SSCI HEARINGS ON COUNTERINTELLIGENCE AND SECURITY ISSUES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90M00005R000900090016-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 23, 2016
• Document Release Date: November 2, 2012
• Sequence Number: 16
• Publication Date: July 11, 1988
• Content Type: MEMO

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100TH ODMOUM
]at Session
f RXPORT
1 100-154
REPORT ON SECURITY AT THE UNITED STATES
MISSIONS IN MOSCOW AND OTHER
AREAS OF HIGH RISK
REPORT
SELECT COMMITTEE ON INTELLIGENCE
UNITED STATES SENATE
SEPTEMBER 9, 198.-Ordered to be printed
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 198:
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100TH CONORJIRS
1st Session
Rvo ,
100-1&4
REPORT ON SECURITY AT THE UNITED STATES MISSIONS
IN MOSCOW AND OTHER AREAS OF HIGH RISK
Sn' tw yi 9, 197.--Ordered to be printed
Mr. BOREN, from the Select Committee on Intelligence,
submitted the following
REPORT
1. INTRODUCTION
Since its inception, the Select Committee on Intelligence has ac-
corded a high priority to security programs designed to combat the
foreign espionage threat against the United States. The Committee
has recommended a number of initiatives over the years, primarily
in four areas: (1) improving the effectiveness of counterintelligence
and security programs through budget authorization and oversight
hearings; (2) reducing the hostile foreign intelligence presence in
the United States; (3) providing a comprehensive, analytical over-
view of the entire national counterintelligence and security effort;
and (4) improving what the Committee identified three years ago as
a seriously deficient security situation at the U.S. Embassy in
Moscow.
BUDGET AUTHORIZATION AND OVERSIGHT
The Committee has believed for some time that those charged
with carrying out security programs for the national security and
intelligence communities have received neither the resources ade-
quate to fulfill their responsibilities nor the necessary recognition
for their missions. Resource constraints and inadequate staffing
limited the effectiveness of many counterintelligence and security
programs. In an attempt to address this problem, this Committee
has provided increased funding and manpower. In response to the
Committee's urging and with authorizations for counterintelligence
programs, the Federal Bureau of Investigation, the Department of
Defense, and the CIA have improved counterintelligence programs
and career opportunities. Between FY 1980 and FY 1985, over 2,200
new counterintelligence positions were created. The Committee
also authorized, and Congress approved, additional funds to
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strengthen the FBI's technical surveillance and data processing ca-
pabilities.
The Committee has urged counterintelligence analysts to
recog-
nize that the threat goes beyond the traditional use of human
agents and includes collection denial and possible deception aimed
at U.S. technical systems.
Beginning in the early 1980's, the Committee supported the insti-
tution of a comprehensive, interagency counterintelligence policy
to better coordinate countermeasures against hostile intelligence
initiatives. In 1982, the Directors of the CIA and FBI instituted
measures to tighten cooperation in counterintelligence.
In 1985-86, the Director of Central Intelligence created new posi-
tions for a National Intelligence Officer and a small inter-agency
analytic staff to assess hostile deception efforts. The CIA's Director-
ate for Intelligence also established a unit to analyze the activities
of foreign intelligence services engaged in hostile actions against
the United States. These two initiatives have contributed to an ex-
pansion of Executive branch multidisciplinary counterintelligence
analysis and a heightened sensitivity to the implications of major
security breaches for intelligence analysis of the Soviet Union.
THE HOSTILE FOREIGN INTELLIGENCE PRESENCE
The Committee has been increasingly concerned about the grow-
ing number of Soviets posted in the United States for purposes of
espionage. The Committee has consistently recommended reciproci-
ty of treatment and equivalence in the size of the Soviet-bloc offi-
cial presence here and the U.S. official presence in the Soviet
Union and Eastern Europe.
In response to restrictions placed on U.S. diplomatic personnel
posted in Soviet-bloc countries, and in an attempt to keep closer
track of bloc personnel serving in this country, the Congress in
1982 passed the Foreign Missions Act. The Act created the Office of
Foreign Missions in the State Department, which was empowered
to impose restrictions and conditions upon certain foreign Embas-
sies here comparable to those imposed on counterpart U.S. Emba_--
sies. This legislation also provided for certain restrictions to be
placed on travel in the United States by Soviet and other diplo-
mats, and required that diplomats' cars carry distinct license
plates, thereby enabling the FBI's counterintelligence units to mon-
itor more easily any suspect activities.
