CASEY'S CIA: NEW CLOUT, NEW DANGER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000201810003-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: January 20, 2012
• Sequence Number: 3
• Publication Date: June 16, 1986
• Content Type: OPEN SOURCE

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CASEY'S CIA:
Lw
CLOUT, NEW DANGER
Under a combative spymaster,
"the company" is back. Covert
operations are in style, and
old hands are back at work.
But controversy rises: Is the
CIA leading the nation down
a perilous new path?
^ Casey is "surely one of'the heroes of
America's fight for freedom in the post-
war era ... The revitalization of an in-
telligence community is one of the
things we celebrate here tonight. "
-President Reagan at an OSS veterans
dinner, May 29, 1986.
`I think Casey has gone off the deep
end. His program of action coupled with
his enormous power make him a very
dangerous man.'!--A noted author on
intelligence issues.
. To his supporters, William J. Casey is
a savior who is leading the Central Intel-
ligence Agency out of the wilderness into
a new era of prominence and power. To
his critics, he is a blustering autocrat
whose impulsiveness threatens America.
On only one thing do most agree: At
73, Bill Casey has become the most
influential director of the CIA since
Allen Dulles, whose reign ended a quar-
ter century ago. Along the way, he has
not only revived the CIA but made it a
formidable player in American policy
overseas-and the center of a growing
storm at home and abroad.
U.S. intelligence opera-
tions are now one of the
fastest growing portions of
the federal budget, expand-
ing even more rapidly than
the Pentagon's share. The
CIA is erecting a massive
new office building that will
double the size of its head-
quarters in Langley, Va.
Many old CIA hands re-
leased in the 1970s have been
rehired, and the agency is
flooded with new job appli-
cants. A morning briefing
book from Casey, replete
with charts and graphs, pro-
vides Ronald Reagan with a
daily roadmap to the world.
Few dispute that Casey
has improved the quality of intelligence
gathering and analysis, especially on
terrorism. One measure of its new man-
date is that officials outside the CIA
are eagerly assigning more tasks to the
agency. There is no doubt that morale
is shooting up within the ranks of "the
company."
But critics, increasingly vocal, argue
that change is coming at a high price.
They say the greatest danger is that
Casey is pushing the agency into covert
wars-as in Nicaragua, Angola and Af-
ghanistan-that can't be won. They as-
sert that U.S. intelligence has failed in
key countries such as Lebanon and
botched the handling of Soviet defectors.
They fear Casey will re-create a "rogue
elephant" and return the agency to its
low state of the early 1970s.
Plugging leaks, nabbing turncoats
More recently, as the nation's spymas-
ter, Casey has been embarrassed by a
hemorrhaging of leaks from within the
intelligence community and revelations
that a series of U.S. officials have been
turning over American secrets to the
Soviet Union and other nations. In past
weeks, leaks have sprung regarding U.S.
eavesdropping on Libya and the Soviets
and the presence of a high-level U.S. spy
in the Polish government. Casey,
charged by law with guarding security
secrets, is lobbying hard for tougher
steps against leakers, including stepped-
up FBI probes and more lie-detector
tests, but the leaks continue. Meanwhile,
U.S. prosecutors have had their hands
full with cases against an unprecedented
automatically Director of
Central Intelligence, sitting
atop a pyramid that includes
the supersecret National Se-
curity Agency (NSA), - the
Defense Intelligence Agen-
cy (DIA) and the National
Reconnaissance Office
(NRO). A problem in any of
number of accused turn-
coats, including convictions
of the Walker family and
Ronald Pelton. On June 4,
Jonathan Pollard ended an-
other case, pleading guilty to
spying for Israel.
Many of these cases do
not touch the CIA itself. But
Casey wears two hats: As
director of the CIA, he is
these agencies winds upon Casey's desk.
With so many leaks and spy trials, it
was only a matter of time before hard-
liners in the Reagan administration col-
lided head-on with the media. That fight
has just begun, and the CIA director has
been in the thick of it, threatening prose-
cution of several news organizations.
