178-10004-10115
2025 RELEASE UNDER THE PRESIDENT JOHN F. KENNEDY ASSASSINATION RECORDS ACT OF 1992
JFK Assassination System
Date: 8/27/201
Identification Form
Agency Information
AGENCY: CHENEY
RECORD NUMBER:
RECORD SERIES:
AGENCY FILE NUMBER:
178-10004-10115
GENERAL SUBJECT FILE
INTELLIGENCE--REPORT BY JAMES J. ANGLETON
Document Information
ORIGINATOR:
FROM:
CIA
TO:
TITLE:
ANGLETON, JAMES
ROCKEFELLER COMMISSION
REPORT TO PRES. COMMISSION ON CIA ACTIVITIES WITHIN THE U.S.
DATE:
PAGES:
00/00/1975
37
SUBJECTS:
ANGLETON, JAMES
CONSPIRACY THEORIES, USSR
NOSENKO, YURI
OSWALD, LEE, RUSSIAN PERIOD
ROCKEFELLER COMMISSION
REPORT
DOCUMENT TYPE:
CLASSIFICATION:
RESTRICTIONS:
CURRENT STATUS :
DATE OF LAST REVIEW:
OPENING CRITERIA;
Secret
1B; 4
Redact
08/09/1993
COMMENTS: See pages 5-7. Does not include attachments.
v9.1
NW 50955
33
DocId: 32112721 Page 1
178-10004-10115
SECRET SENSITIVE
REPORT TO THE PRESIDENTIAL COMMISSION ON
CIA ACTIVITIES WITHIN THE UNITED STATES
Mr. Vice President and Members of the Commission:
In any
In accordance with the Commission's request, my
former colleagues and myself submit herewith a critique
of the counterintelligence function in the Agency: We
welcome the Commission's interest in this matter because
it will be the first review of U.S. counterintelligence
at such a responsible level in Government.
event, it is urged that authoritative attention, beyond
the life of the Commission, be given to the scope and
role of counterintelligence in the Intelligence Community.
This action is imperative because the current leadership is
almost totally uninformed and inexperienced in the specialty
$
of counterintelligence, and its authority for changes is being
permitted to go unchallenged.
The result is reflected in the
failure to maintain continuity in this function. We believe
Photocopy
from
SECRET
Gerald R. Ford Library
CLASSIFIED BY 054519.
EXEMPT FROM GENERAL DECLASSIFICATION
SCHEDULE OF S 01152, EXEMPTION CATEGORY:
§ 55(1), (2) (3) or (4) (circle one or more)
• AUTOMATICALLY DECLASSIFIED ON
Date Impossible to Determine
(unless impossible, insert date or event)
NW 50955
DocId: 32112721 Page 2
SECRET SENSITIVE
that unless there are some enforceable guidelines set forth
by a higher authority, the conduct of effective counterin-
telligence by the Government will be lost for years to come.
Counterintelligence is traditionally a vital plate in
.
the shield of national security. It also protects the
security and well-being of our Allies who have access to our
sensitive intelligence by virtue of identity of interests or
because of formal arrangements and pacts such as NATO. There
are also useful confidential interservice agreements whereby
certain foreign intelligence services conduct unilateral or
joint operations with our field stations, and the standard
of their security is of continuing concern. In lower key,
it is also in the interest of CIA to aid the security serv-
ices of the remaining non-Communist countries where any
friendly elements exist.
Although we have been charged primarily with our view
on CIA counterintelligence as such, we have included, as
perspective requires, the security and counterintelligence
interrelationship of other agencies and departments. Unlike
the collection and evaluation of positive intelligence,
there has not been organized in Government, and particularly
in the Intelligence Community, any machinery to produce an
end-product which might be described to be national as dis-
tinguished from departmental counterintelligence.
little is logical regarding this subject, unless one views the
historical framework of the function, in terms of the special,
Very
NW 50955
DocId: 32112721 Page 3
2
SECRET SENSITIVE
Photocopy
from
Gerald R. Ford Library
DEGRET SENSITIVE
if not privileged, position of the FBI who had dominated the
Intelligence Community as it relates to counterintelligence.
Director Hoover refused to submit his views or policies to
the scrutiny of the Intelligence Community where any problem
remotely impinged on the interests and/or jurisdiction of
the FBI. This unassailable stance estopped any and all at-
tempts to bring the Bureau to account in any interagency
board of equals charged with counterintelligence oversight,
including the very effective President's Foreign Intelligence
Board (PFIAB) who were thoroughly apprised of the facts,
given their continuity and authority within the Community.
What emerged was a loose ad hoc liaison of third parties,
but never a meeting of chiefs with Mr. Hoover to hammer out
basic issues relating to internal security and counterintelli-
gence. This was the state of affairs until the appointment
of Mr. Gray; counterintelligence as a function of Government
with few exceptions was frozen by Mr. Hoover. Mr. Gray's
.
tenure was marred by the turbulence of Watergate, and it was
only with the appointment of Mr. Kelley that a new era opened
up.
Unfortunately, nothing of consequence has been tabled
with Mr. Kelley on the outstanding issues.
