[1]178-10004-10115 2025 RELEASE UNDER THE PRESIDENT JOHN F. KENNEDY ASSASSINATION RECORDS ACT OF 1992 |
[2]. JFK Assassination System Date: 87277201
[4]Identification Form
[6]Agency Information
[8]AGENCY: CHENEY
[9]RECORD NUMBER: —178-10004-10115
[11]RECORD SERIES: GENERAL SUBJECT FILE
[12]AGENCY FILENUMBER: = INTELLIGENCE--REPORT BY JAMES J. ANGLETON
[14]Document Information
[16]ORIGINATOR: CIA
[17]FROM: ANGLETON, JAMES
[18]TO: ROCKEFELLER COMMISSION
[20]TITLE: REPORT TO PRES. COMMISSION ON CIA ACTIVITIES WITHIN THE US.
[22]DATE: 00/00/1975
[23]PAGES: 37
[25]SUBJECTS :
[26]ANGLETON, JAMES
[27]CONSPIRACY THEORIES, USSR
[28]NOSENKO, YURI
[29]OSWALD, LEE, RUSSIAN PERIOD
[30]. . ROCKEFELLER COMMISSION
[31]DOCUMENT TYPE: REPORT
[32]CLASSIFICATION : Secret
[33]- RESTRICTIONS: = 1B; 4
[35]DATE OF LAST REVIEW: — 08/09/1993
[37]OPENING CRITERIA :;
[39]COMMENTS : See pages 5-7. Does not include attachments.
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[51]REPORT TO THE PRESIDENTIAL COMMISSION ON
[52]CIA ACTIVITIES WITHIN THE UNITED STATES
[54]Mr. Vice President and Members of the Commission:
[56]In accordance with the Commission's request, my
[57]former colleagues and myself submit herewith a critique
[58]of the counterintelligence function in the Agency: We
[59]welcome the Commission's interest in this matter because
[60]it will be the first review of U.S. counterintelligence
[61]at such a responsible level in Government. In any
[62]event, it is urged that authoritative attention, beyond
[63]the life of the Commission, be given to the scope and
[64]role of counterintelligence in the Intelligence Community.
[65]This action is imperative because the current leadership is
[66]almost totally uninformed and inexperienced in the specialty
[67]of counterintelligence, and its authority for changes is being
[69]permitted to go unchallenged. The result is reflected in the
[71]failure to maintain continuity in this function. We believe
[73]Gn? oF more)
[75]ai fourcte
[77]8 SE(1), @) {5} er
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[82](unless impossible, insert gate or venti
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[86]OLUTEE SENSE
[88]that unless there are some enforceable guidelines set forth
[89]by a higher authority, the conduct of effective counterin-
[90]telligence by the Government will be lost for years to come.
[91]Counterintelligence is traditionally a vital plate in
[92]the shield of national security. It also protects the
[93]security and well-being of our Allies who have access to our
[94]sensitive intelligence by virtue of identity of interests or
[95]because of formal arrangements and pacts such as NATO. There
[96]are also useful-confidential interservice agreements whereby
[97]certain foreign intelligence services conduct unilateral or
[98]joint operations with our field stations, and the standard
[99]of their security is of continuing concern. In lower key,
[100]_it is also in the interest of CIA to aid the security serv-
[101]ices of the remaining non-Communist countries where any
[102]friendly elements exist. |
[103]Although we have been charged primarily with our view
[104]on CIA counterintelligence as such, we have included, as
[105]perspective requires, the security and counterintelligence
[106]interrelationship of other agencies and departments. Unlike
[107]the collection and evaluation of positive intelligence, |
[108]there has not been organized in Government, and particularly
[109]in the Intelligence Community, any Machinery to produce an
[110]end-product which might be described to be national as dis-
[111]tinguished from departmental counterintelligence. Very
[112]little is logical regarding this subject, unless one views. the
[114]historical framework of the function, in terms of the special,
[116]SEORET SES TYE Ph
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[122]SCUKED SENOTHVE
[123]L£ not privileged, position of the FBI who had dominated the
[124]Intelligence Community as it relates to counterintelligence.
[125]Director Hoover refused to submit his views or policies to
[126]the scrutiny of the Intelligence Community where any problem
[127]remotely impinged on the interests and/or jurisdiction of
[128]the FBI. This unassailable stance estopped any and all at-
[129]tempts to bring the Bureau to account in any interagency
[130]board of equals charged with counterintelligence oversight,
[131]including the very effective President's Foreign Intelligence
[132]Board (PFIAB) who were thoroughly apprised of the facts,
[133]given their continuity and authority within the Community.
[134]What emerged was a loose ad hoc liaison of third parties,
[135]but never a meeting of chiefs with Mr. Hoover to-hammer out
[136]basic issues relating to internal security and counterintelli-
[137]gence. This was the state of affairs until the appointment
[138]of Mr. Gray; counterintelligence as a function of Government -
[139]with few exceptions - was frozen by Mr. Hoover. Mr. Gray's
[140]tenure was marred by the turbulence of Watergate, and it was
[141]only with the appointment of Mr. Kelley that a new era opened
[142]up. Unfortunately, nothing of consequence has been tabled |
[143]with Mr. Kelley on the outstanding issues.
[145]Unlike the producers of positive intelligence, those
[146]engaged in counterintelligence are the primary consumers of
[147]their-own product, and the counterintelligence product is less
[148]perishable than that of positive intelligence. We have at-
[149]tempted to remedy this omission over the years on an ad hoc
[151]basis by distilling intelligence from counterintelligence operations,
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[159]SEGRE SENSITNE
[161]and we have concluded that ad hoc arrangements are inadequate
[163]l
[165]for satisfying those who have a need for the counterintelli-
[166]gence end-product. As to the recipients, they should include
[167]selected officials who are involved in the estimating process
[168]as well as policy makers up to the Cabinet level. This has’
[169]not been the case in the past, and as a result of this void,
[170]there has existed a conflict of views at both the policy and
[171]estimating levels regarding intentions, capabilities and the
[172]peculiar political dynamics of the Soviet Bloc. Experience
[173]would indicate that the basis differences in interpretation
[174]and evaluation are seemingly unbridgeable. What is required
[175]as soon as possible is an authoritative forum with access to
[176]all-source information in which differences may be joined and
[177]adjudicated.
