45. "WHY IN THE WORLD DIDN'T WE KNOW?"

Fred Hitz, the CIA's inspector general, said his job was to walk through the battlefield while the smoke cleared and shoot the wounded. His internal investigations were painstaking and pitiless. He was old-school agency, recruited in his senior year at Princeton after being tapped by the dean of students. As fate would have it, his biggest case concerned his classmate from the CIA's career-training cadre of 1967, an alcoholic burnout from the old Soviet division by the name of Aldrich Hazen Ames.

On Presidents' Day, February 21, 1994, a team of FBI agents hauled Ames out of his Jaguar as he left his suburban home for headquarters, slapped on the handcuffs, and took him away forever. I went to see him in the Alexandria county jail after his arrest. He was a gray man of fifty-three who had been spying for the Soviets for nearly nine years. He would soon be sent to a lifetime of solitary confinement, and he was eager to talk.

Ames was a malcontent and a malingerer who got a job with the agency because his father had once worked there. He spoke passable Russian and wrote readable reports when sober, but his personnel records were a chronicle of drunkenness and ineptitude. He had failed upward for seventeen years. In 1985, he had reached a pinnacle: chief of counterintelligence for the Soviet Union and Eastern Europe. He was known to be an alcoholic malcontent. Yet the agency gave him access to the files of nearly every important spy working for the United States behind the iron curtain.

He had become contemptuous of the CIA. He thought it absurd to say that the Soviet threat to the United States was immense and growing. He decided that he knew better. "I know what the Soviet Union is really all about, and I know what's best for foreign policy and national security," he remembered thinking. "And I'm going to act on that."

Ames obtained permission from his superiors to meet with an officer from the Soviet embassy in Washington, pretending that he could recruit the Russian. In April 1985, in exchange for $50,000, he had handed the Soviet intelligence officer the names of three Soviet citizens who were working with the CIA. Then, a few months later, he named every name he knew. Moscow set $2 million aside for him.

One by one, America's spies inside the Soviet Union were arrested, tried, imprisoned, and executed. As they died, Ames said, "bells and whistles" went off inside the clandestine service. "It was as if neon lights and searchlights lit up all over the Kremlin, shone all the way across the Atlantic Ocean, saying, 'There is a penetration.'" Yet the CIA's leaders refused to believe that one of their own had betrayed them. Using double agents and deception, the KGB skillfully manipulated the CIA's perceptions of the case. It had to be a bug. It could not be a mole.

Ames also gave Moscow the identities of hundreds of his fellow CIA officers and a thorough rundown on their work. "Their names were given to the Soviet intelligence service, as were the details of a number of operations that the United States was engaged in," Hitz said. "This began in 1985, but continued until one or two years before his arrest, and Ames was an avid gatherer of information to supply to his Soviet case officer. So in strict intelligence terms it was a horror."

The agency knew that something had destroyed its Soviet operations. But it took seven years to begin to face the facts. The CIA was unable to investigate itself, and Ames knew it. "You would wind up with people throwing up their hands and saying, 'We can't do it,'" he said with a smirk. "You've got two or three or four thousand people running around doing espionage. You can't monitor it. You can't control it. You can't check it. And that's probably the biggest problem with an espionage service. It has to be small. The minute you get big, you get like the KGB, or you get like us."

"A VIOLATION OF COMMANDMENT NUMBER ONE"

It took Hitz more than a year after the arrest to assess the damage Ames had wrought. In the end, he found that the CIA itself had been part of an elaborate deception.

Among the most highly classified papers that the agency produced during and after the cold war were "blue border" reports, with a blue stripe on the side signifying their importance, assessing the strength of Moscow's missiles, tanks, jets, bombers, strategy, and tactics. They were signed by the director of central intelligence and sent to the president, the secretary of defense, and the secretary of state. "That is what the intelligence community exists to do," Hitz said.

For eight years, from 1986 to 1994, the senior CIA officers responsible for these reports had known that some of their sources were controlled by Russian intelligence. The agency knowingly gave the White House information manipulated by Moscow--and deliberately concealed the fact. To reveal that it had been delivering misinformation and disinformation would have been too embarrassing. Ninety-five of these tainted reports warped American perceptions of the major military and political developments in Moscow. Eleven of the reports went directly to Presidents Reagan, Bush, and Clinton. They distorted and diminished America's ability to understand what was going on in Moscow.

"This was an incredible discovery," Hitz said. The most senior CIA official responsible for these reports insisted--as Ames had done--that he knew best. He knew what was real and what was not. The fact that the reporting had come from agents of deception meant nothing. "He made that decision himself," Hitz said. "Well, that was shocking."

"What came out of this whole episode was a feeling that the agency couldn't be trusted," Hitz said. "In short, it was a violation of Commandment Number One. And that's why it had such a destructive impact." By lying to the White House, the CIA had broken "the sacred trust," Hitz said, "and without that, no espionage agency can do its job."

"THE PLACE JUST NEEDS A TOTAL OVERHAUL"

Woolsey acknowledged that the Ames case revealed an institutional carelessness that bordered on criminal negligence. "One could almost conclude not only that no one was watching, but that no one cared," he said. But he announced that no one would be dismissed or demoted for the "systemic failure" of the CIA in the Ames case. Instead, he sent letters of reprimand to six former senior officers and five still on duty, including the chief of the clandestine service, Ted Price. He defined the failures as sins of omission and blamed them on a flawed culture within the CIA, a tradition of arrogance and denial.