Unlike the producers of positive intelligence, those
engaged in counterintelligence are the primary consumers of
their own product, and the counterintelligence product is less
perishable than that of positive intelligence. We have at-
tempted to remedy this omission over the years on an ad hoc
basis by distilling intelligence from counterintelligence operations,
NW 50955
DocId: 32112721 Page 4
SECRET SENSITIVE
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
and we have concluded that ad hoc arrangements are inadequate
for satisfying those who have a need for the counterintelli-
gence end-product. As to the recipients, they should include
selected officials who are involved in the estimating process
as well as policy makers up to the Cabinet level. This has
not been the case in the past, and as a result of this void,
there has existed a conflict of views at both the policy and
estimating levels regarding intentions, capabilities and the
peculiar political dynamics of the Soviet Bloc. Experience
would indicate that the basis differences in interpretation
and evaluation are seemingly unbridgeable. What is required
as soon as possible is an authoritative forum with access to
all-source information in which differences may be joined and
adjudicated.
We believe that the result would give the guidelines
and targets for political action follow-up and would have a
significant impact on interdepartmental policies which are
not unrelated to the Soviet Bloc realities which we have un-
covered in counterintelligence.
Specifically, reference is made to cases which involve
a determination regarding the bona fides of Soviet defectors
and Bloc sources whose positive information is given the
broadest dissemination even though the source is suspect.
From the beginning it has been defectors who have given us
the most vivid appreciation of the clandestine activities of
the Soviet Bloc. It is through defectors that one gains
SECRET SENSITIVE
Photocopy
from
Gerald R. Ford Library
NW 50955
DocId: 32112721 Page 5
SECRET SENSITIVE
knowledge regarding the identities and use of penetration
agents and agents of influence who are, in turn, the kingpins
of Soviet strategic deception.
An example of recent vintage which illustrates the
range of confusion is Mr. McCone's response on television to
a question that certain information was not turned over to
the Warren Commission because the source was the KGB defector,
Nosenko, whose bona fides at the time were not fully estab-
lished. After having asserted that much effort always is devoted
to the problems of bona fides, Mr. McCone related that he had
been informed that the Agency's position now regarding Nosenko,
as
a result of a painstaking examination, was that he is
bonafide.
Astounded by this statement, the undersigned called
the Agency officer who was the former executive assistant to
Mr. McCone for clarification. He opined that Mr. McCone
could not remember everything but that he would look into the
matter. As of this writing there has been complete silence
as to the identity of the Agency's spokesman.
To understand the significance of this anonymous bestowal
of bona fides requires some further explanation of the Nosenko
case. Several thousand man-hours have been expended in inter-
viewing Nosenko and analyzing his information.
While there
were those somewhat removed from the case who accepted his
bona fides, a contrary view was registered by the following:
the Chief of the Soviet Division (who is now the Director's
National Intelligence Officer for Soviet Production); the then
NW 50955
DocId: 32112721 Page 6
SECRET SENSITIVE
Photocopy
from
Gerald R. Ford Library
SECRET. SENSITIVE
Deputy Chief of the Soviet Division, even though he was the
first contact of Nosenko's in the field; and his chief as-
sociates in the Division. In favor of Nosenko's bona fides
have been the Office of Security and certain other members
of the Soviet Division. The most persuasive detractor of
Nosenko has been the KGB defector, Golitsyn. He is regarded
to be the most knowledgeable KGB defector to come our way.
After a lengthy analysis, he concluded that Nosenko was а
dispatched agent provocateur. His views are also shared
independently by another Soviet Intelligence Officer who
defected to the Agency. The Counterintelligence Staff ar-
rived at the same conclusion.
The question of bona fides
is unresolved. It has been permitted to fester without any
authoritative conclusion because it is an interagency prob-
lem affecting other Soviet Bloc cases which are controlled
elsewhere in the Community. Nosenko's information revolves
around the following subject matters:
J
1. President Kennedy's Assassination:
Nosenko's story is that while he was in the
KGB's internal intelligence, he read the case
file on Oswald. Given the timing of his de-
fection, shortly after the assassination, his
not borne out by the initial poly-
account
-
graph may be viewed as exonerating the
Soviets of any complicity with Oswald, thus
NW 50955
DocId: 32112721
Page 7
པ ད 1:|:ཀུན :|:| བ 1:|:|:ཀྱི
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
supporting the flimsy documentation on
Oswald handed over to the U.S. Government
by the USSR. This would also tend to disa-
vow any relationship between the USSR and
Cuba in clandestine activity.
2. Penetrations: With one or more
exceptions, he stated that there were no
penetrations of the U.S. Government.
This
assertion flew in the face of the overview
which Golitsyn gave to us regarding Soviet
Bloc penetration of Western services and
strategic deception.
3. Order of Battle of the KGB at Home
and Abroad: There are many instances where
Nosenko's information contradicts Golitsyn's.
-
industrial com-
We have concluded on the basis of present evidence that
Nosenko was dispatched to the West to mutilate the counter-
intelligence leads which had been revealed by Golitsyn.
As to his observations regarding Oswald, it was the Soviets
who have pushed the deception theme to the effect that
Oswald was an instrument of the military
plex of the eastern United States. This thought was first
raised by Khrushchev in Cairo in an unusual interview which
he had with an American journalist. It has since been pur-
sued by the Soviets through various channels, mainly KGB,-
and it is now common currency in Soviet newspapers and other
media.
NW 50955
DocId: 32112721 Page 8
GECRET SENSITIVE
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
The Nosenko case goes to the quick of the
counterintelligence problem facing not only the FBI and the
Agency but all Western Intelligence and Security Services,
many of whom have received information derived from Nosenko.
It is evident that as presently organized, the
Intelligence Community is incapable of correlating intelli-
gence production with the product and analysis of counter-
intelligence information.