[179]We believe that the result would give the guidelines
[180]and targets for political action follow-up and would have a
[181]significant impact on interdepartmental policies which are
[182]not unrelated to the Soviet Bloc realities which we have un-
[183]covered in counterintelligence. .
[185]Specifically, reference is made to cases which involve
[186]a determination regarding the bona fides of Soviet defectors
[187]and Bloc sources whose positive information is given. the
[188]broadest dissemination even though the source is suspect.
[189]From the beginning it has been defectors who have given us
[190]the most vivid appreciation of the clandestine activities of
[192]the Soviet Bloc. It is through defectors that one gains
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[200]SECRET SENSHESE
[202]knowledge regarding the identities and use of penetration
[203]agents and agents of influence who are, in turn, the kingpins
[204]of Soviet strategic deception.
[205]| An example of recent vintage which illustrates the
[206]range of confusion is Mr. McCone's response on television to
[207]a question that certain information was not turned over to
[208]the Warren Commission because the source was the KGB defector,
[209]Nosenko, whose bona fides at the time were not fully estab-
[210]lished. After having asserted that much effort always is devoted
[211]to the problems of bona fides, Mr. McCone related that he had
[212]been informed that the Agency's position now regarding Nosenko,
[213]as a result of a painstaking examination, was that he is
[214]bonafide. Astounded by this statement, the undersigned called
[215]the Agency officer who was the former executive assistant to
[216]Mr. McCone for clarification. He opined that Mr. MeCone
[217]could not remember everything but that he would look into the
[218]matter. As of this writing there has been complete silence
[219]as to the identity of the Agency's spokesman.
[220]To understand the significance of this anonymous bestowal
[221]of bona fides requires some further explanation of the Nosenko
[222]“case. Several thousand man-hours have been expended in inter-
[223]viewing Nosenko and analyzing his information. While there
[224]were those somewhat removed from the case who accepted his
[225]bona fides, a contrary view was registered by the following:
[226]the Chief of the Soviet Division (who is now the Director's
[228]National Intelligence Officer for Soviet Production); the then
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[240]Deputy Chief of the Soviet Division, even though he was the
[241]first contact of Nosenko's in the field; and his chief as-
[242]sociates in the Division. In favor of Nosenko's bona fides
[243]have been the Office of Security and certain other members
[244]of the Soviet Division. The most persuasive detractor of
[245]Nosenko has been the KGB defector, Golitsyn. He is regarded
[246]to be the most knowledgeable KGB defector to come our way.
[247]After a lengthy analysis, he concluded that Nosenko was a
[248]dispatched agent provocateur. His views are’ also shared
[249]independently by another Soviet Intelligence Officer who
[250]defected to the Agency. The Counterintelligence Staff ar-
[251]rived at the same conclusion. The question of bona fides
[252]is unresolved. It has been permitted to fester without any
[253]authoritative conclusion because it is an interagency prob-
[254]lem affecting other Soviet Bloc cases which are controlled
[255]elsewhere in the Community. Nosenko's information revolves»
[256]around the following subject matters:
[257]1. President Kennedy's Assassination:
[259]Nosenko's story is that while he was in the
[261]KGB's internal intelligence, he read the case
[263]file on Oswald. Given the timing of his de-
[265]fection, shortly after the assassination, his
[267]account = not borne out by the initial poly-
[269]graph - may be viewed as exonerating the
[271]Soviets of any complicity with Oswald, thus
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[281]supporting the flimsy documentation on
[283]Oswald handed over to the U.S. Government
[285]by the USSR. This would also tend to disa-
[287]vow any relationship between the USSR and
[289]Cuba in clandestine activity.
[291]2. Penetrations: With one or more
[293]exceptions, he stated that there were no
[295]penetrations of the U.S. Government. This
[297]assertion flew in the face of the overview
[299]which Golitsyn gave to us regarding Soviet
[301]Bloc penetration of Western services and
[303]strategic deception. |
[305]3. Order of Battle of the KGB at Home
[307]and Abroad: There are many instances where
[309]Nosenko's information contradicts Golitsyn's.
[310]We have concluded on the basis of present evidence that
[311]Nosenko was dispatched to the West to mutilate the counter-
[312]intelligence leads which had been revealed by Golitsyn.
[313]As to his observations regarding Oswald, it was the Soviets
[314]who have pushed the deception theme to the effect that
[315]Oswald was an instrument of the military - industrial com-
[316]plex of the eastern United States. This thought was first
[317]raised by Khrushchev in Cairo in an unusual interview which
[318]he had with an American journalist. It has since been pur-
[319]sued by the Soviets through various channels, mainly KGB,.
[321]and it is now common currency in Soviet newspapers and other
[322]media.
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[330]SECRET SENSITNE
[332]The Nosenko case goes to the quick of the
[333]counterintelligence problem facing not only the FBI and the
[334]Agency but all Western Intelligence and Security Services,
[335]many of whom have received information derived from Nosenko.
[336]It is evident that as presently organized, the
[337]Intelligence Community is incapable of correlating intelli-
[338]gence production with the product and analysis of counter-
[339]intelligence information.
[341]Given the inability of the Intelligence Community to come
[342]to grips with the problems raised by counterintelligence, it
[343]is suggested that the only solution to the very unsatisfactory
[344]situation today would be the appointment of an ombundsman who
[345]would be authorized to act directly on behalf of the
[346]National Security Council on serious interagency problems which
[347]have a direct bearing on the plans and capabilities of the
[348]Communist Bloc and involve the more sensitive operations of
[349]counterintelligence. Alternatively, consideration could be
[350]given to the responsibilities of the Chairman of PFIAB, which
[351]might be enlarged to satisfy this need. | .
[353]As Attachment A, I submit a letter and attachment which
[354]was submitted to the Secretary of Defense on 31 January 1975.
[355]Given the march of events and the uncertainties involved, in
[356]addition to the responsibilities of his high office, it is
[357]understandable, perhaps, that the Secretary has not wished
[358]to become entangled in disputations on this subject matter
[359]as long as the Agency and its various Directors are being
[361]subjected to investigation. Nevertheless, in our view, the
[363]a SERRE
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[373]issues involving Soviet strategic disinformation and our
[374]defense posture go to the heart of national security inso-
[375]far as they relate to estimates affecting the world balance
[376]of power. Additionally, we believe it to be most misleading
[377]for one to assume that estimates derived from technical col-
[378]lection alone justify the negotiation of finite disarmament
[379]and other. treaties with the Soviet Bloc governments unless
[380]there is corresponding high-level covert intelligence pro-
[381]duction which supplements and confirms the findings of
[382]technical collection.
