5 AMERICAN CAUGHT BY KGB SINCE CIA EX-AGENT SOLD DATA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000605100041-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 23, 2016
• Document Release Date: February 21, 2013
• Sequence Number: 41
• Publication Date: July 18, 1986
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2013/02/21 CIA-RDP90-00965R000605100041-8
- -F-gr WASHINGTON POST
18 July 1986
5 Americans Caught by KGB
Sitite CIA Ex-Agent Sold Data
By Nalte---r Pincus \A
111ashat4ton Pat Staff Writir
At 9:15 p.m. on May 7, in the
yard of Apartment Block No. 22 on
Moscow's Malaya Priogovskaya
street, a blue-jeaned American
named Eric Sites strolled past car-
rying a rolled-up newspaper. Sites,
who worked for the U.S. Embassy's
military attache office and whose
wife was waiting in a nearby embas-
sy car, hoped to rendezvous with a
Soviet citizen who had been re-
cruited by the Central Intelligence
Agency.
Instead, Soviet KGB secret police
agents swooped down on Sites, ar-
rested him and quickly expelled him
from the Soviet Union as persona
awr grals, awarding to as account
in the Soviet government newspa-
per Izvestia.
Sites was at least the fifth Amer-
ican official caught red-handed at
espionage in the Soviet Union sinc
Edward L. Howard, a disgruntl
former CIA employe, began sellin
secrets to the KGB in 1984, accord
ing to several U.S. government
sources. Three of the officials, who
are named by Izvestia, are con-
firmed by the State Department,
which previously had acknowledged
only one of the arrests.
Howard had been traineilltvith his
wife between January 1081 and
early 1983, to handle U.S. agents in
Moscow. After being briefed on
some of the names and identities of
those agents, however, Howard
indicated deception in a polygraph
test, was pulled from the Moscow
assignment and eventually fired
from the CIA. Identified as a Soviet
espionage agent last summer, How-
ard outwitted the Federal Bureau of
Investigation and fled the United
States in a case that attracted con-
siderable publicity, including a
lengthy article in The Washington
Post May 30 on Howard's back-
ground.
American officials are now con-
cluding that Howard is "the worst
intelligence loss in years," as one
informed official put it, and the
"worst foul-up by U.S. agencies."
The betrayal has left U.S. intelli-
gence operations in Moscow in
shambles,' according to another
U.S. official, and deeply shaken the
FBI's counterintelligence program
and the CIA's personnel policies.
After several internal investiga-
tions and a sharply critical inquiry
by the president's Foreign Intelli-
gence Advisory Board, the CIA has
begun a series of personnel re-
forms. Letters of reprimand have
been issued to several CIA and FBI
officials.
To months before Sites was
caught, the Soviets picked up Mi-
chael Sellers, a second secretary in
the U.S. Embassy in Moscow and
expelled him. "What is unusual,"
one source familiar with the How-
ard case said, Is how right the So-
viets have been in their actions."
The first to be caught after How-
ard initially talked to the KGB was
Paul M. Stambaugh, also a second
secretary in the Moscow embassy.
He was picked up in February
1985, as he was meeting his agent,
a Soviet aviation engineer named
A.G. Tolkachev.
Tolkachev, who apparently was
executed, was one of a still-undis-
closed number of Soviet citizens
acting as U.S. agents in Moscow
who have recently disappeared, ac-
cording to several sources. "They
are 'rolling up' people," said one
source, who added that since How-
ard fled it has been harder to trust
the agents still remaining.
"It will be years before things can
be put back together," he said. For
example, the Methods used by CIA
agents to arrange meetings and ex-
change information with Soviet con-
tacts evolved over many years?pe-
riodically reviewed in Moscow by
FBI agents?and must be restruc-
tured, according to intelligence
sources.
In the United States, the CIA and
FBI are trying to remedy the weak-
nesses exposed by the Howard
case, which some intelligence ex-
perts see as a classic example of
how not to recruit, fire and keep
track of an agent. After Howard had
been with the CIA for two years, an
investigation of his background
turned up a history of lying, drink-
ing, womanizing and drug use. After
he was fired and began a new job in
Santa Fe, N.M., Howard also took
repeated trips overseas, displayed
Soviet souvenirs and a new-found
wealth, all apparently without
arousing CIA or FBI suspicions.
In an apparent effort to improve
its image, the FBI held a widely
publicized news conference June 20
announcing the arrest and expulsion
of the senior Soviet air attache in
Washington for trying to purchase
secret documents from an Air
Force officer. FBI spokesmen de-
tailed the operational techniques
used by Col. Vladimir Izmaylov and
took credit for hampering further
Soviet operations.
But several experienced U.S. in-
telligence sources said the unusual
publicity given that case was largely
the result of the CIA's determina-
tion to counter the impact of the
Howard case and the bureau's de-
sire to trumpet its successful inves-
tigation.
One former intelligence officer
called the public revelation a "really
dumb move" that ended what could
have been a useful, long-term coun-
terintelligence operation and may
have put "good EU.S.1 people in
jeopardy in Moscow" if the Soviets
decide to retaliate by kicking out a
U.S. military attache.
President Reagan has yet to ap-
prove his intelligence advisory
board's study of the Howard case,
which was supervised by Anne L.
Armstrong, the panel's chairman.
A preliminary draft, which de-
tailed shortcomings in the CIA's re-
cruitment of Howard and his sub-
sequent handling by the agency and
the FBI, caused CIA Director Wil-
liam J. Casey to set aside the initial
in-house agency investigation, ac-
Coo(Autii
STAT
STAT
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STAT
sa
Declassified in Part - Sanitized Copy Approved for Release 2013/02/21 : CIA-RDP90-00965R000605100041-8
cording to sources. A second CIA
inquiry, by the agency's inspector
general, identified not only weak-
nesses in the system but also spec-
ified failures by individuals.
