6.6.1 Couriers
A courier has no responsibilities other than clandestine communications. Any involvement of the courier in ac- tivities that may draw attention from counterintelligence is unwise. For example, if there is a political party, friendship society, or other organization that would be considered favorable to Service B, couriers, under no cir- cumstances, should be identified with them.
Courier work is among those things that consist of hours of boredom punctuated with moments of sheer terror. Keeping a courier, who is not a member of your service and/or has diplomatic cover, is challenging.
Occasionally, it may be practical to transfer a courier to other, more challenging duties. Once that transfer is made, however, the individual should never be reassigned to courier duty, as the probability of that person having become known to counterintelligence is much higher. There may be occasions where diplomats, or even mem- bers of diplomats’ families who have diplomatic immu- nity, may serve as couriers. Their value in the diplomatic service must be weighed against the near certainty that if discovered, they will be expelled aspersona non grata. Drivers, especially those trained to receivecar tosses, are a variant of couriers, and to which the same constraints apply. Using persons with diplomatic immunity may be slightly more sensible in the case of drivers, since their cars are usually immune to search. On the other hand, a diplomatic car will have distinctive license plates and may be under surveillance whenever it leaves diplomatic premises. Counterintelligence services may take the risk, given the potential reward, of putting electronic tracking devices on diplomatic vehicles.
6.6.2 Safehouses
and
Other
Meeting
Places
Safehouses may not be literal stand-alone houses. Indeed, in an urban area, the anonymity of an apartment house or office building may give greater security.
In more rural areas, houses may indeed be needed. This is especially the case if the country team needs storage of bulky supplies (e.g., weapons, sabotage materials, propa- ganda), printing presses, etc.
In general, communications, as well as equipment clearly associated with clandestine operations, should be portable and not fixed in a safehouse used for meetings. If this is done, there is a chance that a counterintelligence search of the premises might not turn up anything incriminating. On the other hand, things that must be carried around may be discovered if a person or vehicle is searched. The safehouse should have emergency communications
6.6. SUPPORT SERVICES 25
so that it can be reached to call off a meeting or to warn of surveillance or an impending raid, preferably with a wrong-number dialogue or other deniable communica- tions method.
It is a difficult call as to whether a safehouse should have destruction facilities. Modern forensic laboratories can reconstruct papers that are merely burned or shredded, although shredders are no longer exotic items, especially if the safehouse serves a mundane office function. More definitive destruction capabilities will confirm the clan- destine use of the premises, but they may be a reasonable protection if the safehouse is being overrun and critical communications or other security material is in jeopardy.
6.6.3
Finance
Industrialized nations, with complex financial systems, have a variety of reporting systems about money trans- fer, from which counterintelligence potentially can de- rive patterns of operations and warnings of operations in progress.Money launderingrefers to methods for getting cash in and out of the financial system without it being noticed by financial counterintelligence.
The need for money, and challenge of concealing its transfer, will vary with the purpose of the clandestine sys- tem. If it is operated by a case officer under diplomatic cover, and the money is for small payments to agent(s), the embassy can easily get cash, and the amounts paid may not draw suspicion. If, however, there will be large payments to an agent, getting the money still is not a problem for the embassy, but there starts to be a concern that the agent may draw attention to himself by extensive spending.
US security systems, about which the most public infor- mation is known, usually include a credit check as part of asecurity clearance, and excessive debt is a matter of concern. It may be the case that refusing to clear peo- ple with known financial problems has stopped a poten- tial penetration, but, in reality, the problem may well be at the other side.Aldrich Ames,Robert Hanssen, andJohn Walkerall spent more money than could be explained by their salaries, but their conspicuous spending did not draw attention; they were detected because variously through investigations of leaks that threw suspicion on their ac- cess to information. Suspicion did fall onJack Dunlap, who had his security clearance revoked and committed suicide. Perhaps Dunlap was more obvious as a low-level courier and driver than the others, while the others were officers in more responsible positions.
