NOVEMBER 27, 1995

 

Statement of Frederick P. Hitz
Inspector General
Central Intelligence Agency
Before the
Select Committee on Intelligence
United States Senate

9 November 1995

 


MR. CHAIRMAN, MR. VICE CHAIRMAN, MEMBERS OF THE COMMITTEE: I AM PLEASED TO APPEAR BEFORE YOU THIS MORNING TO DISCUSS THE SPECIAL ASSESSMENT PREPARED BY MY OFFICE IN CONNECTION WITH THE AMES DAMAGE ASSESSMENT.

IN JULY OF THIS YEAR, THE DIRECTOR OF CENTRAL INTELLIGENCE ASKED ME TO PROVIDE AN INDEPENDENT ASSESSMENT OF WHETHER THE DIRECTORATE OF OPERATIONS (DO) ADEQUATELY INFORMED CONSUMERS OF CERTAIN SENSITIVE HUMAN SOURCE REPORTING THAT THESE SOURCES MIGHT BE CONTROLLED BY AN OPPOSITION INTELLIGENCE SERVICE. THIS ISSUE WAS RAISED IN PRELIMINARY BRIEFINGS GIVEN THE DCI BY THE AMES DAMAGE ASSESSMENT TEAM. SPECIFICALLY, I WAS DIRECTED TO FOCUS ON:

 

WE FOUND THAT DURING THE PERIOD 1985-1994 THE DO DID NOT INFORM CONSUMERS THAT SOME OF ITS MOST SENSITIVE INTELLIGENCE REPORTING CAME FROM SOURCES KNOWN OR SUSPECTED TO BE CONTROLLED BY AN OPPOSITION SERVICES EVEN AFTER IT WAS DECIDED THAT MANY OF CENTRAL EURASIA (CE) DIVISION'S SOURCES WERE CONTROLLED, NEITHER WRITTEN NOTIFICATION NOR SUFFICIENTLY NUMEROUS AND DETAILED BRIEFINGS WERE PROVIDED TO CONSUMERS OF PREVIOUSLY DISSEMINATED REPORTS, AND REPORTING FROM CONTROLLED SOURCES CONTINUED TO BE DISSEMINATED WITH INADEQUATE OR INAPPROPRIATE CAVEATS.

ALTHOUGH AN OFFICER WHO SERVED FOR OVER A DECADE AS CHIEF OF CE DIVISION REPORTS AND REQUIREMENTS BEARS PRIMARY RESPONSIBILITY FOR THESE DEFICIENCIES, HIS SUCCESSORS ALSO WERE INVOLVED. CHIEFS OF CE DIVISION, DEPUTY DIRECTORS FOR OPERATIONS, AND DIRECTORS OF CENTRAL INTELLIGENCE DURING THE RELEVANT PERIOD SHOULD BE HELD ACCOUNTABLE AS WELL FOR FAILING TO EXERCISE SUFFICIENT MANAGEMENT OVERSIGHT, ONLY ONE OF THESE 12 OFFICERS REMAINS WITH THE AGENCY; THE OTHERS HAVE RESIGNED OR RETIRED.

 

PROCESS AND METHODOLOGY

MR. CHAIRMAN, YOU ASKED THAT I DESCRIBE THE PROCESS AND METHODOLOGY USED BY THE IG TEAM THAT CONDUCTED THE SPECIAL ASSESSMENT.

WE BEGAN WITH INFORMATION DEVELOPED BY THE DAMAGE ASSESSMENT TEAM. TO ESTABLISH PRIORITIES IN ITS ASSESSMENT OF THE DAMAGE RESULTING FROM THE COMPROMISE OF CE DIVISION HUMAN SOURCES BY ALDRICH H. AMES, THE DAMAGE ASSESSMENT TEAM IN 1994 REQUESTED MAJOR INTELLIGENCE CONSUMERS TO IDENTIFY SENSITIVE REPORTS ON THE SOVIET UNION AND RUSSIA ON WHICH THEY HAD PARTICULARLY RELIED DURING THE PREVIOUS DECADE. AT THE TIME WE BEGAN OUR REVIEW IN JULY 1995, THE DAMAGE ASSESSMENT TEAM AND CE DIVISION CONSIDERED OR SUSPECTED CERTAIN OF THE SOURCES OF THE REPORTS CITED BY CONSUMERS TO BE CONTROLLED BY AN OPPOSITION INTELLIGENCE SERVICE. OUR REVIEW FOCUSED-ON THESE SOURCES.

