CIA STATEMENT RELEASE OF BNL-RELATED INVESTIGATION

• Document Type: FOIA
• Keywords: PRESS RELEASE
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005617864
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 20
• Document Creation Date: June 24, 2015
• Document Release Date: February 16, 2011
• Case Number: F-2010-01786
• Publication Date: February 5, 1993

CENTRAL INTELLIGENCE AGENCY
WASHINGTON, D.C. 20505
OFFICE OF PUBLIC AND AGENCY INFORMATION
Phone: [phone]
APPROVED FOR RELEASE[]
DATE: 31-Jan-2011
This morning the Acting Director of Central intelligence
released an unclassified summary of the final report of the
investigation by the Office of Inspector General into CIA's
handling of BNL-related matters, He also released the
Decision memorandum prepared by former Director Robert M.
Gates on the Inspector General's report.
The CIA's Inspector General found no evidence of
deliberate withholding of information or wrongdoing by any
Agency employee in connection with the BNL case.
As in the case of the report on BNL released on
5 February by the Senate Select Committee on Intelligence
(SSCI),, the Inspector General's report raises a number of
issues about the internal functioning of the Agency and about
the relationship between intelligence, the law enforcement
agencies, the courts, and the Congress. Work is underway to
implement the recommendations in the Inspector General's BNL
report approved by former Director Gates.
 MEMORANDUM FOR: Inspector General
FROM: Director of Central Intelligence
SUBJECT BNL Investigation
2
1. I have carefully read the Inspector General's
"Report of the Investigation of CIA'S Handling of BNL-Related
Matters." I have also read the voluminous comments from all
affected components and individuals, each of them critical of
the Report and citing either IG inaccuracies or
misinterpretations, extenuating circumstances with respect to
its own actions, and, in some cases, alleging distortions by
the investigating team itself. The Report has kindled--
finger-pointing among affected components and between
individuals. Against this turbulent backdrop, I feel
compelled to act upon the IG Report, even at the very end of
my tenure as DCI, because I commissioned the investigation
and many of the events occurred on my watch.
2. 1 accept the Conclusions and Recommendations
sections of the Report, subject to the observations below.
3. Tns+ Fici_en Co rd+'nation Within the Agency (pp.
I accept the characterization and conclusions of the
report, particularly with respect to the September 4 and- 17
letters to Justice, the Gonzalez Summary, DO Information, and
Additional Public Statements. I also accept the basic
conclusion that the letters to Agriculture received
insufficient review and coordination,, although I believe that
the Report should have given more weight in addressing the
letters to the systemic problem (underscored by the Report
with respect to the Gonzalez summary) of the inadequacy of
"normal" DI practices and analytical characterizations when
applied in legal or regulatory matters.
4. Bias Against Full i iosur of Relevant Zrformatjon
(pp. ). I agree with the 1G. However, CIA's record in
this area has been steadily improving, especially with
respect to Congressional inquiries and questions. where
there are problems I believe they are due to a variety of
factors -- all of which must be addressed and/or performance
corrected or improved, including (as the IG notes) concern
for sources and methods, lack of adequate document retrieval
(also noted by the IG), workload, inadequate coordination and
 communication of needs or requirements. Where there is any
sign of willful intent not to be fully responsive to
Congressional, Court or other official inquiries (subject
only to protection of sources and methods), those involved
should be disciplined.' The IG is right -- CIA must do better
in this area.
5. Manaa m n nvs_siOh JZnadecuat Staff Work (pp.
I accept the overall conclusions of the IG, except that
I believe the report does not adequately reflect the efforts
by OGC beginning on 16 September to get to Judge Shoob to
explain CIA's-documents (although given my repeated
expressions of interest in getting someone from CIA to
Atlanta, I should have been asked to call the Attorney
General).
6. Inadeouatt congr~ s;ona a'Goa (p. ). I agree
with the IG, even though OCA's explanation of the
countervailing considerations has some merit. A direct
approach to Chairman Gonzalez or his senior staff on the
summary, with all the risks, should have been given more
serious thought.
8.
below.
121
9. The IG has made 10 recommendations, I concur
without reservation on all of the first nine. Specifically,
as numbered in the Report:
(1) The Executive Director should establish a
standing senior group responsible for coordinating,
overseeing, and ensuring accountability for developing
situations that, in the judgment of any member of the group,
merit senior-level, focused attention in order to avoid the
manifold problems that surrounded CIA handling of BNL. The
current BNL task force should serve as a model.