[384]This view argues against the philosophy now being aired
[385]with Olympian aplomb that technical coverage alone is a
[386]substitute for clandestine sources or that it gives a reliable
[387]data base which justifies a super power to bargain away its
[389]strength. (Attachment B sets forth the views of
[391]Mr. Paul Nitze and his first-hand impression of the SALT
[392]talks. Of particular interest is his description of the
[393]atmospherics: [a] the peculiar role of the KGB among Soviet
[394]negotiators, and [b] how an uninformed U.S. representation
[395]learned from the Soviet delegation of changes in the U.S.
[396]negotiating positions arrived at in Washington. The KGB
[397]attempted similar ploys during the Johnson Administration
[398]with a former high official of President Kennedy's on the
[399]Vietnam issue.)
[401]If there be validity to the information derived from
[403]Golitsyn, then it would follow that detente and estimates
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[411]SEGRET SENSTENE
[413]derived therefrom are misleading with regard to the events
[414]in Portugal, Vietnam and other areas where we are in com-
[415]petition with the Soviets and the Bloc. A more accurate
[416]picture could be obtained if the structure of the
[417]Intelligence Community, in its processing of information,
[418]were less concerned with public or overt data regarding
[419]the Soviet Bloc intentions, such as the reporting of
[420]Ambassadors and other representatives, and instead give
[421]full faith and credit to secret information from bona fide
[422]sources who are or were within the Soviet Bloc system and
[423]whose warnings regarding disinformation have been uni-
[424]versally ignored. To - repeat, it is the opinion of these
[425]sources that the bulk of information available to the
[426]West: through Soviet Bloc contacts, regarding the strategy
[427]and aims of the Eastern Bloc, is, on the whole, spurious
[428]and represents Little more than coordinated handouts which
[429]advance the interests of Soviet Bloc strategic disinformation
[430]at many levels of communications.
[432]The remainder of this report represents the status, as
[433]of March 1975, of U.S. counterintelligence, primarily within
[434]the CIA, but also, as the perspective requires, at the na-
[435]tional level. The discussion consists of four parts;
[437]The authority under which CIA conducts
[438]counterintelligence activities.
[440]The nature of those activities.
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[444]SECRET SENSITIVE
[446]A summary of critical developments in
[447]the history of U.S. counterintelligence from
[448]1945 to 1975. .
[450]Recommendations which we respectfully |
[451]urge the Commission to submit to the President
[453]for his consideration.
[454]I. THE AUTHORITY
[456]The current version of National Security Council
[457]Intelligence Directive No. 5, U.S. Espionage and Counter-
[458]intelligence Activities Abroad, effective 17 February 1972,
[460]-is the charter for the conduct of foreign clandestine ac-
[461]tivities by CIA and by the other members of the U.S. in-
[462]telligence and counterintelligence community. NSCID/5
[464]defines counterintelligence as " ... that intelligence
[465]activity, with its resultant product, devoted to destroying.
[466]the effectiveness of inimical foreign intelligence activities
[467]and undertaken to protect the security of the nation and its
[468]personnel, information and installations against espionage,
[469]sabotage and subversion. Counterintelligence includes the
[470]process of procuring, developing, recording and disseminating
[471]information concerning hostile clandestine activity. and of
[472]penetrating, manipulating or repressing individuals groups
[474]or organizations conducting such activity."
[476]As defined, counterintelligence consists of two parts,
[478]security and counterespionage. Security is essentially the
[480]Pho
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[485]at
[488]SECRET SENSI
[489]static defenses erected against the clandestine activities
[490]of adversaries of the U.S., whereas counterespionage is
[491]aggressive activity of engaging the adversary clandestinely.
[493]NSCID/5 stipulates that the Director of Central
[494]Intelligence shall undertake specified actions in order to
[495]ensure centralized direction of all clandestine activities
[496]within the scope of the Directive. It also charges CIA
[497]with primary responsibility for U.S. clandestine activities
[498]abroad and permits other departments and agencies to conduct
[499]such foreign clandestine activities as are supplementary or
[500]are necessary to their security. Departmental counterin-
[501]telligence is brought. together through two Director of
[502]Central Intelligence Directives, one which requires coordi-
[503]nation in advance with CIA on clandestine counterintelligence
[504]operations abroad, and the other which stipulates that CIA
[505]shall serve as a central repository of foreign counterin-
[506]telligence data to the Intelligence Community.
[508]The flow of authority is from the National Security
[509]Council to the Director of Central Intelligence to the
[510]Deputy Director for Operations to: the central counterintelli-
[511]gence unit of CIA or to an area division to provide whatever
[512]assistance the Director may require to discharge his obliga-
[513]tions under NSCID/5 and its assignment to him of responsi-
[514]bility for the protection of methods and sources or under
[515]other laws, orders and directives. The immediate mandate
[517]of the counterintelligence component, however, is derived from
[519]“TEN na pee pom
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[527]OEUKEL SENSITIVE
[528]those responsibilities assigned directly to CIA (and thus
[529]chiefly from paragraphs lb, 3b, 3c, 3d and 9 of NSCID/5, the
[530]chief provisos of which have been noted above).
[532]In our view the DCI is not exercising under NSCID/5
[533]responsible centralized direction of counterintelligence
[534]clandestine activity. As indicated to the Commission in
[535]verbal testimony,. the current Director has spent less than
[536]four to five hours with the Counterintelligence Staff from
[537]the moment he became the Deputy Director for Operations
[538]until the present. His knowledge of the activity during the
[539]period when he was Chief of the Far East Division was one of
[540]failure and is reflected in an Inspector General's report of
[541].the period. This and some of his communications to the field
[542]are a matter of record in the FE Division. Instead of exer-
[543]cising leadership in resolving the serious problems of pene-
[544]tration and disinformation, which are of prime importance to
[545]the security of the country, under his aegis there has been a
[546]decentralization and mutilation within the Agency and, there-
[547]fore, within the Community of high-level counterintelligence
[548]activity. We believe that substantial changes are needed
[549]and that these changes should be effected with and through
[550]an understanding of our counterintelligence mission, capa-
[551]bilities and needs. In setting forth our collective views on
[552]these matters, we do so, drawing on our professional experi-
[553]ence as to what needs to be set right and how it may be done.
