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Flashback: FBI Probes Espionage at Clinton White House
Reposted Dec. 19, 2001
By J. Michael Waller and Paul M. Rodriguez
The FBI is probing an explosive foreign-espionage operation that could
dwarf the other spy scandals plaguing the U.S. government. Insight has
learned that FBI counterintelligence is tracking a daring operation to
spy on high-level U.S. officials by hacking into supposedly secure
telephone networks. The espionage was facilitated, federal officials
say, by lax telephone-security procedures at the White House, State
Department and other high-level government offices and by a Justice
Department unwillingness to seek an indictment against a suspect.
The espionage operation may have serious ramifications because the FBI
has identified Israel as the culprit. It risks undermining U.S. public
support for the Jewish state at a time Israel is seeking billions of
tax dollars for the return of land to Syria. It certainly will add to
perceptions that the Clinton-Gore administration is not serious about
national security. Most important, it could further
erode international confidence in the ability of the United States to
keep secrets and effectively lead as the world's only superpower. More
than two dozen U.S. intelligence, counterintelligence, law-enforcement
and other officials have told Insight that the FBI believes Israel has
intercepted telephone and modem communications on some of the most
sensitive lines of the U.S. government on an ongoing basis. The worst
penetrations are believed to be in the State Department. But others say
the supposedly secure telephone systems in the White House, Defense
Department and Justice Department may have been compromised as well.
The problem for FBI agents in the famed Division 5, however, isn't just
what they have uncovered, which is substantial, but what they don't yet
know, according to Insight's sources interviewed during a yearlong
investigation by the magazine. Of special concern is how to confirm and
deal with the potentially sweeping espionage penetration of key U.S.
government telecommunications systems allowing foreign eavesdropping on
calls to and from the White House, the National Security Council, or
NSC, the Pentagon and the State Department.
The directors of the FBI and the CIA have been kept informed of the
ongoing counterintelligence operation, as have the president and top
officials at the departments of Defense, State and Justice and the NSC.
A "heads up" has been given to the House and Senate Intelligence
Committees, but as Insight went to press, no government official would
speak for the record.
"It's a huge security nightmare," says a senior U.S. official familiar
with the super-secret counterintelligence operation. "The implications
are severe," confirms a second with direct knowledge. "We're not even
sure we know the extent of it," says a third high-ranking intelligence
official. "All I can tell you is that we think we know how it was
done," this third intelligence executive tells Insight. "That alone is
serious enough, but it's the unknown that has such deep consequences."
A senior government official who would go no further than to admit
awareness of the FBI probe, says: "It is a politically sensitive
matter. I can't comment on it beyond telling you that anything
involving Israel on this particular matter is off-limits. It's that
hot."
It is very hot indeed. For nearly a year, FBI agents had been tracking
an Israeli businessman working for a local phone company. The man's
wife is alleged to be a Mossad officer under diplomatic cover at the
Israeli Embassy in Washington. Mossad - the Israeli intelligence
service - is known to station husband-and-wife teams abroad, but it was
not known whether the husband is a full-fledged officer, an agent or
something else. When federal agents made a search of his work area they
found a list of the FBI's most sensitive telephone numbers, including
the Bureau's "black" lines used for wiretapping. Some of the listed
numbers were lines that FBI counterintelligence used to keep track of
the suspected Israeli spy operation. The hunted were tracking the
hunters.
"It was a shock," says an intelligence professional familiar with the
FBI phone list. "It called into question the entire operation. We had
been compromised. But for how long?"
This discovery by Division 5 should have come as no surprise, given
what its agents had been tracking for many months. But the FBI
discovered enough information to make it believe that, somehow, the
highest levels of the State Department were compromised, as well as the
White House and the NSC. According to Insight's sources with direct
knowledge, other secure government telephone systems and/or phones to
which government officials called also appear to have been compromised.