Given the inability of the Intelligence Community to come
to grips with the problems raised by counterintelligence, it
is suggested that the only solution to the very unsatisfactory
situation today would be the appointment of an ombundsman who
would be authorized to act directly on behalf of the
National Security Council on serious interagency problems which
have a direct bearing on the plans and capabilities of the
Communist Bloc and involve the more sensitive operations of
counterintelligence.
Alternatively, consideration could be
given to the responsibilities of the Chairman of PFIAB, which
might be enlarged to satisfy this need.
As Attachment A, I submit a letter and attachment which
was submitted to the Secretary of Defense on 31 January 1975.
Given the march of events and the uncertainties involved, in
addition to the responsibilities of his high office, it is
understandable, perhaps, that the Secretary has not wished
to become entangled in disputations on this subject matter
as long as the Agency and its various Directors are being
subjected to investigation. Nevertheless, in our view, the
NW 50955
DocId: 32112721 Page 9
☐
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
issues involving Soviet strategic disinformation and our
defense posture go to the heart of national security inso-
far as they relate to estimates affecting the world balance
of power.
Additionally, we believe it to be most misleading
for one to assume that estimates derived from technical col-
lection alone justify the negotiation of finite disarmament
and other treaties with the Soviet Bloc governments unless
there is corresponding high-level covert intelligence pro-
duction which supplements and confirms the findings of
technical collection.
This view argues against the philosophy now being aired
with Olympian aplomb that technical coverage alone is a
substitute for clandestine sources or that it gives a reliable
data base which justifies a super power to bargain away its
(Attachment B sets forth the views of
strength.
Mr. Paul Nitze and his first-hand impression of the SALT
talks. Of particular interest is his description of the
atmospherics: [a] the peculiar role of the KGB among Soviet
negotiators, and [b] how an uninformed U.S. representation
learned from the Soviet delegation of changes in the U.S.
negotiating positions arrived at in Washington. The KGB
attempted similar ploys during the Johnson Administration
with a former high official of President Kennedy's on the
Vietnam issue.)
If there be validity to the information derived from
Golitsyn, then it would follow that detente and estimates
NW 50955
DocId: 32112721 Page 10
SECRET STENSTEINE
Photocopy
from
Gerald R. Ford Library

.
SECRET SENSITIVE
derived therefrom are misleading with regard to the events
in Portugal, Vietnam and other areas where we are in com-
petition with the Soviets and the Bloc. A more accurate
picture could be obtained if the structure of the
Intelligence Community, in its processing of information,
were less concerned with public or overt data regarding
the Soviet Bloc intentions, such as the reporting of
Ambassadors and other representatives, and instead give
full faith and credit to secret information from bona fide
sources who are or were within the Soviet Bloc system and
whose warnings regarding disinformation have been uni-
versally ignored. To repeat, it is the opinion of these
sources that the bulk of information available to the
West through Soviet Bloc contacts, regarding the strategy
and aims of the Eastern Bloc, is, on the whole, spurious
and represents little more than coordinated handouts which
advance the interests of Soviet Bloc strategic disinformation
at many levels of communications.
The remainder of this report represents the status, as
of March 1975, of U.S. counterintelligence, primarily within
the CIA, but also, as the perspective requires, at the na-
tional level. The discussion consists of four parts;
The authority under which CIA conducts
counterintelligence activities.
The nature of those activities.
NW 50955
DocId: 32112721
Page 11
10
SECRET SENT
SENSITIVE
1
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
A summary of critical developments in
the history of U.S. counterintelligence from
1945 to 1975.
Recommendations which we respectfully
urge the Commission to submit to the President
for his consideration.
I. THE AUTHORITY
The current version of National Security Council
Intelligence Directive No. 5, U.S. Espionage and Counter-
intelligence Activities Abroad, effective 17 February 1972,
is the charter for the conduct of foreign clandestine ac-
tivities by CIA and by the other members of the U.S. in-
telligence and counterintelligence community. NSCID/5
that intelligence
"
defines counterintelligence as
activity, with its resultant product, devoted to destroying.
the effectiveness of inimical foreign intelligence activities
and undertaken to protect the security of the nation and its
personnel, information and installations against espionage,
sabotage and subversion. Counterintelligence includes the
process of procuring, developing, recording and disseminating
information concerning hostile clandestine activity and of
penetrating, manipulating or repressing individuals groups
or organizations conducting such activity."
As defined, counterintelligence consists of two parts,
security and counterespionage. Security is essentially the
ŋ
Photocopy
Gerald R. Ford Library
from
NW 50955 DocId: 32112721 Page 12
SECRET SENSITIVE
static defenses erected against the clandestine activities
of adversaries of the U.S., whereas counterespionage is
aggressive activity of engaging the adversary clandestinely.
NSCID/5 stipulates that the Director of Central
Intelligence shall undertake specified actions in order to
ensure centralized direction of all clandestine activities
within the scope of the Directive. It also charges CIA
with primary responsibility for U.S. clandestine activities
abroad and permits other departments and agencies to conduct
such foreign clandestine activities as are supplementary or
are necessary to their security. Departmental counterin-
telligence is brought together through two Director of
Central Intelligence Directives, one which requires coordi-
nation in advance with CIA on clandestine counterintelligence
operations abroad, and the other which stipulates that CIA
shall serve as a central repository of foreign counterin-
telligence data to the Intelligence Community.
The flow of authority is from the National Security
Council to the Director of Central Intelligence to the
Deputy Director for Operations to the central counterintelli-
gence unit of CIA or to an area division to provide whatever
assistance the Director may require to discharge his obliga-
tions under NSCID/5 and its assignment to him of responsi-
bility for the protection of methods and sources or under
other laws, orders and directives. The immediate mandate
of the counterintelligence component, however, is derived from
NW 50955
DocId: 32112721
Page 13
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
those responsibilities assigned directly to CIA (and thus
chiefly from paragraphs lb, 3b, 3c, 3d and 9 of NSCID/5, the
chief provisos of which have been noted above).