[554]The primary cause of the present vulnerability of our na-
[556]tional security is the inadequate attention and serious lack
[558]rintelligence function.
[560]r) h 7%
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[568]KE ETIR 2 WSL RUASE AY
[569]OLbHE] OLe EE
[571]II. THE NATURE OF COUNTERINTELLIGENCE ACTIVITIES
[573]The counterintelligence unit of the CIA bears a direct
[574]responsibility for the security of all Agency espionage and
[575]counterintelligence Operations conducted abroad. It is also
[576]“directly responsible for identifying and containing or con-
[577]trolling hostile clandestine activity through such operations
[578]as the following:
[580]- The identification of adversary
[581]personnel, regardless of citizenship or
[582]location abroad. |
[584]~ The penetration of foreign services.
[586]- The handling and utilization of
[587]certain intelligence and counterintelligence
[588]defectors from foreign services.
[590]~ The management of double agent opera-
[592]tions. .
[594]~ The detection, analysis and nullifi-
[595]cation of hostile deception operations,
[596]including disinformation.
[598]- Counterintelligence analysis and
[599]operations directed against adversary
[600]propaganda, defamation, forgeries and other
[601]covert activities.
[603]- The exploitation of communications
[605]intelligence in furtherance of counterin-
[607]telligence objectives...
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[615]SEERET SENSHWE
[617]- The conduct of liaison abroad with
[618]foreign counterintelligence and security
[619]services and with foreign services
[620]generally about counterintelligence matters.
[622]- The conduct of domestic counterintel-
[623]ligence liaison to ensure the necessary
[624]sharing of information and coordination of
[625]action..-
[627]- The Maintenance of its own records and
[628]the managerial supervision of CIA's central
[629]repository of records to ensure that the
[630]foreign counterintelligence in these holdings
[631]is collated, analyzed and made available to
[632]others in the Intelligence Community on a
[634]need-to-know basis.
[635]III. A SUMMARY OF THE COUNTERINTELLIGENCE HISTORY OF CIA
[637]After the Second World War, except for a few stations
[638]abroad, centralized U.S. counterintelligence practically
[639]disappeared. By October 1945, when 0.S.S. was liquidated,
[640]its counterintelligence branch, X-2, had become a wide-
[641]spread net of overseas stations staffed by some 650 counter-—
[642]intelligence specialists. Starting nearly from scratch,
[644]X-2 had created and developed a thoroughly professional
[645]U.S. counterintelligence capability in-a very short time
[647]because it served a leadership that understood and respected
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[655]BLUE] OCNOHIVE
[657]the counterintelligence function and conferred upon it the
[658]necessary measure of authority, autonomy and the essential
[659]secrecy required for the conduct of this activity. To better
[660]understand the need for reform, it is believed that a short
[661]historical presentation is essential. What is here submitted
[662]is based on voluminous files and documentation which record
[663]the shaky progress of counterintelligence as practiced by
[664]the U.S. Government following World War II until the present.
[666]After October.1945 the concept of counterintelligence as
[667]a separate and equal function withered away. On 17 October
[668]of that year Brigadier General John A. Magruder, then the
[669]director of the Strategic Services Unit (a short-lived
[670]inheritor of 0.S.S.), stated in a memorandum to
[671]Mr. John J. McCloy that the valuable 0.S.S. liaison relation-
[672]ships abroad were deteriorating because foreign services were
[673]uncertain as to whether the United States would have a central
[674]intelligence service. General Magruder was an honorable and
[675]conscientious custodian of 0.S.S.
[677]Although CIA was established in 1947, and although the
[678]first version of NSCID/5, promulgated in December 1947,
[679]charged the Director of Central Intelligence with the conduct
[680]of all organized federal counterespionage operations overseas,
[681]the new Agency did not have a central counterintelligence
[682]unit of mechanism through which it could meet its counter-—
[684]intelligence responsibilities.
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[692]On 1 January 1949 a report was submitted to the
[693]National Security Council at its request by men whom it had
[694]appointed to a Survey Group: Messrs. Allen W. Dulles
[695](chairman), William H. Jackson and Mathias F. Correa. As
[696]one who had played a key role in the Office of Strategic
[697]Services, Mr. Dulles was familiar with the wartime role and
[698]performance of X-2. He understood its record and mission
[700]which were succinctly stated in the War Report: Office
[702]of Strategic Services.! The opening paragraph of this of-
[703]ficial account of X-2 reads as follows: "Counterespionage
[705]is a distinct and independent intelligence function. It
[706]embraces. not only the protection of the intelligence in-
[707]terests of the government it serves, but, by control and
[708]Manipulation of the intelligence operations of other
[709]nations, it performs a dynamic function in discerning
[710]their plans and intentions, as well as in deceiving then.
[711]An effective counterespionage organization is therefore an
[712]intelligence instrument of vital importance to. national
[713]security."
[715]The Dulles Committee made recommendations designed to
[717]strengthen CIA and its counterintelligence capability. The
[719]1
[720]Vol. I, Washington Organization, History Project, Strategic
[721]Services Unit, Office of the Assistant Secretary of War,
[722]War Department, Washington, D. C., July 1949.
[724]2
[725]Ibid., p. 189.
[727]17
[729]Photocopy
[730]from
[731]Geratd R. Ford Library
[733]HY 50955 DoclId:32112771 Page 18
[735]SEGRE SEIS
[736]1949 report is infused with an understanding of problems and
[737]principles that have remained much the same for the past
[738]quarter of a century. The following two brief quotations are
[739]illustrative: " ... We... propose that the branches of
[740]the Central Intelligence Agency which are directly engaged
[741]in clandestine actitivities, such as secret intelligence
[742][espionage], counterintelligence, secret operations and the
[743]like, be given a great measure of autonomy as to internal
[744]administration, the control of their operations and the
[745]selection of personnel." The report also stated, "It |
[746]seems apparent that the present counterespionage staff of
[747]the Office of Special Operations should be materially
[748]strengthened and more intensive counterespionage work
[749]promoted,"
[751]Until the end of 1954, however, counterintelligence
[752]remained structurally and in other respects subordinate to
[753]the collection of positive intelligence. In August 1950 there
[754]was a counterintelligence sub-unit called Staff C, but it had
[755]a total strength of twenty-three. The Soviet Intelligence
[756]Branch’ of Staff C consisted of three people. The result was
[757]a dispersion of the counterintelligence function among the
[758]area branches and a degradation of the work to such lowest
[759]common. denominators as name tracing, maintenance of
[760]counterintelligence files and the like.