At the eye of the storm, Bill Casey
rests easy. His office on the seventh
floor of Langley is lined with pictures of
several Presidents he has served, and
"the director," as he is known, brushes
aside the fires around him. There have
been so many over the years that Casey
seems immune to them. He speaks with
authority, and he acts as though he-
and his boss-have only a short time left
to remake the world.
It is that connection to the boss,
Ronald Reagan, that is Casey's greatest
source of power. Reagan likes Casey
for many of the same reasons that he is
drawn to White House Chief of Staff
Donald Regan: Both are bluff Irish-
men, self-made millionaires, men of
Reagan's generation who love risks and
never walk away from a fight. Casey is
even one-up: More than Regan, he is an
ideological soul mate of the President.
They have been close ever since Reagan
called in Casey to run his 1980 cam-
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paign. Reagan rewarded him with the
CIA directorship and made him the
first head of the agency to sit in the
cabinet.
When Casey took over in 1981, the
agency had been in trouble for nearly a
decade. Its image was scarred in the
early 1970s by disclosures of assassina-
tion plots, experiments with mind-al-
tering drugs and spying on U.S. citi-
zens during the Watergate era.
Congress had reacted with budget
cuts and restrictions on the agency.
The ranks of senior agents were deplet-
ed-so much that by the time Ameri-
can hostages were seized in Iran in
1979, Washington had little sense of
what had been happening there. For-
eign sources elsewhere had cut their
ties to the CIA, fearing exposure. Mo-
rale throughout the agency was low.
Adm. Stansfield Turner, Casey's pre-
decessor under President Carter, had
focused on technical intelligence gather-
ing, lacking a mandate to restore the
agency to its prescandal status. Before
that, a series of directors under Presi-
dents Ford and Nixon in the mid-1970s
were preoccupied with limiting the dam-
age from the scandals they inherited.
Bigger budget, higher spirits
While still new on the job, Casey
quickly got Reagan's consent to over-
ride Budget Director David Stockman
and undertake an ambitious long-term
restoration. The result: A $24 billion
spy budget that has increased by some
25 percent annually. The CIA's share
of the budget is about $3 billion a year.
"Casey is a doer and risk taker who's
revived the agency's activist spirit,"
says former Director William Colby.
Under Casey, Ehe intelligence services
have about 16,000 employes engaged in
activities that range from analyzing sat-
ellite photos of Iranian troop movements
to undermining foreign governments.
Relatively few-albeit an important
few-are involved in the more romantic
cloak-and-dagger spying in dark corners
of Moscow and East Berlin.
There is more to the new CIA than
affluence. From Mideast terrorism to
high-tech smuggling by the East bloc,
complex new challenges are thrusting it
into new areas and altering the way it
collects and packages information. To
adapt, Casey has boosted manpower by
2,500. Two thirds of the agency's em-
ployes have been hired in the past de-
cade, giving Casey wide latitude in shap-
ing a new generation of professionals.
The CIA's higher profile and the
country's changing mood are conferring
a new respectability and sparking a surge
of new applicants-up to 150,000 a year.
Only 1 percent are accepted. By con-
trast, as many as 45,000 apply each year
to the Foreign Service, and the Peace
Corps had 13,000 applicants in 1985.
In his rebuilding, Casey has given
priority to restoring so-called human
intelligence (HUMINT)-a CIA term
for old-fashioned spying. Casey's en-
thusiasm for cloak-and-dagger action
has been undiminished since his days of
running more than 100 agents in Eu-
rope during World War II for the Of-
fice of Strategic Services.
Once in command, Casey rehired
most of the 800 agents let go by
Turner. Casey, says former CIA official
George Carver, "is attuned to the es-
sentiality of human intelligence with all
its inevitable messiness." On a trip to
Central America, Casey made a point
of meeting with every agent in the field,
a general stopping to talk with every
private.
Despite his efforts, many respected
analysts believe the U.S. still trails oth-
er nations in the scope and quality of
undercover activity.
