION: THE REFORMS

  CHAPTER TWENTY-FOUR - ENOUGH IS NOT ENOUGH

  APPENDIX I – Intelligence Agencies

  APPENDIX II - Nuclear Status

  APPENDIX III - Planning an Intelligence Operation in Northern Ireland

  BIBLIOGRAPHY

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  PREFACE TO THE PIMLICO EDITION

  On February 21, 1994, Aldrich Ames was arrested at his home in Arlington, Virginia. The report of his arrest in the newspapers the next day suggested that he was an ordinary spy, a throwback to the Cold War, who had been caught working for the Russians. But 51-year-old Ames was much more than that. For rune years, while working in the Directorate of Operations (DO) of the Central Intelligence Agency, Ames had relayed every secret that he had learned to his paymasters in Russian intelligence.

  The information that Ames handed over included the identity of every significant network run by the CIA in the Soviet Union, the identity of every spy, the sources and methods used by the CIA in covert operations and the identity of many of the 6,000 people who work in the DO. So random and so prolific was Ames that he used simply to sweep every document off his desk into shopping bags to hand over to his Russian controller.

  The result was that at least ten Russians were arrested, tortured and executed. Hundreds of operations were compromised and, for much of the previous ten years, the. CIA was left without any significant sources operating in Russia. For this priceless intelligence, Ames received $2.7m in cash which he stashed in bank accounts in Switzerland, Colombia and America. By the time of his arrest, much of the money had been spent by Ames and his high-living wife, Rosario.

  The Ames case was important because it graphically illustrated some fundamental failings in the American intelligence community. It was also to bring into question the whole nature of intelligence in the post-Cold War world and to fuel what is now an unstoppable movement for the radical reform of American intelligence.

  Ames was a drunken loser who nonetheless had managed to prosper at the CIA where he was seen not as an alcoholic security risk who urgently needed treatment but as one of the boys whose little weaknesses should be ignored or covered up. For all his 30 year CIA career, Ames had had problems with drink, had routinely breached basic security by, for example, leaving Top Secret documents on the New York subway, and he had consistently failed to recruit any agents while on overseas assignments. Yet, this apparently useless individual had been promoted until he was in charge of some of the most sensitive areas of the Soviet European Division of the DO.

  From the moment Ames had walked into the Russian Embassy in June 1985 with his first shopping bag of documents, both the CIA and the FBI suspected that there might be a mole at work. The consequences of Ames’ treachery were so immediate and so enormous, with arrest following arrest and network after network rolled up, that a mole was the only and obvious explanation. Yet, it was to be nine years before Ames was finally unmasked. Much of the reason for that delay can be laid at the door of the CIA itself. The DO was simply unable to accept the idea that one of its own could be a spy. Probing questions from the FBI were turned aside and those within the Agency who wanted to ask difficult questions were seen as troublemakers. It was simply inconceivable to the CIA that this elite band of brothers could have spawned such a man as Ames.

  But the cultural rot went deeper than that. For decades, successive Directors of Central Intelligence, DCIs, had been seen as interfering outsiders who failed to understand the culture of the DO. Attempts at reform during the early 1980s by Bill Casey had been foiled. When Judge William Webster was appointed DCI by President Reagan, he was not told for eighteen months about the losses that the DO had experienced in the Soviet Union. When Bob Gates was DCI during the Bush administration, he was never told that the crown jewel of his empire — the SE Division of the DO — was producing almost no valuable intelligence from human sources.

  By the time Gates resigned as DCI to make way for James Woolsey, the man President Clinton appointed DCI in January 1993, the hunt for a mole had finally focused inside the CIA and Ames was in the frame. Yet the first time Gates heard Ames’ name when he read it in the newspapers. The first time Gates knew the extent of the damage that had been done by Ames was when he read about it in the newspapers.

  These extraordinary lapses by the DO suggested an arrogance and a lack of accountability that were simply unacceptable. For years it had been like that but, for the first time, Ames exposed how deep the rot had gone.

  But aside from matters of management and procedure, the fact that Ames had managed to do so much damage without the DCI or his immediate subordinates even noticing brought into question the rationale for an intelligence service at all. During the last days of the Cold War, at a time when the Soviet Union was imploding and communism collapsing, the CIA was operating without access to human intelligence sources in Moscow. And nobody noticed. That being so, the question confronting the Clinton administration was to discover if intelligence has a real role in the post-Cold War world and, if so, what is it?