In our view the DCI is not exercising under NSCID/5
responsible centralized direction of counterintelligence
clandestine activity. As indicated to the Commission in
verbal testimony, the current Director has spent less than
four to five hours with the Counterintelligence Staff from
the moment he became the Deputy Director for Operations
until the present. His knowledge of the activity during the
period when he was Chief of the Far East Division was one of
failure and is reflected in an Inspector General's report of
.the period. This and some of his communications to the field
are a matter of record in the FE Division. Instead of exer-
cising leadership in resolving the serious problems of pene-
tration and disinformation, which are of prime importance to
the security of the country, under his aegis there has been a
decentralization and mutilation within the Agency and, there-
fore, within the Community of high-level counterintelligence
activity. We believe that substantial changes are needed
and that these changes should be effected with and through
an understanding of our counterintelligence mission, сара-
bilities and needs. In setting forth our collective views on
these matters, we do so, drawing on our professional experi-
ence as to what needs to be set right and how it may be done.
The primary cause of the present vulnerability of our na-
tional security is the inadequate attention and serious lack
of understanding of the counterintelligence function.
NW 50955 DocId: 32112721 Page 14
Photocopy
from
Gerald R. Ford Library
II.
SECRET SENSITIVE
THE NATURE OF COUNTERINTELLIGENCE ACTIVITIES
The counterintelligence unit of the CIA bears a direct
responsibility for the security of all Agency espionage and
counterintelligence operations conducted abroad. It is also
directly responsible for identifying and containing or con-
trolling hostile clandestine activity through such operations
as the following:
-
i
The identification of adversary
personnel, regardless of citizenship or
location abroad.
The penetration of foreign services.
The handling and utilization of
certain intelligence and counterintelligence
defectors from foreign services.
tions.
The management of double agent opera-
The detection, analysis and nullifi-
cation of hostile deception operations,
including disinformation.
Counterintelligence analysis and
operations directed against adversary
propaganda, defamation, forgeries and other
covert activities.
-
The exploitation of communications
intelligence in furtherance
telligence objectives..
of counterin-
NW 50955 DocId: 32112721 Page 15
14.
Photocopy
from
Gerald R. Ford Library
III.
- Th
SECRET SENSITIVE
The conduct of liaison abroad with
foreign counterintelligence and security
services and with foreign services
generally about counterintelligence matters.
The conduct of domestic counterintel-
ligence liaison to ensure the necessary
sharing of information and coordination of
action..
-
The maintenance of its own records and
the managerial supervision of CIA's central
repository of records to ensure that the
foreign counterintelligence in these holdings
is collated, analyzed and made available to
others in the Intelligence Community on a
need-to-know basis.
A SUMMARY OF THE COUNTERINTELLIGENCE HISTORY OF CIA
After the Second World War, except for a few stations
abroad, centralized U.S. counterintelligence practically
disappeared. By October 1945, when O.S.S. was liquidated,
its counterintelligence branch, X-2, had become a wide-
spread net of overseas stations staffed by some 650 counter-
intelligence specialists. Starting nearly from scratch,
X-2 had created and developed a thoroughly professional
U.S. counterintelligence capability in a very short time
because it served a leadership that understood and respected
NW 50955
DocId: 32112721 Page 16
15
Photocopy
from
Gerald R. Ford Library
OLUNG JENSITIVE
the counterintelligence function and conferred upon it the
necessary measure of authority, autonomy and the essential
secrecy required for the conduct of this activity. To better
understand the need for reform, it is believed that a short
historical presentation is essential. What is here submitted
is based on voluminous files and documentation which record
the shaky progress of counterintelligence as practiced by
the U.S. Government following World War II until the present.
After October 1945 the concept of counterintelligence as
a separate and equal function withered away. On 17 October
of that year Brigadier General John A. Magruder, then the
director of the Strategic Services Unit (a short-lived
inheritor of O.S.S.), stated in a memorandum to
Mr. John J. McCloy that the valuable O.S.S. liaison relation-
ships abroad were deteriorating because foreign services were
uncertain as to whether the United States would have a central
intelligence service. General Magruder was an honorable and
conscientious custodian of O.S.S.
Although CIA was established in 1947, and although the
first version of NSCID/5, promulgated in December 1947,
charged the Director of Central Intelligence with the conduct
of all organized federal counterespionage operations overseas,
the new Agency did not have a central counterintelligence
unit of mechanism through which it could meet its counter-
intelligence responsibilities.
NW 50955 DocId: 32112721 Page 17
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
On 1 January 1949 a report was submitted to the
National Security Council at its request by men whom it had
appointed to a Survey Group: Messrs. Allen W. Dulles
(chairman), William H. Jackson and Mathias F. Correa. As
one who had played a key role in the Office of Strategic
Services, Mr. Dulles was familiar with the wartime role and
performance of X-2. He understood its record and mission
which were succinctly stated in the War Report: Office
of Strategic Services.1 The opening paragraph of this of-
ficial account of X-2 reads as follows: "Counterespionage
is a distinct and independent intelligence function. It
embraces not only the protection of the intelligence in-
terests of the government it serves, but, by control and
manipulation of the intelligence operations of other
nations, it performs a dynamic function in discerning
their plans and intentions, as well as in deceiving them.