These same analysts say problems
with human intelligence account partly
for several alleged failures-
Lebanon: While the CIA had reason
to suspect that Iranian-backed terrorists
would eventually bomb the U.S. Marine
barracks in Beirut, it lacked informa-
tion needed to prevent the 1983 attack
or to warn of its imminence. Says an
Israeli intelligence source: "The CIA is
still in the dark in Lebanon."
? Grenada: Closer to home, the U.S.
had no clue that a faction of the ruling
New Jewel Movement was plotting to
assassinate Prime Minister Maurice
Bishop in 1983. The CIA also underesti-
mated the size of the Cuban force on the
island, complicating the U.S. invasion.
? Chernobyl: Despite spy-in-the-sky
satellites orbiting over the Soviet Union,
the CIA knew nothing of the recent
nuclear disaster for three days. It found
out only when Sweden publicly prodded
Moscow to confirm the accident.
Casey has installed a sophisticated,
computerized center for keeping track
of terrorists, but the CIA so far has had
scant success penetrating their organi-
zations. Senator David Durenberger
(R-Minn.), chairman of the Senate In-
telligence Committee, says the agency's
greatest successes come from electronic
spying. One near success was an elec-
tronic interception that almost prevent-
ed the bombing of a Berlin nightclub.
"The best stuff," Durenberger ex-
plains, "comes from human sources, but
that's almost exclusively provided by
liaison with foreign intelligence ser-
vices." Most helpful on terrorism are
Israel, Italy, Egypt and Morocco.
Less is known about the effectiveness
of CIA efforts to strike at Mideast terror-
ists through surrogates. But at least one
project went tragically awry. The CIA
trained a renegade Lebanese counterter-
rorism unit responsible for a 1984 car-
bomb blast that killed 80 civilians and
injured 200. The strike-not authorized
by the CIA-was aimed at a leader of the
Shiite group believed to have engineered
the bombing of the Marine barracks.
In sharp contrast, the U.S. is consid-
ered the world's best in the two catego-
ries of electronic intelligence: SIGINT,
the acronym for signal intelligence and
communications, and IMINT, for radar
and photo imagery,, SIGINT comes
from intercepted messages and IMINT
from ground and satellite stations that
provide pictures of everything from mis-
sile deployments to highway conditions.
High tech and close analysis
Even.critics give Casey high marks for
upgrading the quantity and quality of
Natioeal Intelligence Estimates (NIE),
the basic assessments of global political,
military and economic trends. In 1980,
there were 12 NIE's a year. Now,'there
are more than 60, as well as several
hundred long-range research projects.
Much of this, sources say, is due to
Deputy Director Robert Gates, who has
also opened new lines to outside experts.
In 1980, the CIA hosted two or three
academic conferences a year. Now, un-
der Gates's direction, there are up to 75.
To aid government consumers of in-
telligence, CIA analysts are also permit-
ted to highlight dissenting views as well
as inform readers which assessments are
based on speculation and which on hard
fact. Other Casey practices include a
weekly watch report pinpointing trou-
ble spots around the globe.
Insiders complain that Casey often
interprets analyses to suit his views.
Ralph McGehee, who spent 25 years in
the agency, says flatly that Casey "has
distorted intelligence to rationalize co-
vert operations." One senior analyst,
John Horton, quit in protest in 1984
after Casey rejected his Mexico analysis
by scribbling, "This is a bunch of crap"
across it. "Casey wanted an alarmist
view of Mexico's stability to rationalize
U.S. goals in Central America," Hor-
ton says.
But Casey has been known to yield
when facts tell a story he dislikes. The
White House was unhappy to hear it
when the CIA told Reagan-correctly,
as it turned out-that a boycott of a
Soviet gas pipeline to Western Europe
would not work. Casey's record also
Continued
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includes moments of uncanny accuracy
as a forecaster. One example: Months
before Soviet leader Leonid Brezhnev
died, Casey sent Reagan a memo breez-
ily concluding in race-track form:
"Chernenko peaked too soon. Kiri-
lenko faded in the stretch.... If I had
to bet money, I'd say Andropov on the
nose and Gorbachev across the board."
