>INSIGHT MAGAZINE >5/5/00 >**EXCLUSIVE** > >FBI Probes Espionage at Clinton White House > >A foreign spy service appears to have penetrated secret communications in >the Clinton administration, which has discounted security and intelligence >threats. > >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 year-long >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 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 is 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 ^� 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 ^� 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. Whether the president or his national-security >aides, including NSC chief Sandy Berger, have shared or communicated U.S. >suspicions and alarm is unclear, as is the matter of any Israeli response. >^�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 it >was 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 telephone >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 Independent Counsel, it was unusual >because of what 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 Insight^�s sources, Starr never bothered to find out from >appropriate agencies, such as the FBI or the CIA, whether the monitoring >by a foreign government of the president^�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.^� > >^�You^�ve Got the Crown Jewels^� > >If spies wanted to penetrate the White House, a facility widely considered >the most secure in the world, how might it be done? For that matter, how >might any agency or department of government be penetrated by spies? > >^�Actually, it^�s pretty easy if you know what you^�re doing,^� says a >retired U.S. intelligence expert who has helped (along with other >government sources) to guide Insight through the many and often >complicated pathways of government security and counterespionage. > >Access to designs, databases, ^�blueprints,^� memos, telephone numbers, >lists of personnel and passwords all can be obtained. And from surprising >sources. Several years ago this magazine was able to review from a remote >site information on the supposedly secret and inaccessible White House >Office Data Base, or WHODB (see ^�More Personal Secrets on File @ the >White House,^� July 15, 1996). > >Despite the spending of additional millions to beef up security when the >White House installed a modern $30 million computerized telephone system a >few years ago, communications security remains a big problem. Whatever the >level of sophistication employed, there are soft underbellies that raise >significant national-security problems. And potential for espionage, such >as electronic intercepting of phone calls, is very great. > >Calls to or from the White House dealing with classified information are >supposed to be handled on secure lines, but it doesn^�t always happen. >Sometimes, according to Insight^�s sources, despite the existence of >special phones at the White House and elsewhere to handle such calls, some >don^�t use them or only one side of the call does. An Insight editor >recently was allowed for demonstration purposes to overhear a conversation >placed over an unsecured line involving a ^�classified^� topic. > >Carelessness always has been a problem, but former and current FBI special >agents say that under the Clinton administration the disregard for >security has been epidemic. Many officials simply don^�t like the bother >of communicating on secure phones. > >In another instance, Insight was provided access to virtually every >telephone number within the White House, including those used by outside >agencies with employees in the complex, and even the types of computers >used and who uses them. Just by way of illustration, this information >allowed direct access to communications instruments located in the Oval >Office, the residence, bathrooms and grounds. > >With such information, according to security and intelligence experts, a >hacker or spy could target individual telephone lines and write software >codes enabling the conversations to be forwarded in real-time for remote >recording and transcribing. The White House complex contains approximately >5,800 voice, fax and modem lines. > >^�Having a phone number in and of itself will not necessarily gain you >access for monitoring purposes,^� Insight was told by a senior >intelligence official with regular contact at the White House. ^�The >systems are designed to electronically mask routes and generate secure >connections.^� That said, coupling a known phone number to routing >sequences and trunk lines would pose a security risk, this official says. > >Add to that detailed knowledge of computer codes used to move call traffic >and your hacker or spy is in a very strong position. ^�That^�s why we have >so many redundancies and security devices on the systems ^� so we can tell >if someone is trying to hack in,^� says a current security official at the >White House. > >Shown a sampling of the hoard of data collected over just a few months of >digging, the security official^�s face went flush: ^�How the hell did you >get that! This is what we are supposed to guard against. This is not >supposed to be public.