ABSTRACT OF REPORT OF INVESTIGATION

THE ALDRICH H. AMES CASE: AN ASSESSMENT OF CIA'S ROLE IN IDENTIFYING AMES AS AN INTELLIGENCE PENETRATION OF THE AGENCY

October 21, 1994



MEMORANDUM FOR: Heads of Agency Offices

FROM: Director of Central Intelligence

SUBJECT: Distribution of Unclassified Abstract IG Report of Ames Investigation

I am providing each of you with a copy of this important document that you may retain in your office. I urge you to ensure that all employees in your area, at all levels, be given the opportunity to read and learn from it. The Agency Information Staff is also making the abstract available on Lotus Notes.

Because the Ames case has implications that concern us all, I further suggest you take the opportunity to discuss it with your employees. I expect you to interpret what we have learned so painfully from this case into examples of how these lessons apply in your area of responsibility.
R. James Woolsey



UNCLASSIFIED ABSTRACT OF THE CIA INSPECTOR GENERAL'S REPORT ON THE ALDRICH H. AMES CASE

PREFACE TO THE REPORT FROM THE IG

Procedurally, this has been an unusual report for the CIA IG to write. In the first instance, our inquiry was directly requested by the Chairman and Vice-Chairman of the Select Committee on Intelligence of the U.S. Senate in late February 1994--shortly after Aldrich H. Ames was arrested. Normally, our congressional oversight committees ask the Director of Central Intelligence to request an IG investigation. On this occasion their request was directed to the IG.

Second, the DCI chose to ask us to look into the Ames matter in phases after Ames's arrest for fear of disrupting the Ames prosecution. We were requested to inquire into the circumstances surrounding the CI investigation of the Ames betrayal--what procedures were in place respecting CIA counterespionage investigations at the time Ames volunteered to the Soviets in 1985; how well did they work; and what was the nature of CIA's cooperation with the FBI in this case. On March 10, 1994, the DCI asked us to seek to determine if individuals in Ames's supervisory chain discharged their responsibilities in the manner expected of them and directed the Executive Director of CIA to prepare a list of Ames's supervisors during the relevant periods. The DCI also directed that awards and promotions for the individuals on the Executive Director's list be held in escrow pending the outcome of the IG investigation. I wish to state at this point that neither I nor any member of the team investigating the Ames case have viewed the DCI's escrow list. We wanted to be as completely unaffected by the names on the list as we could be in order to discharge our responsibility to advise the DCI objectively of possible disciplinary recommendations. As a precautionary measure, I did ask my Deputy for Inspections, who is otherwise uninvolved in the Ames investigation, to view the escrow list to advise of any individuals on it whom we might have failed to interview through inadvertence. That has been our only involvement with the escrow list.

Third, there was an unusual limitation placed on our inquiry at the outset caused by a desire on the part of the DCI, the Department of Justice and the U.S. Attorney in the Eastern District of Virginia to do nothing that would complicate the Ames trial. We willingly complied with these constraints, confining ourselves to background file reviews and interviews of nonwitnesses until the Ameses pled guilty on April 28, 1994. The consequence has been that we have had to cover a great deal of ground in a short period of time to conduct this investigation in order to have a report ready for the DCI and the congressional oversight committees by September 1994. I am extremely proud of our 12-person investigative team.

Apart from the unusual procedures affecting this investigation, the Ames case presented several major substantive problems as well. This case raised so many issues of concern to the DCI, the oversight committees and the American people, that we have not chosen to tell the story in our normal chronological way. Instead, we have focused on themes: Ames's life, his career, his vulnerabilities. We have tried to discuss how counterespionage investigations have been conducted in CIA since the Edward Lee Howard betrayal and the Year of the Spy, 1985--in the context of this particular case. Necessarily, we have made analytical judgments about what we have learned--some of them quite harsh. We believe this is our job--not just to present the facts, but to tell the DCI, the oversight committees and other readers how it strikes us. We have the confidence to do this because we have lived with the guts of Ames's betrayal and his unearthing for countless hours and we owe our readers our reactions. In this sense our 12 investigators are like a jury--they find the facts and make recommendations to the DCI for his final determination. This investigative team, like a jury, represents the attitude of the intelligence professionals from whose ranks they are drawn and from whom they drew testimony--sometimes shocked and dismayed at what we've learned, often appreciative of the individual acts of competence and courage, and always intrigued by the complexity of the Ames story.

In the end, the Ames case is about accountability, both individual and managerial. The DCI and the congressional oversight committees have made this the issue, but if they had not, we would have. As a postscript to my opening sentences, let me note that the CIA IG had begun to look into the Ames case on its own, even before the SSCI or the DCI had requested it, because we believe that the statute setting up our office requires it. The issue of managerial accountability has been one of this office's principal points of focus since its inception in 1990--and we have enjoyed mixed success in our reviews and recommendations to promote it.

Seeking to determine managerial accountability in the Ames case has not been an easy task. On the individual level, we have uncovered a vast quantity of information about Ames's professional sloppiness, his failure to file accountings, contact reports and requests for foreign travel on time or at all. We have found that Ames was oblivious to issues of personal security both professionally--he left classified files on a subway train--and in his espionage--he carried incriminating documents and large amounts of cash in his airline luggage; he carried classified documents out of CIA facilities in shopping bags; and he openly walked into the Soviet Embassy in the United States and a Soviet compound in Rome. We have noted that Ames's abuse of alcohol, while not constant throughout his career, was chronic and interfered with his judgment and the performance of his duties.

By and large his professional weaknesses were observed by Ames's colleagues and supervisors and were tolerated by many who did not consider them highly unusual for Directorate of Operations officers on the "not going anywhere" promotion track. That an officer with these observed vulnerabilities should have been given counterintelligence responsibilities in Soviet operations where he was in a prime position to learn of the intimate details of the Agency's most sensitive operations, contact Soviet officials openly and then massively betray his trust is difficult to justify. The IG investigative team has been dismayed at this tolerant view of Ames's professional deficiencies and the random indifference given to his assignments, and our recommendations reflect that fact.