Despite improvements in intelligence
gathering, Casey has stirred up a hor-
net's nest of critics, both within the
Reagan administration, where officials
anonymously-though gingerly-wor-
ry about his assertive'style, and on Capi-
tol Hill. The director's relations with
Congress, though better today, have of-
ten been rocky. Beginning with charges
of personal financial irregularities, there
have been periodic calls for his resigna-
tion. The rancor peaked when Congress
found he had ordered the mining of
Nicaraguan harbors without telling key
members. "If Bill Casey were Paul Re-
vere, he wouldn't have told us the red-
coats were coming until it was in the
papers," fumed Representative Norman
Mineta (D-Calif.).
By far the most controversial feature
of the new CIA is its aggressive leader-
ship in U.S.-sponsored covert opera-
tions, now consuming 3600 million a
year. The President has made Casey
stage manager of the so-called Reagan
Doctrine-the policy of aid to rebels
against Soviet-backed governments in
Angola, Afghanistan, Nicaragua and
Cambodia, along with lesser operations
in other countries.
Like Reagan, Casey sees covert oper-
ations abroad as a way to stem Mos-
cow's "creeping imperialism." In
speech after speech, he describes the
Mideast oil fields and the isthmus be-
tween North and South America as pri-
mary targets of the Kremlin. Moscow,
he believes, creates problems of unrest
that defy solution by diplomacy or
troops, leaving the U.S. with only one
option: Providing assistance to forces
trying to prevent consolidation by Sovi-
et-backed regimes.
Risks vs. rewards
Many critics-from Congress to for-
mer top intelligence operatives-say
the not-so-secret wars are ineffective,
creating situations the U.S. can't con-
trol and using money better spent else-
where. They also -argue that Casey's
lack of a careful strategy could allow
covert wars to escalate, dragging in
U.S. troops and compromising the na-
tion's strategic position.
It is obviously a risky strategy. Nica-
raguan contras were organized by the
CIA and the Argentine military in
1981, but as their numbers have
swelled they have proved hard to con-
trol. There have been persistent reports
of drug smuggling and human-rights
abuses by the contras. U.S. military
sources complain that CIA training of
Casey in an earlier role, advising rebels frequently has been shoddy, con-
Reagan during 1980 presidential campaign ducted by retired military personnel
who often speak no Spanish.
A bigger source of controversy-and The Pentagon's Special Forces say
the sharpest blow to Casey personally- they are best suited to aid paramilitary
was the redefection of senior KGB oper- operations-and many experts concur.
ative Vitaly Yurchenko, trumpeted as But Defense Secretary Weinberger has
the best CIA catch in years. He walked rejected CIA proposals to turn over the
away from his CIA handlers at a covert wars to the elite Army units.
Georgetown bistro last November, On occasion, the CIA has gone be-
showing up the next day at the Soviet yond advising. Indeed, the most disput-
Embassy to denounce the agency. Previ- ed single act of the Sandinista-contra
ously, Yurchenko had been debriefed for conflict-the 1984 mining of Nicara-
three months. That exercise yielded in- guan ports-was apparently performed
formation exposing several Americans not by contras, but by CIA agents. For-
who were selling secrets to the Soviets. mer rebel leader Edgar Chamorro tells
U.S. officials say Yurchenko simply of a CIA official coming to his door at
changed his mind-largely, the CIA 2 a.m., asking him to sign a statement
concedes, due to its poor handling of taking responsibility for the action.
him. The affair was a personal setback The effort against Nicaragua points
for Casey, who took great interest in up the uncertainty in all such covert
Yurchenko, insisting on having meals operations. In none of the publicly
with him and disregarding agency skep- known cases do the CIA-backed orga-
tics who questioned the defector's stabil- nizations have realistic prospects of un-
ity. In the scandal's aftermath, Casey seating pro-Soviet regimes.
ordered a complete overhaul of the sys- In Afghanistan, the U.S. investment
tem for dealing with defectors. far exceeds that of all other covert ac-
Lions combined. Since 1979, beginning
even before the Soviet invasion late that
year, the U.S. has funneled close to SI
billion to rebels. Informed observers
say that 30 percent or more of the aid
has been stolen in the pipeline that goes
through Pakistan.
