AFIO Weekly Intelligence Notes #14-02 8 April 2002

Weekly Intelligence Notes #14-02
8 April 2002

WIN #14-02 dated 8 April 2002

Weekly Intelligence Notes (WINs) contain intelligence-related notes and commentaries produced, written or edited by Roy Jonkers for non-profit educational uses by AFIO members and WIN subscribers. The reports contain copyright material and may not be disseminated without permission of the producer/editor. Opinions expressed are those of the author(s) cited and/or the producer. The perspectives taken are one based on the US national security interests and a long professional view with roots in the WWII period.

AFIO BUSINESS INTELLIGENCE SYMPOSIUM will be conducted on Thursday 16 May 2002, featuring the "Impact of Terrorism on Business," again produced by two eminent members of the Board of Directors, Tom Spencer, Esq. (Chairman) assisted by Ted Shackley (CIA ret), guaranteeing highest quality of content and venue. (Section V)

CONTENTS of this WIN

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SECTION I - Current Intelligence

Venezuela Coup d'�tat

National Imagery and Mapping Agency Transformation

Who Will Run Intelligence

SECTION II - Context and Precedence

Security Problems in the FBI

Intelligence Collection from the Sea

SECTION III - Cyber Intelligence

Scientists Accused of Stealing Trade Secrets

CERT Warns of Automated Hacker Attacks

Prison Penalty for Hacking Attack

Auction Fraud Tops FBI's Internet Scam List

SECTION IV - Books and Sources

Security Policy References

Counter-Terrorism Resources CD

Iraq War

SECTION V - Letters and Announcements

In Memoriam - James F. Bradley, Jr., and Leo Rosenbaum

AFIO Business Intelligence Symposium - 16 May 02 Tyson's Corner VA

SECTION I - CURRENT INTELLIGENCE

VENEZUELA COUP D'�TAT -- President Hugo Chavez of Venezuela was removed by the Venezuelan Army on 11 April 2002. Key leaders of the armed forces have traditionally maintained strong ties with the USA, and they reportedly objected to President Chavez' decisions to move Venezuela somewhat out of Washington's orbit, to develop closer ties with anti-government Colombian guerrillas and with Cuba, and, most recently, to decrease oil production - this last action probably the final fatal mistake, considering the world oil situation and prices. There is media speculation that US Government representatives (the CIA is always mentioned) were involved in the coup decision.

The Army moved decisively after reportedly receiving intelligence that "Chavistas," the most vociferous of the President's supporters, were distributing weapons in their slum strongholds in the hills surrounding the capital. The military was presented with an opportunity to act when Chavez' forces brutally suppressed a strike and a demonstration by thousands of oil workers protesting layoffs caused by the drastic reduction in production. Some 14 people were reportedly killed and about 80 wounded when Presidential Guards and members of the Interior Ministry political police (DISIP) opened fire on the demonstrators, reportedly killing 14 marchers and wounding 80 others.

The Army High Command ordered their Intelligence battalion to cut the President's communications with his supporters and the outside world, while the Caracas Garrison Security Battalion moved to secure the Miraflores Presidential palace and other important pro-Chavez targets throughout the Capital. The 4th Armored Division and the 42nd Parachute Infantry Brigade were alerted to move from their base at Maracay into the Capital to suppress any attempt by Chavez supporters or troops loyal to the President to resist the coup. The 41st Armored Brigade at Valencia and 43rd Mechanized Cavalry Brigade at San Juan de los Morros moved to block the highways into the City. The President was then confronted by the Chiefs of Staff, forced to resign and taken into custody.

A new President was installed by the Army, oil production was ordered to be increased, and Venezuela returned to the Washington orbit. President Chavez was taken into custody. Undoubtedly the inside story of the strike and the following coup, and who pulled what strings, including the degree of involvement of US Intelligence, which must have monitored this situation closely and perhaps served an active role, is more interesting than the public media story. We will have to keep our eye on the bottom line and see what happens next -- Chavez and his policies are not without popular support within the country. (Jonkers) (AFI Research 12 April 02 ///F. Hayes // afi@supanet.com ) (US media 11/12 April)

NATIONAL IMAGERY AND MAPPING AGENCY TRANSFORMATION -- The National Imagery and Mapping Agency (NIMA) is facing "huge" challenges as it transforms itself to respond to homeland defense needs and other requirements of the War on Terrorism, according to the agency's director. Lt. Gen. Jim Clapper (USAF, retired) recently said a number of these challenges revolve around reorienting NIMA to a domestic focus. "The challenge for the intelligence community is ... transitioning from foreign intelligence -- and using those capabilities in a domestic homeland security context," There are new customer and partner constituencies that NIMA has never had to deal with before. For example, before Sept. 11 there was no mechanism for systematically and routinely conveying intelligence information to state governors or state emergency planners. "Since the event, we're learning how to do that." To provide a focus for this effort, NIMA has established its own Homeland Security office.