WE REVIEWED THE OPERATIONAL FILES, DAMAGE ASSESSMENT TEAM EVALUATIONS, REPORTS OF COUNTERINTELLIGENCE REVIEWS CONDUCTED BY CE DIVISION AND THE COUNTERINTELLIGENCE CENTER, AND THE CAVEATS USED IN CONNECTION WITH THE DISSEMINATION OF SENSITIVE REPORTS. WE ASSESSED THE APPROPRIATENESS OF THE CAVEATS IN LIGHT OF INFORMATION AVAILABLE TO CE DIVISION WHEN EACH SENSITIVE REPORT WAS DISSEMINATED.

CURRENT AND FORMER CE DIVISION PERSONNEL WERE INTERVIEWED TO OBTAIN INFORMATION ABOUT MEASURES THE DO MIGHT HAVE TAKEN TO ALERT INTELLIGENCE CONSUMERS THAT INFORMATION IN CERTAIN SENSITIVE REPORTS MAY HAVE BEEN PROVIDED AT THE DIRECTION OF AN OPPOSITION SERVICE. WE ALSO INTERVIEWED THREE FORMER DEPUTY DIRECTORS FOR OPERATIONS AND TWO FORMER DCIS TO DISCUSS THEIR UNDERSTANDING OF CE DIVISION REPORTING PRACTICES. WE DISCUSSED ISSUES RELATED TO SENSITIVE REPORTING WITH PERSONNEL FROM CE DIVISION, THE COUNTERINTELLIGENCE CENTER, AND THE RELEVANT DO STAFFS.

WE DID NOT ATTEMPT TO MAKE OUR OWN JUDGEMENT ABOUT WHETHER OR NOT THE SOURCES THAT WE REVIEWED WERE IN FACT CONTROLLED BY AN OPPOSITION INTELLIGENCE SERVICE AT ANY PARTICULAR POINT IN TIME. WE RELIED INSTEAD ON THE CONCLUSIONS REACHED BY THE DAMAGE ASSESSMENT TEAM, LARGELY CONCURRED IN BY CE DIVISION. THE ISSUE OF THE EXTENT TO WHICH INFORMATION DERIVED FROM THE REPORTING OF CONTROLLED SOURCES MAY HAVE INFLUENCED INTELLIGENCE CONSUMERS AND AFFECTED THE FORMULATION OF U.S. FOREIGN OR DEFENSE POLICY ALSO WAS BEYOND THE SCOPE OF OUR MANDATE FROM THE DCI.

 

THE APPROPRIATENESS OF MEASURES TAKEN BY THE DO TO ENSURE THAT RECIPIENTS OF CERTAIN INTELLIGENCE REPORTS WERE AWARE OF THE POSSIBILITY THAT INFORMATION IN THOSE REPORTS MAY HAVE BEEN TRANSMITTED AT THE DIRECTION OF AN OPPOSITION INTELLIGENCE SERVICE

OUR JUDGEMENTS AS TO THE APPROPRIATENESS OF MEASURES TAKEN BY THE DO TO ENSURE THAT CONSUMERS OF CERTAIN INTELLIGENCE REPORTS WERE AWARE THAT THE SOURCES OF THESE REPORTS MAY HAVE BEEN CONTROLLED BY AN OPPOSITION SERVICE WERE BASED ON UNDERSTANDINGS ABOUT DO REPORTING THAT WE BELIEVE ARE GENERALLY SHARED BOTH INSIDE AND OUTSIDE THE DO. FIRST, IT IS AXIOMATIC THAT, UNLESS SPECIFIED OTHERWISE, DO DISSEMINATIONS ARE ASSUMED TO CONTAIN CLANDESTINELY ACQUIRED INFORMATION, THE POSSESSION OF WHICH BY THE U.S. GOVERNMENT IS, TO THE BEST OF THE DO'S KNOWLEDGE AND BELIEF, UNKNOWN TO THE GOVERNMENT OR ORGANIZATION TO WHICH THE INFORMATION BELONGS. SECOND, IT MAY UNDER CERTAIN CIRCUMSTANCES BE PERFECTLY LEGITIMATE FOR THE DO TO DISSEMINATE INFORMATION THAT IS KNOWN BY ITS OWNER TO RAVE REACHED THE US GOVERNMENT, AND THIS MIGHT EVEN INCLUDE INFORMATION THAT THE DO HAS REASON TO BELIEVE HAS BEEN DELIBERATELY TRANSMITTED AS PART OF A CONTROLLED-AGENT OPERATION UNDERTAKEN BY AN OPPOSITION SERVICE. BUT SUCH DISSEMINATIONS ARE LEGITIMATE ONLY IF THE CONSUMER IS MADE AWARE OF THE CONTEXT OF THE ACQUISITION OF THE INFORMATION SO THAT IT MAY BE EVALUATED ACCORDINGLY. FINALLY, ALTHOUGH MEASURES MAY BE TAKEN TO PROTECT THE IDENTITIES OF SOURCES, CONSUMERS SHOULD NOT BE MISLED ON THE BASIC ISSUES OF RELIABILITY AND ACCESS. WE CONCLUDED THAT MANY SENSITIVE DISSEMINATIONS FROM THE SOURCES WE REVIEWED FAILED TO MEET THESE STANDARDS.