^� > >Indeed. Nor should the telephone numbers or locations of remote sites or >trunk lines or other sundry telecommunications be accessible. What^�s >surprising is that most of this specialized information reviewed by >Insight is unclassified in its separate pieces. When you put it together, >the solved puzzle is considered a national-security secret. And for very >good reason. > >Consider the following: Insight not only was provided secure current phone >numbers to the most sensitive lines in the world, but it discovered a >remote telephone site in the Washington area which plugs into the White >House telecommunications system. Given national-security concerns, Insight >has been asked not to divulge any telephone number, location of >high-security equipment, or similar data not directly necessary for this >news story. > >Concerning the remote telecommunications site, Insight discovered not only >its location and access telephone numbers but other information, including >the existence of a secret ^�back door^� to the computer system that had >been left open for upward of two years without anyone knowing about the >security lapse. This back door, common to large computer systems, is used >for a variety of services, including those involving technicians, >supervisors, contractors and security officers to run diagnostic checks, >make repairs and review system operations. > >^�This is more than just a technical blunder,^� says a well-placed source >with detailed knowledge of White House security issues. ^�This is a very >serious security failure with unimaginable consequences. Anyone could have >accessed that [back door] and gotten into the entire White House phone >system and obtained numbers and passwords that we never could track,^� the >source said, echoing yet another source familiar with the issue. > >Although it is not the responsibility of the Secret Service to manage >equipment systems, the agency does provide substantial security controls >over telecommunications and support service into or out of the White >House. In fact, the Secret Service maintains its own electronic devices on >the phone system to help protect against penetration. ^�That^�s what is so >troubling about this,^� says a security expert with ties to the White >House. ^�There are redundant systems to catch such errors and this was not >caught. It^�s quite troubling.^� It^�s not supposed to happen.^� > >Insight asked a senior federal law-enforcement official with knowledge of >the suspected Israeli spying case about the open electronic door. ^�I >didn^�t know about this incident. It certainly is something we should have >known given the scope of what^�s at stake,^� the official says. > >Then Insight raised the matter of obtaining phone numbers, routing >systems, equipment sites, passwords and other data on the >telecommunications systems used by the White House: How hard would it be >for a foreign intelligence service to get this information? ^�Obviously >not as hard as we thought,^� a senior government official said. ^�Now you >understand what we^�re facing and why we are so concerned.^� > >That^�s one reason, Insight is told, the White House phone system is >designed to mask all outgoing calls to prevent outsiders from tracing back >into the system to set up taps. However, knowing the numbers called >frequently by the White House, foreign agents could set up listening >devices on those lines to capture incoming or outgoing calls. Another way >of doing it, according to security experts, is to get inside the White >House system. And, though it^�s considered impossible, that^�s what they >said about getting the phone numbers that the president uses in his office >and residence. Like trash, information is everywhere ^� and often is >overlooked when trying to tidy up a mess. > >^� PMR and JMW > >^�So What, It^�s Only Israel!^� > >There is a tendency in and out of government to minimize the impact of >Israeli espionage against the United States because Israel is a friendly >country. That overlooks the gravity of the espionage threat, says David >Major, former director of counterintelligence programs at the National >Security Council. ^�This ^�don^�t worry about allied spying, it^�s okay^� >attitude is harmful,^� he warns. ^�The U.S. should expect that the rest of >the world is bent on rooting out its national-security secrets and the >secrets that could subject its leaders to blackmail.^� Minimizing or >excusing ^�friendly spying,^� he argues, only discourages vigilance and >encourages more attacks on U.S. national security. ^�I^�m not outraged by >nations that find it in their interests to collect intelligence but by our >unwillingness to seriously pursue counterintelligence.^� > >Major, now dean of the private Center for Counterintelligence and Security >Studies, asks: ^�What price should Israel pay for this? My predictions are >that there will be no impact whatsoever. Do we put our heads in the sand >or do we take it as a wake-up call?^� > >Others observe that Israel has passed stolen U.S. secrets to America^�s >adversaries. The government of Yitzhak Shamir reportedly provided the >Soviet Union with valuable U.S. documents stolen by Israeli spy Jonathan >Pollard. ^�It^�s the security equivalent of herpes,^� says a former U.S. >antiterrorism official now at a pro-Israel think tank who requested >anonymity. ^�Who gets it [beyond Israel] nobody knows.... Once we let it >happen, the word gets out that ^�you can get away with this.^�^� --- Submissions should be sent to [EMAIL PROTECTED] To unsubscribe, send "unsubscribe spooks" to [EMAIL PROTECTED]