Established in 1996, NIMA was the result of the consolidation of the Defense Mapping Agency (DMA), the Central Imagery Office (CIO), the Defense Dissemination Program Office (DDPO) and the CIA's National Photographic Interpretation Center (NPIC). Unfortunately, many of these infrastructures were "sick" from day one, according to Clapper.

"I can tell you, without fear of contradiction, that NIMA has the worst infrastructure of any component of the intelligence community . . . And that's the legacy of standup, where NIMA inherited a series of sick infrastructures." To address this problem, "we're going to spend a lot of money on a series of acquisitions to re-capitalize [our] imagery analysis and geospatial ... systems."

Director Clapper also plans to consolidate NIMA's offices into one location, and transform the workforce into one more dominated by contractors. He said that by fiscal year 2003, the contractor FTEs [full-time equivalents] at NIMA will outnumber the government workforce. "We are increasingly relying on our contractor partners to build databases, which we've done very rapidly and very effectively in Afghanistan, where we turned to a contractor consortium of 12 contractors to basically rebuild and refresh the database [of that country]." Indicating new priorities centering on geospatial intelligence in the Information Age, the cartographer workforce inherited from DMA will also "decline dramatically" over the next few years.

Research and development efforts at NIMA are responding to new requirements posed by asymmetric conflicts, such as Operation Enduring Freedom. Developing technologies for compiling intelligence on underground facilities and structures is a high priority. Another is re-orienting the agency to near-real-time imagery intelligence. "Something we mastered well during the duration of the Cold War was targeting, planning for and attacking fixed facilities, . . .Now we're dealing with moving targets ... and getting to the point where the moving target can be a single human being or a small group of human beings." Air Force officials already have praised NIMA systems for their utility during operations in Afghanistan.

NIMA will be receiving a substantial funding boost in Fiscal Year 2003. Unlike the CIA, the NIMA is not prohibited from collecting imaging data on the United States. General Clapper will address an AFIO luncheon in Virginia on 16 April. A more general NIMA 'public affairs version' of Director Clapper's plans for NIMA will be contained in the next AFIO 'Intelligencer' to be mailed out within the next two weeks. (Jonkers) (Aerospace Daily, 11 April 02 //J. Morris).

WHO WILL RUN INTELLIGENCE? -- Retired Gen. Brent Scowcroft, Chairman of the President's Foreign Intelligence Advisory Board (PFIAB), and head of one of the (two) studies on Intelligence ordered by the President, briefed the National Security Council (NSC) late last month on his findings. He proposed separating the DCI position from the CIA position, and to give the new 'super' DCI more power by placing three agencies now under the purview of the Defense Department under him/her. The new 'super' DCI would no longer have the responsibility of running the CIA -- the Director CIA would report to the DCI. Currently, George J. Tenet holds both the CIA and the DCI jobs.

In theory the Director of Central Intelligence (DCI), who is also the Director of CIA, runs U.S. Intelligence. In reality, the Pentagon controls 80 percent of the intelligence budget, and the Secretary of Defense oversees the three key intelligence-gathering agencies in play -- the National Security Agency (NSA), the National Reconnaissance Office (NRO) and the National Imagery and Mapping Agency (NIMA). Secretary of Defense Rumsfeld is said to have great reservations about Chairman Scowcroft's proposals. He noted that General Scowcroft had discussed, at the NSC meeting, "concerns about intelligence gathering . . . and how they're working, and how they might work better, that were quite useful."