An effective counterespionage organization is therefore an
intelligence instrument of vital importance to national
security.
,, 2
The Dulles Committee made recommendations designed to
strengthen CIA and its counterintelligence capability. The
1
Vol. I, Washington Organization, History Project, Strategic
Services Unit, Office of the Assistant Secretary of War,
War Department, Washington, D. C., July 1949.
2
Ibid., p. 189.
NW 50955 DocId: 32112721 Page 18
17
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
1949 report is infused with an understanding of problems and
principles that have remained much the same for the
quarter of a century.
past
The following two brief quotations are
illustrative:
"
. . . We
...
propose that the branches of
the Central Intelligence Agency which are directly engaged
in clandestine actitivities, such as secret intelligence
[espionage], counterintelligence, secret operations and the
like, be given a great measure of autonomy as to internal
administration, the control of their operations and the
selection of personnel." The report also stated, "It
seems apparent that the present counterespionage staff of
the Office of Special Operations should be materially
strengthened and more intensive counterespionage work
promoted."
:
Until the end of 1954, however, counterintelligence
remained structurally and in other respects subordinate to
the collection of positive intelligence. In August 1950 there
was a counterintelligence sub-unit called Staff C, but it had
a total strength of twenty-three. The Soviet Intelligence
Branch of Staff C consisted of three people. The result was
a dispersion of the counterintelligence function among the
area branches and a degradation of the work to such lowest
common denominators as name tracing, maintenance of
counterintelligence files and the like.
A notice of 20 December 1954 announced the formation of
a new, senior counterintelligence element, the Counterintel-
ligence Staff. For the first time CIA had elevated the
SECRET 18 INSITIVE
Photocopy
from
NW 50955 DocId: 32112721 Page 19
Gerald R. Fond Laxay
SECRET SENSITIVE
counterintelligence function, as a Staff function, to full
parity with espionage and covert activities. One of the
first undertakings of the Counterintelligence Staff was
to determine who was doing counterintelligence work, what
they were doing and under what circumstances.
This survey
was launched in 1955 and completed in 1956. It established
that except for the Counterintelligence Staff itself, the
Operational Directorate had only 133 full-time counterin-
telligence officers, about 6 per cent of its total non-
clerical strength.
GS-09, and their average Agency experience was five years.
Only one in four had had either basic or advanced training
in counterintelligence.
The average grade of these officers was
From the end of 1954 until April 1973, the apex of its
development, the Counterintelligence Staff grew in numbers,
By the latter date its per-
skills and responsibilities.
sonnel strength, as I noted in my earlier report to the
Commission, consisted of 130 officers and seventy-two assist-
ants and clerical personnel.
This total of 202 still con-
stituted only 3.7 per cent of the total Directorate of
Operations strength of 5,662. As a result CIA could not
meet its counterintelligence responsibilities adequately
even at this peak of on-board counterintelligence strength.
It is our view that the Operations Directorate ought to
devote no less than 10 per cent of its manpower to
counterintelligence and that no less than half of its
19
NW 50955 DocId: 32112721 Page 20
Photocopy
from
Gerald R. FordLibrary

SECRET SENSITIVE
counterintelligence personnel should be allocated to the
counterintelligence unit in Headquarters. This 10 per cent,
'comprising 566 officer and clerical employees, would still
fall considerably short of our counterintelligence strength.
in the fall of 1945 when O.S.S. was dissolved.
The Counterintelligence Staff was nevertheless able
The scope
to work effectively against its major targets.
of this paper prohibits an adequate resume, but there is an
indication of the results achieved in the fact that during
the years 1961 through 1963 eight major Soviet penetrations
of American and foreign liaison intelligence services were
uncovered and that six of the eight exposures resulted
directly from CIA's counterintelligence work. Fifteen Soviet
agents were arrested, as well as more than twenty others
who were working clandestinely for one or another of the
East European services.
In August 1973 as a result of the change in leadership
in the Agency, there was put in motion a series of baffling
administrative and functional changes which ignored the
state of the art; the need for resolving many inter-Agency
problems in counterintelligence, and, particularly, the
need to work out with the FBI in depth a number of conflicts
concerning the bona fides of sources; the handling of defec-
tors; and authoritative research and analysis pertinent to
these differences.
NW 50955 DocId: 32112721 Page 21
20
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
The strength of CIA's counterintelligence unit was
cut almost in half to eighty-nine; and by December 1974
the on-board strength of our counterintelligence personnel,
officer and clerical, was down to seventy-seven, a total
comprising 1.7 per cent of Operations Directorate strength.
This abrupt reduction in force was accompanied by the
transfer of four interlocking staff elements (International
Communism, Operational Approvals, Police and Counterintelli-
gence Liaison) to other jurisdictions. I do not know of
any reasons concerning the performance of the Counterintelli-
gence Staff or the scope of hostile clandestine intelligence
action against the U.S. which would justify this drastic
reduction and weakening.
With regard to the FBI it is a fact that for some years.
prior to the death of Mr. Hoover, there were sharp differ-
ences between the FBI and the Counterintelligence Staff
regarding the bona fides of Soviet intelligence personnel
who represented perhaps the prime sources of information in
relation to Soviet Bloc activity in the U.S., penetration in
the Government and the order of battle of the Soviet presence.
CIA was fortunate to acquire a KGB defector in
December 1961 who had spent many years at a very high level
of Soviet security acquiring the most sensitive information
in the full knowledge that when the time was propitious, he
would defect to the West and impart his information. By way
of simplification, it should be noted that this individual
21
NW 50955 DocId: 32112721 Page 22
Photocopy
from
Gerald R. Ford Library.