Finally, on the grander scale of how the reaction to the major loss of Soviet cases in 1985-86 was managed, our team has been equally strict, demanding and greatly disturbed by what we saw. If Soviet operations--the effort to achieve human penetrations of the USSR for foreign intelligence and counterintelligence information--was the highest priority mission of the clandestine service of CIA in 1985-86, then the loss of most of our assets in this crucial area of operations should have had a devastating effect on the thinking of the leaders of the DO and CIA. The effort to probe the reasons for these losses should have been of the most vital significance to U.S. intelligence, but particularly to the CIA, and should have been pursued with the utmost vigor and all necessary resources until an explanation--a technical or human penetration--was found.

It is true that the spy was found, but the course to that conclusion could have been much more rapid and direct. While those few who were engaged in the search may have done the best they could with what they had, in this investigation we have concluded that the intelligence losses of 1985-86 were not pursued to the fullest extent of the capabilities of the CIA, which prides itself on being the best intelligence service in the world. The analytical judgments and recommendations in this Report reflect that conclusion. We wish it could have been otherwise.

Frederick P. Hitz Inspector General



SUMMARY

1. In the spring and summer of 1985, Aldrich H. Ames began his espionage activities on behalf of the Soviet Union. In 1985 and 1986, it became increasingly clear to officials within CIA that the Agency was faced with a major CI problem. A significant number of CIA Soviet sources began to be compromised, recalled to the Soviet Union and, in many cases, executed. A number of these cases were believed to have been exposed by Edward Lee Howard, who fled the United States in September 1985 to avoid prosecution for disclosures he made earlier that year. However, it was evident by fall of 1985 that not all of the compromised sources could be attributed to him.

2. Later in 1985, the first Agency efforts were initiated to ascertain whether the unexplained compromises could be the result of a) faulty practices by the sources or the CIA officers who were assigned to handle them (i.e., whether the cases each contained seeds of their own destruction), b) a physical or electronic intrusion into the Agency's Moscow Station or Agency communications, or c) a human penetration within the Agency (a mole). Although they were never discounted altogether, the first two theories diminished in favor over the years as possible explanations for the losses. A "molehunt"--an effort to determine whether there was a human penetration, a spy, within CIA's ranks-was pursued more or less continuously and with varying degrees of intensity until Ames was convicted of espionage in 1994, nine years after the compromises began to occur.

3. The 1985-1986 compromises were first discussed in late 1985 with DCI William Casey, who directed that the Deputy Director for Operations (DDO) make every effort to determine the reason for them. In January 1986, SE Division instituted new and extraordinary compartmentation measures to prevent further compromises. In the fall of 1986, a small Special Task Force (STF) of four officers operating under the direction of the Counterintelligence Staff (CI Staff) was directed to begin an effort to determine the cause of the compromises. This effort, which was primarily analytic in nature, paralleled a separate FBI task force to determine whether the FBI had been penetrated. The FBI task force ended, and the CIA STF effort diminished significantly in 1988 as its participants became caught up in the creation of the Counterintelligence Center (CIC). Between 1988 and 1990, the CIA molehunt came to a low ebb as the officers involved concentrated on other CI matters that were believed to have higher priority.

-- Soviet East European Division, later renamed Central Eurasia Division, directed operations related to the Soviet Union and its successor states.

4. In late 1989, after his return from Rome, Ames ' s lifestyle and spending habits had changed as a result of the large amounts of money he had received from the KGB in return for the information he provided. Ames made no special efforts to conceal his newly acquired wealth and, for example, paid cash for a $540, 000 home. This unexplained affluence was brought to the attention of the molehunt team by a CIA employee in late 1989, and a CIC officer began a financial inquiry. The preliminary results of the financial inquiry indicated several large cash transactions but were not considered particularly significant at the time.

5 . Nevertheless, information regarding Ames's finances was provided to the Office of Security (OS) by CIC in 1990. A background investigation (BI) was conducted and a polygraph examination was scheduled. The BI was very thorough and produced information that indicated further questions about Ames and his spending habits. However, this information was not made available to the polygraph examiners who tested him, and CIC did not take steps to ensure that the examiners would have full knowledge of all it knew about Ames at the time. In April 1991, OS determined that Ames had successfully completed the reinvestigation polygraph with no indications of deception, just as he had five years previously.

6 . In 1991, CIA' s molehunt was revitalized and rejuvenated. Two counterintelligence officers were assigned full-time to find the cause of the 1985-86 compromises. The FBI provided two officers to work as part of the molehunt team.

7. During this phase, attention was redirected at Ames and a number of other possible suspects. In March 1992, a decision was made to complete the financial inquiry of Ames that had been initiated in 1989. In August 1992, a correlation was made between bank deposits by Ames that were identified by the financial inquiry and meetings between Ames and a Soviet official that the Agency and FBI had authorized in 1985. The joint CIA/FBI analytic effort fort resulted in a report written in March 1993, which concluded that, among other things, there was a penetration of the CIA. It was expected by CIA and FBI officials that the report, which included lists of CIA employees who had access to the compromised cases, would be reviewed by the FBI in consideration of further investigative steps.

8. The totality of the information available to CIC and the FBI prompted the FBI to launch an intensive CI investigation of Ames. During this phase, the FBI attempted to gather sufficient information to determine whether Ames was in fact engaged in espionage, and the Agency molehunt team was relegated to a supporting role. Every effort was made to avoid alerting Ames to the FBI CI investigation. According to FBI and Agency officials, it was not until a search of Ames's residential trash in September 1993, which produced a copy of an operational note from Ames to the Russians, that they were certain Ames was a spy. After the FBI had gathered additional information, Ames was arrested on February 21, 1994 and pled guilty to espionage on April 28, 1994.