Speaking to the press, Defense Secretary Donald F. Rumsfeld said multiple sources for intelligence information are needed and useful. Comparing them to the competing research and development his pharmaceutical company undertook when he was its president, Secretary Rumsfeld told reporters that he had "always felt that in intelligence gathering . . . what you need is multiple sources of information." He added that instead of efficiency in gathering intelligence, "you're looking for creativity, you're looking for innovation . . . and to be dependent upon a single source or a single line or a single viewpoint is not a great idea."

Secretary Rumsfeld said he had discussed intelligence reorganization with DCI George Tenet and that the CIA director had not reached any conclusions as to what, if anything, should be changed. A joint Senate-House intelligence committee investigation is expected to come up with its own view of what changes are needed with the intelligence community.

Doubt about President Bush' eventually pushing major changes was raised in February by Vice President Cheney at the Council on Foreign Relations. "It's important for us to avoid a situation in which we spend so much time moving the boxes around on the chart and redrawing wiring diagrams that we lose sight of our basic requirements and mission here," Cheney said. Instead, he said, "you put good people in those jobs, give them clear direction and then hold them accountable for their performance, and I think that's probably more important than whatever reporting arrangements we have inside in the community itself."

Having echoed some of what Cheney said, Rumsfeld concluded his intelligence-reorganization discussion with reporters saying, "I doubt it will happen. Don't know. We'll see." (Jonkers) (WashPost 9April 02, p. 17 // W. Pincus)

SECTION II - CONTEXT AND PRECEDENCE

SECURITY PROBLEMS IN THE FBI -- Former FBI and CIA Director William Webster testified before the Senate Judiciary Committee for two hours recently on the results of his seven-member commission investigation of FBI security problems. The commission said FBI senior executives paid little attention significant deficiencies in the bureau's internal security system, that internal security concerns were given a low priority, that security training was virtually nonexistent and that management problems let to internal security breakdowns.

He also told the committee that most spies volunteer to turn over information in exchange for money and that, as a result, the FBI needed to upgrade background and financial investigations and increase the number of its own spies in other countries [the press account did not cover how or if this would be coordinated with CIA]. "Almost every spy that we have found, both in the CIA and the FBI, has been found with the aid of recruited sources of our own in other hostile intelligence agencies," he said. The commission's report found that the FBI's confessed Russian spy, Robert Hanssen, mined the FBI computer system to compromise "over 50 FBI human sources and potential recruits."

Recommendations for restructuring FBI security included a new security division reporting directly to the Director, a career security officer program, sweeping changes in computer and information security, a stronger centralized personnel security system, and regular financial reporting. To date, the cost to begin the necessary programs to upgrade 15 internal security areas in need of "critical improvements" has been pegged at $78 million with additional costs being likely. The security upgrade effort, coupled with the reorientation of the bureau to concentrate more on the problems of international terrorism, are likely to require a major portion of the relatively new Director's attention for some time. (Harvey) (Wash. Times 10 Apr '02, pg. 4, // J. Seper )

INTELLIGENCE COLLECTION FROM THE SEA -- A potential threat to the US collection of intelligence by sailing ships or flying aircraft in or over the coastal waters of foreign nations appeared on the scene this last year in the Far East. The ramming of the US EP-3 intelligence collection aircraft a year ago by China, and the sinking of a suspected North Korean intelligence collection ship last December by the Japanese, occurred within the 200-nautical mile so-called Exclusive Economic Zone (EEZ) of the coastal states. Both the PRC and Japan argue that such intelligence or military activities are not allowed in, or over, their EEZs. Japan intends to introduce a law allowing suspect foreign ships in its EEZ to be arrested, and if they resist, to be fired on.

The important future aspect of these incidents for US intelligence operations is that the right of US collection platforms to operate in the waters and air of coastal powers (outside of the accepted 12-nautical mile limit) may be hampered if such actions of two major powers set a trend. Military activities in economic zones have always been a controversial issue, and maritime powers such as the United States have insisted on freedom of military activities out of concern that naval and air access could be severely restricted by EEZ "enclosures." Acceptance of the Chinese and Japanese EEZ arguments in the future could impact on US intelligence collection operations, such as those currently said to be underway off the coast of Somalia, the Red Sea, and the Gulf of Aden. (Harvey) (Far Eastern Economic Review 11 Apr '02, // M. Valencia)