Despite that, Reagan decided last fall
to increase aid to rebels in both Af-
ghanistan and Angola, even providing
them with Stingers-hand-held, top-of-
the-line antiaircraft weapons. The CIA
director promptly flew to Zaire to set
up the aid flow to Angolan rebels. Ca-
sey spends up to a third of his time in
the field.
Not all of Casey's subordinates share
his enthusiasm for covert operations.
Insiders say John McMahon, a CIA
veteran who was the agency's No. 2.
resigned under pressure in February
largely because of reservations about
covert activity, particularly in Central
America and Afghanistan.
With time, ' the big exercises abroad
have become increasingly contentious.
That makes the term "covert" decided-
ly a misnomer-and a major source of
friction with Congress.
"We're told not to discuss opera-
tions, but then we hear it come up in
White House briefings," says Senator
Patrick Leahy (D-Vt.). "It's stretching
the oversight process to the breaking
point."
Despite complaints, Congress places'
few blanket restrictions on CIA actions
abroad. The only existing restraints are
a longstanding ban on assassination of
foreign leaders and a legal responsibil-
ity to keep lawmakers "fully and cur-
rently informed of all intelligence activ-
ities." Congress has exercised the
power of the purse, cutting off funds
for contras, then reinstating them with
the proviso that the CIA not control
the aid. If Congress, as expected, re-
news aid yet agairr, that restriction al-
most certainly will be lifted.
Moscow's response has been any-
thing but encouraging. Instead of re-
straining adventurism, Gorbachev is
stepping it up, claim U.S. officials.
They complain that he has recently
completed a major buildup in Angola
and launched an offensive in Afghani-
stan, and his Sandinista friends are
hanging tough in Nicaragua.
All of this means that with equally
determined leaders such as Reagan and
Casey, the CIA will play an expanding
role in countering Moscow. Conserva-
tives will applaud and the critics will
grow more vocal, warning of dire con-
sequences for both the agency and the
country. Meanwhile, as critic John
Horton puts it, "You have to under-
stand that Bill Casey is a 73-year-old
man having a tremendous time." ^
by Robert A. Manning with
Steven Emerson and Charles Fenyvesi
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CIA Chief Casey, right, draws his power from the best possible source
ef,
President Kennedy awards a National
Security Medal to Allen Dulles, retiring
head of CIA, in November, 1961
With President Nixon looking on, Wil-
liam Colby becomes intelligence chief
during the dark days for the agency
Adm. Stansfield Turner takes over for
' President Carter. Turner focused more
on technical advances, less on spies
New buildings at the CIA's Langley, Va., office complex symbolize
Casey's mandate. They will add 1 million square feet of office
space, doubling the size of the agency's headquarters
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4 Months before Leonid Brezh-
nev died on Nov. 10, 1982, Ca-
sey came close to predicting
the order of Soviet succession
up to today's leader, Mikhail
Gorbachev. He would bet Gor-
bachev "across the board," he
told the President. Here,
troops carry body of interim
leader Konstantin Chernenko
- Ferdinand and Imelda Marcos
before their forced exit. With a
solid spy network and sharp
analysis, the CIA foresaw the
rise of Communist rebels, ero-
sion of Marcos's support, un-
rest in the military and Marcos's
vote fraud. The result: Reagan
dumped Marcos, helping usher
in the Aquino government
4 A crude mine sweeper pulls
mines placed by the CIA from
the harbor,at Puerto Corinto in
Nicaragua. The mining was
one of the agency's most awk-
ward moments under Casey. It
forced him to apologize to
Congress, which he failed to
notify, and stirred world criti-
cism of the U.S. actions
- Even with its vast resources,
the CIA could not prevent the
car bombings in Beirut of two
U.S. Embassy buildings and a
Marine barracks in which 241
troops died. The most reliable
information on radical Moslem
groups-suspected in the
attacks-is provided by other
governments, including Israel
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