9. The two CIA officers and the two FBI officers who began working in earnest on the possibility of an Agency penetration in 1991 under the auspices of the Agency's CIC, deserve credit for the ultimate identification of Ames as a hostile intelligence penetration of CIA. Without their efforts, it is possible that Ames might never have been successfully identified and prosecuted. Although proof of his espionage activities was not obtained until after the FBI began its CI investigation of Ames in 1993, the CIA molehunt team played a critical role in providing a context for the opening of an intensive investigation by the FBI. Moreover, although the CIA and the FBI have had disagreements and difficulties with coordination in other cases in the past, there is ample evidence to support the statements by both FBI and CIA senior management that the Ames case was a model of CI cooperation between the two agencies.

10. From its beginnings in 1986, however, the management of CIA's molehunt effort was deficient in several respects. These management deficiencies contributed to the delay in identifying Ames as a possible penetration, even though he was a careless spy who was sloppy and inattentive to measures that would conceal his activities. Despite the persistence of the individuals who played a part in the molehunt, it suffered from insufficient senior management attention, a lack of proper resources, and an array of immediate and extended distractions. The existence and toleration of these deficiencies is difficult to understand in light of the seriousness of the 1985-86 compromises and especially when considered in the context of the series of other CI failures that the Agency suffered in the 1980s and the decade-long history of external attention to the weaknesses in the Agency's CI and security programs. The deficiencies reflect a CIA CI function that has not recovered its legitimacy since the excesses of James Angleton, which resulted in his involuntary retirement from CIA in 1974. Furthermore, to some extent, the "Angleton Syndrome" has become a canard that is used to downplay the role of CI in the Agency.

11. Even in this context, it is difficult to understand the repeated failure to focus more attention on Ames earlier when his name continued to come up throughout the investigation. He had access to all the compromised cases; his financial resources improved substantially for unestablished reasons; and his laziness and poor performance were rather widely known. All of these are CI indicators that should have drawn attention to Ames. Combined, they should have made him stand out. Arguably, these indicators played a role in the fact that Ames was often named as a prime suspect by those involved in the molehunt.

12. One result of management inattention was the failure of CIA to bring a full range of potential resources to bear on this counterespionage investigation. There was an over-emphasis on operational analysis and the qualifications thought necessary to engage in such analysis, and a failure to employ fully such investigative techniques as financial analysis, the polygraph, behavioral analysis interviews, and the review of public and governmental records. These problems were exacerbated by the ambiguous division of the counterespionage function between CIC and OS and the continuing subordination by the Directorate of Operations (DO) of CI concerns to foreign intelligence collection interests. Excessive compartmentation has broadened the gap in communications between CIC and OS, and this problem has not been overcome despite efforts to improve coordination. CIC did not share information fully with OS or properly coordinate the OS investigation process.

13. These defects in the Agency's capability to conduct counterespionage investigations have been accompanied by a degradation of the security function within the Agency due to management policies and resource decisions during the past decade. These management policies emphasize generalization over expertise, quantity over quality, and accommodation rather than professionalism in the security field. This degradation of the security function has manifested itself in the reinvestigation and polygraph programs and appears to have contributed to Ames's ability to complete polygraphs successfully in 1986 and 1991 after he began his espionage activities.

14. Beyond defects in counterespionage investigations and related security programs, the Ames case reflects significant deficiencies in the Agency's personnel management policies. No evidence has been found that any Agency manager knowingly and willfully aided Ames in his espionage activities. However, Ames continued to be selected for positions in SE Division, CIC and the Counternarcotics Center that gave him significant access to highly sensitive information despite strong evidence of performance and suitability problems and, in the last few years of his career, substantial suspicion regarding his trustworthiness. A psychological profile of Ames that was prepared as part of this investigation indicates a troubled employee with a significant potential to engage in harmful activities.

15. Although information regarding Ames's professional and personal failings may not have been available in the aggregate to all of his managers or in any complete and official record, little effort was made by those managers who were aware of Ames's poor performance and behavioral problems to identify the problems officially and deal with them. If Agency management had acted more responsibly and responsively as these problems arose, it is possible that the Ames case could have been avoided in that he might not have been placed in a position where he could give away such sensitive source information.

16. The principal deficiency in the Ames case was the failure to ensure that the Agency employed its best efforts and adequate resources in determining on a timely basis the cause, including the possibility of a human penetration, of the compromises in 1985-86 of essentially its entire cadre of Soviet sources. The individual officers who deserve recognition for their roles in the eventual identification of Ames were forced to overcome what appears to have been significant inattentiveness on the part of senior Agency management. As time wore on and other priorities intervened, the 1985-86 compromises received less and less senior management attention. The compromises were not addressed resolutely until the spring of 1991 when it was decided that a concerted effort was required to resolve them. Even then, it took nearly three years to identify and arrest Ames, not because he was careful and crafty, but because the Agency effort was inadequate.

17. Senior Agency management, including several DDOs, DO Division Chiefs, CIC and DO officials, should be held accountable for permitting an officer with obvious problems such as Ames to continue to be placed in sensitive positions where he was able to engage in activities that have caused great harm to the United States. Senior Agency management, including at least several DCIs, Deputy Directors, DO Division Chiefs, and senior CI and security officials, should also be held accountable for not ensuring that the Agency made a maximum effort to resolve the compromises quickly through the conduct of a focused investigation conducted by adequate numbers of qualified personnel.

 

WHAT WAS AMES'S CAREER HISTORY WITH CIA?

18. In June 1962, Ames completed full processing for staff employment with the Agency and entered on duty as a GS-4 document analyst in the Records Integration Division (RID) of the DO. Within RID, Ames read, coded, filed, and retrieved documents related to clandestine operations against an East European target. He remained in this position for five years while attending George Washington University, on a part-time or full-time basis. In September 1967, Ames received his Bachelor of Arts degree in history with an average grade of B-.

19. Ames originally viewed his work with RID as a stopgap measure to finance his way through college. However, he grew increasingly fascinated by intelligence operations against Communist countries, and, influenced by other RID colleagues who were entering the Career Trainee (CT) program, he applied and was accepted as a CT in December 1967. When Ames completed this training nearly a year later, he was assigned to an SE Division branch. He remained there for several months before beginning Turkish language studies.

