Cited under fair use for non-profit educational use.
From INSIGHT MAGAZINE.
Published in Washington, D.C.. . . . . . . . Vol. 13, No. 35 --
Sept 15, 1997 . . . . . . . . www.insightmag.com
Did Clinton Bug Conclave for Cash?
By Timothy W. Maier
A presidential conference with Asian leaders was bugged by U.S.
intelligence agencies, say high-level sources, and information was
passed from the White House to big Democratic corporate donors.
I magine sitting in your room, shoes kicked off and your necktie
loosened. It's been a long, hard day and now, sipping coffee,
you're talking to a colleague who is fixing a drink at the
mini-bar. At the same time, you're on the phone sharing information
about the conference you've just attended. Sounds pretty typical,
doesn't it? Okay, now continue to imagine that just a few floors
below your hotel room there's a secret command center filled with
federal law-enforcement officers, intelligence agents and military
personnel watching and listening to your every move and
. . . . Such a scenario might make sense if you were a mobster or a
spy or a terrorist on whom the government needs to conduct such
surveillance to protect the country from crime, espionage, or acts
of terror. But what if this scene -- extended to hundreds of hotel
suites and meeting rooms in a major coastal city -- occurred during
an international conference of world leaders hosted by the
president of the United States of America?
. . . . Insight has been told that this is exactly what happened in
1993 in Seattle during a five-day Asia-Pacific Economic
Cooperation, or APEC, conference, in which leaders of about 15
nations gathered to discuss the future of trade and security issues
involving the United States and our Pacific partners. "There were
bugs placed in over 300 locations," says a high-level source with
detailed knowledge about the extraordinary top-secret operation run
by the FBI in conjunction with intelligence personnel from the
National Security Agency, or NSA, and the Office of Naval
Intelligence, among many others.
. . . . "Just about every single room was bugged," according to the
high-level source who spoke to Insight on condition of anonymity.
"Vehicles were bugged," as were telephones and conference centers.
Even a charter-boat trip arranged by the president to Blake Island,
a 475-acre state park in the Puget Sound, was monitored by agents
with electronic-listening devices.
. . . . The top-secret bugging operation was massive and
well-coordinated. And the only reason it has come to light is
because of concerns raised by high-level sources within federal
law-enforcement and intelligence circles that the operation was
compromised by politicians -- including mid- and senior-level White
House aides -- either on behalf of or in support of President
Clinton and major donor-friends who helped him and the Democratic
National Committee, or DNC, raise money. A quid pro quo?
. . . . If the allegations of a massive, secret eavesdropping
operation and leaks of information from that project by
presidential aides prove true, then the White House will have a lot
of explaining to do. So will the DNC and people involved in the
reported clandestine plot who subsequently gained knowledge of
suspected White House leaks but chose not to launch a
. . . . The FBI was not happy with many aspects of the operation,
according to the sources -- especially so when agents discovered
the leaks. Complaints were brought within the bureau but,
apparently, got nowhere. That is, until now.
. . . . The White House and the DNC deny the charges, let alone
admit that such a secret intelligence operation was conducted
against the heads of government gathered for the trade conference.
The NSA and the National Security Council, or NSC, won't respond to
questions about such an operation or any similar operation, Insight
sources in and out of government have confirmed. Neither will the
FBI nor the Defense Department comment. The CIA and other
intelligence agencies are mum, too.
. . . . Besides the revelation of the Seattle operation, Insight's
sources say that information collected by the project's "monitors"
was shared with people outside of national-security circles and
involved proprietary data on oil and hydroelectric deals in Asia,
including Vietnam. "I was told that information was passed to
attorneys working for the DNC" who were involved directly and
indirectly with large business ventures overseas, says one of the
sources, who adds that one of the couriers was alleged to be a
mid-level White House aide.
. . . . Such startling revelations about domestic
intelligence-gathering and allegations of leaks for political
purposes certainly will become a cause célèbre for investigators
now probing campaign fund-raising abuses by the DNC and the White
House. "You get me the name of a person who will talk about this to
us," says one senior congressional investigator contacted by
Insight, and Congress will get to the bottom of it.