Woolsey presented his decision to the House intelligence committee on the afternoon of September 28, 1994. He made a bad impression. "You have to wonder whether the CIA has become no different from any other bureaucracy," the committee's chairman, Dan Glickman, a Kansas Democrat, said upon emerging from the meeting. "You have to wonder if it has lost the vibrancy of its unique mission."

The Ames case created an attack on the CIA that was unprecedented in its intensity. It came from the right and it came from the left and it came from the dwindling center of American politics. Anger mixed with ridicule--a deadly brew--flowed from the White House and Congress. There was a strong sense that the Ames case was not an isolated aberration but evidence of a structural dry rot. Lieutenant General Bill Odom, who had run the National Security Agency under President Reagan, said the solution was radical surgery.

"I would disembowel the CIA," he said. "It's contaminated. And if you take halfhearted measures it will remain contaminated."

Striving to defend the agency from without and within, Woolsey promised the American people that they had a right to ask where the CIA was headed. But he had lost his ability to chart that course. So on September 30, 1994, Congress created a commission on the future of the CIA and gave it the power to blaze a new path for the agency in the twenty-first century. The Ames case had created a once-in-a-generation chance for change.

"The place just needs a total overhaul," said Senator Arlen Specter of Pennsylvania, a Republican who had served six years on the Senate intelligence committee.

What was needed was a push from the president of the United States, which never came. It took three months to select the seventeen members of the commission, four months to draft an agenda, and five months before the panel held its first formal meeting. The commission was dominated by members of Congress, notably Representative Porter J. Goss of Florida, a conservative Florida Republican. Goss had spent an undistinguished stint with the clandestine service in the 1960s, but he was the only member of Congress who could claim hands-on experience at the agency. The commission's most distinguished outsider was Paul Wolfowitz, who came to the table thinking that the CIA's ability to gather intelligence through espionage had collapsed, and who would be among the most influential members of the next president's inner circle.

The commission was led by Les Aspin, who had lost his job as secretary of defense nine months before, fired for his inability to make decisions. Clinton had named him chairman of the President's Foreign Intelligence Advisory Board. Depressed and disorganized, Aspin asked big questions without clear answers: "What does it all mean now? What are the targets now? What are you trying to do?" When he died suddenly of a stroke at fifty-six a few months later, the commission's staff was despondent and its work went adrift. The commissioners headed in a dozen different directions, unable to decide on a destination.

The staff director, Britt Snider, proclaimed: "Our goal is to sell intelligence." But many of the witnesses were warning that salesmanship was not the issue. It was the product.

The commission finally convened and took testimony. Bob Gates, who had drawn up the long list of 176 threats and targets three years before, now said the agency was overwhelmed by the multiplicity of tasks. Case officers and station chiefs said the clandestine service was drowning under too many requests to do too many small-bore things too far afield. Why was the White House asking the CIA to report on the growth of the evangelical movement in Latin America? Was that really important to the national security of the United States? The agency was only capable of a few major missions. Tell us what you want us to do, the CIA's officers begged.

But nothing focused the commission. Not the March 1995 attack by a religious cult that poured sarin gas into the Tokyo subways, killing 12 people and injuring 3,769, an event that signified the transformation of terrorism from nation-states to the self-anointed. Not the April 1995 bombing of the federal headquarters in Oklahoma City, which killed 169 people, the deadliest attack on American territory since Pearl Harbor. Not the discovery of a plot by Islamic militants to blow up a dozen American airliners over the Pacific and crash a hijacked jet into CIA headquarters. Not the warning from a CIA officer that someday the United States would face "aerial terrorism"--an airplane dive-bombing a target. Not the fact that a total of three people in the American intelligence community had the linguistic ability to understand excited Muslims talking to each other. Not the realization that the ability of the CIA to analyze information was being drowned by the explosion of e-mail, personal computers, cellular telephones, and publicly available encryption for private communications. Not the growing realization that the CIA was in a state of collapse.

The report, seventeen months in the making, had no weight and no impact. "Counterterrorism received little attention," said Loch Johnson, a member of the commission's staff. "The limits of covert action were never defined; the weaknesses in accountability went largely unaddressed." No one who read it bought the anodyne arguments that a little fine-tuning would fix the machine.

As the commission completed its report, a total of twenty-five people were enrolled at the CIA's career training center for young new recruits. The agency's ability to attract talent was at an all-time low. So was its reputation. The Ames case had made the CIA's future a casualty of its history.

The clandestine service was "terribly concerned about what they feel are inadequate numbers of people on the front line," Fred Hitz said at the time. "Getting the right people and getting them in the right place is already a different problem to solve. We've got good people but not enough of them, and not enough of them in the places where we need them. If the president of the United States and the Congress of the United States don't help, then the one thing that will bring us around will bring us around too late. Some horrible event happening somewhere in the world, maybe in our own nation, that makes us all wake up as Pearl Harbor made us wake up and say--why in the world didn't we know?"

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