20. Ames's first overseas posting took place between 1969 and 1972. It was not a successful tour, and the last Performance Appraisal Report (PAR) of his tour stated, in effect, that Ames was unsuited for field work and should spend the remainder of his career at Headquarters. The PAR noted that Ames preferred "assignments that do not involve face-to-face situations with relatively unknown personalities who must be manipulated." Such a comment was devastating for an operations officer, and Ames was discouraged enough to consider leaving the Agency.

21. Ames spent the next four years, 1972-76, at Headquarters in SE Division. Managing the paperwork and planning associated with field operations at a distance was more comfortable for Ames than trying to recruit in the field himself, and he won generally enthusiastic reviews from his supervisors. One payoff from this improved performance was the decision in September 1974 to name Ames as both the Headquarters and field case officer to manage a highly valued Agency asset.

22. Ames's opportunity to expand his field experience came with his assignment to the New York Base of the DO's Foreign Resources Division from 1976 to 1981. The PARs that Ames received during the last four of his five years in New York were the strongest of his career. These PARs led Ames to be ranked in the top 10% of GS-13 DO operations officers ranked for promotion in early 1982. He was promoted to GS-14 in May 1982.

23. The career momentum Ames established in New York was not maintained during his 1981-83 tour in Mexico City. This assignment, like his earlier tour and his later tour in Rome, failed to play to Ames's strengths as a handler of established sources and emphasized instead an area where he was weak--the development and recruitment of new assets. In Mexico City, Ames spent little time working outside the Embassy, developed few assets, and was chronically late with his financial accountings. Further, Ames developed problems with alcohol abuse that worsened to the point that he often was able to accomplish little work after long, liquid lunches. His PARs focused heavily, and negatively, on his failure to maintain proper accountings and were generally unenthusiastic. In Mexico City, Ames also became involved in an intimate relationship with the Colombian cultural attaché, Maria del Rosario Casas Dupuy.

24. Despite his lackluster performance in Mexico City, Ames returned to Headquarters in 1983 to a position that he valued highly. His appointment as Chief of a branch in an SE Division Group was recommended by the officer who had supervised Ames in New York and approved by Chief, SE Division and the DDO. This position gave him access to the Agency's worldwide Soviet operations. Ames completed this tour with SE Division by being selected by the SE Division Chief as one of the primary debriefers for the defector Vitaly Yurchenko from August to September 1985. For his work in the SE Division Group, Ames was ranked very near the lower quarter of DO operations officers at his grade at this time.

25. By early 1984, Ames was thinking ahead to his next field assignment and asked to go to Rome as Chief of a branch where he had access to information regarding many operations run or supported from that post. He left for Rome in 1986. He once again began to drink heavily, particularly at lunch, did little work, sometimes slept at his desk in the afternoons, rarely initiated developmental activity, and often fell behind in accountings, reporting and other administrative matters. Ames was successful in managing liaison relations with U.S. military intelligence units in Italy, but he registered few other achievements.

26. Ames's mediocre performance for the Agency in Rome did not prevent his assignment upon his return to Headquarters in mid 1989 to head a branch of an SE Division Group. Here again he had access to many sensitive cases. When that position was eliminated in a December 1989 reorganization of SE Division, Ames became Chief of another SE Division branch, where he remained until late 1990. At this time, Ames was ranked in the bottom 10% of DO GS-14 operations officers. He appears to have been a weak manager who focused only on what interested him.

27. Ames moved to a position in the Counterintelligence Center in October 1990. In the CIC, where he remained until August 1991, he prepared analytical papers on issues relating to the KGB but also had access to sensitive data bases. Discussions between Ames and the Deputy Chief, SE Division, resulted in Ames's temporary return to SE Division as head of a small KGB Working Group between August and November 1991.

28. In 1991, Chief SE Division requested that a counternarcotics program be established through liaison with the states of the former Soviet Union. Thereafter, Ames began a rotation to the Counternarcotics Center (CNC) in December 1991. At CNC, where Ames remained until his arrest, he worked primarily on developing a program for intelligence sharing between the United States and cooperating countries.

29. Ames was arrested on February 21, 1994. On that date, DCI Woolsey terminated his employment with the Agency.

 

WHAT WERE AMES'S STRENGTHS, WEAKNESSES AND VULNERABILITIES?

 

Performance Problems

30. Ames appears to have been most successful and productive in assignments that drew on his:

• Analytical skills, particularly collating myriad bits of information into coherent patterns;

• Writing skills, both in drafting operational cables and crafting more intuitive thought pieces;

• Intellectual curiosity and willingness to educate himself on issues that were beyond the scope of his immediate assignment; and

• Creativity in conceiving and implementing sometimes complex operational schemes and liaison programs.

31. Ames was far less successful--and indeed was generally judged a failure--in overseas assignments where the development and recruitment of assets was the key measure of his performance. For most of his career, moreover, a number of work habits also had a dampening impact on his performance. These included:

• Inattention to personal hygiene and a sometimes overbearing manner that aggravated the perception that he was a poor performer;

• A lack of enthusiasm for handling routine administrative matters. By the late 1970s, when Ames was assigned to New York, this pattern of behavior was evident in his tardy filing of financial accountings and failure to document all of his meetings in contact reports. Ames's disdain for detail also manifested itself in his pack-rat amassing of paper and his failure, especially in Rome, to handle action cables appropriately and expeditiously; and

• Selective enthusiasm. With the passage of time, Ames increasingly demonstrated zeal only for those few tasks that captured his imagination while ignoring elements of his job that were of little personal interest to him.

 

Sleeping on the Job

32. A significant number of individuals who have worked with Ames in both domestic and foreign assignments state that it was not uncommon for Ames to be seen asleep at his desk during working hours. This behavior often coincided, especially in Rome and at Headquarters in the l990s, with Ames having returned from lunch where he consumed alcohol.

 

Failure to File Required Reports

33. The Agency has an established system of reports of various kinds that serve administrative, operational, security, and counterintelligence purposes. Ames paid very little attention to a variety of these reporting requirements. His inattention to these matters was by and large ignored, to the extent it was known by Agency management.