. . . . Insight's sources say that besides worry about the damage
caused by one of the largest eavesdropping operations mounted on
American soil in U.S. history -- it allegedly included video, audio
and telecommunications equipment -- U.S. intelligence experts also
worry about the effects potential leaks of private conversations by
heads of state and top ministers may have had on business and
political deals around the globe.
. . . . Beyond the tawdry politicizing of this alleged operation,
the very nature of such an intelligence undertaking on American
soil comes as no great surprise. The surprise is in the detailed
information about the clandestine operation that reached Insight.
"No reputable government official would discuss it" with you, an
astonished senior intelligence official said privately when asked
. . . . But clandestine snooping on a grand scale is familiar stuff
in the Washington area. It is a widely known secret that the NSA
has a system known as ECHELON by which the government can -- and
routinely does -- intercept E-mail, fax, telex and telephone
communications. Designed primarily for nonmilitary targets --
including governments, businesses and individuals -- the system
steals communications internationally, says John Pike, the director
of cyberstrategy projects at the Washington-based Federation of
. . . . "I assume that it is all being monitored with keyword
scanning," Pike says. "They throw away almost all of the stuff they
collect. But they have that watch list for names and they are
working on voice-recognition software and that's going to be the
big thing in the future." Such technology is used jointly by NSA
and its allies as a "creative" means to avoid court orders, Pike
. . . . In 1992, a year before the alleged bugging of the Seattle
conference, a group of agents for GCHQ, the British counterpart of
the NSA, blasted ECHELON. "We feel we can no longer remain silent
regarding that which we regard to be gross malpractice and
negligence within the establishment in which we operate," the
intelligence agents told the London Observer. The British agents
claimed the NSA even helped intercept communications from Amnesty
International and Christian Aid. Asked about ECHELON, the NSA says,
"We have no information to provide."
. . . . Given all this snooping, there is little wonder that a
worldwide market has developed for impenetrable encryption, which
also could curb identity theft -- stealing Social Security numbers
and credit cards. "It's the reason I can't make any money on my
World Wide Web site," Pike says. "People, for better or worse,
don't trust the Internet. What we need is strong encryption
available to everybody. Yes, it's going to cramp the style of the
folks at the Puzzle Palace [NSA], but a life more difficult at NSA
means life is easier for the rest of the planet. The benefits of
promoting global Internet commerce outweigh the harm to the NSA."
. . . . But, of course, exporting sophisticated encryption
technology is prohibited, and everything bureaucratically possible
is being done to restrict its widespread dissemination in the
United States and overseas.
. . . . Mike Godwin, an attorney with the California-based
Electronic Frontier Foundation, says the government is afraid.
"Encryption is frightening to the government because it makes
transactions hard to trace. We have the technology to shift the
balance back to the 19th century, where you could be certain
someone was not listening outside of your house. But you can't be
. . . . Indeed you can't. Apparently not even at an international
conference of world leaders hosted on American soil by the
president of the United States. Worse still, under this
administration it may even be that the electronic pockets of
America's top security agencies are not safe from gumshoe
counterspies who, for reasons of politics or money, deliver vital
information gained from snooping and otherwise to political
operatives eager to trade it for contributions from international
corporate operators or whomever is paying the most today.
. . . . It is because of such concerns that bipartisan members of
Congress -- including nervous Democrats -- publicly and privately
are stepping up their demands for an independent-council
appointment to probe campaign abuses. It seems likely that more
calls for probes soon will be heard. And questions about what the
FBI knows, as well as the Secret Service, may lead to yet more
Snoops, Sex and Videotape
By Timothy W. Maier
Intelligence sources say Clinton ordered bugging of his summit
guests and that information obtained on international deals was
provided through cutouts to enrich corporate friends of the DNC.
I t comes as no surprise to national-security specialists -- except
in the magnitude of the operation -- that the FBI and other U.S.
intelligence agencies conducted a sweeping electronic-espionage
mission in the fall of 1993 during a summit meeting of the
Asia-Pacific Economic Cooperation, or APEC, meeting in Seattle
hosted by President Clinton.
. . . . It also may come as no surprise to anyone who has been
following the fund-raising scandals that information from this
covert national-security operation -- first reported by Insight
last week -- subsequently may have been leaked to politicos at the
White House. They, in turn, are suspected of passing such
classified data to Democratic National Committee, or DNC, officials
and outside attorneys working for the Democratic Party --
information of great importance to high-stakes private business
deals with Asian countries.