WE FOUND THAT THE DO DID NOT TAKE APPROPRIATE MEASURES TO ENSURE THAT CONSUMERS OF CERTAIN INTELLIGENCE REPORTS WERE AWARE OF THE POSSIBILITY THAT INFORMATION IN THOSE REPORTS MAY HAVE BEEN TRANSMITTED AT THE DIRECTION OF AN OPPOSITION INTELLIGENCE SERVICE. CAVEATS ON MANY SENSITIVE REPORTS IDENTIFIED BY CONSUMERS AS PARTICULARLY SIGNIFICANT WERE MISLEADING AND INAPPROPRIATE IN RELATION TO THE INFORMATION AVAILABLE TO THE DO INDICATING THAT THE SOURCE MIGHT BE CONTROLLED BY AN OPPOSITION SERVICE.

BOTH CURRENT AND FORMER DO AND CE DIVISION OFFICIALS AGREE THAT THE DO FAILED TO CONVEY THE EXTENT OF ITS CONTEMPORANEOUS KNOWLEDGE THAT SOURCES WERE CONTROLLED BY AN OPPOSITION INTELLIGENCE SERVICE. EVEN AFTER IT WAS DECIDED THAT CERTAIN SOURCES WERE CONTROLLED, CE DIVISION DID NOT PROVIDE WRITTEN NOTIFICATION TO CONSUMERS.

CE DIVISION DID NOTIFY INDIVIDUALS IN THE NATIONAL INTELLIGENCE COUNCIL AND THE DIRECTORATE OF INTELLIGENCE THAT PROBLEMS EXISTED CONCERNING REPORTING FROM SENSITIVE SOURCES WHO MAY HAVE BEEN CONTROLLED BY AN OPPOSITION SERVICE. THERE APPARENTLY ARE NO CONTEMPORANEOUS MEMORANDA DOCUMENTING THESE BRIEFINGS, AND RECOLLECTIONS DIFFER AS TO THEIR SUBSTANCE AND THOROUGHNESS.

EXCEPT IN ONE CASE, DEPARTMENT OF DEFENSE CONSUMERS ASSERT THAT THEY WERE NOT INFORMED CONCERNING SOURCES CE DIVISION KNEW OR SUSPECTED WERE CONTROLLED UNTIL NOTIFIED BY THE DAMAGE ASSESSMENT TEAM IN MARCH 1995.

THE OFFICER WHO SERVED AS CHIEF OF CE DIVISION REPORTS AND REQUIREMENTS FOR 11 YEARS, AND WHO WAS THE DIVISIONIS PRINCIPAL LIAISON WITH DEPARTMENT OF DEFENSE CONSUMERS OF SENSITIVE REPORTING, TOLD US THAT HE HAD NEVER EXPLICITLY INFORMED DEPARTMENT OF DEFENSE CONSUMERS THAT SENSITIVE SOURCES OF REPORTING WERE KNOWN OR SUSPECTED TO BE CONTROLLED. HE RECALLED TELLING CONSUMERS TO EXERCISE CAUTION IN USING REPORTING FROM NEW OR UNVALIDATED SOURCES OR TO LOOK CLOSELY AT CERTAIN REPORTING AND GET BACK TO HIM ON WHETHER IT WAS CONSISTENT WITH EXISTING KNOWLEDGE OF THE SUBJECT.

HE ACKNOWLEDGED, HOWEVER, THAT THIS WAS NOT A DEPARTURE FROM THE ROUTINE INTERACTION HE HAD WITH INTELLIGENCE CONSUMERS THROUGHOUT HIS TENURE AS CHIEF OF REPORTS AND REQUIREMENTS. IN FACT, HE SAID THAT HE WOULD NOT HAVE INFORMED CONSUMERS ABOUT INDICATIONS THAT SOURCES WERE CONTROLLED BECAUSE THIS MIGHT HAVE CAUSED CONSUMERS TO DISREGARD THE "VALID" AND "AUTHENTIC" INFORMATION THOSE SOURCES WERE PROVIDING.