 

Foreign Travel

34. Over the course of several years, Ames failed to report foreign travel to OS as required by Headquarters Regulation. It is difficult to determine whether and to what extent management was aware of his unreported travel. The official record includes no mention, but fellow employees appear to have had some knowledge of his travels, especially in Rome.

 

Contact Reports

35. Ames also failed to file timely contact reports regarding many of his meetings with foreign officials. While this failure originally may have been related to his laziness and disdain for regulations, it became more calculated and had serious CI implications once he had volunteered to the Soviets in 1985. Ames states that he deliberately avoided filing complete and timely reports of his contacts with Soviet officials in Washington. If he had done so, he believes, Agency and FBI officials might have identified contradictions. Moreover, he believes they would have seen no operational advantage to the meetings, ceased the operation, and removed the ready pretext for his espionage activities. This also was true of his meetings with Soviets in Rome.

 

Financial Accountings

36. Throughout the course of Ames's career, managers reported that they frequently counseled and reprimanded him, or cited in his PAR Ames's refusal to provide timely accountings and properly maintain his revolving operational funds. This is more than a question of financial responsibility for DO officers. It also provides DO managers with another means of monitoring and verifying the activities of the operations officers they supervise.

 

Foreign National Contacts and Marriage

37. Ames also did not fully comply with Agency requirements in documenting his relationship with Rosario. He never reported his intimate relationship with her as a "close and continuing" one while he was in Mexico City. Management was aware generally of a relationship but not its intimate nature and did not pursue the reporting. He did follow proper procedures in obtaining approval for their marriage. However, Agency management did not accept or implement properly the CI Staff Chief's recommendation at the time that Ames be placed in less sensitive positions until Rosario became a U.S. citizen.

 

Security Problems

38. Ames also seemed predisposed to ignore and violate Agency security rules and regulations. In New York in 1976, he committed a potentially very serious security violation when he left a briefcase full of classified information on a New York subway train. In 1984, Ames brought Rosario to an Agency-provided apartment; a clear violation that compromised the cover of other operations officers. Ames also committed a breach of security by leaving a sensitive secure communications system unsecured at the FR/New York office. On July 2, 1985, Ames received the only official security violation that was issued to him when he left his office safe open and unlocked upon departure for the evening. Ames admits to using his home computer occasionally when in Rome between 1986 and 1989 to draft classified memoranda and cables that he would print out and take into the office the next day. In the most extreme example of his disregard for physical security regulations, of course, Ames wrapped up five to seven pounds of cable traffic in plastic bags in June 1985 and carried it out of Headquarters to deliver to the KGB.

 

Alcohol Abuse

39. Much has been made since his arrest of Ames's drinking habits. While it is clear that he drank too much too often and there is some basis to believe this may have clouded his judgment over time, he does not appear to have been an acute alcoholic who was constantly inebriated. Ames acknowledges the presence of a variety of symptoms of alcohol addiction. The term "alcoholic" often conjures up images of broken individuals who spend their days helplessly craving a drink, becoming intoxicated beyond any self-control, and only breaking out of their intoxication with severe withdrawal symptoms. As explained in the psychological profile prepared by the psychologist detailed to the IG, alcohol addiction is, in reality, a more subtle, insidious process. This accounts for the fact that many of Ames's colleagues and a few supervisors were able to work with Ames without noticing his substance abuse problem.

40. In regard to why they did not deal with problems associated with Ames's alcohol abuse, several Agency managers say that alcohol abuse was not uncommon in the DO during the mid- to late-1980s and that Ames's drinking did not stand out since there were employees with much more serious alcohol cases. -Other managers cite a lack of support from Headquarters in dealing with problem employees abroad.

41. Medical experts believe that alcohol, because it diminishes judgment, inhibitions, and long-term thinking ability, may play some role in the decision to commit espionage. At the same time, because the number of spies is so small relative to the fraction of the U. S. population that has an alcohol abuse problem, statistical correlations cannot be made. As a result, alcohol abuse cannot be said to have a predictive connection to espionage and, in and of itself, cannot be used as an indicator of any real CI significance.

 

Financial Problems

42. In 1983-85, Ames became exceedingly vulnerable to potential espionage as a result of his perception that he was facing severe financial problems. According to Ames, once Rosario moved in with him in December 1983 he had begun to feel a financial pinch. Ames describes being faced with a credit squeeze that included a new car loan, a signature loan that had been "tapped to the max," mounting credit card payments, and, finally, a divorce settlement that he believed threatened to bankrupt him.

43. Ames claims to have first contemplated espionage between December 1984 and February 1985 as a way out of his mounting financial dilemma. Confronting a divorce that he knew by that time was going to be financially draining, and facing added expenses connected with his imminent marriage to someone with already established extravagant spending habits, Ames claims that his financial predicament caused him to commit espionage for financial relief.

 

WHY DID AMES COMMIT ESPIONAGE?

44. Ames states that the primary motivating factor for his decision to commit espionage was his desperation regarding financial indebtedness he incurred at the time of his separation from his first wife, their divorce settlement and his cohabitation with Rosario. He also says that several otherwise inhibiting "barriers" had been lowered by a) the opportunity to meet Soviet officials under Agency sanction, b) the lack of concern that he would soon be subject to a reinvestigation polygraph, c) his fading respect for the value of his Agency work as a result of lengthy discussions with Soviet officials, and d) his belief that the rules that governed others did not apply to him. Ames claims he conceived of a one-time "scam" directed against the Soviets to obtain the $50,000 he believed he needed to satisfy his outstanding debt in return for information about Agency operations he believed were actually controlled by the Soviets. He recognized subsequently that there was no turning back and acted to protect himself from the Soviet intelligence services by compromising Agency sources first in the June 1985 big dump.

 

HOW WERE INDICATIONS OF SUBSTANTIAL CHANGES IN AMES'S FINANCIAL SITUATION HANDLED?

45. The financial inquiry regarding Ames began in November 1989 with the receipt of information from at least one Agency employee that Ames's financial situation had changed and he was living rather extravagantly. Upon his return from Rome, Ames purchased a home in Arlington for more than a half million dollars in cash and made plans to remodel the kitchen and landscape the yard, sparing no expense. Ames was also known to have purchased a Jaguar automobile and to have Filipino servants whom he had flown to and from the Philippines. Ames's lifestyle change was apparent to others as well and several employees state that they noticed at that time a marked improvement in Ames's physical appearance, including capped teeth and expensive Italian suits and shoes.