. . . . But what does come as a surprise is an apparent failure by
federal law-enforcement and intelligence authorities to pursue
allegations of kickbacks to FBI agents involved in the sweeping
intelligence operation and separate allegations involving underage
boys provided as prostitutes to visiting dignitaries attending the
weeklong November conference of 15 Asia-Pacific nations.
. . . . One reason for the alleged coverup -- and that may be the
only term appropriate, according to high officials in and out of
government who claim direct and indirect knowledge of the APEC
bugging -- is that those said to have engaged in kickbacks
involving thousands of dollars include FBI agents through suppliers
with whom they worked to procure electronic audio- and
. . . . As for the allegations of juvenile prostitution, sources
who spoke to Insight on the condition they not be further
identified say the reason these "crimes" were not pursued is that a
probe would have exposed the Top Secret national-security
. . . . Put on the record, it is a different story. Official
spokesmen for federal authorities variously decline comment or say
they have no knowledge of any such enterprise. Seattle FBI
spokes-man Ray Lauer says, "I am not aware of the operation."
Secret Service spokesman James Mackin says, "We cannot provide you
with any information." National Security Council, or NSC, spokesman
P.J. Crowley says, "The White House declines comment." And other
White House and DNC spokesmen say they know nothing.
. . . . Julie Miller, a spokesman at FBI headquarters, says:
"Unfortunately, we can't comment on this. I know that's not what
you are looking for, but we can't comment. I'm sorry." When asked
whether she denies such a surveillance operation occurred, Miller
says: "No, I can't deny it. We can't comment."
. . . . Robert Bucknam, the chief of staff for FBI Director Louis
Freeh, refused to come to the phone when Insight called repeatedly.
Ultimately, Bill Carter, a senior FBI spokesman, said that while he
could not confirm or deny the existence of any national-security
operation, he is very concerned about the allegations of crimes not
being pursued involving prostitution and kickbacks.
. . . . "To be honest, I don't know what you're talking about,"
said Carter. However, after several minutes of conversation, he
said without hesitation that if any allegations of wrongdoing were
forwarded to him he personally would see that it is "forwarded to
the appropriate office.... We certainly would look into it." He
added that "we take it very seriously" and said that while it is
the policy of the FBI neither to confirm nor deny the existence of
any national-security operation, he would respond with any
available information. At press time, he had not.
. . . . Told of the reactions of these spokesmen, Insight sources
were appalled and amused. Those claiming direct knowledge say this
is why they came to Insight, and that only action by the
appropriate congressional committees and a federal grand jury can
get to the bottom of allegations involving official crimes and a
national-security operation gone awry.
. . . . It was allegations of White House leaks of classified
information to the DNC and/or its political operatives that led
Insight to the allegations of kickbacks to FBI agents in the field
and, in turn, to the information concerning alleged juvenile
. . . . Beyond the fact that such crimes may have been committed,
some of those in government posts contacted by this magazine
repeatedly raised the same hue and cry about how such a large-scale
operation as the Seattle APEC espionage caper could have remained
secret for so long with so many agencies involved.
. . . . The reason for the long silence, according to sources who
claim direct knowledge (and provided Insight with hard
documentation on aspects of the operation) is that the assignment
was presented as being for the good of the country. National
security was at stake. Some claiming direct involvement say they
are outraged and are willing to come forward and tell what they
know under oath before a grand jury or congressional committee.
Others, fearful of reprisal and career damage, will not step into
the limelight but are deeply troubled by what they did -- or what
they did not do.
. . . . Here then, told for the first time, is the story likely to
provide an outline for any federal investigation. Undoubtedly there
will be recriminations and finger-pointing, and where it leads has
yet to be determined. But to start, federal investigators will have
to secure copies of reported audio- and video-surveillance tapes
secured by the FBI while monitoring downtown Seattle hotels in
which visiting dignitaries stayed during the conclave. These tapes
were collected in "real time" by surreptitious devices placed in
private rooms of APEC officials. In one series of tapes, they show
underage boys engaging in sexcapades with men in several rooms over
a period of days.