The 1985 Committee report, "Soviet Presence in the U.N. Secre-
tariat," outlined several serious aspects of Soviet espionage activi-
ties in the United States A review of bilateral equivalence resulted
in the requirement, contained in the FY 1986 Intelligence Authori-
zation Act, that the President provide the House and Senate Intel-
ligence Committees, the Senate Foreign Relations Committee, and
the House Foreign Affairs Committee with annual reports of any
disparities between the size of U.S. overseas missions and the size
and treatment accorded corresponding missions from other coun-
tries in the United States.
Committee Members introduced legislation to mandate equiva-
lency in the size of the Soviet and U.S. diplomatic missions to the
United Nations and in the size of the Soviet Embassy and consular
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Lnd data processing ca-
?nce analysts to recog-
,itional use of human
asible deception aimed
.ee supported the insti-
nterintelligence policy
-st hostile intelligence
LA and FBI instituted
telligence.
ence created new posi-
I a small inter-agency
ts. The CIA's Director-
analyze the activities
iostile actions against
' contributed to an ex-
ry counterintelligence
implications of major
.he Soviet Union.
PRESENCE
erned about the grow-
States for purposes of
,commended reciproci-
3,f the Soviet-bloc offi-
esence in the Soviet
diplomatic personnel
tempt to keep closer
itry, the Congress in
t created the Office of
-hick was empowered
'rtain foreign Embas-
nterpart U.S. Embas-
:in restrictions to be
viet and other diplo-
arry distinct license
Iligence units to mon-
ce in the U.N. Secre-
viet espionage activi-
equivalence resulted
Intelligence Authori-
1se and Senate Intel-
ions Committee, and
nnua] reports of any
nissions and the size
ns from other coun-
to mandate equiva-
"atic missions to the
rnbassy and consular
8
staffs here and those of the United States in the Soviet Union. As a
consequence of the Leahy-Cohen amendments of 1985 and 1986, the
United States moved toward essential equivalence with the Soviet
Union in its diplomatic and consular presence, and the Soviet
Union was compelled to reduce sharply the size of its U.N. mission
and its diplomatic and consular presence in the United States. By
relying on the FBI to designate the specific individuals that had to
leave, the U.S. Government was able to impair the large KGB pres-
ence in both New York and Washington, D.C.
COUNTERINTELLIGENCE REPORT
In 1986, the Committee published a detailed report, "Meeting the
Espionage Challenge: A Review of United States Counterintelli-
gence and Security Programs," in an effort to stimulate improve-
ment in the protection of sensitive information from the threat of
foreign acquisition. The study was written in close cooperation with
the National Security Council Staff and the Intelligence Communi-
ty Staff, which were reviewing the same subject for the White
House. The final document contained over a hundred specific find-
ings and recommendations. The White House set forth dozens of
new security initiatives in its own classified report on counterintel-
ligence and many proposals that had languished in the bureaucra-
cy were elevated to the policy level for consideration and adoption.
MOSCOW EMBASSY
Among other things, "Meeting the Espionage Challenge" de-
scribed the Committee's long-standing concern for the security of
the U.S. Embassy in Moscow against the hostile intelligence as-
sault of the KGB.
In June 1985, a FBI counterintelligence expert detailed in testi-
mony before the Committee the espionage opportunities enjoyed by
the Soviets because of United States employment of over 200 Soviet
nationals in support positions at the Moscow Embassy, and the cor-
responding disadvantage suffered by U.S. counterintelligence due
to the Soviet practice of employing only their own citizens in com-
parable support positions at their diplomatic missions in the
United States. At this hearing. witnesses also testified regarding
the 1984 discovery that typewriter: at the Moscow Embassy had
been bugged with sophisticated electronic transmitting devices
which gave the Soviets access to some Embassy communications.
In 1985, the Committee received its first testimony indicating
that there was strong evidence that the Soviets had succeeded in
incorporating a complex and comprehensive electronic surveillance
system into the structure of the new U.S. Embassy under construc-
tion in Moscow, even though the Intelligence Community had been
in possession of indications of such penetration since 198?.