46. The financial inquiry faltered over resource limitations and priority conflicts, was reinvigorated in March 1992 and was not completed until mid-1993. The information obtained as a result of the Ames financial review, especially the correlation between deposits made by the Ameses and the operational meetings, was an essential element in shifting the focus of the molehunt toward Ames and paving the way, both psychologically and factually, for the further investigation that resulted in his arrest. Yet the financial review was permitted to stall for almost a year while other matters consumed the time and effort of the single CIC officer who possessed the interest and ability necessary to conduct it. Technical management expertise to oversee the investigator's activities and help guide him was lacking. Given the responsibility that was placed on the investigator and his relative inexperience in conducting and analyzing financial information, he did a remarkable job. But there was clearly a lack of adequate resources and expertise available in CIC for this purpose.

47. If the financial inquiry had been pursued more rapidly and without interruption, significant information about Ames's finances would have been acquired earlier.

 

WAS THE COUNTERESPIONAGE INVESTIGATION COORDINATED PROPERLY WITH THE FBI?

48. Under Executive Order 12333, CIA is authorized to conduct counterintelligence activities abroad and to coordinate the counterintelligence activities of other agencies abroad. The Order also authorizes CIA to conduct counterintelligence activities in the United States, provided these activities are coordinated with the FBI. Under a 1988 CIA-FBI Memorandum of Understanding (MOU) the FBI must be notified immediately when there is a reasonable belief that an individual may engage in activities harmful to the national security of the United States.

49. CIA-FBI cooperation in the Ames case after the spring of 1991 generally exceeded the coordination requirements under the 1988 MOU. The FBI could have taken over the Ames case completely in 1991 but apparently concluded that it did not have sufficient cause to open an intensive CI investigation directed specifically at Ames. The FBI officers who were part of the team were provided unprecedented access to CIA information related to Ames and to other CIA cases. These FBI officers indicate that they had full access to all of the CIA information they needed and requested. Once the FBI did take over the case in 1993, CIA cooperation with the Bureau was excellent, according to FBI and CIA accounts.

 

WERE SUFFICIENT RESOURCES AND MANAGEMENT ATTENTION DEVOTED TO THE AMES INVESTIGATION?

50. In considering whether the resources that were applied to the molehunt were sufficient, it is necessary to evaluate the need for secrecy and compartmentation. If alerting a potential mole to the investigation was to be avoided at all costs, then concerns about the size and discretion of any group undertaking the investigation would be paramount. Nevertheless there must be some balance between secrecy and progress. Despite the arguments for the small size of the molehunt team, many officers concede that more resources could have been brought to bear earlier on the Ames investigation.

51. Even accepting the argument that the team had to be small to maintain compartmentation and to manage a complex CI investigative process, the resource issue remains because the molehunt team members who were made available were not focused exclusively on the task, but were frequently diverted to other requirements. The limited size and diffused focus of the molehunt team does not support DO management's assertions that the 1985-86 compromised Soviet cases were "the biggest failure a spy Agency could have." Rather, the resources applied to the task force indicate lack of management attention to this most serious of intelligence failures.

52. The resources that the Agency devoted to the molehunt were inadequate from the outset, especially when considered in light of the fact that the 1985-86 compromises were the worst intelligence losses in CIA history.

 

AS AGENCY USE OF POLYGRAPHS AND BACKGROUND INVESTIGATIONS BEEN SUFFICIENT TO DETECT POSSIBLE AGENCY COUNTERINTELLIGENCE PROBLEMS AT THE EARLIEST TIME?

53. The fact that Ames conceived, executed and sustained an espionage enterprise for almost nine years makes it difficult to argue that Agency screening techniques functioned adequately to detect a CI problem at the earliest possible time. The question then becomes whether the screening techniques, particularly the periodic polygraph examination, were adequate and why they did not detect Ames. The available evidence indicates that there were weaknesses in the polygraph methods that were used. However, it is difficult to conclude that the techniques themselves are inadequate since the major failing in the Ames case appears to be traceable to non-coordination and non-sharing of derogatory information concerning Ames.

54. Although this IG investigation necessarily focused on the Ames polygraph and background investigations, many employees of the Office of Security also raised more generic problems in these programs. At a minimum, these expressions of concern about the Agency's polygraph program reflect a significant morale problem.

55. In light of the dominant role that the polygraph plays in the reinvestigation process, OS management came to be interested in production. For most of the time since 1986--when the five-year periodic reinvestigation program was begun--until the present, the reinvestigation program has been behind schedule. As a result, OS managers have stressed the successful completion of polygraph examinations. Many examiners believe that this requirement implicitly stressed quantity over quality. In addition to the pressures of production, the lack of experience in the polygraph corps has detrimentally affected the Agency's polygraph program. The 1988 IG reinspection of the polygraph program noted this loss of experience. Many current and former OS polygraphers say that the OS policy of promoting generalists has caused the loss of experience. Many individuals also cite the lack of complete information on testing subjects as a defect in the Agency's polygraph program.

56. The 1986 polygraph of Ames was deficient and the 1991 polygraph sessions were not properly coordinated by CIC after they were requested. The Office of Security (OS) conducted a background investigation (BI) prior to Ames's polygraph examination in 1991. This 1991 BI is deemed by OS personnel to be a very professional and in-depth investigation of Ames's personal and professional activities. The investigator who conducted this BI deserves great credit for the competency and thoroughness of her efforts. Unfortunately, the results of this 1991 BI were not available to the polygraph examiners at the time they tested Ames nor was financial information that had been developed by CIC. Ultimately, the miscommunication between the CIC and OS components that were involved led the individual examiners to conduct standard reinvestigation polygraph tests that Ames passed. Both examiners say that having such detailed information available could have significantly altered their approach to testing Ames.