[762]A notice of 20 December 1954 announced the formation of
[763]anew, senior counterintelligence element, the Counterintel-~
[765]ligence Staff. For the first time CIA had elevated the
[767]Photocopy
[769]Gerald R Fond trary
[771]HY 50955 Docld:32112721 Page 19
[773]SEER:
[775]counterintelligence function, as a Staff function, to full
[776]parity with espionage and covert activities. One of the
[777]first undertakings of the Counterintelligence Staff was
[779].to determine who was doing counterintelligence work, what |
[780]they were doing and under what circumstances. ._ This survey
[781]was launched in 1955 and completed in 1956. It established
[782]that except for the Counterintelligence Staff itself, the
[783]Operational Directorate had only 133 full-time counterin-~
[784]telligence officers, about 6 per cent of its total non-
[785]clerical strength. The average grade of these officers was
[786]GS-09, and their average Agency experience was five years.
[787]Only one in four had had either basic or advanced training
[788]in counterintelligence.
[790]From the end of 1954 until April 1973, the apex of its
[791]development, the Counterintelligence Staff grew in numbers,
[792]skills and responsibilities. By the latter date its per-
[793]sonnel strength, as I noted in my earlier report to the
[794]Commission, consisted of 130 officers and ‘seventy-two assist-
[795]ants and clerical personnel. This total of 202 still con-
[796]stituted only 3.7 per cent of the total Directorate of
[797]Operations strength of 5,662. Asa result CIA could not
[798]meet its counterintelligence responsibilities adequately
[799]even at this peak of on-board counterintelligence strength.
[800]It is our view that the Operations Directorate ought to
[801]devote no less than 10 per cent of its manpower to
[803]counterintelligence and that no less than half of its
[805]Phatocoy
[806]from
[807]Gerald R. FordLitarary
[809]HY 50955 Docid:32112721 Page 20
[811]SECRET SESSt
[812]counterintelligence personnel should be allocated to the
[813]counterintelligence unit in Headquarters. This 10 per cent,
[814]‘comprising 566 officer and clerical employees, would still
[815]fall considerably short of our counterintelligence strength
[816]in the fall. of 1945 when O.S.S. was dissolved.
[817]| The Counterintelligence Staff was nevertheless able
[818]to work effectively against its major targets. The scope
[819]of this paper prohibits an adequate resume, but there is an
[820]indication of the results achieved in the fact that during
[821]the years 1961 through 1963 eight major Soviet penetrations
[822]of American and foreign liaison intelligence services were
[823]uncovered and that six of the eight exposures resulted
[824]directly from CIA's counterintelligence work. Fifteen soviet
[825]agents were arrested, as well as more than twenty others
[826]who were working clandestinely for one or another of the
[827]East European services.
[829]In August 1973 as a result of the change in leadership
[830]in the Agency, there was put in motion a series of baffling
[831]administrative and functional changes which ignored the
[832]state of the art; the need for resolving many inter-Agency
[833]problems in counterintelligence, and, particularly, the
[834]need to work out with the FBI in depth a number of conflicts
[835]concerning the bona fides of sources; the handling of defec-
[836]tors; and authoritative research and analysis pertinent to
[838]‘these differences.
[840]20
[842]Photocopy
[843]Gerald R. Fond Litrary
[845]HY 50955 Docld:32112721 Page 21
[847]SECRET SENSHNE
[849]The strength of CIA's counterintelligence unit was
[850]cut almost in half - to eighty-nine; and by December 1974
[851]the on-board strength of our counterintelligence personnel,
[852]officer and clerical, was down to seventy-seven, a total
[853]comprising 1.7 per cent of Operations Directorate strength. -
[854]This abrupt reduction in force was accompanied by the
[855]transfer of four interlocking staff elements (International
[856]Communism, Operational Approvals, Police and Counterintelli-
[857]“gence Liaison) to other jurisdictions. I do not know of
[858]any reasons concerning the performance of the Counterintelli-
[859]gence Staff or the scope of hostile clandestine intelligence
[860]action against the U.S. which would justify this drastic
[861]reduction and weakening.
[863]With regard to the FBI it is a fact that for some years |
[864]prior to the death of Mr. Hoover, there were sharp differ~
[865]ences between the FBI and the Counterintelligence Staff
[867]regarding the bona fides of Soviet intelligence personnel
[869]who represented perhaps the prime sources of information in
[870]relation to Soviet Bloc activity in the U.S., penetration in
[871]the Government and the order of battle of the Soviet presence.
[873]CIA was fortunate to acquire a KGB defector in
[874]December 1961 who had spent many years at a very high level
[875]of Soviet security acquiring the most sensitive information
[876]in the full knowledge that when the time was propitious, he
[877]would defect to the West and impart his information. By way
[879]of simplification, it should be noted that this individual
[881]fhe Photocopy
[882]from
[883]Geratd R Ford Library,
[885]HW 50955 Docld:32112771 Page 22
[887]SECRET SENSITIVE
[889]was responsible for the breaking of many espionage cases in
[890]the West, but equally important he divulged Soviet plans,
[891]strategy and organization effected in 1959 by the KGB under
[892]the auspices of the Central Committee which in turn mapped
[893]out in partnership with other services of the Bloc a pro-
[894]gram of action whose principal targets were the isolation
[895]of the U.S. as the "Main Enemy” and the ultimate change in
[896]the balance of military power in favor of the Soviet Bloc.
[897]During the later tenure of Mr. Hoover, which was
[898]fraught with difficulties between the FBI and members of
[899]the Senate, and included other changes hampering or limit-
[900]ing the FBI's ability to conduct internal security opera-
[901]‘tions, the hard issues of disagreement were never dealt
[902]with on an agency-to~agency basis. To the contrary, as
[903]the Commission is well aware, there was eventually a break-
[904]down in liaison across the board between departments and
[905]agencies of the Government with the FBI (with the exception
[906]of the White House). Further, the internal disputes within
[907]the Bureau challenging Mr. Hoover's leadership were extremely
[908]detrimental to any objective consideration concerning the
[909]national security, and consequently years were lost in
[910]pursuing the national counterintelligence objective.