The tip-off about these operations - the pursuit of which sometimes has
led the FBI on some wild-goose chases - appears to have come from the
CIA, says an Insight source. A local phone manager had become
suspicious in late 1996 or early 1997 about activities by a
subcontractor working on phone-billing software and hardware designs
for the CIA.
The subcontractor was employed by an Israeli-based company and cleared
for such work. But suspicious behavior raised red flags. After a fairly
quick review, the CIA handed the problem to the FBI for follow-up. This
was not the first time the FBI had been asked to investigate such
matters and, though it was politically explosive because it involved
Israel, Division 5 ran with the ball. "This is always a sensitive issue
for the Bureau," says a former U.S. intelligence officer. "When it has
anything to do with Israel, it's something you just never want to poke
your nose into. But this one had too much potential to ignore because
it involved a potential systemwide penetration."
Seasoned counterintelligence veterans are not surprised. "The Israelis
conduct intelligence as if they are at war. That's something we have to
realize," says David Major, a retired FBI supervisory special agent and
former director of counterintelligence at the NSC. While the U.S.
approach to intelligence is much more relaxed, says Major, the very
existence of Israel is threatened and it regards itself as in a
permanent state of war. "There are a lot less handcuffs on intelligence
for a nation that sees itself at war," Major observes, but "that
doesn't excuse it from our perspective."
For years, U.S. intelligence chiefs have worried about moles burrowed
into their agencies, but detecting them was fruitless. The activities
of Israeli spy Jonathan Pollard were uncovered by accident, but there
remains puzzlement to this day as to how he was able to ascertain which
documents to search, how he did so on so many occasions without
detection, or how he ever obtained the security clearances that opened
the doors to such secrets. In all, it is suspected, Pollard turned over
to his Israeli handlers about 500,000 documents, including photographs,
names and locations of overseas agents. "The damage was incredible," a
current U.S. intelligence officer tells Insight. "We're still
recovering from it."
Also there has been concern for years that a mole was operating in the
NSC and, while not necessarily supplying highly secret materials to
foreign agents, has been turning over precious details on meetings and
policy briefings that are being used to track or otherwise monitor
government activities.
The current hush-hush probe by the FBI, and what its agents believe to
be a serious but amorphous security breach involving telephone and
modem lines that are being monitored by Israeli agents, has even more
serious ramifications. "It has been an eye opener," says one
high-ranking U.S. government official, shaking his head in horror as to
the potential level and scope of penetration.
As for how this may have been done technologically, the FBI believes it
has uncovered a means using telephone-company equipment at remote sites
to track calls placed to or received from high-ranking government
officials, possibly including the president himself, according to
Insight's top-level sources. One of the methods suspected is use of a
private company that provides record-keeping software and support
services for major telephone utilities in the United States.
A local telephone-company director of security, Roger Kochman, tells
Insight, "I don't know anything about it, which would be highly
unusual. I am not familiar with anything in that area."
U.S. officials believe that an Israeli penetration of that telephone
utility in the Washington area was coordinated with a penetration of
agents using another telephone support-services company to target
select telephone lines. Suspected penetration includes lines and
systems at the White House and NSC, where it is believed that about
four specific phones were monitored - either directly or through remote
sites that may involve numbers dialed from the complex.
"[The FBI] uncovered what appears to be a sophisticated means to listen
in on conversations from remote telephone sites with capabilities of
providing real-time audio feeds directly to Tel Aviv," says a U.S.
official familiar with the FBI investigation. Details of how this could
have been pulled off are highly guarded. However, a high-level U.S.
intelligence source tells Insight: "The access had to be done in such a
way as to evade our countermeasures.i That's what's most disconcerting."
Another senior U.S. intelligence source adds: "How long this has been
going on is something we don't know. How many phones or telephone
systems we don't know either, but the best guess is that it's no more
than 24 at a time i as far as we can tell."