The question remains if sudden wealth is likely to be detected. More extensive bank reporting, partially as a result of the USPATRIOT Actand other reporting re- quirements of the Financial Crimes Enforcement Net- work(FinCEN), the latter established before 9/11, may make receiving payments easier to catch.
Additional requirements for bank reporting were in the PATRIOT act, and intended to help catch terrorists preparing for operations. It is not clear, however, if ter- rorist operations will involve highly visible cash transac- tions. The 9/11 operations cellswere reported to have required somewhere between $400,000 and $500,000 in operating funds, and there were indeed wire transfers in the $100,000 range. Still, the question remains if a rel- atively small expenditure, compared with the enormous amounts in theillegal drug trade, will draw counterintel- ligence/counterterrorist attention.
Wire transfers and bank deposits go through formal value transfer systemswhere there is reporting to govern- ment. Especially terrorist groups, however, have access toinformal value transfer systems(IVTS), where there is no reporting, although FinCEN has been suggesting indi- rect means of detecting the operation of IVTS.[22] For clandestine networks where the case officers are un- dernon-official cover, handling large sums of cash is more difficult and may justify resorting to IVTS. When the cover is under aproprietary (owned by the intelligence agency) aviation company, it can be relatively simple to hide large bundles of cash, and make direct payments.
Formal Value Transfer Systems
In the US, financial transactions begin with mutual iden- tification between the customer and the financial institu- tion. Although there are manyInternet fraudsinvolving fake financial institutions or criminals masquerading as a financial institution (i.e.,phishing), the more difficult re- quirement is for the prospective customer to show accept- able identification to the bank. For basic relationships, a government-issued identification document, such as a passport or driver’s license, usually suffices. For foreign nationals, their country’s equivalent may be accepted, al- though it may be harder to verify.
Going beyond the basics becomes much more difficult. Were the relationship one that involved classified in- formation, there would be an extensive personal his- tory questionnaire, fingerprint check, name search with law enforcement and intelligence, and, depending on the clearance level, additional investigations.
Credit bureaus and other financial information services may be helpful, although the accuracy of some of these is questionable. There are Federal requirements to check names against lists of possible terrorists, financial crim- inals and money launderers, etc. In many respects, we have a problem where financial institution employees, without law enforcement training, are being asked to be detectives. There is a conflict of interest and lack of law enforcement training when bank employees are asked to monitor the legality of their customers’ acts. Stay aware of the status of court tests of legislation and regulation in this area, as well as new legislation. While it is possi- ble to teach many investigative skills, every experienced
26 CHAPTER 6. CLANDESTINE HUMINT
and successful investigator speaks of instinct, which takes years to develop.
Money Laundering and subverting formal value transfer systems
Money laundering is more associated with domestic crime than with clandestine operations, and is less likely to be involved in clandestine operations. Nevertheless, a brief mention of its potential benefits are in order. The basic principle of money laundering is that someone is in a business that has large cash income, such as drug sales or gambling. The receiving organization needs to find a way that these get into usable bank accounts, so they can be accessed for large purchases.
The most common way to do money laundering is to find a legal business that naturally receives much of its in- come in cash. These could include hair and beauty shops, small groceries, and, ironically, laundries and dry clean- ers. The legal business, or more likely multiple busi- nesses, receive the illegal cash as well as normal receipts, and draw amounts that do not attract suspicion. Periodi- cally, the launderer may have the cash-receiving firm buy something for him, or, less commonly, to write a large check that goes into his legal account. Care is taken that the amounts in the legal accounts do not hit the limits that cause automatic reporting.