[911]During this period, in our view, national estimates and
[912]evaluations were formulated in concrete establishment of
[913]detentist philosophy which marked the real state of
[915]Soviet Bloc subversion in the secret war.
[917]Photocopy
[918]from
[919]Geratd R. Ford Library
[921]HW 50955 Docld:32112721 Page 23
[923]SECRET SUSIE
[925]By way of explanation, we can illustrate the ineffectual
[926]coordination with a case involving a long-term Soviet pene-
[927]tration in the Agency. A very important staff agent was
[928]unmasked by virtue of information supplied by the aforemen~
[929]tioned defector, but in.the process the FBI officially took
[930]the position that the candidate who was submitted by the
[931]Agency was not the Soviet agent in question, and by memo-
[932]randum they proposed that we submit all of the data to the
[933]Department of Defense on grounds that the penetration agent
[934]was more likely a past or present asset of the military.
[935]Subsequently, a high-level source confirmed our original
[936]identification, which in turn was accepted by the FBI. The
[937]case is illustrative of the inability within this Government
[938]to resolve interagency differences in all of. those sensitive
[939]fields affecting penetration.
[941]The result of the 1973 changes was a decentralization
[942]of counterintelligence, a retrogression to the inadequacies
[943]of the period 1949 to 1955. Now, as then, counterintelligence
[944]in CIA lacks the necessary specialists and the requisite
[945]interaction at the Agency's highest levels. Some of the
[946]present grave problems are not new, but the recent changes
[947]have greatly magnified them. Among our present: weaknesses
[948]are the following:
[950]/ - An almost total failure against
[951]- Soviet illegals (intelligence officers
[953]under deep, non-official cover). At
[955]Photocopy
[956]from
[957]Gerald R. Ford Library
[959]HW 50955 Docld:32112771 Page 24
[961]SEGRET SENSITIVE
[963]present CIAis not conducting a single
[964]operation against a Soviet illegal.
[966]~ An incapacity to pursue unresolved
[968]outstanding leads. We estimate that there
[969]ate some fifteen hard-core leads to known
[970]or probable penetrations by adversary
[971]services into U.S. or Allied services;
[972]that there are about one hundred leads
[973]meriting immediate study, analysis, in-
[974]vestigation and exploitation; and that
[975]there are no less than one thousand that
[977]merit pursuit. All of them are now'
[978]dormant.
[980]~ An inability to deal effectively
[981]with the twin problems of devising and
[982]carrying out strategic U.S. deception
[983]operations and of nullifying adversary
[985]deception. This serious weakness is not
[986]imbedded in CIA alone, and it did not
[987]result from the restructuring of agency
[988]counterintelligence. The U.S. lacks
[990]a single, duly mandated, centralized
[991]authority for dealing with deception.
[992]Those few individuals and groups in the
[993]U.S. Government, chiefly in the military
[995]services, who are concerned with strategic
[997]Photocopy
[998]from
[999]Geraid R. Ford Litrary
[1001]HW 50955 Docld:32112771 Page 25
[1003]deception lack ready or frequent access
[1004]to the policy level. They attempt to
[1005]frame deception plans in ignorance of
[1006]new policies, and they can obtain top-
[1007]level review of their plans only on an
[1008]ad hoc basis. The remedy is not to
[1009]abandon deception and counter-deception
[1010]but to elevate these functions. Should
[1011]the Government do so, however, CIA would
[1012]now lack the required expertise.
[1014]- A dwindling cadre. A substantial
[1015]core of experienced counterintelligence
[1016]specialists is the first preequisite for
[1017]an effective counterintelligence program.
[1018]Only a few are left today. The problem
[1019]results not solely from the drastic reduc-
[1020]tion in force in ‘1973 but also from a
[1021]philosophy and system that have made it
[1022]almost impossible to replace either the -
[1024]"numbers of the skills of those lost
[1025]through attrition. In the Operational
[1026]Directorate it is the Area Divisions that are
[1027]linked by a command line to top CIA manage-
[1028]ment in Headquarters and to all 147 Agency
[1030]stations overseas. The Divisions select
[1032], . : : Py
[1033]25 : oF
[1034]7 soe Seay, ty
[1038]HW 50955 Docld:32112771 Page 276
[1040]SEGKET SCHON
[1042]young intelligence officers soon after the
[1043]completion of their initial training, at the
[1044]outset of their careers. They send many of
[1045]them abroad, direct their work through
[1046]Chiefs of Stations and Bases and bring them
[1047]back in accordance with the personnel needs
[1048]of Headquarters and the Field. The result
[1050]is a system of rotation that benefits both
[1051]the Agency and the employee. In contrast,
[1052]the counterintelligence unit in Headquarters
[1053]has no representative of its own overseas.
[1055]To secure competent replacements, it must try
[1056]to intervene in the normal progress of .
[1057]careers, to persuade officers and Divisions
[1058]that higher interests require a change of
[1059]their plans and to convince the officers that
[1060]they should choose careers in counterintelli-
[1061]gence even though their career advancement
[1063]is infact likely to be impeded by this choice.
[1064]In brief, CIA has no system for developing
[1065]counterintelligencé career officers; sending
[1066]them abroad on a rotational basis to acquire,
[1067]through a series of tours, the necessary
[1068]experience as specialists; and providing them
[1069]with the same incentives and career prospects
[1071]as those of their peers in the Area Divisions.
[1073]HY 50955 Docrld:32112721 Page 27
[1075]SEEXED SEASUAE
[1077]- An accelerating decline in the
[1079]quality of our counterintelligence liaison
[1080]relationships abroad. Here too there is a
[1082]parallel with the problems’ that beset us in
[1083]the past and that gave’ cause to
[1084]General Magruder to express his concern in 1945,
[1085]Most of CIA’s liaison overseas is
[1086]carried out with counterintelligence and
[1087]security services because only a minority
[1088]of nations maintain.foreign espionage
[1089]organizations, whereas nearly all have
[1090]internal security services. Italy is
[1091]typical. It has a few intelligence offi-
[1092]cers overseas, but 99 per cent of its
[1093]strength is at home. The major Italian in-
[1094]telligence service is the Defense Intelli-
[1095]gence Agency (SID). The SID draws its
[1096]counterintelligence from the Carabinieri
[1097](a semi-military organization with:a net-
[1098]work of posts spread throughout the country)
[1099]and from all of the military services. ‘The
[1100]service has a vast array of domestic sources
[1101]that number in the high thousands and range
[1102]from the portieri who tend apartments
[1103]throughout Italy to high dignitaries of the
[1105]church and state. The chief of the SID has
[1107]Prog
[1108]Mag,
[1109]at ae se 27 ine preren aly en a
[1110]wih deli | tes deed fava "ty
[1112]HY 50955 Docld: 32112721 Page 28
[1114]SECRET SENSITIVE
[1116]direct access to the Minister of Defense, .
