WEEKLY INTELLIGENCE NOTES (WIN) #39-00
dtd 29 September 2000

WINs are intelligence commentaries produced and edited by Roy Jonkers, based on public media sources, for non-profit research and educational purposes by AFIO members and WIN subscribers.

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SECTION I - CURRENT INTELLIGENCE

SECURITY CLEARANCE OF US AMBASSADOR TO ISRAEL PULLED -- The State Department announced on 22 September that the department had suspended the clearances of US Ambassador Martin S. Indyk until it completes an investigation of "suspected violations of security standards." The suspension bars Indyk from handling classified materials, requires him to be escorted inside the State Department building, and presumably makes it difficult for him to play his role in negotiations between Israel and the Palestinians. The Department's decision to announce suspension of his clearances came after an anonymous call to the Senate Intelligence Committee reporting that State was going to ignore security violations by the ambassador.
According to the US press, investigators are focusing on "sloppy handling of classified information" and reportedly are looking into whether Indyk took classified materials home and improperly used an unclassified laptop for a classified briefing - - a by now familiar scenario. However, an internet report attributed to a Jerusalem source indicates that the situation may be more serious. The FBI is said to be focusing on allegations that the ambassador systematically handed over US classified material to persons in Israel unauthorized to receive them. It is alleged that a recent unusual trip by CIA Director George Tenet to Israel resulted in a report concluding that the ambassador had committed serious security violations.
The context for this affair is diplomatic, political and structural. It may impact on the Administration's race for a diplomatic triumph of some sort of agreement between Israel and the Palestinians. It also could have implications for US electoral politics, but these are beyond the scope of this commentary. And lastly, it further impacts on the image and substance of the US intelligence and security structure. With leakages on all sides, the intelligence structure is obviously damaged by what has been described as a high-level environment of sustained and arrogant disdain for security for some years now, and may well be in serious danger unless the alert is sounded and the course reversed.
This may finally be underway in the State Department, as it is in Los Alamos. Security became a serious topic in the State Department after the publicity about the disappearance of a laptop computer containing top secret information, and after '98 and '99 State IG reports citing widespread failure in the Department to safeguard classified information. Thirty-two State Department employees had their security clearances revoked or suspended during the past eighteen months. The Indyk affair may well be another manifestation of this crackdown.
Indyk, 49, identified as a lobbyist for Jewish causes, with close ties to the Israeli Labor Party leadership, became a US citizen seven years ago, in January 1993, just in time to be sworn in as the senior Middle East specialist on the National Security Council (the center of the nation's national security secrets), at the start of President Clinton's administration. He was subsequently appointed Ambassador to Israel from April 1995 to October 1997, and was reappointed in 1999 at the request of Prime Minister Ehud Barak. (NY Times 23Sep00, p.A3 /C. Marquis // Wash Post 23Sep2000, p.A11 /S. Mufson;/// Israeli Web site/ Jerusalem DEBKA file: "The Indyk case -- a grave threat to the Gore campaign and US-Israel relations" 24Sep00 /// AP 25 Sep 2000) [B. Schweid]. (Jonkers)

EDMOND POPE CHARGED AS SPY -- The Russian prosecutor general sent to court official charges against Captain (USN ret) Edmond Pope, the American businessman accused of espionage for seeking details of a new high-speed Russian torpedo said to be nicknamed Shkval. The Federal Security Service said Pope was caught purchasing data about the Shkval. He was arrested in April and accused of espionage.
Pavel Astakhov, Pope's lawyer, said that Russian investigative authorities had refused to include in the files documents that might show that the data Pope was seeking were not secret. He claimed that the Shkval had been offered for export in the past.
One would surmise that Pope, aged 54, faces trial and conviction, and that subsequently some formula for release back to the US will be found. Pope is said to be suffering from cancer. (WashPost 28Sep2000, p. A27) (Jonkers)

SMALL MISSILE FIRED AT UK INTELLIGENCE HEADQUARTERS -- A small "missile" was fired at the headquarters of Britain's MI-6 headquarters in central London on Wednesday evening, September 20th, hitting the building and causing an explosion on the eighth floor. There were no injuries and damage was limited to one window and two wall panels. A grenade launcher was found in a nearby park, of a type easily available to the IRA (Irish Republican Army). The IRA is observing a cease-fire, but splinter groups opposed to Northern Ireland's fragile peace process have been blamed for a series of bombs planted in London this year. The British and Irish secret services are stepping up their efforts to identify and disrupt a suspected eastern European arms supply line to dissident IRA terrorists. British intelligence is expecting an increase in bomb attacks in London, but still assume that the targets will be mainly military or political.
MI-6, formed in 1921, is responsible for foreign intelligence. It is thought to be cooperating closely with the UK domestic security service, MI-5, in keeping track of terrorist groups, including particularly IRA terrorists. The high-tech MI-6 headquarters bristles with security features, and the most sensitive areas are reported to be below street level. (NYTimes Intl, Sep21, pA8; World News 21 Sep, p.A25; WashPost 22Sep00, p. A19; Fin Times 25Sep00, p.8) ) (courtesy LaClair) (Jonkers)

