JOHN N. MCMAHON, DEPUTY DIRECTOR OF THE CIA FORESTERS' WIVES CLUB FORT MYER, VIRGINIA WEDNESDAY, FEBRUARY 15, 1984

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000600170002-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 10
• Document Creation Date: December 19, 2016
• Document Release Date: October 11, 2005
• Sequence Number: 2
• Publication Date: February 15, 1984
• Content Type: SPEECH

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John N. McMahon, Deputy Director of the CIA
Foresters' Wives Club
Fort Myer, Virginia
Wednesday, February 15, 1984
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DEPUTY DIRECTOR JOHN McMAHON: You people have folks in
the cold that you bring in every now and then. And I understand
Tom Lennon is here from Juneau, Alaska, who's trying to find out
what the Washington bureaucracy is about. So welcome to the real
forest, Tom, and I'm sure you'll enjoy it.
I've often tried to figure out the dialogue that takes
place between the Department of Agriculture and the Forest Ser-
vice with the Department of Interior. And in exploring that and
the turf and who does what to whom, I'm reminded of a story that
was making the rounds a few months ago when Jim Watt was Secre-
tary of Interior. And Max Peterson was talking to him about some
mutual concern, and Max decided to get a little philosophical
with him. And he said "Mr. Secretary." He said "Can you really
tell me what happens when a tree in the forest falls and no one's
there to witness it? Does it really make a sound?" And Watt's
reply was "What is a tree doing in our forest?"
[Laughter.]
You folks also spend a lot of your life not only
managing the forests, but also putting out fires. We've put out
fires in an intelligence sense. Some people also accuse us of
starting a few. But in all, we have a very exciting activity in
our intelligence efforts in the United States, and they are
indeed awesome.
Max spoke of the responsibility of the Director to co-
ordinate and worry about the intelligence of the United States at
large. And that is true, and it's an awesome task when you think
of all the activities of the Army, Navy and Air Force, the DIA,
NSA, and even the counterintelligence activities of the FBI, not
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to mention the intelligence efforts in the Department of Energy
associated with the nuclear programs, or the Department of
Treasury. And of course, then we have CIA. But trying to
package all of this so that it makes sense, not only as far as
accomplishment is concerned, but also for the taxpayer, to make
sure that we don't have unncessary duplication. And the whole
responsibility of the Director, community-wise, is to make the
whole budget by which all the different organs and agencies of
the United States government work. He also approves the programs
that they conduct, and is also responsible for tasking those or-
ganizations to do the things that he wants done.
More importantly, and which really helps our policy-
makers, is that the product of all those worldwide efforts then
flow back to CIA, where it is packaged in national packages,
national papers, and given to our policy-makers so that, hope-
fully, they can make the right decisions.
One thing in intelligence, we're always very proud of
the intelligence we produce, but we'll never go bad for the
policy decisions made by those folks.
The agency itself in CIA is not like any other bureau-
cracy. It's rather unique, enjoys unique laws. Congress in its
wisdom back in 1947 was clever enough to realize that you can't
quite run an intelligence organization, particularly an intelli-
gence collection organization, like you would run the Fish and
Wildlife. And therefore, we do have unique lattitude in con-
ducting our government business, not the least of which is the
ability to hire and fire people as we see fit and to pay them as
we see fit, depending on the need.
The agency is broken into four parts. It has its
typical administration, which provides the heat, light and power,
like any other organization. But when you stop and look at it,
it goes a little further than that. If you just look at the
medical problems that we face, often overseas in unique places
where there are no medical facilities, our people are also
exposed to a great deal of stress, probably not much more stress
than a fire-fighter has when something crowns over his head. But
there is a unique stress if you're walking up the backstairs of
some sleazy hotel in the Near East to meet a foreman who's
in-volved in a terrorist activity. Those folks don't take second
answers, or they don't take second chances. And so wherever our
people go overseas, it's not quite like running a bureaucratic
organization. And so the demand on them, as well as their
families, is considerable. They lead at least two lives. And
they have to live within whatever cover umbrella we put them in,
plus go out and do our business as well.