[1117]and some service chiefs have also had the
[1118]benefit of immediate access to the
[1119]president of the republic. Through its
[1120]liaision with the SID the CIA greatly.
[1121]augments its own resources at scant cost.
[1122]The same pattern obtains, in varying
[1123]degrees, in all of the countries (more
[1124]than one hundred) and most of the serv-
[1125]ices (more than three hundred) with which
[1126]CIA maintains liaison relationships.
[1128]Counterintelligence liaison requires
[1129]close and expert attention. It is built upon
[1130]mutual interest; but through training, per-
[1131]suasion and other means the skillful liaison
[1132]officer expands the shared basis and thus
[1133]directs or redirects the enormous counterin-
[1134]telligence resources of the non-Communist
[1135]world against targets of primary importance
[1136]to the U.S. |
[1138]In return for this vast strengthening
[1139]of our defense, our Allies look to us for
[1140]several advantages: for example, a buttres-
[1141]sing of their frequently meager capabilities
[1142]in research and analysis. They must also be
[1144]confident that we can give a full measure of
[1146]wows oF
[1148]HY 50955 Docld: 32112721 Page 29
[1150]SECRET SENSITIVE
[1151]protection to secrets shared with us. And they
[1152]look to us for leadership. At times we have
[1153]disappointed them.
[1155]An instance of this occurred in
[1156]September 1971, when the British expelled ninety to 105
[1157]Soviet intelligence officers from their country
[1158]in a Single action. They had noted a relent-
[1159]less buildup of the Soviet clandestine force
[1160]in their midst. MI 5, the British counter-
[1161]intelligence service, found that the fifteen
[1162]intelligence officers whom it had identified
[1163]in the U.K. in 1950 had grown by 1970 to more
[1164]than 120. The PNG action was carriéd out
[1165]despite some qualms. The Soviets made only a
[1166]token retaliation. The Belgians followed the
[1167]British lead, though on a smaller scale and
[1168]without publicity. A number of liaison serv-
[1169]ices expected the U.S. to make a similar move,
[1170]and the FBI and CIA joined in recommending
[1171]such action here. But no initiative was under-
[1172]taken.
[1174]Now the fabric of our counterintelligence
[1175]liaison relationships shows some fraying be-
[1176]cause of clamor in the American press and a
[1177]consequent change of atmosphere. Our partners
[1179]are no longer sure that we can act decisively
[1181]HW 50955 Docld:32112771 Page 30
[1183]OLGNET SENSHTHE
[1185]in concert with them or even keep their
[1186]secrets. To weather the crisis, CIA needs
[1187]a strengthened counterintelligence cadre in
[1188]its Headquarters, one able to give full
[1189]support and judicious guidance to liaison
[1191]officers abroad.
[1193]-~ A mounting inability to cope with
[1194]the growing menace of hostile clandestine ~
[1196]activity. The sudden reduction in CIA's
[1197]central counterintelligence capacity took
[1198]place at a time when the intelligence
[1199]services of the Soviet Bloc, about twenty-
[1200]five in all, have increased immeasureably
[1201]their total presence abroad and their op-
[1202]erational initiatives, particularly in
[1203]respect to strategic deception and pene-
[1204]tration. The Soviet capability in economic
[1205]and industrial espionage has always been a
[1206]very real danger to the U.S. and remains so.
[1207]For this reason I included a summary of the
[1208]Armand J. Hammer case in my earlier report,
[1209]and I resubmit it with this paper
[1210](Attachment C). A second illustration is the
[1211]case of General Yevgenni Petrovich
[1212]Pitrovanov, also attached (Attachment D).
[1214]Our estimate of total Soviet intelligence Poe
[1216]HW 50955 Docld:32112771 Page 31
[1218]strength abroad in January 1975 was
[1220]ca. 3,900, of whom 332 were stationed in
[1222]the U.S. Soviet official presence in the
[1224]U.S. and other countries has grown more
[1225]-rapidly in recent years than has the
[1227]corresponding number of identified opera-
[1229]tives, although we feel confident that the
[1231]ratio of about 40 per cent has not changed,
[1233]ox not at least to the advantage of the
[1235]West.
[1237]As my previous report stated,
[1239]Director Kelley has warned of a growing
[1241]imbalance between our adversaries and the
[1243]forces at his disposal. We believe that
[1245]there has been a severe decline in the ef-
[1247]fectiveness of U.S. counterintelligence both
[1249]domestically and abroad. Something of the
[1251]aggressiveness of the hostile services is
[1253]shown in their persistent attempts to recruit
[1255]Americans abroad for such clandestine purposes
[1257]as penetration. During the period 1965 through
[1259]mid - 1972, there was a total of 2,150 such
[1261]incidents (an incident being an outright at-
[1263]tempt to recruit or an overture clearly intended
[1265]to lead to recruitment). Thus, in an average
[1267]year, 287 Americans overseas are approached by
[1268]Seay,
[1270]HW 50955 Docld:32112771 Page 32
[1272]adversary services with intent to harm. It
[1273]would be unrealistic not to expect the KGB and
[1274]other clandestine Communist services to
[1275]recognize that the present is a time of disar-
[1276]ray in U.S. counterintelligence and to seek
[1278]to exploit this advantage to the hilt.
[1280]- Inadequate information about the
[1281]intelligence and security services of China,
[1282]Cuba and Eastern Europe, especially the Latter.
[1284]We have a large body of counterintelligence
[1285]about the USSR, and it has been entered into
[1286]computer programs. “Our machines programs about
[1287]the services of Poland, Hungary, East Germany, ,
[1288]Czechoslovakia, Romania, Bulgaria, Albania
[1290]and Yugoslavia are, in contrast, non-existent
[1291]ox moribund. They have been allowed to slide
[1292]because of the pressures of keeping up with
[1293]services as large and virulent as the KGB and
[1294]the GRU. The USSR itself has not made this
[1295]mistake. It orchestrates large-scale clandes-
[1296]tine operations against the West, assigning
[1297]roles to the apparatuses of the Warsaw Pact
[1298]states and to Cuba in accordance with their
[1299]capabilities. These Soviet allies are exten-
[1300]sions of the Soviet capacity to wage under-
[1302]ground warfare, and therefore we need to know
[1304]HY 50955 Docld:32112721 Page 33
[1306]wed LIU EEUE
[1308]them intimately and to keep our knowledge
[1309]current. Our performance falls too short.