SECTION III - CYBER INTELLIGENCE

SCIENTISTS ACCUSED OF STEALING TRADE SECRETS -- Three Chinese nationals accused of stealing trade secrets from Lucent Technologies also victimized four other companies, according to a new indictment returned. Thursday. The three men, including two scientists who worked at Lucent's Murray Hill headquarters, now face 24 counts, including the original conspiracy charge, 14 counts of possessing trade secrets, and nine counts of wire fraud. (Levine's Newsbits, 11 April 02)

http://www.siliconvalley.com/mld/siliconvalley/news/editorial/3045661.htm

http://www.nandotimes.com/technology/story/356900p-2901291c.html

CERT WARNS OF AUTOMATED HACKER ATTACKS -- Hacking tools are becoming increasingly sophisticated. The Computer Emergency Response Team (Cert) has released a report pinpointing the six fastest evolving trends in the black hat world of internet security. The organization, which has been monitoring hacker activity since 1998, found that the most notable trend to evolve over recent years is the automation and speed of attack tools. (Levine 9 April) http://www.vnunet.com/News/1130755

PRISON PENALTY FOR HACKING ATTACK -- A former employee of a firm that makes guidance systems for the Defense Department was sentenced Tuesday to 16 months in state prison for hacking into the company's computer system and shutting it down for 24 hours. Armen Oganesyan, 26, also was ordered by San Fernando Superior Court Judge Robert Schuit to pay $50,000 in restitution. (Levine 10 April)

http://www.siliconvalley.com/mld/siliconvalley/news/editorial/3035838.htm

AUCTION FRAUD TOPS FBI's INTERNET SCAM LIST -- Online auctions account for the majority of complaints about Internet fraud, according to a new report from the FBI. The Internet Fraud Complaint Center, a joint operation of the Federal Bureau of Investigation and the National White Collar Crime Center, said Wednesday that auction fraud accounted for nearly 43 percent of the complaints received from victims and referred to law enforcement groups. (Levine 10 April)

http://zdnet.com.com/2100-1106-879660.html

http://www.newsbytes.com/news/02/175778.html

http://www.msnbc.com/news/736783.asp

SECTION IV - BOOKS AND SOURCES

SECURITY POLICY References -- (1) The Webster Commission report, "A Review of FBI Security Programs,"
is posted here: (a) http://www.usdoj.gov/05publications/websterreport.pdf (Greg O'Hara) and can also be found at
(b): http://www.fas.org/irp/agency/doj/fbi/websterreport.html

(2) Charter of the Joint Security Executive Committee (JSEC), which was established by the Deputy Secretary of Defense and the Director of Central Intelligence in June 1994, http://www.fas.org/sgp/othergov/jsec.html

(3) The JSEC was redesignated the Security Policy Board (SPB) in September 1994, with expanded membership to include all national security agencies, and with a mandate to develop consistent and cost-effective security policies government-wide. See Presidential Decision Directive 29 on "Security Policy Coordination," http://www.fas.org/sgp/spb/pdd29.html

See an archive of Security Policy Board documents here: http://www.fas.org/sgp/spb/index.html

See the text of the 1994 DOD-CIA Joint Security Commission report, "Redefining Security," here: http://www.fas.org/sgp/library/jsc/index.html

(4) In April 2001, after seven years of largely fruitless wrangling, the SPB was abolished by President Bush's National Security Presidential Directive # 1

(Jonkers) (SECRECY NEWS No. 29, April 10, 2002 //Aftergood)

COUNTER-TERRORISM RESOURCES CD -- In the current issue of P.I. magazine, page 15, is a short review of a CD-ROM Library titled "The Counter Terrorism Resources". This CD contains 172 books, reports, photos and documents totaling 19,631 pages and each .pdf file on the CD-ROM is a complete book or report that can be searched, read &printed using Adobe Acrobat Software. Some of the major topics cover Aviation, Bioterrorism Response, Hazmat, International, Nuclear, Planning/Operations, and Technology. The price is $49.95 + $3.00 s&h from David Vine Associates, LLC, 963 Dougherty Road, Aiken, SC 29803 Phone: 800-987-8743. (E. Cooper)

IRAQ WAR -- AFIO Colorado Chapter member Tom Carroll has an article in the Middle East Intelligence Bulletin at < www.meib.org >, entitled "In a War Against Iraq, Can the US Depend on Turkey?" The URL is http://www.meib.org/articles/0203_t1.htm. The upshot is that Turkish cooperation most certainly cannot be taken for granted, but with the proper planning and consultation on the part of the United States, it can probably be secured.(T. Carroll)