And has President Clinton been briefed? "Yes, he has. After all, he's
had meetings with his Israeli counterparts," says a senior U.S.
official with direct knowledge. It is unclear whether the president or
his national-security aides, including NSC chief Sandy Berger, have
shared or communicated U.S. suspicions and alarm; the matter of any
Israeli response has not been determined, either. "This is the first
I've heard of it," White House National Security Council spokesman Dave
Stockwell tells Insight. "That doesn't mean it doesn't exist or that
someone else doesn't know."
Despite elaborate precautions by the U.S. agencies involved, say
Insight's sources, this alleged Israeli intelligence coup came down to
the weakest link in the security chain: the human element. The
technical key appears to be software designs for telephone billing
records and support equipment required for interfacing with local
telephone company hardware installed in some federal agencies. The FBI
has deduced that this sophisticated computer-related equipment and
software could provide real-time audio feeds. In fact, according to
Insight's sources, the FBI believes that at least one secure T-1 line
routed to Tel Aviv has been used in the suspected espionage.
The potential loss of U.S. secrets is incalculable. So is the
possibility that senior U.S. officials could be blackmailed for
indiscreet phone talk. Many officials do not like to bother with using
secure, encrypted phones and have classified discussions on open lines.
Which brings the story back to some obvious questions involving the
indiscreet telephone conversations of the president himself. Were they
tapped, and, if so, did they involve national-security issues or just
matters of the flesh? Monica Lewinsky told Kenneth Starr, as recounted
in his report to Congress, that Lewinsky and Clinton devised cover
stories should their trysts be uncovered and/or their phone-sex capers
be overheard.
Specifically, she said that on March 29, 1997, she and Clinton were
huddled in the Oval Office suite engaging in a sexual act. It was not
the first time. But, according to Lewinsky as revealed under oath to
the investigators for the Office of the Independent Counsel, it was
unusual because of something the president told her. "He suspected that
a foreign embassy was tapping his telephones, and he proposed cover
stories," the Starr report says. "If ever questioned, she should say
that the two of them were just friends. If anyone ever asked about
their phone sex, she should say that they knew their calls were being
monitored all along, and the phone sex was just a put-on."
In his own testimony before a federal grand jury, Clinton denied the
incident. But later - much later - he admitted to improper behavior and
was impeached but not convicted. U.S. District Court Judge Susan Webber
Wright found him to have obstructed justice. Curiously, Starr never
informed Congress whether the Lewinsky tale was true. For that matter,
according to the Insight sources, Starr never bothered to find out from
appropriate agencies, such as the FBI or the CIA, whether the
monnitoring by a foreign government of Clinton's conversations with
Lewinsky occurred.
Insight has learned that House and Senate investigators did ask
questions about these matters and in late 1998 were told directly by
the FBI and the CIA (among others) that there was no truth to the
Lewinsky claim of foreign tapping of White House phones. Moreover,
Congress was told there was no investigation of any kind involving any
foreign embassy or foreign-government espionage in such areas.
But that was not true. In fact, the FBI and other U.S. agencies,
including the Pentagon, had been working furiously and painstakingly
for well over a year on just such a secret probe, and fears were
rampant of the damage that could ensue if the American public found out
that even the remotest possibility existed that the president's phone
conversations could be monitored and the president subject to foreign
blackmail. To the FBI agents involved, that chance seemed less and less
remote.
The FBI has become increasingly frustrated by both the pace of its
investigation and its failure to gain Justice Department cooperation to
seek an indictment of at least one individual suspected of involvement
in the alleged Israeli telephone intercepts. National security is being
invoked to cover an espionage outrage. But, as a high law-enforcement
source says, "To bring this to trial would require we reveal our
methods of operation, and we can't do that at this point - the FBI has
not made the case strong enough." Moreover, says a senior U.S. policy
official with knowledge of the case: "This is a hugely political issue,
not just a law-enforcement matter."
This article first appeared May 29, 2000.
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