Inside the CIA (41 page)

Clair George, then deputy director for operations, agreed to let Baker talk to each of his division and branch chiefs and later to all of the operations employees at headquarters in separate groups. In the talks, Baker would explain his own background. He would point out that, including a stint with the Air Force Office of Special Investigations, he had dealt with classified material for over two decades. He understood the need to keep secrets. Then he would get their attention.

“Why is it,” he would ask, “that when you people are dispatched all over the world, you deal with the foreign press, distill intelligence, send back your observations, and then when you are posted back to this country, you seem to want to refuse to recognize the two entities that probably have more impact on the agency’s future than anything else: the Congress and the press? Both were around before the agency began, and both will be around a long time after the agency is gone.”

Baker would tell the operations people he could do the agency some good. In some cases, he said, he could let operations people know of forthcoming stories so they could withdraw agents who might be in danger.

“There is a lot you do that we
can
talk about,” Baker would say. “The image that many Americans have of you, particularly after Iran-contra, is not positive. There are ways we can work on that and improve public opinion and still be credible.”

Baker came to be impressed by the CIA and the dedication and competence of its employees. Yet smart as they were, they seemed to have difficulty understanding why so many people had a negative impression of what they do.

“Over the years, public views of the Central Intelligence Agency and its role in American foreign policy have been shaped primarily by movies, television, novels, newspapers, books by journalists, headlines growing out of congressional inquiries, exposés by former intelligence officers, and essays by ‘experts’ who have never served in American intelligence, or have served and still not understood its role,” Robert Gates has said. “While the CIA sometimes is able to refute publicly allegations and criticism, usually it must remain silent. The result is a contradictory mélange of images of the CIA and very little understanding of its real role in American government.”

If possible, most CIA people would like to keep it that way. Early on, one high-ranking operations official told Baker the ideal CIA spokesman always said “no comment,” never volunteered anything, and minded his or her own business.
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Then some of those same people wondered why the public had such a negative impression of them.

In effect, Baker was there to market the agency, to let the public know that it
does
do good things. He had found in private surveys that the more people knew about the CIA, the more they trusted it. To be sure, the CIA’s mission was not like the FBI’s. At the bureau, Baker could take advantage of a window—often when an indictment was announced—to trumpet the FBI’s success. At the CIA, the greatest successes were the ones that the agency never wanted anyone to know about. But there were still ways to work things to everyone’s mutual benefit.

Baker would disarm reporters by asking if he could talk with them on a background basis, then engage them in give
and-take discussions. After all, the CIA was not like the Labor Department. Every responsible journalist realized that with the job of writing about the CIA went certain self-imposed restrictions. Most would not want to jeopardize a current operation if it did not entail an abuse. Nor would most blow the cover of a CIA officer unless he or she had been involved in wrongdoing that had larger implications for the agency or country as a whole. Since the passage of the Intelligence Identities Protection Act of 1982, which makes disclosing identities of “covert agents” a crime, journalists had to tread carefully in that arena in any case.
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“Can you still have your integrity and still have your story and not say that?” Baker would ask.

Sometimes the answer was yes, sometimes no. Baker was doing damage control, and he was effective at it. For example, a year after Baker took over, Jeff Gerth of the
New York Times
picked up a story that led to the disclosure that Clyde L. Conrad, a retired Army sergeant, was being investigated for transmitting classified documents to the Hungarian intelligence service. At the time, American and West German intelligence agencies were still pursuing sensitive leads in an effort to nail him.

When Gerth called Baker about the story, Baker told him that running the story then could well mean that it would be blown. The
Times
did not believe that the public’s right to know necessarily included publishing stories that would jeopardize legitimate espionage investigations. It all depended on the facts and the timing. Baker did not actually ask Gerth to hold off on the story. But he let Gerth know that he would help him with the story if he could hold off.

Gerth knew from having dealt with him at the FBI that Baker could be trusted. When he said the case could be blown, Gerth believed him. This was a different shop from the one run by William Casey, who had approached news organizations asking them not to print stories about what former NSA employee Ronald Pelton had told the Soviets—even though the Soviets already knew all about it, and Pelton had already been arrested for espionage.

Gerth agreed to hold off on the story. What Baker did not
know was that at the time, Gerth did not have enough to go on anyway. The person who had tipped him to the story was not in the government. He had mentioned the report offhandedly at lunch. The man did not know the name of the suspect, and as it turned out later, he had told Gerth the wrong country involved in the espionage operation.
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But Gerth could most likely have pieced the story together. Helped by Baker’s tips, Gerth unearthed the correct facts. Three months later, Gerth scooped the rest of the media with one of the biggest spy cases in U.S. history. For nearly a decade, Conrad had copied and transmitted classified documents about U.S. missile bases and facilities and NATO’s fuel system for resupplying tanks to two Hungarian couriers. For the secrets, the Hungarian intelligence service paid Conrad $1 million.
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Gerth’s story led the August 26, 1988, editions of the
New York Times.
Conrad was later convicted of espionage. In June 1990, he was sentenced in Germany to life in prison.
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Baker had performed a service by making sure the story did not appear at a point when the investigation might have been damaged. Gerth, in turn, had gotten a better story than he otherwise would have. It was a symbiotic relationship that would have boggled the minds of most of the earlier CIA spokesmen.

Baker would deal with any reporter so long as the reporter was a professional and demonstrated that he or she would be fair. Like an advertising executive, he would refer to the
“Times
account” or the
“Post
account.” These and other major accounts he handled himself, delegating lesser lights in the journalistic world to his assistants.

If a reporter was interested in a subject that the CIA could be helpful on—say Mikhail Gorbachev’s perestroika, or restructuring, plan—Baker arranged a briefing by the CIA’s analysts. The CIA gave 122 briefings to the press in 1988, compared with 32 in 1986, the year before Baker took over.

