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. Last Updated: 07/27/2016

Counterintelligence Overhaul Planned

WASHINGTON — In the wake of the Robert Philip Hanssen spy case, the Bush administration intends to swiftly carry out recommendations left by President Bill Clinton for a government-wide reorganization of counterintelligence efforts, senior U.S. officials said Friday.

The new administration has yet to act on one of the central recommendations, the appointment of a tsar to oversee counterintelligence spending by all federal agencies and to identify the most important technologies, weaponry and other national assets that must be protected from foreign spies.

Both FBI Director Louis Freeh and CIA Director George Tenet have strongly endorsed David Szady, a counterintelligence expert now in charge of the FBI's field office in Portland, Oregon, to fill the post.

Although some defense and intelligence officials have argued that the "national counterintelligence executive'' should be someone with the stature of a former member of Congress or agency head, an official in George W. Bush's administration said Szady's appointment is "imminent.''

The arrest last week of Hanssen, a veteran FBI agent, on charges of spying for Moscow has already triggered an internal review of the bureau's counterintelligence policies and procedures. Critics have zeroed in on the FBI's resistance to requiring periodic polygraph exams of all employees, a long-standing practice at the CIA and National Security Agency. Coordination of efforts by federal agencies to prevent and root out spies has also been an issue.

The "mole hunt'' that led to Hanssen's arrest was conducted jointly by two organizations, the CIA's Counterintelligence Center and the Russian section of the FBI's National Security Division. The CIA and FBI began working more closely together on counterintelligence matters after the 1994 arrest of Aldrich Ames, a senior CIA officer who was convicted of spying for Moscow for nine years.

Ames was blamed for huge intelligence losses, including the betrayal of at least 10 Russians who were working for the CIA. But U.S. officials ultimately concluded that he could not have been responsible for the compromise of some intelligence operations — such as an investigation of former U.S. diplomat Felix Bloch as a suspected spy in the late 1980s — for the simple reason that he was not privy to them.

When FBI agent Earl Pitts was arrested for spying in 1997, the joint CIA-FBI mole-hunting team thought it had finally gotten its man.

But last year, according to an intelligence source, U.S. officials became convinced that someone with high-level access to government secrets was still providing information to Moscow. And late in the year, the United States obtained what appears to be the Soviet KGB's dossier on a productive spy known as "Ramon'' or "B.''

Who provided those original, internal documents remains a closely held secret. But officials said this week that numerous details in the dossier led investigators to Hanssen, who was put under surveillance in November.

Hanssen allegedly gave Moscow information on extremely sensitive and expensive technical surveillance operations. His lawyer said Hanssen will plead not guilty after a grand jury formally indicts him on espionage charges, which could carry the death penalty.

One congressional expert said Friday the arrest underscores a lack of "security awareness'' throughout the FBI and a failure to develop enough first-rate specialists in counterintelligence, a career track that has lost prestige since the Cold War ended and counterterrorism has gained importance in the bureau.

Clinton was compelled to issue the new counterintelligence plan, called Counterintelligence for the 21st Century, or CI-21, because the FBI has been reluctant to share its counterintelligence authority with other agencies, the congressional source said.

Under the reorganization plan, set forth by Clinton in a formal presidential decision directive known as PDD-75, the counterintelligence executive will report to the FBI director, but also will answer to a counterintelligence board of directors chaired by the FBI director and including senior representatives of the CIA, Pentagon and Justice Department.

The counterintelligence executive, in turn, will head a National Counterintelligence Policy Board consisting of officials from the State, Defense, Justice and Energy Departments and representatives of the FBI, CIA, Joint Chiefs of Staff and National Security Council.