(2) OCA should prepare and submit as part of the
FY 94 legislative program a proposed amendment to the
National Security Act of 1947, as amended, that would make
clear that no provision of that Act or any other law shall
preclude CIA or other parts of the U.S. intelligence
 community from sharing with Justice, or any other federal law
enforcement agency, information acquired or maintained by CIA
that is evidence of or relevant to a possible violation of
federal law.
(3) The Executive Director should establish a task
force to develop guidance, in coordination with justice, that
will clearly define when--if ever, under what circumstances,
and the extent to which federal law enforcement agencies may
task CIA, within the bounds of law and its responsibilities
as a foreign intelligence agency, to collect information
relating to potential or ongoing federal criminal
investigations and prosecutions. Such guidance should be
incorporated in Agency regulations and appropriate training
courses. The task force also should determine whether to
pursue with Justice and others the question of the need for
new legislation in this area.
(4) The Executive Director should establish a task
force headed by a senior DI or DO official to make specific
proposals for developing working relationships with law
enforcement personnel comparable to those shared with
defense, foreign policy and ocher intelligence agency
personnel.
(5) All components, but especially OGC, OCA and
OPAI, must ensure that any Agency materials or statements
destined for justice, Congress or the Courts be subject to
full and thorough coordination within the Agency and be
complete and accurate.
(6) All communications to Congress that require
analytical input should be tasked formally through
appropriate DI management channels.
(7) The Agency, as a rule, should not comment
publicly on matters under internal and external
investigation. Any exceptions must be approved by the DCI.
(8) All Agency components, but especially the DDI,
DDO, General Counsel and D/OCA,?must ensure that any
characterizations of Agency information produced by their
components are accurate and not misleading or subject to
misinterpretation.
(9) My previous decisions on the IG inspection of
the DO information management system are reaffirmed.
 10. The -TG's tenth and last recommendation suggests
that I should "consider" disciplinary actions against four
individuals. I have given this recommendation long and
careful thought. in the last fourteen months, I have tried
to enhance and encourage accountability, full and forthcoming
responses to Congress and strict adherence to procedure and
process. I have concurred in every prior IG recommendation
for disciplinary measures, referrals to the Department of
Justice, and remedial actions. On occasion, my decisions
have been more harsh than recommended by the IG. Thus, I
have taken most seriously the IG recommendation in this case
for unspecified disciplinary measures, which was, after all,
pursuant to my own original instruction to the IG.
11. There are mitigating circumstances or differences
of view advanced in comments on the Report by virtually
everyone who was involved -- OGC, OCA, OPAI, DI, and DO. I
find some of the comments persuasive, though not necessarily
fully exculpatory. For example,
-- OGC did make a serious effort to get to Judge Shoob
beginning on 16 September. Indeed, he rejected one overture
for a meeting on 23 September. And, absent a CIPA Process,
Oct was prohibited from approaching the Judge except through
Justice.
-- The DI's approach to drafting its views is an
outgrowth of 40 years of supporting policymaking. Terms and
style congenial to that purpose are not adequate or
appropriate to legal proceedings and are easily subject to
misinterpretation, as is apparent from the analytic comment
on the Gonzalez Summary.
The General Counsel tried for some time prior to
September to promote better intra-Agency coordination on SNL,
an effort not credited in the IG Report.
- No supervisor can realistically double=check or
independently validate the work of all his or her employees,
we must ask if the right bases have been touched, if there
has been proper coordination, and if the specialist (lawyer
or analyst) is confident of or comfortable with his or her
conclusions, but rarely is there time in the real world of
decision-making to do more.
 - The Gonzalez Summary did play an important role in
the confusion of September, and OGC was unaware of the
existence of the analytic comments on the Summary until very
late.
-- OGC's explanation of its management of the BNL
"account" is reasonable, though in hindsight perhaps the
arrangement was inadequate.
12. To conclude, the IG investigation produced no
evidence of intentional misconduct or misfeasance,
malfeasance, or willful intent not to be responsive. There
is no indication from the IG or the many pages of comments
that anyone had base motives or was trying to do anything but
a good job. Yet, no one in CIA has anything to be proud of
in this case. Mistakes clearly were made, and there was
carelessness and a number of instances of poor judgment. At
the same time, the IG report documents in great detail that
the Agency's mishandling of BNL last fall was the result of
many factors, especially the lack of an adequate dialogue
between CIA and Justice; the lack of procedures to ensure
proper Agency handling of this case; flawed performances by
many individuals; the failure to surface problems at a high
enough level and early enough, which allowed problems to
fester and compound one another; and the failure of a number
of managers to see this "train wreck" coming prior to late
September and to act. It was the aggregate effect and
interplay of a variety of systemic, procedural and personal
shortcomings that produced the poor results.