Informal value transfer systems
Informal value transfer systems(IVTS) ,[22]however, ex- ist in a number of cultures, and bypass regular financial channels and their monitoring systems (seefinancial intel- ligence). These are known by regional and cultural names including:
• hawala(Middle East, Afghanistan, Pak- istan)
• hundi(India)
While details differ by culture and specific participants, the systems work in a comparable manner. To transfer value, party 1 gives money (or other valuta) to IVTS agent 1-A. This agent calls, faxes, or otherwise communicates the amount and recipient of the funds to be transferred, to IVTS agent 2-A, who will deliver the funds to party 2. All the systems work because they are valuable to the culture, and failure to carry out the agreement can invite savage retribution.
Reconciliation can work in a number of ways. There can be physical transfer of cash or valuables. There can be wire transfers in third and fourth countries, countries without strong reporting requirements, which the IVTS agents can verify.
Another means of transferring assets is through commer- cial shipment of conventional goods, but with an artifi- cially low invoice price, so the receiver can sell them and recover disbursed funds through profit on sales.
6.7 References
[1] UK Security Service (MI5). “Espionage and the Law”
(–SCHOLAR SEARCH).
[2] US Department of Defense(2007-07-12).“Joint Publica- tion 1-02 Department of Defense Dictionary of Military and Associated Terms”(PDF). Retrieved 2007-10-01. [3] Condon, Richard(1964). An infinity of mirrors. Random
House.
[4] Intelligence Community Staff (1990-04-12). “Project Slammer Interim Progress Report”. Slammer 1990. Re- trieved 2007-11-04.
[5] Stein, Jeff (1994-07-05). “The Mole’s Manual”. New
York Times. Retrieved 2007-11-04.
[6] Security Policy Advisory Board (1997-12-12).“Security Policy Advisory Board Meeting Minutes”. SPAB 1997. Retrieved 2007-11-04.
[7] Herbig, Katherine L. (2008-03-01). “Changes in Espionage by Americans: 1947-2007” (PDF). De- fense Personnel Security Research Center, with
Counterintelligence Field Activity. Retrieved 2008-04- 07.
[8] Shane, Scott (2008-04-20). “A Spy’s Motivation: For Love of Another Country”. The New York Times. Re- trieved 2008-04-20.
[9] Schecter, Jerrold L.; Deriabin, Peter S. (1992). The Spy
Who Saved the World: How a Soviet Colonel Changed the Course of the Cold War. Scribner.ISBN 0-684-19068-0. Schecter 1992.
[10] Philby, Kim(1968). My Silent War. Macgibbon & Kee Ltd.
[11] Agee, Philip(1975). Inside the Company. Penguin Books.
ISBN 0-14-004007-2. Agee 1975.
[12] Barron, John(1983). KGB Today: The Hidden Hand. Readers Digest Assn.ISBN 0-88349-164-8.
[13] Serov, Ivan A.. “Work with Walk-Ins” (–
SCHOLAR SEARCH). Studies in Intelligence. CIA-Serov.
[14] Gleghorn, Todd E. (September 2003). “Exposing the Seams: the Impetus for Reforming US Counterintelli- gence” (PDF). Naval Postgraduate School. Retrieved 2007-11-02.
[15] “Edwin Wilson: The CIA’s Great Gatsby”. Parade.
September 18, 1993. Retrieved 2007-11-10.
[16] Hughes, Lynn N. (October 27, 2003).“Opinion on Con- viction [US District Court, Southern District of Texas]"
6.8. EXTERNAL LINKS 27
[17] Begoum, F.M. (18 September 1995). “Observations on the Double Agent”(–SCHOLAR SEARCH). Studies
in Intelligence. Retrieved 2007-11-03.
[18] Mueller, Robert(2004-04-14). “Statement of Robert S. Mueller, III, Director, FBI Before the National Commis- sion on Terrorist Attacks upon the United States”. Re- trieved 2007-11-10.
[19] Matschulat, Austin B. (2 July 1996). “Coordination and Cooperation in Counerintelligence” (–
SCHOLAR SEARCH). Studies in Intelligence. Retrieved 2007-
11-03.