If you look at the ability just to move funds, a great
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deal of our activity takes place in countries where the currency
is controlled. And yet somehow we're able to end up with the
right amount of money at the right place at the right time. In
fact, a good many of our financial transactions are some of the
best clandestine operations we run, and I'm sure they make most
bankers and anyone trying to clean up money stand in awe of our
ability to do that.
We have a directorate which is responsible for science
and technology and worrying about building those devices that
permit us to acquire information technologically. And that goes
to your simple James Bond type devices that our agents use, to
larger systems that permit us to scoff up the information we need
in the technical sense.
We have the operations directorate, which is our spies.
They're responsible for our espionage. And they go out and
conduct those operations to acquire the information that most
governments attempt to deny us. And unfortunately, our adver-
saries don't enjoy the free press like we have here in the United
States, and so we have to dig considerably in order to get our
information.
It's interesting, though, that while clandestine opera-
tions and acquiring agents and handling them is a very inef-
ficient process in trying to acquire information and also a very
difficult one. You may work with a person for a year or two
before he's willing to work for you. But the best card that we
have in CIA is not a lot of money. We don't spend a lot of money
to acquire agents, and we don't blackmail them. Our best calling
card is the American way of life. And our job is to get into a
dialogue with the people that we're interested in furnishing
information to us and expose them to how Americans live, how they
tick, and what the United States is all about. And as you stop
to think of it and look around the world, there isn't another
country in the world that can come close to us. We have a
policy, regardless of administrations, of the dignity of the
human being and the rightness that we project, and the goodness
of people and values that we hold dear. And that is the card by
which we use to cause people to work for us.
We have a very glib saying that says we don't recruit
spies; we recruit patriots. And, indeed, that's the case,
because these people come to work for us and provide us the
secrets of their government, not to give it to the United States,
but through the United States hopefully can make their country
better. That's what they look for and that's what they aspire
to.
The clandestine service or espionage program, as you
know, is also responsible for running those operations that we
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call special activities and you now know, through our press,
covert actions. And you have a great deal of noise about that.
And really, it's unfortunate that it represents such a small bit
of our activity that, yet, the way people look upon CIA is
through the noise you see associated with those high visibility
activities.
We find it's very difficult to run such activities in
the United States. I often read it in The Washington Post before
I read it in cables sent to me from the field. But that's the
joy of the United States, and, in a way, that's why we all work.
We would never want it any better. We would just maybe want to
have the press a little more responsible than what it is.
The final directorate, the fourth directorate in the
agency is the directorate of intelligence. And that's the reason
why everyone in intelligence works, whether he's working with
spies or working with technical equipment, or running logistics,
which will get the right place -- the hardware to the right place
at the right time. It's the organization that pulls it together
and decides what it all means, and then publishes it. We have
daily "pubs" that go out constantly. They do research and
produce pubs over a time frame. We write national estimates,
which gives the President and the National Security Council, for
whom we work, the best insight on what's going to happen in any
given country at any given time. And that itself is quite
dramatic just to see unfold.
Our desire is to get that intelligence out to the
policy-makers before they have to make the decision, so they can
prepare for it. And whether they use it or not, at least they
have to kick it aside to do what they want to do. And very few
policy-makers will kick intelligence aside when it's staring them
in the face without good reason. And so we keep a great pressure
on to make sure that we give the policy-makers advance notice on
anything.
We have in the agency a number of people that, with
their backgrounds and with their degrees, would staff any
moderate university in the United States. Their skills go from
agronomists to zoologists. And we even produce papers which the
punch lines might be slightly tongue-in-check. But the headline
on one I read just a few weeks ago, by coincidence, was titled
"The Logjam in the Soviet Timber Business." And indeed, they do
have problems just moving the lumber that they cut. And so we
have people that can reach into any walk of life and be an expert
in it. And we call upon them to regurgitate their knowledge in
the workings.
We spend a great deal of time drawing in academicians
for one or two years so that we can stay current on the latest
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thinking or the latest evolution in whatever that research might
be.