SECRET SENSITIVE
ثر
was responsible for the breaking of many espionage cases in
the West, but equally important he divulged Soviet plans,
strategy and organization effected in 1959 by the KGB under
the auspices of the Central Committee which in turn mapped
out in partnership with other services of the Bloc a pro-
gram of action whose principal targets were the isolation
of the U.S. as the "Main Enemy" and the ultimate change in
the balance of military power in favor of the Soviet Bloc.
During the later tenure of Mr. Hoover, which was
fraught with difficulties between the FBI and members of
the Senate, and included other changes hampering or limit-
ing the FBI's ability to conduct internal security opera-
tions, the hard issues of disagreement were never dealt
with on
an agency-to-agency basis. To the contrary, as
the Commission is well aware, there was eventually a break-
down in liaison across the board between departments and
agencies of the Government with the FBI (with the exception
of the White House). Further, the internal disputes within
the Bureau challenging Mr. Hoover's leadership were extremely
detrimental to any objective consideration concerning the
national security, and consequently years were lost in
pursuing the national counterintelligence objective.
During this period, in our view, national estimates and
evaluations were formulated in concrete establishment of
detentist philosophy which marked the real state of
Soviet Bloc subversion in the secret war.
NW 50955 DocId: 32112721 Page 23
22
Photocopy
from
Gerald R. Ford Library
1
SECRET SENSITIVE
By way of explanation, we can illustrate the ineffectual
coordination with a case involving a long-term Soviet pene-
tration in the Agency. A very important staff agent was
unmasked by virtue of information supplied by the aforemen-
tioned defector, but in the process the FBI officially took
the position that the candidate who was submitted by the
Agency was not the Soviet agent in question, and by memo-
randum they proposed that we submit all of the data to the
Department of Defense on grounds that the penetration agent
was more likely a past or present asset of the military.
Subsequently, a high-level source confirmed our original
identification, which in turn was accepted by the FBI. The
case is illustrative of the inability within this Government
to resolve interagency differences in all of those sensitive
fields affecting penetration.
The result of the 1973 changes was a decentralization
of counterintelligence, a retrogression to the inadequacies
of the period 1949 to 1955. Now, as then, counterintelligence
in CIA lacks the necessary specialists and the requisite
interaction at the Agency's highest levels. Some of the
present grave problems are not new, but the recent changes
have greatly magnified them. Among our present weaknesses
are the following:
-
An almost total failure against
Soviet illegals (intelligence officers
under deep, non-official cover). At
NW 50955
DocId: 32112721
Page 24
Obb23
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
present CIA is not conducting a single
operation against a Soviet illegal.
An incapacity to pursue unresolved
outstanding leads. We estimate that there
are some fifteen hard-core leads to known
or probable penetrations by adversary
services into U.S. or Allied services;
that there are about one hundred leads
meriting immediate study, analysis, in-
vestigation and exploitation; and that
there are no less than one thousand that
merit pursuit.
All of them are
now'
dormant.
-
An inability to deal effectively
with the twin problems of devising and
carrying out strategic U.S. deception
operations and of nullifying adversary
deception. This serious weakness is not
imbedded in CIA alone, and it did not
result from the restructuring of Agency
counterintelligence.
The U.S. lacks
a single, duly mandated, centralized
authority for dealing with deception.
Those few individuals and groups in the
U.S. Government, chiefly in the military
services, who are concerned with strategic
24
NW 50955
DocId: 32112721 Page 25
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
deception lack ready or frequent access
to the policy level. They attempt to
frame deception plans in ignorance of
new policies, and they can obtain top-
level review of their plans only on an
ad hoc basis. The remedy is not to
abandon deception and counter-deception
but to elevate these functions. Should
the Government do so, however, CIA would
now lack the required expertise.
A dwindling cadre. A substantial
core of experienced counterintelligence
specialists is the first preequisite for
an effective counterintelligence program.
Only a few are left today. The problem
results not solely from the drastic reduc-
tion in force in 1973 but also from a
philosophy and system that have made it
almost impossible to replace either the
numbers of the skills of those lost
through attrition. In the Operational
Directorate it is the Area Divisions that are
linked by a command line to top CIA manage-
ment in Headquarters and to all 147 Agency
stations overseas. The Divisions select
25
Photocopy
from
Gerald R. Ford Library
NW 50955 DocId: 32112721 Page 26
SECRET SENSITIVE
young intelligence officers soon after the
completion of their initial training, at the
outset of their careers. They send many of
them abroad, direct their work through
Chiefs of Stations and Bases and bring them
back in accordance with the personnel needs
of Headquarters and the Field. The result
is a system of rotation that benefits both
the Agency and the employee. In contrast,
the counterintelligence unit in Headquarters
has no representative of its own overseas.
To secure competent replacements, it must try
to intervene in the normal progress of
careers, to persuade officers and Divisions
that higher interests require a change of
their plans and to convince the officers that
they should choose careers in counterintelli-
gence even though their career advancement
is in fact likely to be impeded by this choice.
In brief, CIA has no system for developing
counterintelligence career officers; sending
them abroad on a rotational basis to acquire,
through a series of tours, the necessary
experience as specialists; and providing them
with the same incentives and career prospects
as those of their peers in the Area Divisions.
Photocopy
from
Gerald R. Ford Library
NW 50955 DocId: 32112721 Page 27
SECRET SENSITIVE
An accelerating decline in the
quality of our counterintelligence liaison
relationships abroad. Here too there is a
parallel with the problems that beset us in
the past and that gave cause to
General Magruder to express his concern in 1945.