  Immediately after Ames was arrested, America began what was to be a long and agonising period of reassessment of the intelligence community. Both the House and Senate began separate investigations into the Ames case and the CIA’s Inspector-General launched his investigation as well. In addition, President Clinton appointed a commission under Les Aspin, the former Secretary of Defense, to look into the future roles and missions of the intelligence community.


  The House, Senate and Inspector-General’s reports were all very critical of the performance and methods of the CIA. All agreed that reforms were necessary and fault was found with a large number of different individuals who had been responsible for controlling Ames and recommending his various promotions. Jim Woolsey, in a strange lapse of judgment, took no firm action against any of those involved and instead was satisfied with a few minor reprimands. This outraged Congress and Woolsey was eventually forced to resign at the beginning of 1995.

  The Ames case, the critical reports and the Woolsey resignation all combined to produce a very different climate in Washington than had existed when I conducted the initial research for this book. Then, the Berlin Wall had just been torn down, the Cold War had ended and a new era was just beginning. Among the intelligence experts in Washington, there was a general consensus that radical reform in such an uncertain world would be dangerous and could be very destabilising. What was needed was some change but it should be evolutionary rather than revolutionary. Today, those same people want revolution and they want it now.

  Bob Gates, who I had interviewed first when he was still DCI and then again after he had left the CIA, had consistently argued for a gradual approach to reform. When I travelled to his lakeside house in Washington State at the end of 1994, his views had changed dramatically. Now he has a new, radical agenda that he feels is essential if the intelligence community is to remain effective. Among his recommendations:

  1. The CIA should be cut and focus only on interests that are vital to national security — the former Soviet Union, China, regional powers and conflicts, terrorism and nuclear proliferation. The Agency should no longer waste valuable resources on such marginal issues as the environment or population growth.

  2. The DO should be reformed to take account of the obvious failures that arose in the Ames case, including improving diversity of personnel, cutting bureaucracy, and encouraging initiative and responsibility.

  3. Congressional oversight should be strengthened and term limits for members of the intelligence committees abolished. This would avoid the constant necessity of educating committee members about intelligence matters and avoid repeating the mistakes of the Ames case, where Congress was not informed of the damage done to the CIA in the 1980s.

  4. The duplication of military intelligence should be eliminated and almost all competitive analysis among the Defense Intelligence Agency, the CIA and other agencies should be stopped. The only exceptions to this would be situations involving foreign military threats and the proliferation of weapons of mass destruction. The CIA would stop maintaining a database on foreign armed forces and weapons, whereas the DIA would provide only tactical military intelligence.

  5. The national and tactical intelligence programmes should be consolidated to serve both the policy-makers and the Defense Department.

  6. The director of the DIA should be given a fourth star, made director of military intelligence, and given authority to create one intelligence organisation to serve the armed forces.

  7. The CIA should abandon all its paramilitary capabilities and pass them over to the Pentagon. The Agency should not be involved in military work that the armed services can do as well or better.

  8. A National Imagery Agency should be created to place one person in charge of setting priorities for the full range of US imagery collection capabilities.

  9. A system should be put in place to manage the wealth of unclassified information that is available. This would help the intelligence community gain access to information it now wastes time gathering and would also make available information to other interested groups such as universities and think tanks.

  10. The policy-makers must be forced to take a more active role in deciding the priorities for the intelligence community. This would help direct the tasks of every agency and ensure they remained focused on what was actually required rather than on what the community thought it should provide.

  11. The trend towards greater openness should continue so that the public and politicians have a growing and continuing understanding of the intelligence community, what it does and how it does it.

  It is striking that many of these recommendations were actually part of the conclusions of The New Spies. Two years ago, those conclusions were considered radical. Today, they are part of mainstream thinking about the future of the intelligence community. The focus of the debate is moving rapidly and it is already perfectly clear that it is revolution and not evolution that will be the result.

  In May 1995, John Deutch was sworn in as the new DCI. The former Deputy Defense Secretary, Deutch is a tough operator who has a reputation for ruthlessness. Before reluctantly accepting the job, he received an assurance from President Clinton that he would receive the support he needed to push through the changes he wanted. Among those changes is a determination to clear out the top layer of management at the Agency and before he moved into his new office at Langley, he fired Ted Price, the Deputy Director for Operations and served notice that another 30 or so top officials will also go. He intends to transform the DO by cutting staff from its current level of around 6,000 to about 4,000. At the same time, the CIA will cease its current efforts to permanently cover the whole world with intelligence officers in every capital. Instead, Deutch will set out rigid priorities in response to requirements established by the administration which could mean wholesale withdrawal from areas of marginal interest such as central Africa.

