REPORT OF THE SELECT COMMITTEE ON INTELLIGENCE UNITED STATES SENATE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00530R000500940002-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 27, 2016
• Document Release Date: October 26, 2012
• Sequence Number: 2
• Publication Date: September 23, 1986
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/10/26: CIA-RDP90-0053OR000500940002-7
Ono
?? ?,,, ;~- ''~--- ......fir/
"o-ftwom MEMO
IWO
a e rte, - `"~- ~ ____
w. '
I'.
-An
"d h
Kerr end 'LR *,fh,n trai
ce t pbi! r a-f."r
+in
n'V[n ,
ntillr. i
9 nr'rH ro
to Con nowur
n
n~ ~n
rnation ^ f. ~r rap
xpected to ~aterral the unau
Bets, car ezn'ptronally
otes, worksh ribbolrs , s
destraction eets, and 8"11 "a
tssiF~tion.. clessiGed write
REPORT
99-522
MEETING THE ESPIONAGE CHALLENGE:
A REVIEW OF UNITED STATES
COUNTERINTELLIGENCE AND
SECURITY PROGRAMS
REPORT
OF THE
SELECT COMMITTEE ON INTELLIGENCE
UNITED STATES SENATE
OCTOBER 3 (legislative day, SEPTEMBER 23), 1986.-Ordered to be printed
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1986
Declassified and Approved For Release 2012/10/26: CIA-RDP90-0053OR000500940002-7
 Declassified and Approved For Release 2012/10/26: CIA-RDP90-0053OR000500940002-7
CONTENTS
ON INTELLIGENCE
4th Cong., 2d Sess.]
anesota, Chairman
,nt, Vice Chairman
YD BENTSEN, Texas
I NUNN, Georgia
)MAS F. EAGLETON, Missouri
:EST F. HOLLINGS, South Carolina
/ID L. BOREN, Oklahoma
L BRADLEY, New Jersey
as, Ex Officio
irginia, Ex Officio
Staff Director
ty Staff Director
ON, Clerk
Page
1. Introduction and Summary .................................................................................... 1
A. Background ................................... .. . ........... .... 1
.......-......
B. Organization of the U.S. Government to Meet the Hostile Intelli-
gence Challenge .................................... ............................................ 3
C. Counterintelligence: Learning the Lessons of Recent Cases ............ 4
D. Security Countermeasures: Defending on Many Fronts ................... 6
E. Budgetary Impact ..................................................................................... 9
F. Legislative Proposals ................................................................................ 10
G. Respect for Individual Rights ................................................................. 11
II. The Hostile Intelligence Threat ............................................................................ 12
A. Damage to National Security ................................................................. 12
B. Sources of the Threat ............................................................................... 17
1. Soviet Union ............................................................................... 17
2. Warsaw Pact and Cuba ............................................................ 18
3. People's Republic of China ...................................................... 19
4. Other Countries ......................................................................... 20
C. Human Intelligence Techniques ............................................................ 20
1. Official Presence .................... ............................. 21
2. Other Aspects of the Hostile Intelligence Presence............ 23
3. Recruited Agents ....................................................................... 25
4. Soviet Methods of Recruitment .............................................. 26
5. Technology Transfer ................................................................. 28
6. Active Measures and Disinformation .................................... 30
D. Technical Collection Operations ............................................................ 33
1. Interception of Communications ............................................ 33
2. Other Forms of Electronic Surveillance ............................... 34
3. Penetration of Computer Systems .......................................... 35
4. Imagery ....................................................................................... 36
E. Summary .................................................................................................... 37
III. Counterintelligence .................................................................................................. 38
A. Need for a Counterintelligence Strategy .............................................. 39
B. Hostile Presence Limits ........................................................................... 40
C. Counterintelligence Awareness Programs ........................................... 45
D. Domestic Operations ..................... ...................................................... 48
1. Coverage of Establishments and Officers ............................. 49
2. Offensive Operations ................................................................. 50
3. Espionage Investigations and Prosecutions .......................... 52
E. Overseas Operations .............................. 56
F. Personnel Management and Training .................................................. 56
IV. Security Countermeasures ...................................................................................... 58
A. A National Strategic Security Program ............................................... 59
B. Personnel Security .................................................................................... 65
C. Information Security ................................................................................ 74
D. Communications, Computer and Emanations Security ..................... 80
E. Technical and Physical Security ............................................................ 85
F. Industrial Security .................................................................................... 87
G. Congressional Security ............................................................................. 90
V. Appendixes ................................................................................................................ 97
Appendix A. U.S. v. Whitworth, Affidavit of RADM William O. Stu-
deman and Declaration of John L. Martin ........................................ .. 97
Appendix B. Defense Security Institute Analysis of the Harper Case... 105
Appendix C. Defense Security Institute Analysis of the Bell/Za-
charski Case ................................................................................................... 112
Declassified and Approved For Release 2012/10/26: CIA-RDP90-0053OR000500940002-7
 Tom those
Declassified and Approved For Release 2012/10/26: CIA-RDP90-0053OR000500940002-7
ney General's guidelines, and accompanied by improved provisions
for congressional oversight.