Most of CIA's liaison overseas is
carried out with counterintelligence and
security services because only a minority
of nations maintain foreign espionage
organizations, whereas nearly all have
internal security services.
Italy is
typical. It has a few intelligence offi-
cers overseas, but 99 per cent of its
strength is at home. The major Italian in-
telligence service is the Defense Intelli-
gence Agency (SID). The SID draws its
counterintelligence from the Carabinieri
(a semi-military organization with a net-
work of posts spread throughout the country)
and from all of the military services. The
service has a vast array of domestic sources
that number in the high thousands and range
from the portieri who tend apartments
throughout Italy to high dignitaries of the
church and state. The chief of the SID has
SEGNE 27 REISTINE
Photocopy
from
Gerald R. Ford Library
NW 50955
DocId: 32112721 Page 28
SECRET SENSITIVE
direct access to the Minister of Defense,.
and some service chiefs have also had the
benefit of immediate access to the
president of the republic. Through its
liaision with the SID the CIA greatly
augments its own resources at scant cost.
The same pattern obtains, in varying
degrees, in all of the countries (more
than one hundred) and most of the serv-
ices (more than three hundred) with which
CIA maintains liaison relationships.
Counterintelligence liaison requires
close and expert attention.
It is built upon
mutual interest; but through training, per-
suasion and other means the skillful liaison
officer expands the shared basis and thus
directs or redirects the enormous counterin-
telligence resources of the non-Communist
world against targets of primary importance
to the U.S.
In return for this vast strengthening
of our defense, our Allies look to us for
several advantages: for example, a buttres-
sing of their frequently meager capabilities
in research and analysis.
They must also be
confident that we can give a full measure of
SECRET SENSITIVE
28
Photocopy
from
Gerald R. Ford Library
NW 50955
DocId: 32112721 Page 29
SECRET SENSITIVE
protection to secrets shared with us. And they
look to us for leadership. At times we have
disappointed them.
An instance of this occurred in
September 1971, when the British expelled ninety to 105
Soviet intelligence officers from their country
in a single action. They had noted a relent-
less buildup of the Soviet clandestine force
in their midst. MI 5, the British counter-
intelligence service, found that the fifteen
intelligence officers whom it had identified
in the U.K. in 1950 had grown by 1970 to more
than 120. The PNG action was carried out
despite some qualms. The Soviets made only a
token retaliation. The Belgians followed the
British lead, though on a smaller scale and
without publicity. A number of liaison serv-
ices expected the U.S. to make a similar move,
and the FBI and CIA joined in recommending
such action here. But no initiative was under-
taken.
Now the fabric of our counterintelligence
liaison relationships shows some fraying be-
cause of clamor in the American press and a
consequent change of atmosphere.
Our partners
are no longer sure that we can act decisively
SOOME 29 WEL MOVE
Photocopy
from
Gerald R. Ford Library
NW 50955 DocId: 32112721
Page 30

SECRET SENSITIVE
in concert with them or even keep their
secrets.
To weather the crisis, CIA needs
a strengthened counterintelligence cadre in
its Headquarters, one able to give full
support and judicious guidance to liaison
officers abroad.
A mounting inability to cope with
the growing menace of hostile clandestine
activity. The sudden reduction in CIA's
central counterintelligence capacity took
place at a time when the intelligence
services of the Soviet Bloc, about twenty-
five in all, have increased immeasureably
their total presence abroad and their op-
erational initiatives, particularly in
respect to strategic deception and pene-
tration. The Soviet capability in economic
and industrial espionage has always been a
very real danger to the U.S. and remains so.
For this reason I included a summary of the
Armand J. Hammer case in my earlier report,
and I resubmit it with this paper
(Attachment C). A second illustration is the
case of General Yevgenni Petrovich
Pitrovanov, also attached (Attachment D).
Our estimate of total Soviet intelligence
30
Photocopy
from
Gerald R. Ford Library
NW 50955
DocId: 32112721 Page 31
SECRET SENSITIVE
strength abroad in January 1975 was
ca. 3,900, of whom 332 were stationed in
the U.S. Soviet official presence in the
U.S. and other countries has grown more
rapidly in recent years than has the
corresponding number of identified opera-
tives, although we feel confident that the
ratio of about 40 per cent has not changed,
or not at least to the advantage of the
West.
As my previous report stated,
Director Kelley has warned of a growing
imbalance between our adversaries and the
forces at his disposal. We believe that
there has been a severe decline in the ef-
fectiveness of U.S. counterintelligence both
domestically and abroad.
Something of the
aggressiveness of the hostile services is
shown in their persistent attempts to recruit
Americans abroad for such clandestine purposes
as penetration.
During the period 1965 through
mid 1972, there was a total of 2,150 such
incidents (an incident being an outright at-
tempt to recruit or an overture clearly intended
to lead to recruitment). Thus, in an average
year, 287 Americans overseas are approached by
NW 50955 DocId: 32112721
Page 32
.31
Photocopy
Gerald R. Ford Library
kam
SECRET SENSITIVE.
adversary services with intent to harm. It
would be unrealistic not to expect the KGB and
other clandestine Communist services to
recognize that the present is a time of disar-
ray in U.S. counterintelligence and to seek
to exploit this advantage to the hilt.
Inadequate information about the
intelligence and security services of China,
Cuba and Eastern Europe, especially the latter.