In recognition of the need for immediate improvements, the Com-
mittee voted to authorize a $50 million supplemental appropriation
in FY 1985 for security countermeasures at U.S. oversew missions.
The Department of State objected to the provision which directed
the administration of these funds by the CIA. As finally enacted by
the Congress, the appropriation was trimmed to $35 million and
the Department of State was named as one of the agencies to
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which the money was to be allocated. The State Department, work-
ing with intelligence experts, used some of this appropriation to es-
tablish more secure procurement, storage, transport, installation,
and repair of typewriters and other equipment used in the Moscow
Embassy and other diplomatic missions abroad.
In December 1985 and October 1986 staff delegations went to
Moscow to see the situation first-hand. After inspecting both the
old and new Embassy buildings and conducting extensive inter-
views with Embassy personnel, the staff produced two reports that
detailed a still grim picture of small improvements and large re-
maining vulnerabilities.
Parallel initiatives in the Senate have contributed to an increas-
ing awareness of counterintelligence and security problems. In 1985
and 1986, Senator Chiles highlighted construction problems with
the new embassy in Moscow. As a result, Congress mandated a
structural evaluation of the new chancery by the National Bureau
of Standards. The Senate Appropriations and Foreign Relations
Committees have sent delegations to Moscow to inspect the old and
new facilities. In 1986, at the request of the Foreign Relations Com-
mittee, the General Accounting Office prepared a report on securi-
ty at U.S. Embassies overseas. Congress also passed the Omnibus
Diplomatic Security and Antiterrorism Act to fund over five years
a F2.4 billion program to strengthen security at U.S. overseas diplo-
matic posts, as well as an appropriation for the first two years of
the program.
II. SECURITY PROBLEMS AT THE U.S. EMBASSY BUILDINGS
THE CURRENT EMBASSY COMPLEX
Committee staff members who visited the Embassy complex in
December 1985 and October 1986 noted a number of significant se-
curity weaknesses, despite upgrades that had been introduced over
the last two years.
In 1985, the Committee staff found that "secure" areas were
equipped with an obsolescent alarm system similar to those used in
apartment buildings in the United States. An improved alarm
system, which had not yet been installed, had been stored in nons?--
cure space. Both the old and new alarms were dependent upon the
attentiveness and reliability of a single Marine Guard manning the
main guard post in the secure area. Committee staff also noted
that the Marine Guard Detachment did not have especially high
morale at this post.
Security awareness was seriously deficient in 1985. During work-
ing hours secure areas were susceptible to access by unauthorized
persons, alarm systems were frequently shut off, and sometimes
the doors to secure areas were left open. After working hours, fre-
quent incidents of apparent false alarms bred a lack of urgency in
responding to those alarms. By contrast, by late 1986, new locks
and alarms had been installed, and the State Department's Region-
al Security Officer had begun to make real progress toward im-
proving security awareness.
Soviet sophistication in technical penetration operations and the
uncertain physical security at the Embassy prompted concern in
1985 regarding the designated sensitive areas of the Embassy and
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The Committee heard testimony that the Marine Guard compro-
mises, taken with previously existing security and structural prob-
lems in the current Embassy building, will require many millions
of dollars to repair. The Department of State has already asked for
some of those funds, and more are likely to be needed over the next
2-3 years.
Testimony presented to the Committee also indicated that it will
be difficult even to state how Soviet technical penetration of the
new chancery building might be successfully combated, let alone to
actually effect such a program of neutralization. Although several
Executive branch agencies and special boards are considering possi-
ble steps of this sort, witnesses indicated a clear lack of confidence
that any measure could guarantee a secure chancery building in
which sensitive conversations and communications would be truly
protected.
The Committee heard further testimony regarding the basic
flaws in State Department security organization and practices. One
expert witness made a strong plea for the budgetary protection of
State Department technical security programs from competition
from other State Department programs. A State Department offi-
cial conceded that the Department had attempted, earlier in this
fiscal year, to reprogram funds out of technical security. Congres-
sional opposition had prevented that debilitating action from being
effected. It was also noted that the Bureau of Diplomatic Security
has a difficult time recruiting and retaining expert technical per-
sonnel, due to the rigidity of a Foreign Service personnel system
that is designed for categories of employees other than the sort
that are needed for technical security functions.