 

TO WHAT EXTENT DID AMES USE COMPUTER ACCESS AND CAPABILITIES TO ENGAGE IN ESPIONAGE ACTIVITIES?

57. Ames reports that he bought his first computer in the late winter or early spring of 1986 just prior to leaving for Rome. Ames's interest, however, was limited to computer applications rather than the technical aspects of computer science or programming. Ames admits to using his home computer occasionally when in Rome to draft classified memoranda and cables that he would print out and take into the office the next day. Ames admits to writing all his notes to the Soviets on his home computer using WordPerfect word processing software while in Rome. These notes however, were passed only in paper form. Ames began preparing at home and passing computer disks to the Soviets after returning to Washington. These disks had been password-protected by the Russians. The information contained on the disks, according to Ames, consisted only of one or two-page messages from him to his handler. All other information he passed was in the form of paper copies of documents. The intent was for Ames to leave a disk at a drop site and have the same disk returned later at his pick-up site.

58. Ames says that passing disks and using passwords was entirely his idea. Although Ames admits to discussing Agency computer systems with the Soviets, he says it was obvious that his handlers had little or no expertise in basic computer skills. Ames describes his handlers as being "rather proud of their having been able to turn a machine on, crank up WordPerfect and get my message on it."

59. Ames states consistently that he did not use or abuse computer access as a means for enhancing his espionage capabilities. He explains that the computer systems to which he had access in CIC, SE/CE Division and Rome Station were "really no more than bona fide electric typewriters." He does say, however, that this changed after he was given access to the CNC Local Area Network (LAN). That LAN featured the DO's message delivery system (MDS). However, the CNC terminals differed from DO LANs in that the capability to download information to floppy disks had not been disabled in the CNC LAN. The combination of having the MDS system available on terminals that had floppy disk capabilities represented a serious system vulnerability.

60. Ames clearly viewed his access to the CNC LAN as a very significant event in his ability to conduct espionage. The broadened access, combined with the compactness of disks, greatly enhanced the volume of data he could carry out of Agency facilities with significantly reduced risk. Fortunately, he was arrested before he could take full advantage of this system vulnerability.

61. No specific precautions were taken by Agency officials to minimize Ames's computer access to information within the scope of his official duties. In fact, there is one instance where Ames was granted expanded computer access despite expressions of concern by CIC and SE Division management at the time about his trustworthiness. Ames states he was surprised when he signed on and found that he had access to information about double agent cases. This allowed him to compromise a significant amount of sensitive data from the CIC to which he did not have an established need-to-know.

 

IS THERE ANY MERIT TO THE ALLEGATIONS IN THE "POISON FAX?"

62. In April 1994, an anonymous memorandum was faxed to the Senate Select Committee on Intelligence criticizing CIA counterintelligence policies and practices. That memorandum, which came to be known as the "poison fax," also alleged that an SE Division manager had warned Ames he was suspected of being a KGB mole and that a message from the field confirmed this. These allegations were featured in the press and raised questions in the Congress. No evidence has been found to substantiate these allegations.

 

HAS CIA BEEN EFFECTIVELY ORGANIZED TO DETECT PENETRATIONS SUCH AS AMES?

63. During the period of the Agency molehunt that led to Ames, the CI function and its counterespionage element was divided between the DO and OS. This division created problems that adversely affected the Agency's ability to focus on Ames. Although attempts were made to overcome these problems by written understandings and the assignment of OS officers to CIC, these attempts were not altogether successful.

64. Senior security officials have pointed out that there always has been a "fault line" in communications between the CIC, and its predecessors, and the OS. This division has created a number of problems, given the disparate cultures of the two organizations. Attempts are being made to employ CIC-OS teams to overcome these problems, but the problems are inherent to the division of CI responsibilities. The division of responsibility for CI between CIC and OS interfered with a comprehensive approach to the molehunt. When financial leads were obtained in 1989 and 1990, CIC essentially turned the matter over to OS for Ames's reinvestigation but failed to communicate all the relevant facts effectively with the OS personnel who were involved in the reinvestigation.

65. Many senior managers and other officers have strong opinions regarding whether the Agency's CI element, at least the portion that handles possible penetrations of the Agency, should report through the DDO. A number of officers believe that taking the CI function out of the DO would permit the addition of personnel who are not subject to the limitations of the DO culture and mindset. Other officers view the prospect of taking counterespionage outside the DO as impossible and potentially disastrous. Doing so, they argue, would never work because access to DO information would become more difficult. Some officers also argue that reporting directly to the DCI would be copying the KGB approach, which proved over the years to be unworkable. As a counter argument, however, former DCI Webster believes, in retrospect, that the CIC he created in 1988 should have reported to him directly with an informational reporting role to the DDO.

 

WERE CIA COUNTERINTELLIGENCE PERSONNEL WHO CONDUCTED THE MOLEHUNT PROPERLY QUALIFIED BY TRAINING AND EXPERIENCE?

66. Of the four officers who were assigned to the STF in 1986, one remained when the molehunt team was established by CIC in 1991 to continue to pursue the cause of the 1985-86 compromises. That officer was chosen to head the effort primarily because she was an experienced SE Division officer, was familiar with the KGB and wanted to pursue the compromises. According to her supervisor, there were not many other employees who had the years of experience, the operational knowledge, the interest, the temperament, and the personality to persist in this effort. She was joined by another officer who had headed the Moscow Task Force inquiry charged with doing the DO damage assessment concerning the Lonetree/Bracy allegations. A third officer, who had been on rotation to CIC from the Office of Security was chosen to assist the team because of his background and CI experience, although he was not actually made a team member until June 1993. While this investigator was certainly not the only person in CIA who was capable of performing a financial analysis, he was the only one who was known to, and trusted by, the team leader. He was ideal in her view because of his previous work with her on other CI cases. In addition, two FBI officers were assigned to the effort.