SECTION II - CONTEXT AND PRECEDENT

ORGANIZED CRIME ON WALL STREET -- Thomas Fuentes, senior chief of the FBI's organized-crime section, reported to Congress September 13th that organized crime's presence on Wall Street is growing, and that there are increasing signs that foreign mobsters are also trying to penetrate US stock markets. Organized crime groups from Eastern Europe and Russia are trying to raise money on the US stock market. Thus far, Asian organized crime groups have not yet shown an interest in the securities business. The FBI and the Securities and Exchange commission are working on a number of international securities fraud cases, which are complicated by conflicting laws and national jurisdictions.
US domestic mob efforts are still limited to low-priced, thinly traded stocks that are not listed on major exchanges. . One reason for their interest in the security business cited is that they have been driven from some of their "traditional havens, such as garbage-hauling cartels." The FBI is vigorously prosecuting domestic criminals. For example, this past June, eleven members and associates of New York's five major organized-crime families were charged with crimes relating to the manipulation of the securities market. Buyers beware! (WashPost Sep14 2000, p. E1) (Jonkers)

SUDAN BOMBING FALLOUT (continued) Claiming the US government mistakenly bombed his Sudanese pharmaceutical plant in 1998, an Arab businessman, Salah Idris, recently filed a $50 million lawsuit against the government for refusing to admit the mistake. He probably was encouraged to pursue the suit when the US Treasury countermanded its earlier move to block some $24 million of his European bank accounts. Faced with his suit to unfreeze the accounts, Treasury had backtracked despite its claim at the time of the blockage that he was associated with terrorists.
Salah Idris did not stress the intelligence failure charge bruited about in the press after the missile attack but said in his current suit that he is convinced President Clinton ordered the August 1998 bombing to try to restore his diminished presidential authority and popularity during the Monica Lewinsky scandal. The administration claims that the plant had a nerve-gas component stored on the premises, that the plant was heavily guarded, that Idris had links - through the Sudanese regime - to Osama bin Laden, that the plant was producing chemical weapons, and that Idris was associated with the Islamic Jihad -- all of these, however, have been disproved as far as one can infer from the press reporting. He has been given another tract of land for the plant he wishes to build as a replacement. The Sudanese government wishes to preserve the bombed plant as a museum. The Idris suit for $50 million did not address reporting in the US press after the missile attacks to the effect that the decision to launch the attacks was made in an extremely small group of policymakers and over strong reservations voiced in the intelligence reporting of the time. (Chicago Tribune 28 July00, Moseley) (Harvey)

JONATHAN POLLARD POLITICS -- Hillary Clinton reportedly saved Jonathan Pollard, convicted spy and traitor, from being moved from one confinement facility to another, presumably less safe or convenient. The reason why he was to be moved was not reported.
Pollard, who pleaded guilty to espionage for Israel in 1986, is currently imprisoned in a special unit of the Federal Correctional Institution in Butner, N.C. Pollard supporters said they were concerned he might be exposed to an increased possibility of rape, stabbing and other violence in a different jail. Without a doubt these concerns are valid, as the federal and state records in protecting inmate convicts from these types of crimes and abuses appears to be very poor and sometimes reminiscent of concentration camp tales and attitudes -- convicts are "non-citizens." .
The question may be asked, if other convicts are a sort of "sub-humans" not worth protecting, why Pollard? The answer lies in electoral politics. Mrs Clinton has been under pressure to work for clemency for Pollard by conservative Jewish lobbyists in New York, a measure opposed by the current cabinet and agency chiefs. In the absence of a pardon, Senatorial candidate Clinton's intervention was a low-cost partial political response, although the importance of Pollard to the Jewish voters in New York, a greatly varied group and not necessarily one-issue voters, is unclear. (NYTimes, Sep 2, 2000// E. Bumiller) (Jonkers)