By earning the trust of reporters, Baker could do a better job of alerting Webster and other CIA officials to impending stories so they could prepare for them. If a story was untrue, Baker either issued a “no comment” or expanded on the
matter on a background or not-for-attribution basis. In addition, Baker might suggest that the reporter talk to another source to get more information, such as the Association of Former Intelligence Officers. In turn, Baker kept AFIO abreast of important issues without revealing classified information.

David Atlee Phillips, a former chief of the CIA’s Latin America and Caribbean operations, and six former colleagues, founded AFIO in 1975 to help explain the importance and meaning of intelligence to the American people.

“There wasn’t a magazine or newspaper in the country or radio or TV that wasn’t peeing from a great height on the CIA and the intelligence community as a whole,” Samuel Halpern, one of AFIO’s founders, said in explaining its purpose.

Based in McLean, Virginia, AFIO has about 3,300 members from the entire intelligence community. About 10 percent are associate members who are interested in intelligence but not former intelligence agency employees. Besides answering questions from the press, AFIO sponsors luncheon addresses by intelligence officials and holds an annual meeting that features panels by people from the intelligence community.

During one four-month period in 1990, David D. Whipple, the retired CIA operations officer who is AFIO’s executive director, calculated that he did ninety-six press interviews, either in person or on the phone, on such subjects as the Iraqi invasion of Kuwait and allegations that the CIA assassinated Swedish prime minister Olaf Palme.
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There are a number of other associations of retired intelligence officers, and all of them exchange information through an informal organization known only as the Common Interest Network Luncheon. Representatives meet periodically at the Army Navy Country Club in Arlington, Virginia. But while their agenda is to boost intelligence, organizations such as AFIO are not funded or controlled by the CIA or any other intelligence agency. By CIA policy, the agency may not fund or own an organization within the U.S. unless the organization discloses that it is funded by the U.S. government.

Webster took the attitude that when an allegation is so outrageous or controversial that it hurts the reputation of the agency, or accuses the agency of wrongdoing where there was none, Baker should respond. Over the years, thousands of stories had appeared charging the CIA with everything from murder to drug running. In the CIA’s early days, the agency had engaged in abuses ranging from illegal wiretapping to breaking and entering. It was exposure by the press, more than anything else, that led to the Church Committee hearings and the subsequent reforms.

Occasionally, CIA officers learned about abuses from the press and took action as a result. For example, in his book, Colby recounted that he had first learned that the CIA might have attempted assassinations from “a Jack Anderson column of a few years past making some allegations about a plot against [Fidel] Castro.” After finding out that there was some basis for the Anderson story, Colby, as the CIA’s deputy director for operations, got Richard Helms, then the DCI, to sign a directive prohibiting the CIA from engaging in, stimulating, or supporting assassinations.
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But because of the CIA’s earlier record, its refusal to confirm or deny stories, and some overactive imaginations, the stories continued even when the agency had reformed itself. Some reporters as well as some underground publications created cottage industries churning out stories of CIA treachery. Usually, the stories started with a few grains of truth—grains that could easily be planted to grow tales of high intrigue.

For example, on a lonely stretch of road ninety miles from Sydney, Australia, two police officers came across a Mercedes with its parking lights on at four
A.M.
on January 27, 1980. Inside was a grisly sight: under the steering wheel slumped the body of a man swimming in a pool of blood, a rifle in his hands. They searched the man’s pockets and found the business card of William Colby, the former director of U.S. intelligence. On the back of the card was the itinerary of a trip Colby planned to take to Asia the next month. On the seat was a Bible with a meat-pie wrapper between the pages. On the wrapper were the names of Colby and U.S. Rep. Bob
Wilson of California, then the ranking Republican on the House Armed Services Committee.

The body was quickly identified as that of Francis J. Nugan, a cofounder of the Nugan Hand Bank, a merchant banking firm with offices in twenty-four countries.

Within hours, telephones began ringing in the homes and offices of a spooky cast of characters who were some of the bank’s directors, employees, or consultants: three-star U.S. Gen. LeRoy J. Manor, who had recently retired as chief of staff for all U.S. forces in Asia and the Pacific and who was still on secret duty for the Air Force; Gen. Edwin F. Black, who had worked for the Office of Strategic Services, which later became the CIA, and had been chief administrative aide to Allen Dulles; Walter McDonald, a career CIA employee since 1975 and former deputy director in charge of economic research at the agency; Robert “Red” Jantzen, a former CIA station chief in Bangkok; and Rear Adm. Earl “Buddy” Yates, whose CIA work went back to the U-2 spy missions over Russia and who had recently retired as chief of strategic planning for U.S. forces in Asia and the Pacific.

The bank’s apparent intelligence connections, together with the suspicious circumstances of Francis Nugan’s death, quickly led to allegations that the CIA had been using the bank to help topple Australia’s Labor government, that the bank had been engaged in drug running for the CIA, and that the bank was a CIA front.

As it turned out, the Nugan Hand Bank was engaged in plots of a different sort. It was a pyramid scheme that bilked thousands of investors of their money. As front men, the founders, Nugan and Michael J. Hand, a highly decorated Green Beret, had enlisted a number of unwitting former intelligence officers to lend respectability to the bank’s board. Hand, in turn, got Colby involved as a lawyer for the bank. When the scheme began to unravel, Nugan took his own life, leading to investigations all over the world.
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What the investigations uncovered was that the CIA had used the Nugan Hand Bank for money laundering—a perfectly legitimate CIA activity that the CIA engages in to conceal
its covert operations. The CIA uses a number of banks worldwide for the purpose.

“You have to launder your money someplace,” a former CIA operations officer said dryly.