  But amid all the cutting, he intends to beef up the CIA’s ability to gather economic intelligence by hiring more analysts who understand the area. This will not mean an increase in economic espionage involving spying on individual companies. Instead, the Agency will try to produce intelligence on issues of direct economic importance to the government, such as Mexico’s plans to devalue the peso or Japan’s negotiating position in trade talks.

  Many of the changes will be fiercely resisted at the CIA but Deutch has a strong hand and major reform is certain. The CIA is badly demoralised and has lacked any firm leadership for too long. Among many Agency employees, particularly the younger generation who Deutch has promised to promote, there is a recognition that it is reform or die.

  Waiting in the wings is the Aspin Commission which is due to report in the summer of 1996 and whose work is expected to continue despite the untimely death of Les Aspin in May 1995. Deutch is determined to push through as many reforms as possible before the Commission delivers its recommendations so that he is not put in the position of fighting a rearguard action against outside pressure. Exactly what the Commission will recommend is not yet certain but some trends are already clear.

  In June 1995, the Commission travelled to Britain to meet with the heads of MI5, MI6 and GCHQ. This was the single most important overseas trip the Commission planned to make and was set up because the way the British have reformed the intelligence community since the Cold War and the way they currently operate are being seen as potential models for the American intelligence community.

  During their trip to Britain, the Commission were shown how the targeting by both MI5 and MI6 has changed since the end of the Cold War and were told about the results of a study into the future of GCHQ which had just been completed.

  The study was ordered in January 1995 by Prime Minister John Major and was carried out by Roger Hurn, the chairman and chief executive of Smith Industries. He headed a five man committee which included representatives from MI5, MI6 and the Ministry of Defence with a remit to examine the roles, missions and management of the spy agency.

  The study exposed overmanning in both Britain and America, where GCHQ is a large outpost, and proposed cuts of around 30% in the agency’s 6,500-strong staff and £500 million budget. The principal question the Hum study had to answer was just what GCHQ is doing and why. During the Cold War, there was an assumption that every code should be cracked and every message that could be intercepted should be. But now, with resources scarce, priorities have to be set. Clearly it
is right to listen to Libyan diplomatic traffic. But is it right to listen to all such traffic or only some? How much emphasis should be given to bugging the Russians and why?

  The Hurn report suggested that GCHQ would have to be much more specific about what it does to make sure that it produces intelligence tailored to requirements. That in turn means that the organisation will be forced to develop a much closer relationship with M16. Instead of simply going after every target as it sees fit and then producing useful intelligence on demand, GCHQ will now have to respond to requirements set out by MI6, so that both organisations work together towards a common goal.

  In the short term, this means that some senior management will be brought in from MI6. In the longer term, this closer working relationship will result in a gradual loss of independent identity for GCHQ and perhaps the eventual merging of the organisation with SIS.

  The Hurn Commission report caused serious concern in the Foreign Office and at GCHQ itself where there was concern that a loss of influence would adversely affect Britain’s relationship with America. Currently GCHQ works hand in glove with the American National Security Agency and this intelligence relationship is considered a vital pillar in what is left of the Anglo-American relationship. Reduce GCHQ, the argument ran, and you put at risk Britain’s influence with America and thus in the rest of the world.

  This was addressed when the Aspin Commission came calling in June. During the different briefings, much emphasis was placed on just why changes in GCHQ’s methods of operating would actually produce better and more valuable intelligence at less cost. It was an argument the Commission wanted to hear as both the NSA and the other signals intelligence-gathering organisations in America are firmly in their sights.

  If the Aspin Commission accepts at least some of the British model for reform, it is likely that the Pentagon’s single service intelligence agencies will be absorbed into the DIA. This was the original plan when the DIA was founded in 1961 but has been successfully fought off by the military bureaucrats ever since. It is also probable that if Deutch does not cut deep enough into the DO, then the Commission will do it for him. At the same time, the Commission will want to have a more effective analytical process that cuts through all the competition that currently exists to produce timely and definitive analysis for the policy-makers.