IN SUMMARY, DOCUMENTARY MATERIAL DETERMINED TO BE AUTHENTIC WAS TREATED AS ABLE TO "STAND ON ITS OWN" NOTWITHSTANDING THE FACT THAT THE MATERIAL WAS KNOWN TO HAVE BEEN PROVIDED BY A CONTROLLED SOURCE. THOSE INVOLVED IN THE DISSEMINATION OF REPORTING FROM CONTROLLED SOURCES APPEAR TO HAVE HAD GREAT CONFIDENCE IN THEIR ABILITY TO DETERMINE THE GENUINENESS OF DOCUMENTARY MATERIAL SUPPLIED BY THOSE SOURCES.

 

ASSESSING RESPONSIBILITY

ALTHOUGH THE DECISION NOT TO PROVIDE WRITTEN NOTIFICATION TO INTELLIGENCE CONSUMERS WHEN CE DIVISION DETERMINED THAT CERTAIN SOURCES WERE CONTROLLED IS NOW VIEWED BY CE DIVISION AS HAVING BEEN A MISTAKE, SEVERAL REASONS HAVE BEEN SUGGESTED TO EXPLAIN IT. IN OUR VIEW, THESE REASONS FAIL TO PROVIDE A CONVINCING RATIONALE FOR NOT ISSUING WRITTEN NOTIFICATION TO CONSUMERS.

BRIEFINGS OF CONSUMERS CONCERNING CE DIVISION'S CONCLUSION THAT SENSITIVE REPORTS HAD CONTAINED INFORMATION FROM CONTROLLED SOURCES WERE NEITHER WELL-ORCHESTRATED NOR SUCCESSFUL, AND THE NUMBER OF BRIEFINGS ATTEMPTED WAS QUITE LIMITED IN RELATION TO THE NUMBER OF CONSUMERS. AS I NOTED EARLIER, THERE IS NO DOCUMENTATION OF THE BRIEFINGS, AND THE OFFICER RESPONSIBLE FOR BRIEFING EXTERNAL CONSUMERS BY HIS OWN ACCOUNT DID NOTHING MORE THAN IMPART CAUTIONS ABOUT CLOSELY EVALUATING CERTAIN REPORTING.

EVEN AFTER THESE BRIEFINGS, MOREOVER, THE DO CONTINUED TO DISSEMINATE SENSITIVE REPORTING FROM CONTROLLED SOURCES WITHOUT APPROPRIATE CAVEATS.

IN RESPONDING TO THE DIRECTOR'S INSTRUCTION THAT WE IDENTIFY THOSE RESPONSIBLE FOR SHORTCOMINGS DESCRIBED IN THE SPECIAL ASSESSMENT, WE FOCUSED ON INDIVIDUALS WHO OCCUPIED KEY MANAGEMENT POSITIONS AND WERE RESPONSIBLE FOR INSTITUTING SYSTEMS FOR OVERSIGHT AND CONTROL DURING THE RELEVANT PERIOD. OTHERS UNDOUBTEDLY WERE AWARE OF THE DEFICIENCIES DESCRIBED IN THE SPECIAL ASSESSMENT, BUT THEY WOULD NOT HAVE HAD THE SAME DEGREE OF DIRECT RESPONSIBILITY.

WE DETERMINED THAT NINE OFFICERS WHO HELD THE FOLLOWING KEY POSITIONS DURING THE RELEVANT PERIOD SHOULD BE HELD ACCOUNTABLE:

 

MR. CHAIRMAN, I WANT TO EMPHASIZE THAT DIRECTOR DEUTCH'S INSTRUCTION TO ME WAS TO IDENTIFY THOSE RESPONSIBLE FOR ANY SHORTCOMINGS. I WAS NOT ASKED TO RECOMMEND DISCIPLINARY MEASURES, AND THE SPECIAL ASSESSMENT PREPARED BY MY OFFICE DOES NOT DO SO.

IN ADDITION, ALTHOUGH WE FOUND NO REASON TO BELIEVE THAT THE DIRECTORS OF CENTRAL INTELLIGENCE WHO SERVED DURING THE RELEVANT PERIOD WERE AWARE OF THE SPECIFIC DEFICIENCIES DESCRIBED IN THE SPECIAL ASSESSMENT, I BELIEVE DIRECTORS OF CENTRAL INTELLIGENCE ARE OBLIGATED TO ENSURE THAT THEY ARE KNOWLEDGEABLE OF SIGNIFICANT DEVELOPMENTS RELATED TO CRUCIAL AGENCY MISSIONS. SENSITIVE HUMAN SOURCE REPORTING ON THE SOVIET UNION AND RUSSIA DURING AND AFTER THE COLD WAR CLEARLY WAS SUCH A MISSION, AND CERTAIN DCIS WHO SERVED DURING THE RELEVANT PERIOD SHOULD ACCEPT ACCOUNTABILITY FOR SERIOUS SHORTCOMINGS IN THE WAY THIS REPORTING WAS CHARACTERIZED AND DISSEMINATED DURING THEIR TENURE.