25. Recommendation.-Congress should enact legis n compa-
rable to FISA to authorize physical search for ' nce pur-
poses, so as to reduce legal uncertainties in cou lligence in-
vestigations that have prosecution as one of t ectives.
26. Recommendation.-U.S. counterinte agencies should
continue to emphasize, as standard p e, consultation with
the Justice Department at an earl in potential espionage
cases. The Justice Department sh ovide increased training. to
Criminal Division attorneys . . Attorneys concerning the
prosecution of espionage case uding the need to protect sensi-
27. Finding.-The C aken some steps that are likely to
improve counterinte investigations and prosecutions, in the
wake of investig f the Howard case. The Committee will
monitor imple n of those improvements.
28. Recom ation.-The FBI and the Justice Department
should to Ions, as appropriate, to remedy shortcomings ex-
posed by oward case.
E. OVERSEAS OPERATIONS
Strategic counterintelligence objectives abroad
in the United States not only because of the
but also because of the added requirements
support in intelligence collection progr
comes recent CIA initiatives to improve
garding CIA and Department o
ties overseas.
The investigation of es
lieves that the FBI
with agency securi
environment,
nterintelligence
e Committee wel-
its counterintelligence
terintelligence.
iscusses further issues re-
nse counterintelligence activi-
by U.S. civilian and contractor
be called in and should work closely
and are usually not assigned to counterintelligence until they have
experience in other fields. The advantage of this practice is that
personnel can develop their basic investigative or intelligence skills
in less sensitive areas before taking on more important counterin-
telligence duties. The disadvantage is that specialization and career
advancement in counterintelligence may be discouraged because of
the organization's emphasis on other functions.
Every agency is taking steps to upgrade counterintelligence
training, but the results thus far have been uneven. More should
be done to encourage agencies to share their experience with suc-
cessful methods. While each agency operates in a different environ-
ment and with different internal regulations, joint discussion of
such topics as the nature of the threat from particular hostile serv-
ices and the techniques for offensive operations and counter-espio-
nage investigations could be very useful. This would also make
more efficient use of expert personnel who assist in other agencies'
training. In the CIA and the military services, better training i
agency guidelines is also needed.
In the aftermath of the Miller case, the Committee has taken a
close look at FBI personnel management policies for counterintelli-
gence. At the Committee's request, the FBI prepared a study re-
viewing the impact of FBI personnel policies on the Foreign Coun-
terintelligence (FCI) Program in order to determine how the FBI
may more effectively recruit, select, assign, train, promote, and
retain Special Agents for counterintelligence matters. The FBI
study indicated a need for improvements in several areas.
The FBI confronts unusual personnel management problems be-
cause of the large hostile intelligence presence in New York City,
where the cost of living has discouraged FBI Agents from seeking
assignments or pursuing careers. Unlike State Department person-
nel, FBI Agents in New York do not have a special housing allow-
ance to defray the cost of living in town. The Committee believes
that action is needed to improve benefits and incentives in New
York and is prepared to develop legislation that may be needed for
this purpose.
Another manpower issue is the limited number of FBI senior
grade positions in the counterintelligence field, as compared to po-
sitions as Special Agent in Charge of a field office and comparable
headquarters positions with primarily law enforcement duties. The
Committee supports efforts to change this situation, including
funds requested in the FY 1987 budget to increase the number of
senior grade counterintelligence positions at FBI Headquarters.
The Committee also supports the FBI policy requiring that all new
Special Agents in Charge of field officers who have not previously
served in a full-time counterintelligence position must receive FCI
training.
The Committee intends to continue its review of FBI counterin-
telligence personnel policies as part of a broader ongoing study of
intelligence community personnel issues.
DoD counterintelligence components have similar problems and
should develop appropriate revisions in personnel policy to encour-
age specialized counterintelligence career development. In all the
DoD counterintelligence units, as well as the FBI, greater efforts
are needed to recruit and retain the best possible personnel.
Findings and mendations
29. Findi The CIA has begun initiatives to improve its coun-
terintell' ce efforts.
30. mmendation.-U.S. agencies abroad should continue to
obt e timely advice and assistance of the FBI in cases of possi-
bl spionage by civilian and contractor personnel.
F. PERSONNEL MANAGEMENT AND TRAINING
Counterintelligence is not the main function of any of the organi-
zations responsible for U.S. counterintelligence programs. The
CIA's primary task is collection and analysis of political, economic
and military intelligence; the FBI is a law enforcement organiza-
tion; and each of the service counterintelligence organizations is
part of a larger criminal investigative or intelligence agency. This
is one reason why there have been less specialized training and
fewer incentives for careers in counterintelligence. Personnel are
recruited for law enforcement or intelligence positions generally
Declassified and Approved For Release 2012/10/26: CIA-RDP90-0053OR000500940002-7
 Declassified and Approved For Release 2012/10/26: CIA-RDP90-0053OR000500940002-7
Findings and Recommendations
31. Recommendation.-More should be done to encourage agen-
cies to share their experience with successful CI methods and to
make more efficient use of expert training personnel.