13. Thus, I believe it would be unfair to single out a
few people in any one component for discipline when there
were many contributors and when, as the Report makes very
clear, serious procedural and systemic problems played a
large role. The individuals involved in all components, and
all managers have, I believe, learned important lessons. My
approval of all of the IG's other recommendations will, I
hope, ensure that these systemic, procedural, and cultural
problems will be corrected and, in so doing, ensure an
effective CIA response in the future to the new'challenge of
support to law enforcement.
14. My thanks to the IG and his team for carrying out a
tough assignment with a tough deadline. This thorough Report
and its recommendations provide a sound basis for remedial
action.
 15. The IG Report should be shown in its entirety to
the two intelligence Committees, but it must be accompanied
by this decision memorandum. The Committees should also be
told that component comments also are available for their
review.
16. I believe the new OCT or the Acting OCT should
release a declassified version of the Conclusions of the
Report (not the Executive Summary, which I find inadequate),
together with this decision memorandum. Prior to release of
the Concldion , all names and identifying titles should be
deleted with component references substituted. I defer to
the new DCI or Acting OCT as to the timing of any public
release.
CC. DDCI
EXDIR
DDI
DDO
General Counsel
D/OCA
D/PAI
 UNCLASSIFIED SUMMARY I OF THE FINAL REPORT
OF THE
OFFICE OF INSPECTOR GENERAL
INVESTIGATION OF
CIA's HANDLING OF BNL-RELATED MATTERS
1. On October 7,1992, in the wake of Congressional concern over CIA's
handling of information relating to the Banca Nationale del Lavoro (BNL) bank
scandal, the Director of Central Intelligence (DCI) directed that the Inspector
General (IG) undertake on an urgent basis an investigation of CIA's handling of
BNL-related matters with respect to the Department of Justice (DoJ), the Federal
District Court in Atlanta, Congressional inquiries, and other related matters.2
The focus of the investigation was to be on CIA, not DoJ or any other
governmental entity, and its purpose was to determine the reasons for perceived
shortcomings in CIA's responses, to determine whether disciplinary measures
are warranted, and to recommend changes in procedures that will prevent a
recurrence.
2. Since the August 1989 Federal Bureau of Investigation (FBI) raid on
BNL-Atlanta, CIA has provided intelligence regarding BNL to DoJ and the FBI
in response to requests for information in connection with their investigation
and prosecution of Christopher Drogoul, manager of BNL's branch in Atlanta
(BNL-Atlanta). That prosecution involves fraudulent activities directed at
federal bank regulators and the headquarters of BNL in Rome (BNL-Rome) in
connection with loans made to Iraq. CIA intelligence collection efforts focused
primarily on Iraqi procurement efforts abroad, not BNL-Atlanta, although some
intelligence was incidentally acquired regarding the Atlanta branch. The
intelligence reports that were provided to DoJ and the FBI included information
regarding BNL matters that was collected in the course of pursuing CIA's
foreign intelligence collection requirements.
I This is a summary of the full classified report on BNL The text has been shortened considerably and some changes and
additions have been made for purposes of clarity,
21n addition to the DCl's request for this Investigation, he also directed the Inspector General to conduct an inspection of
the entire records system of the Agency's Directorate of operations.
 3. No evidence was found in this investigation to indicate that any CIA
officer intentionally withheld any information concerning BNL from DoJ, the
office of the United States Attorney in Atlanta that was prosecuting the BNL
case, or the Federal District Court in Atlanta for the purpose of obstructing or
preventing the progress of the BNL-Atlanta prosecution or to protect CIA, its
employees, sources, or any foreign officials or governments from being
implicated in that prosecution. Although a few reports were not disseminated
outside the Agency, the decisions not to disseminate them were based upon
routine intelligence judgments and reasonable determinations that the
information they contained was marginal or generally reflected information that
was not unique but available in the open press at the time.
4. Congressman Henry Gonzalez, Chairman of the House Banking,
Finance and Urban Affairs Committee, was given summaries of CIA intelligence
reports accompanied by analytical comments that led him to conclude that CIA
had information confirming that BNL-Rome knew of illegal lending activity by
BNL-Atlanta. In fact, the Intelligence reporting on which this analysis was based
does not support such a definitive conclusion.