In the wake of these inquiries,
several changes are in motion,
sources said.
New recruits are being more
closely screened for past drug and
alcohol use and other potential per-
sonal problems or disorders. The
agency is not, however, taking a
new look at individuals brought into
the covert program at the same
time as Howard, congressional
sources said.
At least one CIA ex-operative,
who was a contemporary of How-
ard's in the agency, is under inves-
tigation by the FBI because of ques-
tionable financial dealings, accord-
ing to informed sources. Some past
and current members of the two
congressional Select Intelligence
committees believe there should be
a reexamination of all those hired
during the 1981-83 period.
The agency is also reinstating a
policy, dropped during the Carter
administration, of not immediately
firing unsatisfactory employes who
are involved in covert or otherwise
secret operations. The practice of
"drying out" or "putting on the
beach" such operatives by giving
them jobs that involve less sensitive
material is being reinstated so that
when they are released their knowl-
edge of highly classified material
would be more dated.
In addition, departing employes
in the future will be given extensive
counseling, and follow-up contacts
will be maintained. Although How-
ard underwent psychiatric care paid
for by the agency, his only contact
with CIA employes after his firing
occurred in late 1984 over a legal
action he filed with the Labor De-
partment regarding his discharge,
sources said. He told those former
colleagues at the time that he had
contemplated going to the Soviet
Embassy in 1983 to sell informa-
tion, but hadn't followed through,
according to sources.
This admission came to the agen-
cy's attention in late 1984, but did
not cause the CIA to put Howard on
any watch list, in part because "he
was considered so pro-Ronald Rea-
gan that he would never sell out his
country," said one source familiar
with the case.
The information was also with-
held from the FBI because the CIA
had been criticized for circulating
personnel information too freely in
the past. In the 1950s, 1960s, and
early 1970s, CIA's counterintelli-
gence operations undertook many
investigations of former agents and
employes in the United States,
which included extensive use of
wiretaps. House and Senate inque.,
ries into the CIA in the 1970s crita
icized this practice and sharply linh.
ited the agency's domestic inves-
tigations thereafter.
The first hint that Howard was.
working for Moscow came from
taly Yurchenko, a KGB officer %dia.,
defected July 27, 1985, and gittie.,
the CIA descriptions of two Ainext.,
ican agents who were giving infort,
mation to the KGB.
Because Yurchenko did not know-
Howard's name, the KGB offiCii....
described a former CIA agent
had been scheduled to go to Mos-
cow and who later met with KGB ,
'officials in Austria in September.
1984. Yurchenko also said this pkr-e
son was the only current or former
CIA agent ever recruited by thea.
KGB.
CIA officials immediately ii
pected Howard and "panicked," ac...
cording to one source. a
They asked the FBI to arrest
him, but at the same time under;
played Howard's importance. tit
was initially described to the FBI as
a disgruntled recruit; nothing wad'.
said about his Moscow assignmerit-
or his access to highly classified ma-
terial and training in counterintel-
ligence techniques.
The FBI, which also has been
working under stricter guidelines
since the 1970s' conkressional in- ?
vestigations, said it could not
arrest warrant for Howard Witholat.
some evidence that a crime bad.
been committed. The bureau decickL,
ed to watch Howard to see whollis
associates were and what he was^
doing.
The intelligence advisory board,.
report criticizes the CIA for hiding.,
the significance of the informatieii:-
Howard was in a position to cW'
close, but then comes down hard on
the failures of the FBI in its invesi"
tigation, according to sources famitr
iar with the report. ..
In describing the Howard case to
the House and Senate intelligence
committees, FBI Director William'
H. Webster "has admitted Vs'
agents screwed up," one legislabs_
said recently.
Howard, for example, realizeith:e.,..,
was under FBI investigation in .047
August last year, shortly aft.ey.;
agents began watching him, accercl-_,
ing to sources familiar with the.
case. On a trip to Seattle, SOURea/
said, Howard and his wife practiced",
the countersurveillance techniques.
they had learned during CIA treiltt;
Mg and apparently discovered they.
were being followed.
When Howard returned to Sanla
Fe from that trip, he took midi:
several moves that, in retrospect:
suggest he knew he was under =V-
picion.
For instance, he bought a rirtliti!
scanner and said he wanted "tcPtie-s.
ten to police and FBI broadcastettl?
former neighbor said recently. In-
addition, after an FBI agent w1iO
lived close to Howard moved out ir
the Santa Fe suburban development
named El Dorado, that house
came the bureau command center
for the investigation, neighbqt,s,
said.
Howard also stepped up a search
for a new job overseas, according to.
a ,-leighbor, and took out an exiled::
sive life insurance policy. He also
gave gold Kruggerands purchasext,
in Europe to a local brokerage rum
to start an annuity program for hit
3-year-old son.
Last Sept. 20, FBI agents con.
fronted Howard and accused him of
peddling secrets, according to.
sources. Howard initially put theat
off by saying he wanted to see: x
lawyer; later he agreed to cooper-
ate, sources said.
ron
? I/I
The next day, allegedly with tile,
help of his wife, he evaded the FBI--
and fled. His whereabouts are 'dn.:
known.
Bureau officials will not disete
the case, but an inexplicable coin-
cidence is that on Sept. 20, llte:
same day the FBI confronted How:ard, the Soviet news service lass
published an article about the arrest
and expulsion of Stambaugh in gas-.
cow, which had taken place =ice;
than seven months earlier.
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