At the end of the series of hearings, the question of whether the
organization of the State Department for handling questions of se-
curity should be revised was discussed. A State Department official
acknowledged that security functions in the Department are divid-
ed among three offices at varying levels within the Department, all
of which must report through the Undersecretary in order to reach
the Secretary. It was agreed that the security functions in the
three offices be combined. A proposal based upon this idea is incor-
porated in the recommendations of this report.
III. DIPLOMATIC SECURITY Ai rI o}uz TIo
FY '88 is the third year of the State Department's five year pro-
gram to implement the recommendations of the Secretary's Adviso-
ry Panel (Inman Report) on embassy security. Expenditures in the
first two years focused on physical security measures intended to
harden U.S. diplomatic facilities against terrorist or mob attacks
The FY '88 authorization request, however, focuses on technical se-
curity against the hostile intelligence threat. Recent events in
Moscow certainly suggest this emphasis is appropriate, if not over-
due.
The FY '88 request include $104 million in new monies for tech-
nical security. The major categories of expenditure are as follows:
Support for positions and r M`i1,onr
p ograms already in place plus increased costs due
to currency fluctuations and inflation ................................................................... $30
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program increases fsecuor:
Construction rity including guards and other measures to protect
construction sites ................................................................................................ 25
Technical security in new diplomatic facilities including protection
against technical penetration attempts, the replacement of foreign no-
tionals by U.S. citizens as computer operators, and the procurement of
specialized equipment ........................................................................................ 16
Protection of office equipment, intended for use at the Moscow Embassy
and other overseas missions, through its life cycle from procurement
to installation and repair .................................................................................. 15
Security protection (guards, vehicles, equipment) for American officials.
including the Secretary of State, traveling overseas and foreign digni-
taries visiting the United States ...................................................................... 8
Interagency counterterrorism research and development ............................. 9
Training of security personnel and provision of secure storage for equip-
ment prior to shipment .............................. :.... 1
In the judgment of the Intelligence Committee, these expendi-
tures are all justified and appropriate.
The budget authorization request was developed before the
recent revelations involving the Marine guards in Moscow. The
State Department, in conjunction with the CIA and the National
Security Agency, is preparing a supplemental budget authorization
request. It will take several weeks to develop the request, which
will cover the costs of removing, replacing, and painstakingly ana-
lyzing equipment that may have been compromised as well as ren-
ovating and examining facilities that may have been penetrated.
IN'. RECOMMENDATIONS
The Committee has concluded that fundamental long-term
changes are necessary in the way the United States conducts its
mission in Moscow, other high-threat areas, and elsewhere. If secu-
rity is to become a reality in our Embassies, the short-term fixes
and patchwork approach of the past must be scrapped. Instead. the
Congress and Executive must commit themselves to a program of
institutional reforms that meet the challenge directly.
RECOMMENDATION 1: DEMOLISH THE NEW MOSCOW CHANCERY
BUILDING
Overwhelming evidence indicates that a highly organized and so-
phisticated effort by the Soviet Union has compromised the techni-
cal security of the new Chancery. A significant level of doubt will
always exist concerning our ability to conduct secure activities in
the building. There is no assurance that these problems can be
solved adequately, short of total demolition. Accordingly, the Com-
mittee recommends that the Chancery be destroyed and that plan-
ning be started to construct a secure facility.
The Committee recognizes that demolishing an office building in
which $23 million and the considerable energies of specialists in
the field have been invested is a difficult and potentially controver-
sial recommendation. However, failure to take action, even at this
late date, would obligate further sizable expenditures in the future
to no foreseeable gain. The fact that drastic remedial measures
have not, until recently, been given due consideration should not
affect the imperative to act now.
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Such an effort must be thoroughly coordinated, however, within
the diplomatic and intelligence communities of the United States
Government. We must concede less in our negotiations with the
Soviet Union in order to prevent a re t of previous mistakes and
mismanagement. The Soviets should be put on notice that the
State Department will negotiate a new set Of construction agree-
ments that meet our security requirements. Past mistakes, such as
allowing the Soviets the ability to prefabricate major sections of
the Chancery offsite and
ers making use of Soviet construction work-
, cannot be repeated. ]Furthermore, the United States must not
allow the Soviets to occupy. their new Chancery on Mt. Alto until
we can occupy a new Chancery with a reasonable assurance that it
has not been compromised. The State Department must plan for
the continued long-term occupation of the existing U.S. Embassy in
Moscow and make the structural and security modifications neces-
sary' to conduct secure operations and communications.