5. During late 1989 and 1990, CIA obtained a limited amount of
information that related to the issue of whether BNL-Rome knew during 1988
and 1989 of the activities of BNL-Atlanta that later became the subject of DoJ's
investigation and prosecution. Almost all of this information was shared with
DoJ as early as October 1990. It appears that some of the information in these
CIA reports is based on public media reports, hearsay, or mere conjecture on the
part of CIA contacts and sources. All of the information in the reports was not
fully evaluated, only reflects what CIA officers were told by others and did not
represent Agency conclusions that the information in the reports is accurate.
None of the information available to CIA establishes that BNL-Rome did know
of the activities of BNL-Atlanta that later became the subject of DoJ's
investigation and prosecution. Further, as is clear from Judge Lacey's
description of other information that was available to DoJ at the time, much
similar information had been obtained from other sources, considered carefully,
and discounted by the U.S. Attorney in Atlanta in the course of the DoJ
investigation of the BNL matter. Nonetheless, several of the CIA reports clearly
contain indications that BNL-Rome may have been aware of BNL-Atlanta's
actions.
6. In retrospect, mistakes clearly were made by Agency officers in their
handling of events related to the BNL matter, and there was carelessness and a
number of instances of poor judgment. CIA's mishandling of its role in the BNL
matter last fall was the result of many factors, especially the lack of an adequate
dialogue between CIA and justice; the lack of procedures to ensure proper
Agency handling of this case; flawed performances by many individuals; the
failure to surface problems at a high enough level and early enough; and the
failure of a number of managers to see this "train wreck" coming prior to late
 September and to act. It was the aggregate effect and interplay of a variety of
systemic, procedural and personal shortcomings that produced the poor results.
These shortcomings are described in further detail below.
 7. Insufficient coordination between Agency components retrieving,
interpreting, describing, and sharing information relating to BNL was largely
responsible for the allegation that CIA support to DoJ's prosecution in Atlanta
was inadequate, obstructionist, or part of some broader conspiracy to suppress
information.
a. September 4 and 17 Letters to DoJ--These two letters, the first
classified and the second unclassified, were written by the Office of
General Counsel (OGC) in response to DoJ requests and created the
impression, in their responses to Question 8, that CIA information
regarding BNL-Rome knowledge of BNL-Atlanta activities was based
solely on unclassified media sources. These letters represented a pattern
of inadequate coordination within the Agency of statements destined for
external sources. OGC cannot document any formal coordination of those
letters before they left the Agency. There was some discussion of the
substance of the answers in the September 4 letter with officials in CIA's
Directorate of Operations (DO) and Directorate of Intelligence (DI).
However, the content of the September 17 letter, which was destined for
public consumption, was discussed only with DoJ. OGC's failure to
coordinate the answers to the September 4 letter, compounded by a more
egregious failure when those answers were again not coordinated and
were repeated in the September 17 letter, resulted in the release-of an
incomplete and misleading Agency statement about CIA's knowledge of
BNL.
b. Gonzalez Summary--As part of a summary of Agency
documents, Chairman Gonzalez was provided CIA analytical comments
that led him to conclude that CIA had information confirming that BNL-
Rome knew of the lending activities of BNL-Atlanta for which
Christopher Drogoul was being prosecuted. This summary was an
attempt by the Agency to comply with a legitimate Congressional request,
and at the same time protect DO operational information. According to a
DO officer who worked on the Summary, the DO also wanted to avoid
the provision of misleading information to the House. Despite these good
intentions, however, a lack of review, absence of central direction and
insufficient coordination resulted in a misleading product that prompted
widespread public controversy, criticism of the Agency's performance
and suspicion of its motives. A number of Agency components-DO,
OGC, DI and the Office of Congressional Affairs (OCA) had some
involvement in the development of the Gonzalez Summary. However, no
central point of coordination was established, and too little substantive
 discussion occurred between components regarding the accuracy of the
Summary, particularly with regard to the analytical comments that were
added by the DI. The comments were not treated as a "finished" DI
intelligence product that would have required a higher level of
coordination. Normally when such products are intended to go to
Congress, they are required to be reviewed by DI management and other
DI components. A DI supervisor, who did not recall seeing the analytical
comments, was of the opinion that the release of the comments was
probably not the best approach in this situation. When the Gonzalez
Summary and its analytical comments were returned to the DO, copies
were furnished to the DO and OCA. However, there was a failure by the
DO and OCA to ensure that OGC saw the document with the analytical
comments. Given OGC's well known reporting obligations to DoJ
relating to the BNL prosecution, this was a major shortcoming. The result
was that DoJ and OGC were caught completely by surprise when the
information was made public by Chairman Gonzalez on September 14,
1992. In DoJ's eyes, the CIA, not an individual analyst, had adopted a
formal position that appeared to be inconsistent with the premise of the
BNL prosecution and with what OGC had advised DoJ previously.