WEN HO LEE & THE FEAR OF ESPIONAGE (continued) -- The press is providing full coverage as the affair unrolls, so little more needs to be said. The US Department of Justice criticized the Federal District Judge James Parker, for rebuking the Department. DOJ also asserted that they agreed to a plea bargain only because they faced having to reveal classified information in open court -- a defense pressure tactic known as "graymail." In Hearings before the Senate Select Committee on Intelligence, views of the FBI Director and the Attorney General were provided, covered by C-Span, in part reasonable, in part surreal.
President Clinton's chief scientific advisor, Neal Lane, who is also head of the National Science Foundation, gave his opinion that the over-reaction to fears of espionage may in the end hurt US weapons development, including both nuclear weapons and satellites. Lane said he was worried about the impact of the security crackdown "on the labs' ability to do their mission," including the effect of polygraph testing of some 15,000 people, directed by Congress.
Also, new security rules governing satellites are now being applied to universities doing unclassified basic research using satellites. Even at the height of the Cold War, the government "issued a directive affirming that free exchange of scientific ideas is a vital component in our economic and physical security" - something so important "that it justified the risk that our adversary might receive some benefit as well."
From having observed many decades of ebb and flow, we know that the current hysteria of trying to throw out the baby with the bathwater will pass and that hopefully the balance between the need for adequate security and the need for free interchange of ideas will be maintained. (Wash Post 28Sep2000, p.A6) (Jonkers)

SECTION III - BOOKS & LETTERS

THE INFORMANT: A True Story, by Kurt Eichenwald, Broadway Books, 2000. This is a story about business intelligence gone awry - complete with covert meetings, secret codes, and industrial espionage, culminating in price-fixing for a range of consumer products. It is the story of a high-ranking Archer Daniels Midland Co executive, Mark Whitacre, who did something extraordinary: he confessed to an FBI agent that had routinely met with competitors to fix the price of lysine, a food additive given to livestock. The reverberations of this confession and the subsequent FBI investigation are continuing, even though ADM settled the case for $100 Million. More than 20 other industries are now under investigation, and European regulators are also starting to crack down.
Mark Whitacre is not the hero of the tale, although he set off the investigation. He was secretly embezzling millions from his company, using bogus off-shore companies, at the same time that he was secretly taping his co-workers. Thus it developed that the Government's star witness was a criminal (who now reposes in jail -- though informants are often not choirboys), and the story of how the FBI and the Justice Department salvaged the case has its own fascination.
The reviewer calls the book a "gripping read," but states that in the end the author cannot explain why Whitacre acted as he did - turning his company in to the FBI. So it is a story about errant business practices and business espionage, fraud and prosecution - to be read for its own sake rather than for an explanation of personal motives. (reviewed by Mike France, Business Wk, Sep25,00, p.21 // courtesy LaClair) (Jonkers)

TERRORISM TRAINING MANUAL ACQUIRED

WASHINGTON -- U.S. intelligence agencies have allegedly obtained computer-disk copies of a six-volume manual that was used by Saudi dissident Osama bin Laden to train recruits at his terrorist camps in Afghanistan. The 1,000-page Arabic manual, called the 'Encyclopedia,' contains information on how to recruit followers, conduct terrorist operations and assemble bombs similar to those that destroyed U.S. embassies in East Africa in 1998, killing more than 200 people, according to senior U.S. intelligence officials. The press quotes "intelligence officials" as saying the manual is a "gold mine" of information on bin Laden's tactics. Others say that it is not that big a deal. "That manual is a briefing book on 'how to conduct terror' and is no different than what (militant Islamic groups) Hamas or Hezbollah or Iran would use," says Ken Katzman, a terrorism analyst at the Congressional Research Service, the investigative arm of Congress. CIA and FBI had no comment.
The manual in CD-ROM was recently given to CIA and the FBI's Washington headquarters by Jordanian intelligence officials. They seized it from one of 16 men arrested in Jordan last December for allegedly planning attacks in Israel and Jordan for New Year's. Lt. Ziad Hajaya, a computer expert at the Jordanian General Intelligence Department, told a closed military court in Amman, Jordan, last year that one of the seized disks included information on "explosives and manufacturing explosives, toxic and heavy weaponry."
A connection with Osama bin Laden was allegedly a lieutenant in bin Laden's army who, in return for a lesser sentence in connection with the bombing of US embassies, has been cooperating with the US Government. Other parts of the manual have been compiled over the years as individuals who have trained in bin Laden's camps have been picked up.
(USA Today /J. Kelley/; Natl Public Radio 18 Sep 00) (Jonkers)

SECTION V - ODDS AND ENDS

SO MUCH FOR THAT - In WWII the US ARMY had more ships than the US Navy. The German AIR FORCE had 22 infantry divisions, 2 armor divisions, and 11 paratroop divisions. None of them were capable of airborne operations. The German ARMY had paratroops who WERE capable of airborne operations. Go figure. A challenge for intelligence?

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