The Committee recognizes that demanding reciprocity in regard
to the U.S. and Soviet Chancery buildings may not adequately ad-
dress security dilemmas presented by the occupation of the res -
dences on Mt Alto by the Soviets The Committee suggests that
this matter merits further intensive consideration by the intellj-
gence and diplomatic communities and recommends that consider-
ation be given to removing the occupants of the residences in the
United States and the Soviet Union until such time as the security
concerns of the Committee are resolved.
RECOMMENDATION 2: CONSOLIDATE THE SECURITY, EMEASSS' CONSTRUC-
TION, AND FOREIGN MISSION PROGRAMS OF THE STATE DEPARTMENT
The record demonstrates that the security and building functions
of the State Department are fragmented and are scattered in at
least three different major organizational units This is a signif-
cant reason for the security breakdowns in the Moscow Embass-,
program. While creation of the new Bureau of Diplomatic Securit,
is a Positive improvement of the Omnibus Diplomatic Security ar,
Antiterrorism Act of 19x6, more needs to be done before Congresz
can be assured that security concerns are considered at the highest
police levels and that resources are efficiently and effectively spent
in the future
Accordingly, the Committee recommends that the Bureau of DiT,
lomatic Security, the new construction element of the Foreigr.
Buildings Office, and the Office of Foreign miss,
in Missions be consolidate:
a single new organizational unit. Furthermore, it recommends
that this unit be directly responsible and accountable to the Secre-
tary of State.
Furthermore, the Committee requests the Director of Central In-
telligence to certify to the Committee the
existing security conditions of al:
occupation. Embassy facilities, and of all new facilities prior to their
.
RECOMMENDATION 3: FENCE DIPLOMATIC SECURITY FUNDING
Consolidating the management of the diplomatic security and
building function is only a first step in assuring a vigorous and suc-
cessful long-term counterintelligence effort. In addition, protection
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cials,
Con-
with
the U.S.
foreign
)d other
previous
ry to
ent con-
should
main-
ent to
uate
Depart-
itment
Oppor-
t' De-
an eye
ftievant
uate
13
training opportunities should be
this will contribute to a fuller un errsstandi The Committee hopes
spectives, of all government ~g of the goals and per.
The Committee agencies involved.
not consid Commd recognizes that security awareness is sometimes
"culture" of the foreign service. Events
ere part of the reading other gen-
tlshow, however, that the day of "gentlemen not emen's mail" passed long ago. Accordingly, the Committee recom-
mends that the Secretary of State strengthen Department efforts to
provide more effective security awareness and training before over-
seas assignments, increase the authority- of Regional Security Offi-
cers at overseas missions, and reemphasize the ultimate account-
ability of Ambassadors for Embassy security. In cases of negligence
and malfeasance of duty, the Department of State must act quickly
to assess accountability and implement necessary disciplinary ac-
tions.
This Committee recognizes that personnel from government
agencies other than the State Department comprise a significant
Part of an Embassy staff. In many cases career Foreign Service Of-
ficers are in a minority. This results in fragmentation and uneven
levels of counterintelligence training at overseas
posts.
the Committee recommends that an office be established torserve
as the focal point for security awareness and eounterintellingence
training for all U.S. Government personnel from outside the na-
tional security arena (e.g. the Departments of Commerce and Agri-
culture), as well as from agencies under the Department of State
(e.g., AID and USIA), who are assigned to overseas missions. In ad-
dition, this office should be the final authority for judging the suit-
ability on counterintelligence grounds of personnel who are as-
signed from any agency to U.S. Embassies.
The State Department also needs to provide for greater emphasis
on the counterintelligence implications of certain conduct by Em-
bassy personnel, including Marine Guards. Cases of misconduct in
Communist bloc countries, such as fraternization or "black
market" involvement, ought to be routinely investigated, using
polygraph examinations, as appropriate, for possible indications of
espionage.
O
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