c. DI and OGC`s Letters to Agriculture--An August 1992 letter
from OGC and a declassified January 1990 DI letter, both sent to the
Department of Agriculture, created the impression that certain CIA
information regarding BNL was based only on unclassified media
sources. The OGC letter was emblematic of the insufficient attention to
detail and lack of coordination regarding information leaving the Agency
that typified the actions of those involved in the BNL matter. While the
accounts of those involved in the development of the OGC letter indicate
that some degree of discussion did take place in connection with the
response, the lack of clarity in their collective recollections indicates a
serious lapse in the degree of care that was given at the time to its
accuracy. No indication was found that OGC discussed the letter's
contents with the DI. The senior OGC officer who signed the letter does
not recall the circumstances surrounding the letter and assumed it had
been properly coordinated. An OGC attorney who drafted the letter
recalls that he contacted the DI to determine the source of the "additional
information" cited in the DI's January letter and was told it was the
Financial Times. However, the DI officer contacted claims that the OGC
attorney is mistaken and this discussion could not have occurred since the
DI officer was on vacation at the time. The OGC attorney admits to the
possibility that he spoke to someone other than the DI officer but does not
know who this could have been. The DI analyst who drafted the DI letter
says that, if the OGC attorney had raised the matter, he would have been
advised that the statement contained in the DI letter regarding
information as to BNL-Rome's knowledge of BNL-Atlanta's activities
probably was not based solely on press reports. The OGC attorney cannot
 recall who else in OGC reviewed the draft of the letter prior to his
submitting it for signature. The attorney's immediate supervisor
originally did not recall anything about the August letter but now says he
was present when the senior OGC officer signed it. Although the January
1990 DI letter was properly coordinated for declassification, it appears the
OGC letter to the Department of Agriculture was produced without
sufficient attention to the questions it was answering and their
significance to the BNL case. Thus, in August 1992, inaccurate statements
were made in OGC's letter to Agriculture due to insufficient review and
coordination. These errors were later compounded and magnified when
OGC developed its response to Question 8 of the September 1 DoJ
request.
d. DO Infoirnation-It is apparent that OGC and DO personnel
did not communicate adequately throughout the course of this case in
terms of the objectives and potential adverse consequences of responses to
requests to review and retrieve operational information. Although in the
main there was good documentation of formal requests, there also were
instances where communication on substantive issues was too informal
and was never recorded. Under the circumstances and requirements that
were extant at the time, the DO search would appear adequate. However,
given the requirements of civil and criminal litigation made obvious by
BNL and other cases, it is now apparent that these standards were not
adequate. In response to the first OGC request for BNL information in
August 1990, for example, the DO conducted a standard search of what
the DO considers its official records system. Although costly and labor
intensive, a search of existing electronic messages would have produced
additional information from outside that system, which is normally
searched in response to internal and external requests. There was no
dialogue between OGC and DO personnel at the time of the DoJ requests
regarding a requirement to search outside that system Nor does there
appear to have been any attempt to coordinate a search of other data
collections, used primarily for operational support, that could possibly
have contained related information. (See, also, paragraph 10 below for
systemic issues regarding the DO records system.) Two years later, in the
midst of a damaging public controversy, these other retrieval possibilities
were pursued and extraordinary measures added. Customized full-text
searches using several hundred new and revised search terms were made
of the existing collection of electronic messages. Over 100 DO personnel
were employed in reviewing this output and in searching other data
collections, most of which are manual.
e. Additional Public Statements--The October 10, 1992, public
statement commenting on previous testimony by CIA officials before the
SSCI was not properly coordinated and was not consistent with CIA's
institutional interests. The Agency would be better served by returning to
 a strict policy of not publicly commenting on matters that are under
investigation by the Executive, Legislative, or judicial Branches or in
litigation. Agency management must exert greater restraint in submitting
to urges to cure the public record and rush to favorable judgments. This
is, after all, an intelligence agency, and an internal policy of openness to
employees must not blur the wisdom of avoiding word-for-word
exchanges with the media on matters where the Agency is handicapped
by its inability to place all relevant information in the public domain.
8. The Agency has a general bias against disclosing all relevant
information in response to legitimate requests from DoJ and other Federal
agencies. This was particularly evident in the DO responses to particular
requests for information pertaining to certain individuals and firms. In each of
these cases, the responses provided, while true, were too restrictive to give the
reader an accurate understanding of the nature of the Agency's relationship with
the individuals or the extent of its knowledge of the entities. The responses
provided to the SSCI on November 5, 1992 concerning some of these same
individuals and firms were more thorough and reflective of what should be
provided to legitimate requesters. Adopting a policy that all relevant
information should be disclosed in response to proper requests from federal
authorities, unless there is a legal basis to withhold information and a need to do
so, would limit the opportunities for misleading or incomplete responses and
provide adequate basis for protecting intelligence sources and methods.