If you look at the scope of what we're called upon, it's
dramatic. We obviously follow very closely the Soviet Union. In
fact, most of our effort can be considered at any given time to
be either collecting information about the Soviet Union or
writing papers about it and analyzing it. And there's good
reason for it. It's the only nation in the world that can
obliterate us, if they want to. And so we try to stay on top of
what they're doing and make sure there are no surprises, tech-
nologically or politically. And of course, when you look at the
Soviet Union, you just don't look at the awesome military build-
up that has taken place over the last few years. You look at
what is happening in the political dynamics, which is today not
much different than it was last year, or the year before that.
It's all more of the same. But economically, it has a lot of
problems. Economically, the Soviet Union spends 140' of its gross
national product on military might. That's well over twice what
the United States spends. And it's been doing that for well over
a decade.
They do have problems, because here's a country that,
over the decade, has grown one to two percent. Last year, it was
up a little over three, but will fall back down again. And you
have to ask yourself a question: how can a country keep putting
that kind of investment into defense and not bring along the rest
of the various sectors along with it. And the answer is that it
can't. And the Soviets then turn to solving a lot of their
problems by stealing the technology around the world. And they
have a tremendous program, starting with the Politburo, going
right down to the KGB and GRU, where they go out and steal
Western technology.
You've read in the papers where in the past year over a
hundred Soviets have been expelled from European countries for
trying to steal their technology. They set up dummy firms.
There are thirty dummy firms right here in the United States that
order from other U. S. companies computers, microelectronics, and
what have you. And our laws here do not go to stopping that.
Our laws only go to the export of it. So the Soviets get it,
digest it, see what it looks like, and either it goes out as
household effects, or it goes up through Canada, where there are
very little export controls, to a dummy company in Canada, and
then over to the Soviet Union. And they do that with spades in
Western Europe, and Western Europe technologically is competitive
to the United States, particularly in the electronic world. The
Soviets run over three hundred front companies in the United
States assuming all of this technology. And it goes right into
military application. I don't care what form of military
hardware you look it in the Soviet Union, you see that it was
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either made in the United States or Western Europe or Japan.
When we first intercepted the AWACS radar, we thought it
was ours. We were right; it was ours, except it was on the
Soviet airplanes. If you look at their look-down, shoot-down
radars in their aircraft, it's the same look-down, shoot-down
that we have in our F-16, one of our most modern airplanes. In
any part of the Soviet Union where military hardware exists,
there is something that comes from the West in it. So we spend a
lot of time worrying about that. We spenda lot of time trying to
energize the world to be watchful for that.
There was an article in France just a few weeks ago
amazed at the United States and the ability of the United States
to maintain two defense budgets, one its own, and one the Soviet
Union's, because they know we are providing the Soviet Union with
so much hardware we had to invest so much more just to stay even
with ourselves and trying to get this awareness throughout the
United States and academia, where the Soviets also attack.
They'll send these students over here in exchange programs and go
to our leading universities. They're all 42, 45 year old
physicists. They go to M.I.T., to Stanford, and to Chicago, and
they study nuclear physics, or what have you. And of course, we
send over, in exchange, the liberal arts major who's interested
in Soviet history, or music, or culture, or something of that
sort.
So it's something we have to face, and we spend a lot of
time trying to convince other people who can do something about
it to do that.
If you look at the rest of the world, you see that you
worry not only about the political events. We're called upon to
be a global organization. We must worry about the Beagle Channel
as much as we worry about Moscow. We have to worry about the
Falklands, a little island known as Grenada. Every place in the
world we're called upon to make sure that there are no surprises.
If you look at that world, though, you see that it's in
dire trouble. The Third World, as we kindly refer to it now,
owes something like $800 billion. They can't make those payments
on their debt, and, as a result, the bankers begin to foreclose,
or they lose credit. When they can't use credit, they can't get
the raw material which permits them to produce whatever they're
producing in order to export to build up credit. So it's a
never-ending cycle. And when you have this large debt that these
countries face, then you get political instability. And when you
get that instability, then that opens the door for communists, or
whoever, to go in to cause dissension. And of course, that
bothers us. And we see it happening right here in Central
America, very close to home. And so those things draw a great
deal of attention.
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On top of that, on top of the political analysis that
one would normally associate with intelligence work, or eco-
nomics, or technology transfer, we have that insidious growth
industry known as terrorism. And fortunately we've been spared
terrorism in this countr, although overseas Americans over the
course of the years have been leading targets for terrorists. Up
to two years ago, Americans were the targets because they were th
bankers. When a terrorist group needed money, they would kidnap
the local American businessman, hold him for ransom, get paid,
and then they would have their fiscal year funding. When that
ran out, then they would kidnap the next one.