32. Recommendation.-Additional measures should be taken to
improve benefits and incentives for FBI Agents in New York City,
including any legislation needed to give the FBI comparable au-
thority to the State Department.
33. Finding.-The FBI is planning to increase the number of
senior grade counterintelligence positions at FBI Headquarters.
The Committee supports these efforts.
34. Recommendation.-While each counterintelligence agency
must recruit to satisfy its unique needs, greater attention should be
given to determining specialized qualifications required for person-
nel to meet each agency's CI needs as distinct from law enforce-
ment or foreign intelligence needs.
35. Recommendation. -DoD counterintelligence components
should continue to develop appropriate revisions in personnel
policy to encourage specialized counterintelligence career develop-
ment.
IV. SECURITY COUNTERMEASURES
In 1984-85 the Executive branch conducted
v
ted se -depth stud-
ies of security policies and practices for protect' assified infor-
mation and activities against hostile intelli collection. The
Committee has reviewed findings and recom dations from all of
these studies, as well as observations and sals made by other
Congressional committees, by witnesses he Committee's closed
hearings, and by experts inside an utside the Government.
Taken together, these reports and mmendations raise grave
questions regarding U.S. security ams to protect sensitive in-
The Walker case disaster an e bugging of typewriters in our
Moscow embassy were compr es that waited years to be uncov-
ered and that illuminated si icant weaknesses in the nation's se-
curity. There have been 'disparities in policies and standards
for personnel, informatio echnical and other security measures.
Serious imbalances in r rce allocation have existed, and in some
areas inadequate res have led to serious gaps in protection.
Research and devel t to improve security has been haphazard
f l
t
es
Since the late , the Committee has worked with the Execu-
tive branch an intelligence community to strengthen counter-
intelligence t out the Government, so that the FBI, CIA and
DoD count lligence components could deal more effectively
with the i e intelligence threat. Until 1985, however, neither
this Co tee nor any other congressional body had taken a simi-
larly c rehensive look at the defensive security countermeas-
ures t surround the core of classified information and that are
sup ed by counterintelligence. The Committee's closed hearings
in fall of 1985 were the first systematic Congressional review of
se ity programs since the 1957 report of the Commission on Gov-
ernment Security established by Congress (with Senator John Sten-
nis as its Vice Chairman). Although the Committee is e
by many of the steps now being taken to remedy serio
cies, the continuing fragmentation of security planni
requires a substantial reorganization of the way th
handles its many security programs. Congress has a
put its own house in order; and the Committee ha
mendations for that purpose as well.
The Committee has addressed security count
levels. First is the national policy level, w
initiatives and programs are developed, a
Many of the most serious security weaknes
of an effective, national policy that gives
programs and ensures comprehensive a
second level is the numerous separate
ent national policy framework. These,
tion security, personnel security, co
er security, emanations security (T
countermeasures, physical securit
ations security. Their variety itse
ests of different agencies and p
effort must be made if we
compromises that repeat t
harm from interception q
We would not wish t
U.S. security counter
guarantees against c
cant improvement i
that is wreaked by
this objective.
ouraged
deficien-
and policy
milar duty to
pecific recom-
easures at two
government-wide
ved and overseen.
esult from the lack
priority to security
lanced planning. The
rity disciplines, which
e solved within a coher-
sciplines include informa-
nications security, comput-
PEST), technical surveillance
industrial security and oper-
clearly indicates how difficult it
xpertise and reconcile the inter-
grams-intelligence, military, dip-
and budgetary. Nevertheless, the
e to reduce the likelihood of future
multi-billion dollar damage of the
rper and Bell cases or the incalculable
our communicatins and technical pene-
mislead; in any foreseeable environment,
asures programs can provide no absolute
promises and losses. Our goal is a signifi-
security, a further limiting of the damage
ose compromises and losses. Our belief is that
not unduly intrusive measures can accomplish
ATIONAL STRATEGIC SECURITY PROGRAM
In Decemb , 1985, the Committee recommended to the National
Security Co cil that the Excutive branch develop a comprehen-
sive and in grated National Strategic Security Program to coordi-
nate and fi5ster the protection of sensitive information and activi-
ties from,/he efforts of hostile intelligence services. The purpose is
I(such a program would give greater visibility, higher priori-
tIncreased attention of senior officials to security counterme-
sFrequently, security programs have neither an influential
vgovernment departments and agencies nor adequate fund-
icareer opportunities. Security must be recognized by the
E ve branch and Congress as a crucial underpinning to the
o asic functions-military, intelligence and diplomatic-that
feguard national security. rovide a coherent
the reason for such a program is to p
Second
A
dis
,
s
structure to address and overcome security deficiencies.
Declassified and Approved For Release 2012/10/26: CIA-RDP90-0053OR000500940002-7