MANAGEMENT OVERSIGHT/INADEQUATE STAFF WORK
9. Insufficient supervision and poor staff work characterized the Agency's
handling of BNL issues. Senior managers correctly expected to be kept abreast
of significant developments by subordinates. On the other hand, they must also
assume final responsibility for the failures of those subordinates, especially
when the managers did not make the effort necessary to scrutinize their work
properly. Managers and their subordinates at all levels in the components
working on BNL-related matters, particularly in OGC, were slow to recognize
the inadequacies of the Agency's responses to DoJ and the Atlanta prosecution,
and were not sufficiently alert to the growing significance of the BNL case itself.
Many commented that BNL was not a major Item for them at the time.
However, by September 1992, a significant amount of Agency effort,
Congressional interest and media attention had been devoted to Iraqi
procurement and the BNL issue for more than a year. Yet, there seems to have
been no instance in late summer 1992 when any, senior Agency manager saw the
need to undertake a complete review of how these matters were being handled.
a. September 17 Letter to DoJ. The September 17 letter to DoJ
troubled almost everyone who knew about it, but no one was
 uncomfortable enough to- take corrective action. An OGC supervisor was
sufficiently bothered that he expressed his concerns to his supervisor and
called DoJ to discuss the answer to Question 8 but did nothing to correct it
despite the fact that he was personally aware that similar language was
being opposed strongly in the context of a draft public statement for DoJ.
Yet, despite their expressed doubts about the wisdom of such an answer,
OGC yielded to its interest in satisfying DoJ, citing as further justification
a perceived interest in not changing the original mischaracterization that
had been made in the September 4 letter. Those involved in the
production and review-of this letter exercised poor judgment and failed in
their responsibility to protect the Agency's credibility.
b. Poor Communication With Atlanta. In September and October
1992, OGC failed to exercise sufficient effort to make direct contact with
the Atlanta prosecutors and.Judge Shoob in order to clarify the Agency
documents the Court had received. It was obvious to all concerned that
the prosecutors and the Judge were having difficulty interpreting the
Agency's information and harmonizing it with the theory of the
prosecution. Yet, after initiating dialogue with other Agency components
regarding the need for a trip to Atlanta and being directed by the DCI to
make the trip, OGC management failed to follow through and ensure that
there was no confusion as to the meaning of the Agency's materials.
Although OGC attorneys made several efforts to include a CIPA
proceeding as part of the Drogoul sentencing hearing, these efforts were
inadequate. The law requires that only DoJ may represent the U.S. in
litigation in which the U.S. or a federal agency is a party and it is not
suggested that OGC should have approached the Judge unilaterally.
However, under the circumstances, it was incumbent on OGC trs take.
whatever steps necessary, including seeking a call from the DCI to the
Attorney General, to ensure that judge Shoob was briefed on the CIA
information. This is especially so because OGC had sent out the
incomplete September 17 letter based on the rationale that the answers
would be explained to judge Shoob. Once that unclassified letter went
out in the form that it did, it was absolutely essential that Judge Shoob
have the benefit of the Agency's explanation of it as soon as he received it
and the Agency documents. Otherwise the Agency's credibility would
clearly be called into question, as in fact happened. OGC management
also failed to ensure a rapid response to written queries from the Court
and Acting U.S. Attorney for explication of CIA documents or to provide
any explanation to the Court after the Drogoul plea was withdrawn.
While it may be argued that further efforts by OGC'were not requested or
favored by DoJ or the U.S. Attorney's Office, the Agency cannot afford to
submit so quickly to the preferences of other agencies when its own
interests are at risk.
 c. September 4 Letter to DoJ. There was a lack of oversight and
supervision by OGC managers in the approval and transmittal to DoJ of
the answer to Question 8 in the September 4 letter. This answer allowed
DoJ and the Court in Atlanta to misconstrue the nature and extent of
Agency information. While OGC argues that the extremely narrow
answer to Question 8 was appropriate in the context of what was already
known to DoJ, the answer simply should not have been sent as written.
Such a fine legal perspective does not adequately consider the interests of
the Agency in ensuring clarity and precision in official Agency statements
and does not excuse the failure of the Agency's legal representatives to
protect those interests. Finally, the responses in the letter concerning
certain individuals should have been more complete.
d. Gonzalez Summary. CIA had good intentions in providing the
Summary in the first place. Sufficient care was not taken, however, to
ensure that the analytical comments it contained were accurate.