[20] Masterman, J. C.(1982). The Double-Cross System in
the War of 1939–1945. Ballantine, 1982. ISBN 0-345- 29743-1.
[21] Brown, Anthony Cave (1975). Bodyguard of Lies: The
Extraordinary True Story Behind D-Day. HarperCollins. ISBN 0-06-010551-8.
[22] United States Department of the Treasury, Financial Crimes Enforcement Network (March 2003). “Informal Value Transfer Systems, FinCEN Advisory Issue 33”
(PDF).
6.8 External links
• Why the West can't infiltrate al-Qaida by Craig Whitlockof theWashington PostMarch 20, 2008
Chapter 7
Clandestine HUMINT and covert action
National governments deal in bothintelligenceand mil- itary special operationsfunctions that either should be completely secret (i.e., clandestine: the existence of which is not known outside the relevant government cir- cles), or simply cannot be linked to the sponsor (i.e., covert: it is known that sabotage is taking place, but its sponsor is unknown). It is a continuing and un- solved question for governments whether clandestine in- telligence collection and covert action should be under the same agency. The arguments for doing so include having centralized functions for monitoring covert action and clandestineHUMINTand making sure they do not con- flict, as well as avoiding duplication in common services such as cover identity support,counterespionage, and se- cret communications. The arguments against doing so suggest that the management of the two activities takes a quite different mindset and skills, in part because clan- destine collection almost always is on a slower timeline than covert action.
7.1 Historical background
During the Second World War, the United StatesOffice of Strategic Services(OSS; the predecessor to theCentral Intelligence Agencyand to part ofUnited States Army Special Forces) worked closely with the British Secret Intelligence Service(SIS),Special Operations Executive (SOE), andPolitical Warfare Executive(PWE). The lat- ter two organizations were wartime, and their functions were merged back into SIS after the war.
The U.S. has generally followed the British model of a single civilian agency with close cooperation withmilitary intelligenceand military special operations forces. Many countries follow this model, but there are often calls to reorganize it, splitting off various functions into indepen- dent agencies. Historically, since the British clandestine intelligence, in recognizable form, goes back to the First World War, and their Second World War covert oper- ations organization preceded U.S. entry into the war, it makes sense to present them first. There has always been a close relationship between the U.K. and U.S. organiza- tions.
7.1.1 United Kingdom prewar operations
Prior to World War II, the British covert action func- tion was in Section D of theSecret Intelligence Service (SIS). SIS also had theclandestine HUMINTresponsi- bilities. Indeed, the United Kingdom had a recognizable HUMINT function, obvious less formal than the 20th century versions, going back toSir Francis Walsingham in 1583.[1][2]
7.1.2 United States background
The American system tends to require more legal for- malism than the British, so it became necessary to define “covert action”. As a practical definition, covert action is something of which the target is aware, but either does not know, or cannot prove, who is influencing political, mili- tary, scientific, or economic factors in the target country. Plausible deniabilityis another way to say that the spon- sor cannot be proven. Clandestine actions, in contrast, are actions of which the target remains unaware, such as espionage. .[3]
In the years immediately preceding the Second World War, the U.S. had no standing clandestine HUMINT or covert action organizations. There were certainly exam- ples of both, such as Marine MajorEarl Ellis' series of visits, in the 1920s, to Japanese islands in the Pacific. El- lis, who died under mysterious circumstances while on duty, created the basic plan for U.S. “island hopping” operations in the Pacific Theater of the Second World War.[4]
Used wisely, a covert action, also called “special ac- tivities” in the military budget, can deliver a stronger message than diplomacy, and cause full-scale war to be avoided. This was the original concept of George Ken- nan, which followed the Second World War and became the basic policy of the U.S. in 1947:
[5]
“Political warfare is the logical application of Clausewitz’s doctrine in time of peace. In broadest definition, political warfare is the em- ployment of all the means at a nation’s com-