Two years ago, that took a turn. They decided to go
after Americans and kill Americans, and they were killing them
simply because they were Americans. And if you look at any
statistic on terrorism, you see that Americans lead the chart.
In the last eight or ten years, there have been well over 12,000
people killed or injured by terrorist events. And Americans,
unfortunately, have more than their fair share of that statistic.
Not too long ago, we kept track of some fifty major
terrorist organizations. They were big. They were bureaucratic.
And we had a fair degree of success in penetrating them, and we
could get agents into them because they were large. We could
find out what they were up to. They're highly compartmented, as
you can imagine. But it did permit us to neutralize different
terrorist acts. And by neutralizing them, I don't mean that we
go out and zap the terrorists. I mean we expose them to the
local enforcement agencies, or, if they're moving weapons, we
inert the weapons so they can't be used. And that's been going
on very quietly.
But now in the last year and a half or so, there's been
another hundred terrorist groups emerge. And these are mom and
pop outfits. They're family affairs. If you're not a member of
the family, you don't get it. And as a result, it's very
difficult for us to get in to find out what is happening so we
can take pre-emptive measures against that.
The Summer Olympics in Los Angeles is going to be a
great drawing card for terrorism. They like to strike where
there's a lot of publicity. It brings a lot of attention to
their cause, as fanatical as that may be. And needless to say,
the FBI and the Los Angeles Police Department are quite concerned
on how to handle that and make sure there isn't a large event.
America basically has easy access. I know it's easy
for the KGB, because they can come in through Canada or Mexico
very easily. Just get in a car and drive across the border.
Terrorists can do the same thing. And what we have to worry
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about is when Iran, who is now running a state-supported program
to kill Americans and French, to export terrorism, will be coming
to this country. They've been trying to do it overseas. They're
knocking off any Iranian who's in exile, wherever he may be. And
of course they're a lot of them here in this country as well.
In years past, we had Libya that would spend a lot of
time training terrorists. But they were always very ineffective.
Libya could never get its act together. Then Iraq. Then Syria.
Now we have Syria very much involved in harboring terrorists, and
then, of course, Iran, who's making it part of their foreign
policy to do that.
So that worries us quite a bit.
On top of that, we have a thing known as narcotics,
illegal drugs in this country. Last year, 41,000,000 Americans
paid $80 billion to buy illegal drugs in the United States. That
begins to tear away at the very fabric of any society. And it
has to be stopped. We're called upon to help expose the way that
that trafficking takes place overseas. And of course, we all
know the big producers, such as Colombia, pushing narcotics into
this country through the Caribbean, or the flow of heroin coming
out of the Golden Triangle; Pakistan, Afghanistan and Iran all
contributing to the flow coming in through Italy and southern
France into New York. And the problem with this is that there's
so much money involved. You cut off one channel, and there's
twenty more to take its place. You interdict one trafficker, and
there's a hundred to take his place. They make so much money on
one run that they'll buy a whole airplane just for a run and then
leave it because it is such big business.
We also suspect, with a fair degree of accuracy, that
some 40 to 50 billion of that 80 billion ends up here in the
United States, in the shopping centers, in the apartment com-
plexes, you name it, right here in River City. What we'd like to
know is how does that get cleaned up. How do you get that dirty
narcotics money and clean it up through this whole process so it
ends up that way? So we spend a great deal of time trying to see
how that international flow of money is taking place. I'm sure
there's a lot of people in this country who walk around in
pinstriped suits that kind of look the other way when day after
day in their bank they see one million, two million, three
million, five million dollars being turned around in the same
account. And they never look beyond that account.
I think we're getting some laws passed in this country
which will permit the FBI to begin and move in on things like
that and start asking questions. But in the interim, we're
called upon to tell everybody what's going on overseas and how is
this all happening to impact here in the United States.
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I will pause for a moment, if I might, since I've run my
quota, according to Jan, and be pleased to take any questions you
may have.
[End of speech.]
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