FURTHERMORE, I BELIEVE THAT DIRECTORS OF CENTRAL INTELLIGENCE SHOULD ACCEPT ACCOUNTABILITY FOR MAJOR SYSTEMIC FAILURES IN THE INTELLIGENCE PROCESS WHETHER OR NOT THEY HAVE SPECIFIC PERSONAL KNOWLEDGE. WE CANNOT HOPE TO BUILD AN ACCOUNTABLE ORGANIZATION UNLESS WE MAKE IT CLEAR THAT ACCOUNTABILITY BEGINS AT THE TOP.

MR. CHAIRMAN, THE SPECIAL ASSESSMENT CONTAINED RECOMMENDATIONS CONCERNING:

 

AS YOU KNOW, MR. CHAIRMAN, DIRECTOR DEUTCH ALREADY IS TAKING ACTION ALONG THESE LINES.

MR. CHAIRMAN, YOU ASKED THAT I DISCUSS THE ISSUE OF PRIOR IG REVIEWS OF CE DIVISION. THEN DCI WEBSTER AND DDCI KERR WERE ALERTED IN AN INSPECTION REPORT IN 1991 TO DEFICIENCIES IN THE AGENCY'S SOVIET CI PROGRAM AND PROBLEMS WITH DO REPORTING ON SOVIET MATTERS. THE REPORT ON THE SOVIET AND EAST EUROPEAN DIVISION WAS SENT TO THEM IN APRIL 1991.

THE REPORT DID NOT FORMAL RECOMMENDATIONS BUT DID MAKE A NUMBER OF SUGGESTIONS AND STRESSED THAT AGENCY MANAGEMENT SHOULD ACT ON THESE. IT WARNED THAT THERE WERE WEAKNESSES IN THE PROCESS OF VETTING THE CREDIBILITY AND RELIABILITY OF ASSETS AS WELL AS IN THE CHARACTERIZATION OF THEIR REPORTING. IT SUGGESTED AN INDEPENDENT REVIEW BY A GROUP OUTSIDE OF THE DIVISION AND A REEXAMINATION OF REPORT CAVEATS. SPECIFICALLY, THE REPORT CONCLUDED THAT THE WAY SOME CAVEATS WERE WRITTEN -- AND THIS IS A DIRECT QUOTE -- "COULD CONFUSE THE CUSTOMER, LEADING THEM TO PLACE GREATER CREDIBILITY IN SOME INFORMATION THAN WARRANTED OR LEADING TO FALSE CONFIRMATION OF EARLIER REPORTING."

I NOTED IN A MEMORANDUM TO THE DIRECTOR ACCOMPANYING THE 1991 REPORT MY INTENTION TO RE-INSPECT THE DIVISION. THAT RE- INSPECTION TOOK PLACE IN 1993. BECAUSE THE DIVISION HAD UNDERGONE A NUMBER OF SIGNIFICANT ORGANIZATIONAL AND LEADERSHIP CHANGES, THE INSPECTION FOCUSED PRIMARILY ON THE STATE OF INTERNAL MANAGEMENT AND MORALE. THE REPORT CONCLUDED THAT AGENCY MANAGEMENT HAD TAKEN A NUMBER OF POSITIVE STEPS TO ADDRESS THE 1991 REPORT'S FINDINGS AND SUGGESTIONS ON COUNTERINTELLIGENCE ISSUES. THE COUNTERINTELLIGENCE CENTER HAD BECAME MORE INVOLVED. HOWEVER, THE REPORT EMPHASIZED THAT DO MANAGEMENT SHOULD CONSIDER DEVOTING MORE PERSONNEL AND OTHER RESOURCES TO COUNTERINTELLIGENCE.

MR. CHAIRMAN, THAT CONCLUDES MY STATEMENT AND I AM READY TO ANSWER ANY QUESTIONS THAT THE COMMITTEE MAY HAVE, WITHIN THE BOUNDS OF MY ABILITY TO PROVIDE FURTHER DETAILS IN THIS OPEN SESSION.