[1311]- A lack of communication and inter-
[1312]action between the Director of Central In-
[1313]telligence and CIA's counterintelligence unit.
[1314]The present Director lacks counterintelligence
[1315]experience. He has asked for, and received, only
[1316]one two-hour briefing onthe subject. Most of his
[1317]predecessors, in contrast, were vitally concerned.
[1318]Through briefings and through operational parti-
[1319]cipation they acquired a real familiarity with
[1320]the wide spectrum of counterintelligence and the
[1321]problems that it inevitably engenders. The pres-
[1322]ent Director of Central Intelligence, on the
[1323]other hand, has managed CIA's affairs without
[1324]consulting me or other highly experienced
[1325]counterintelligence officers about Agency opera-
[1326]tions, programs or priorities. Those now desig-
[1327]nated to succeed us cannot, with the best will in
[1328]the world, make a sudden leap that will carry
[1329]them across decades of intensive, daily experi-
[1330]ence acquired by those who already have left the
[1331]Agency and those who are unquestionably leaving
[1332]in the not-too-distant future. Thus counter-
[1333]intelligence is left with a growing threat, un-—
[1334]diminished responsibilities, a sharp reduction
[1335]in capabilities and no. effective access to the
[1337]Agency's top managerial level on substantive Pro,
[1341]issues.
[1343]HW 50955 Docld: 32112771 Page 34
[1345]HW 50955
[1347]SEGKEY SEASTTIVE
[1348]IV. RECOMMENDATIONS
[1350]The following recommendations are presented for the
[1351]consideration of the Commission with the sole intent of
[1352]revitalizing national counterintelligence and enabling it
[1353]to discharge its assigned responsibilities in furtherance
[1354]of national security. To this end we propose the following
[1355]changes:
[1357]1. That the Operational Directorate of
[1359]CIA assign not less than one-tenth of its
[1361]component to counterintelligence.
[1362]2. That of this total about half be
[1364]assigned to a central counterintelligence unit
[1366].in Headquarters and that the remaining half be
[1368]divided among the various Area Divisions and
[1370]branches in Headquarters and selected Agency
[1371]stations abroad.
[1373]3. That CIA provide this cadre with
[1374]counterintelligence training in depth.
[1376]4, That selected counterintelligence
[1378]personnel be rotated through Headquarters
[1380]and field assisgnments of growing responsi-
[1382]bility in accordance with career plans that
[1384]afford them opportunities for advancement
[1386]which equal those of their Agency colleagues.
[1388]34
[1389]e %
[1391]; “ty,
[1393]Docla: 321127271 Page 35
[1395]5. That counterintelligence designees
[1396]abroad work under the nominal command of
[1397]Chiefs of Stations but that they engage in
[1398]counterintelligence work full time and that
[1399]they have privacy channels of communications
[1400]with the Headquarters counterintelligence
[1401]unit which will ensure that access to their
[1402]sensitive information remains on a compart-
[1403]mented, need-to-know basis.
[1405]6. That close operational liaison
[1406]between the PBI and the counterintelligence
[1407]unit be fostered, and that direct, operational,
[1408]domestic liaison with other U.S. departments
[1409]and agencies by the counterintelligence unit
[1410]be maintained to whatever extent the national
[1411]interest requires.
[1413]7. That the U.S. establish a single
[1414]central organ to formulate policy for national
[1415]strategic deception and to deal with adversary
[1416]deception, specifically including disinforma-
[1417]tion. . Further, that this body have the neces-
[1418]sary access to policy-creating levels of the
[1419]U.S. Government and that it have the necessary
[1420]measure of jurisdiction over Governmental
[1421]components engaged in deception and counter-
[1423]deception.
[1425]~ Lt
[1427]wbuilh 35 oii
[1428]fed de td des wie bud a dé . ‘%
[1429]; ag. AO,
[1431]7
[1433]HY 50955 Docld:32112721 Page 36
[1435]SECRET SENSITIVE
[1437]8. That CIA counterintelligence liaison
[1438]abroad be improved through a judicious aug-
[1439]mentation of exchange of counterintelligence
[1440]information, including penetration leads, by
[1441]augmentation of U.S. capacity for leadership
[1442]in dealing with the common adversary, and
[1443]the expansion of the cadre of counterintelli-
[1444]gence liaison officers abroad.
[1446]9. That CIA undertake a more vigorous
[1447]program to obtain further data about the
[1448]intelligence and counterintelligence services
[1449]of China, Cuba and Eastern Europe, so that
[1450]our knowledge of them becomes fully compara-
[1451]ble with our knowledge of the Soviet serv-
[1452]ices, and that these increased holdings be
[1453]placed in machine records as rapidly as their
[1454]size warrants.
[1456]10. That the U.S., and especially the
[1457]FBI and the CIA, intensify counteringelligence
[1458]work against Soviet and other illegals.
[1460]ll. That within the expanded counterintel-
[1461]ligence unit in CIA headquarters a defector
[1462]section be created and that this section be
[1463]responsible for supervising the operational
[1464]handling and continuing debriefing of desig-
[1466]nated defectors, both abroad and in the U.S.,
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[1470]SECRET SENSITIVE
[1472]the latter responsibility to be assigned in
[1473]agreement with the FBI and other affected
[1474]departments and agencies.
[1476]12. That the chief of the counterintelli-
[1477]gence unit have direct and frequent access to
[1478]the Director of Central Intelligence and
[1479]other Deputy. Directors and members of the
[1480]Intelligence Community engaged in security and
[1481]counterintelligence to ensure that counter-
[1482]intelligence considerations are given due
[1483]weight. in the formulation of policy and that
[1484]counterintelligence Capabilities are fully
[1485]utilized in defending CIA and other U.S.
[1486]departments and agencies against clandestine
[1487]activity, including penetration operations,
[1489]carried out by our adversaries.
[1491]S bent, ley lator
[1493]James Angleton
[1495]Attachments: as stated
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