We have a large body of counterintelligence
about the USSR, and it has been entered into
computer programs. Our machines programs about
the services of Poland, Hungary, East Germany,
Czechoslovakia, Romania, Bulgaria, Albania
and Yugoslavia are, in contrast, non-existent
or moribund. They have been allowed to slide
because of the pressures of keeping up with
services as large and virulent as the KGB and
the GRU. The USSR itself has not made this
mistake. It orchestrates large-scale clandes-
tine operations against the West, assigning
roles to the apparatuses of the Warsaw Pact
states and to Cuba in accordance with their
These Soviet allies are exten-
capabilities.
sions of the Soviet capacity to wage under-
ground warfare, and therefore we need to know
32
NW 50955 DocId: 32112721
Page 33
Photocopy
from
Gerald R. Ford LY
VEVIL
OLNDITIVE
them intimately and to keep our knowledge
current.
Our performance falls too short.
A lack of communication and inter-
action between the Director of Central In-
telligence and CIA's counterintelligence unit.
The present Director lacks counterintelligence
experience. He has asked for, and received, only
one two-hour briefing on the subject. Most of his
predecessors, in contrast, were vitally concerned.
Through briefings and through operational parti-
cipation they acquired a real familiarity with
the wide spectrum of counterintelligence and the
problems that it inevitably engenders.
The pres-
ent Director of Central Intelligence, on the
other hand, has managed CIA's affairs without
consulting me or other highly experienced
counterintelligence officers about Agency opera-
tions, programs or priorities. Those now desig-
nated to succeed us cannot, with the best will in
the world, make a sudden leap that will carry
them across decades of intensive, daily experi-
ence acquired by those who already have left the
Agency and those who are unquestionably leaving
in the not-too-distant future. Thus counter-
intelligence is left with a growing threat, un-
diminished responsibilities, a sharp reduction
in capabilities and no effective access to the
Agency's top managerial level on substantive
issues.
SAURES, VAN VE
NW 50955
DocId: 32112721 Page 34
Photocopy
from
Gerald R. Ford Library
IV.
RECOMMENDATIONS
SECRET SENSITIVE
The following recommendations are presented for the
consideration of the Commission with the sole intent of
revitalizing national counterintelligence and enabling it
to discharge its assigned responsibilities in furtherance
of national security. To this end we propose the following
changes:
1. That the Operational Directorate of
CIA assign not less than one-tenth of its
component to counterintelligence.
2. That of this total about half be
assigned to a central counterintelligence unit
.in Headquarters and that the remaining half be
divided among the various Area Divisions and
branches in Headquarters and selected Agency
stations abroad.
3. That CIA provide this cadre with
counterintelligence training in depth.
4. That selected counterintelligence
personnel be rotated through Headquarters
and field assisgnments of growing responsi-
bility in accordance with career plans that
afford them opportunities for advancement
which equal those of their Agency colleagues.
NW 50955 DocId: 32112721
Page 35
34
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
5. That counterintelligence designees
abroad work under the nominal command of
Chiefs of Stations but that they engage in
counterintelligence work full time and that
they have privacy channels of communications
with the Headquarters counterintelligence
unit which will ensure that access to their
sensitive information remains on a compart-
mented, need-to-know basis.
6. That close operational liaison
between the FBI and the counterintelligence
unit be fostered, and that direct, operational,
domestic liaison with other U.S. departments
and agencies by the counterintelligence unit
be maintained to whatever extent the national
interest requires.
7% That the U.S. establish a single
central organ to formulate policy for national
strategic deception and to deal with adversary
deception, specifically including disinforma-
tion. Further, that this body have the neces-
sary access to policy-creating levels of the
U.S. Government and that it have the necessary
measure of jurisdiction over Governmental
components engaged in deception and counter-
deception.
}
NW 50955 DocId: 32112721 Page 36
SEGIE 35 SENSITIVE
Photocopy
frum
Gerald R. Ford Library.
SECRET SENSITIVE
8. That CIA counterintelligence liaison
abroad be improved through a judicious aug-
mentation of exchange of counterintelligence
information, including penetration leads, by
augmentation of U.S. capacity for leadership
in dealing with the common adversary, and
the expansion of the cadre of counterintelli-
gence liaison officers abroad.
9. That CIA undertake a more vigorous
program to obtain further data about the
intelligence and counterintelligence services
of China, Cuba and Eastern Europe, so that
our knowledge of them becomes fully compara-
ble with our knowledge of the Soviet serv-
ices, and that these increased holdings be
placed in machine records as rapidly as their
size warrants.
10. That the U.S., and especially the
FBI and the CIA, intensify counteringelligence
work against Soviet and other illegals.
11. That within the expanded counterintel-
ligence unit in CIA headquarters a defector
section be created and that this section be
responsible for supervising the operational
handling and continuing debriefing of desig-
nated defectors, both abroad and in the U.S.,
NW 50955 DocId: 32112721
Page 37
36.
Photocopy
from
Gerald R. Ford Library
SECRET SENSITIVE
the latter responsibility to be assigned in
agreement with the FBI and other affected
departments and agencies.
12. That the chief of the counterintelli-
gence unit have direct and frequent access to
the Director of Central Intelligence and
other Deputy Directors and members of the
Intelligence Community engaged in security and
counterintelligence to ensure that counter-
intelligence considerations are given due
weight in the formulation of policy and that
counterintelligence capabilities are fully
utilized in defending CIA and other U.S.
departments and agencies against clandestine
activity, including penetration operations,
carried out by our adversaries.
Attachments: as stated
NW 50955
DocId: 32112721 Page 38
James Angleton
James Angleton
37
SEOPET SCHRPTIVE
Photocopy
from
Gerald R. Ford Library