SECTION V - ANNOUNCEMENTS

IN MEMORIAM --
James F. Bradley, Jr, whose late-night brainstorm as a Navy officer led to the development of a system for tapping into Soviet submarine communications, has died, in McLean VA. He was 81. Bradley, who retired from the Navy in 1974 as a captain, was credited with discovering a way in the 1970's to find underwater Soviet naval cables that were used for communications. The first tap, in the Pacific, was used for nearly a decade before it was betrayed by a spy in 1981, but the method was successfully used in other locales until the end of the cold war. Bradley recalled that in his childhood, the banks of the Mississippi River were dotted with signs warning, "Cable Crossing - Do Not Anchor." He reasoned that if the Soviets had similar signs along their coasts, the US Navy could find the lines and then tap into them.

In 1971, the American submarine Halibut slowly approached the Siberian coast with its periscope up. The sailors and intelligence officers aboard found cable signs, and then American divers put a tap at the bottom of the Sea of Okhotsk to intercept Soviet communications, including those from the Northern Fleet and the KGB. American intelligence was able to intercept these communications until 1980, when a NSA employee, Ronald Pelton, told the Soviets that the US had tapped into the cable communications. Pelton was convicted of espionage in 1986 and sentenced to life in prison.

James Francis Bradley Jr. was born on Sept. 5, 1920, in St. Louis. He joined the Navy and in World War II commanded an amphibious landing ship at the battles of Leyte Gulf and Okinawa. He graduated in 1945 from the US Naval Academy in Annapolis. He later served as the commanding officer of a transport ship in the Vietnam War and as a submarine division commander, a naval attach� in Germany and an intelligence officer.

In 1966, he became the undersea warfare director in ONI in Washington. In that job, around 1970, he came up with the plan to intercept Soviet communications. One by one our old colleagues of the WWII generation leave the field. We salute Captain James Bradley, USN, and his exceptional contributions. (Poteat/Jonkers)

Leo Rosenbaum -- We regret to report that Leo Rosenbaum, a life member of AFIO died at home in Sebring, FL on March 24, 2002, following a battle with cancer that began in June 2001. He was 78. There will be a memorial service for him at Temple Rodef Shalom, 2100 Westmoreland Street, Falls Church, VA 22043, on Sunday, April 14 at 7:00 pm. This message is from his wife Alma Rosenbaum, 1004 Lake Sebring Drive, Sebring, FL; phone (863) 385-8194.

(Jonkers)

AFIO BUSINESS INTELLIGENCE SYMPOSIUM -- Thursday 16 May 02, at the Holiday Inn, Tyson's Corner (Rte 123 & Rte 7), McLean Virginia. Speakers from the White House, Department of Justice, FBI, CIA and DARPA have been invited, along with practicing professionals. The theme of the conference is "The Impact of Terrorism on Business," covering homeland and worldwide security, intelligence methods and counterintelligence practices relevant to business and professional enterprises, including IT and other technologies.
            This one-day executive symposium is the fourth of an outstanding series of AFIO Business Intelligence conferences produced by two eminent AFIO Board members, Tom Spencer, Esq., Chairman, assisted by Ted Shackley (CIA ret), assuring the highest quality agenda and venue. It will be an exceptional opportunity for obtaining hard-hitting substantive information, legal and policy directions, professional contacts and useful networking. See agenda on the AFIO Website, www.afio.com
            You may register by E-MAIL afio@afio.com, listing name, title, organization, address, phone and e-mail contact numbers. You may charge the registration fee to your VISA, MasterCard or American Express card via e-mail or fax (703 790 0320).
            Alternatively you may register by MAIL and enclose your check. The address is: AFIO/Symposium, 6723 Whittier Avenue, Ste 303A, McLean, VA 22101-4533.
            Registration fee, including lunch and parking, is $225.
            A special discount rate of $135 is applicable to AFIO members (individual and corporate) and their personal guests, to professors and students, and to members of collegial intelligence professional organizations (SCIP, OPS, NIP, NMIA). Early registration is recommended to avoid disappointment. (Jonkers)

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what they do not want to hear"

-- George Orwell

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