67. Put most simply, the consensus view of those in CIC who were directly involved in the molehunt seems to be that good CI officers have both innate and learned characteristics that make them effective. In addition to innate CI ability, a good CI analyst needs a great deal of general and particular knowledge to make the mental connections necessary to conduct a CI investigation. General knowledge in the molehunt context refers to knowledge of the KGB, while particular knowledge refers to knowledge of the 1985-86 compromised cases. In addition, many CIC employees say that operational experience is essential to CI work. Although this general and particular knowledge can be acquired through study, for the most part it is obtained over years of experience actually working on foreign intelligence operations and CI cases in a particular subject area.

68. In the judgment of the IG, these criteria for qualification as a CI analyst and for the process of conducting a CI investigation reflect a very narrow view of the scope and nature of CI investigations. In the Ames case, it was unduly cramped and justified an unfortunate resistance to adding more personnel to the molehunt unless they were deemed by the team leader to be qualified. Further, this view of counterespionage presents significant risks both to the Agency and successful prosecutions in the future. In the Ames investigation, the equities of any future prosecution were protected by the fact of FBI participation. Law enforcement officers bring an understanding of investigation procedure critical to building a successful prosecution. Without FBI participation, the risk of the narrow CIC view is that prosecutions may be jeopardized in future CI investigations. In addition to protecting Agency and prosecutive equities, training in law enforcement and other investigative techniques would expand the scope of information and techniques available to the Agency's CI investigators.

69. Despite these general shortcomings in CI training and methodology, the molehunters performed admirably. Their work included useful analysis that helped advance the resolution of the 1985-86 compromises significantly. On occasion, their work also went beyond the scope of what had been considered an adequate CI investigation to that point. Thus, they advanced the art form of CI investigations within CIA. In the final analysis, they contributed substantially to catching a spy.

 

WAS THE MOLEHUNT THAT LED TO AMES MANAGED PROPERLY, AND WHO WAS RESPONSIBLE?

70. Supervisory responsibility for the molehunt that eventually led to Ames shifted over time as managers, organizations and circumstances changed.

71. The primary responsibility for the molehunt within the Agency rested with officials in the CI Staff, later the CIC, as well as senior DO management. Management of the molehunt during the initial, analytic phase was inconsistent and sporadic. Although keen interest was expressed from time to time in determining what went wrong, the resources devoted to the molehunt were quite modest, especially considering the significance to the DO and the Agency of the rapid compromise of essentially all major Soviet sources. Those directly engaged in the molehunt also had to contend with competing assignments and were distracted from the molehunt by other possible explanations for the compromises, such as technical penetrations and the Lonetree/Bracy case, that eventually proved not to be fruitful. Senior CI managers at the time admit that they could, and probably should, have devoted more resources to the effort.

72. In the CI Staff, the early years of the molehunt were primarily analytical and episodic, rather than investigative and comprehensive. Although information gathering and file review are important, little else appears to have been done during this time. A number of CI cases concerning Agency employees were opened based on suspicious activity, but none were brought to resolution. No comprehensive list of Agency officers with the requisite access was created and analyzed during this stage in an attempt to narrow the focus of the molehunt.

73. SE Division management must also assume some responsibility, given the fact that the 1985-86 compromises involved major SE Division assets. SE Division management should have insisted upon an extensive effort and added its own resources if necessary to determine the cause of the compromises. It is not sufficient to say, as these and many other officials now do, that they did not more closely monitor or encourage the molehunt effort because they knew they were suspects themselves and did not wish to appear to be attempting to influence the matter in an undue fashion. The distinction between encouraging a responsible effort and improperly interfering in the progress of that effort is considerable. In any event, another senior SE official who was not on the list could have been given the necessary authority and responsibility.

74. Given the importance of the compromises and the need to determine their cause, the DDOs during this phase also must bear responsibility for not paying more attention to and better managing the molehunt.

75. Beyond those in the DO and CIC who had direct responsibility for the molehunt during this phase, OS should have done a better job of developing leads that would have assisted the molehunt team in focusing its attention on Ames as early as 1986. In the mid-1980s, OS had fallen behind in its reinvestigation polygraphs, and many officers had not been repolygraphed for periods much longer than the required five-year intervals. Ames had not been polygraphed for almost ten years when he was scheduled for a reinvestigation polygraph in 1986. That polygraph raised several questions but failed to reveal any problems despite the fact he had begun spying for the Soviets a year earlier and he reports he was very apprehensive at the time about being exposed.

76. The reorganization of OS in 1986 was followed in 1988 by the creation of the CIC which included a large OS contingent operating as an integral part of CIC. While one of the purposes of CIC was to consolidate all of the Agency's CI resources in a single component, the result was an overlap of missions, jurisdictional struggles at the highest levels of OS and CIC, and a failure to share information. According to a Nay 1991 Office of Inspector General Report of Inspection concerning OS, these problems were caused by the failure of Agency management to define the relative responsibilities of the two components, to provide a mechanism for a smooth flow of information between them, and to establish policy for managing cases of common interest.

77. CIC and the FBI can be credited for initiating a collaborative effort to revitalize the molehunt in April 1991. However, CIC management must also bear responsibility for not allocating sufficient dedicated resources to ensure that the effort was carried out thoroughly, professionally and expeditiously. The delay in the financial inquiry can be attributed largely to the lack of investigative resources allocated to the effort. The CIC investigator deserves a great deal of credit for his initiative and interest in financial analysis and it appears clear that an inquiry into Ames's finances would not have occurred to anyone else in CIC had he not been available to suggest it and carry it out. However, the failure to either dedicate the investigator fully to this inquiry before 1992, or to bring in other officers who would have been able to conduct a similar or more thorough financial analysis of Ames, represents one of the most glaring shortcomings of the molehunt. This failure alone appears to have delayed the identification of Ames by at least two years.

78. In 1993, when the FBI opened an intensive CI investigation of Ames, the Agency was fully cooperative and provided excellent support to the FBI's investigation. CIA deferred to the FBI's decisions regarding the investigation and allowed Ames continued access to classified information in order to avoid alerting him and to assist in developing evidence of his espionage. The common goal was to apprehend Ames, while safeguarding evidence for a successful prosecution. As has been stated earlier, the CIA/FBI working relationship during the FBI phase appears to have been a model of cooperation.