Essentially, those analytical comments were overstated by a poor choice
of words and were based only on the reports referred by the State
Department and not on a review of all relevant CIA reporting. The
Summary and the analytical comments that were added were subjected to
only cursory review in the DI and OCA before being provided to the
Chairman's staff. Considering that the Summary was being provided to
the Chairman of a standing House Committee with jurisdiction in the
matter, it should have commanded the attention and review accorded by
the DI to any significant finished intelligence product. Within OCA, it
should have been reviewed by the Director or Deputy Director. Also, the
DO and OCA should have ensured that OGC was aware of the analytical
comments.
e. September 21 Meeting At DoJ. Agency employees at the
September 21 meeting effectively countermanded a derision by the
Agency's most senior officers in crafting a statement they deemed most
appropriate for use by DoJ. Agency officers attending this meeting failed
to consult with their superiors and gave the Agency's imprimatur to the
public statement to be used by Acting U.S. Attorney Brill in court. The DI
analysts present effectively modified the analytical comments that had
been provided to Congress without any official acknowledgment,
correction, or adjustment within the Agency. While DoJ officials at the
meeting did not exert explicit pressure on the analysts to alter their views,
the context and setting lent itself to misunderstanding of DoJ's motives. It
is unfortunate that experienced Agency attorneys at this meeting did not
more forcefully assert Agency interests.
f. DI and OGC Letters to Agriculture. The August 1992 OGC
letter was not reviewed carefully by OGC management to ensure that it
was accurate and that the recipient was not being misled. Similarly, the
 DI letter of January 1990 should have been reviewed more carefully by DI
management since it contained a substantive Intelligence judgment that
went beyond mere transmittal language.
g. Public Statement for DoJ. The only purpose that could be
served by the ill-advised public statement of September 18 that was
developed by Agency officials was to soothe DoJ's anger and provide
further public support for the flawed September 17 letter. As with the
September 17 letter, some Agency officers expressed reservations or
outright disagreement with providing DoJ such a statement. OCA went
out of its way to express concern with misleading statements in the early
OGC drafts. The DO in particular opposed such a statement and,
according to DO officers, even voiced objections to the DCI. The DI
expressed strong reservations to OGC. The most senior officers, up to and
including the DCI, expressed concern and added cautionary language to
the drafts of the statement. Despite this significant high-level attention,
however, no one brought sufficient weight to the discussions to prevent
transmittal of a statement to DoJ.
10. When Chairman Gonzalez questioned CIA's cooperation with DoJ in
his September 14, 1992 press statement, there was no attempt by OCA to meet
with him to clarify the Agency's position. An OCA officer recalled that OCA
probably did not do this because of the BNL litigation and the fact that the
Attorney General had barred all government agencies from providing additional
classified information to Chairman Gonzalez because of his actions. This
explanation begs the question. OCA should have raised with senior Agency
managers the possibility of a meeting with Chairman Gonzalez. At the very least,
consideration should have been given to talking to Chairman Gonzalez's senior
staffer about the Chairman's interpretation of the summary.. It is by no means
certain that additional classified information would have been required to be
disclosed to the Chairman in explaining the purport of that already in his
possession. OCA's role is to make every effort to ensure that congressional
leaders, even those in non-intelligence oversight positions or with whom the
Agency might have institutional differences, are not misinformed about Agency
involvement in issues of significant congressional concern.
11. Information Retrieval. The Agency's information retrieval systems,
including both manual and ADP components, clearly are inconsistent with a
variety of current requirements and must be improved. In order to maintain
internal compartmentation, records have been intentionally fragmented. The
result is a system that was never designed to facilitate external requests that
depend upon complete divulgence of all information in the Agency's possession
 regarding individuals or entities that may be of little or no operational
intelligence interest to CIA. Some DO employees point out that the system also
was not designed to facilitate internal requests of such a nature. The DO
component that is the official custodian and retriever of DO operational records
still does not have complete knowledge of and unilateral access to all DO records
systems, making it impossible at this time for searchers to say with complete
certainty that all information on a given subject has been found. Coordination
among components involved in records reviews is seriously deficient. As late as
August 1992, the key Agency components handling BNL matters were unaware
of who was retrieving what, when, why, and for whom. Only late in the crisis
that developed regarding BNL information were an Agency focal point officer
and a central data base established.
12. Relationships with Law Enforcement Issues. The U.S. Intelligence
Community and the U.S. Law Enforcement Community have developed in very
different ways, under starkly different pressures, to respond to unique missions
and objectives. Intelligence as gathered by CIA is often of hearsay-quality and
comes from sources of varying degrees of reliability, can often never be verified
and is rarely subject to public scrutiny. Evidence developed in criminal
investigations, by contrast, is usually obtained from direct sources under threat of
perjury or false statement prosecutions themselves and subject to the galvanizing
test of public trial and cross-examination. Yet the two communities, driven by
the increasing intertwining of domestic and international interests, are moving
inexorably toward one another. Some accommodations have been made on each
side, yet the two have failed to address adequately the fundamental distinctions
in their practices, procedures and cultures. The less than complete response of
the CIA to DoJ's BNL prosecution demonstrates the need for significant
clarifications regarding the rules of crimes reporting and support to law
enforcement by the intelligence agencies; better definition of the problems of law
enforcement tasking and the protection of intelligence sources and methods
within the parameters of criminal or civil proceedings; and the development of a
strategy for overall improvements in CIA's cooperation with law enforcement
investigations.
13. DO officers are understandably cautious since there exist broad
strictures regarding their authority to collect information for U.S. law
enforcement purposes, and on reporting on the activities of U.S. persons. Law
enforcement officers and prosecutors are rightly apprehensive about the potential
impact of unverified intelligence information and its attendant national security
classification on the viability of their cases and investigations. Initiatives in this
area must come from the Agency's top leadership, but ultimately the working
levels of these agencies must be imbued by that leadership with a stronger sense
of the requirement that they work together more cooperatively.
14. The Agency does not have sufficiently strong and direct working
relationships between Agency operations and analytic personnel, on the one
 hand, and law enforcement and prosecutive personnel, on the other. These
should go beyond the existing relations that are focused on and through OGC. A
model for such relationships exists in the continuous dialogue that Agency
analytic personnel have with personnel elsewhere in the intelligence, defense and
foreign policy agencies. The BCCI experience has led to an effort to develop such
relationships with federal banking authorities.
15. Degree of Senior Management Attentiveness. No senior Agency
manager paid sufficient attention to the developing crisis relating to the BNL
matter. There were sufficient danger signals to indicate that someone should
have seized responsibility for ensuring that Agency actions were well
coordinated and fully considered.
FAILURE TO MEET PROFESSIONAL STANDARDS
16. Agency components and employees are expected to meet the highest
standards of professionalism in carrying out their functions and dudes.
Individuals in the following components did not meet these standards in
performing their responsibilities and duties with respect to the BNL matter as
discussed in this report
? OGC-for failure to ensure the proper supervision and handling of
the BNL litigation on behalf of the Agency.
? DI-for not properly reviewing Agency information to be provided
to a congressional committee and for providing analytical
comments that proved to be misleading.
? OCA-for failure of senior management to take prompt steps to
ensure that proper consideration was given to providing
Chairman Gonzalez with a dear understanding of Agency
information after he publicly disclosed what he believed CIA's
information showed regarding BNL, and for failing to ensure
appropriate review and coordination of proposed responses to the
Congress and to DoJ.
DO-for failure of senior line management to properly manage
records holdings and develop and implement procedures within
DO components to ensure full and accurate responses to DoJ
inquiries, and for failure to coordinate the analytical comments on
the Gonzalez Summary with OGC.
 RECOMMENDATIONS
17. This investigation report recommends;
? A senior group be given responsibility for coordinating, overseeing,
and ensuring accountability concerning developing situations that
merit focused attention by senior managers.
? OCA submit a proposed amendment to existing law that would make
it dear that CIA is not precluded from sharing with federal law
enforcement agencies information relevant to possible violations of
federal law.
? OGC work with DoJ to clarify when federal law enforcement agencies
may task CIA to collect information related to federal criminal
investigations and prosecutions.
? Establishment of a task force to develop proposals for establishing
Agency relationships with law enforcement personnel similar to those
that exist with defense, foreign policy, and other intelligence
personnel
? All components be directed to ensure that Agency materials or
statements destined for DoJ, Congress, or the courts be fully
coordinated within the Agency and be complete and accurate.
? All communications to Congress that require analytical input be
tasked formally through appropriate DI management channels.
? The Agency adopt a firm policy of not commenting publicly
concerning matters under internal or external investigation or in
litigation.
? OGC, DI, and DO be directed to ensure that any characterizations of
Agency information produced by their components are accurate and
not misleading.
Creation of a new DO information management system that will
ensure timely searches for and retrieval of all information on a given
subject.
? Consideration of appropriate disciplinary actions.