. . . . Despite the protestations by FBI agents who uncovered this
exploitation, supervisors in the Seattle field office of the FBI --
as well as supervisors and managers at FBI headquarters in
Washington -- refused to mount a criminal investigation or support
local prosecution. Instead, according to one source, the FBI agents
"were told to forget about it" because arresting the men involved
with the children "would jeopardize the national-security mission."
. . . . Frustrations were then compounded when intelligence
officials learned about alleged political dissemination of
classified information obtained covertly from the economic
conference. According to sources with direct knowledge, and others
who were told by senior U.S. officials, the espionage data were
turned over to attorneys working closely with the DNC. Outraged
intelligence professionals had nowhere to go because this had been
a covert spy operation that in the eyes of Washington never
. . . . Intelligence sources describe the espionage operation as
collecting raw economic data on Asian businesses through the FBI;
the Customs Service; Naval Intelligence; the Air Force Office of
Special Investigations; the National Security Agency, or NSA; and
. . . . Some federal agents routinely accepted thousands of dollars
in kickbacks from technical-equipment contractors during this
operation that began about four months prior to the five-day summit
in November. The FBI agents justified the kickbacks as a means to
offset hundreds of hours of overtime that never were compensated.
In one case, an agent received a check for $16,000, according to
sources familiar with the scheme. Seattle FBI agents had been under
attack from prior cases in which a grand jury investigated similar
allegations but did not indict. According to a source close to that
probe, it had the effect of forcing everyone "to keep cleaner
books." As another intelligence source says, "I got rid of all my
. . . . The FBI agents themselves were part of a clique called the
"Footprinter's Club," which began as a social gathering among
members of other federal agencies but grew into a means by which to
share information. "They would learn how to do things off the
books," a high official tells Insight, "but that's not the real
crime here. These are good guys. They are doing what they are told
needs to be done. They're not the bad guys. They were taking a few
thousand dollars compared to the billions in contracts that were
awarded. This Seattle operation is about keeping the people at the
top in power politically."
. . . . Such "honest graft" and other shenanigans angered some of
the players involved in the espionage mission. They say they were
astonished that the Clinton administration used the result of their
spying for political purposes. In fact, these sources claim the
classified information was not leaked but deliberately provided
through a complex chain of agencies and operatives for the sole
purpose of retaining political power. Much of the information was
real-time data that went directly to the NSA via satellites, while
other confidential information was taken by FBI couriers to the
NSA. In total, 10,000 to 15,000 conversations were recorded.
. . . . Some of that information was sifted by 20 to 30 NSA
officials to and with coordination by a senior-level NSA manager
who turned over this data to a senior NSC official and two
mid-level NSC staffers. It was this screened information that then
was provided to two West Coast law firms that had worked off the
books for the DNC. The DNC was able to use that information to
create business and financial opportunities and as part of
. . . . The Clinton administration, in particular the late commerce
secretary Ron Brown, allegedly used the information to arrange
more-favorable credits and banking deals for Asian countries,
according to intelligence sources. For example, the FBI-led APEC
intelligence mission gleaned from the bugging operation that
Vietnam desired at least two 737 freighter aircraft and passenger
jets to promote tourism. An American entrepreneur had located used
jets, but that deal was queered by the Clinton administration when
it dangled a better one by offering lower interest payments for new
planes. This, in turn, ingratiated the Clinton administration to
the beneficiary countries and both they and the contractors
allegedly were given reason to support the DNC. Says a source close
to the Vietnam deal, "The Chinese got the benefits, the contracts,
and this information was not coming from Chinese intelligence. It
was American intelligence."
. . . . Could such claims be true? Where is the line between
conjecture and fact? In this odd and spooky world of intelligence
gathering, sometimes it is difficult to tell. Based on a survey of
players and documents, Insight has been able to confirm some -- but
not all -- aspects of the suspected DNC "leaks" and business
ventures previously reported. One reason is that most of the
intelligence agents involved in the spy operation had no idea where
the end product went. They all were told it was a national-security
mission and that the surveillance was to protect the 15 or more
leaders of nations attending the conference. Never mind that the
targets were rarely the leaders of the nations, but their
assistants and staffers, referred to as "secondary people," because
that's who cut the deals. If the bugs were found, there was
plausible denial: Any country could be responsible for the bugs;
and the Secret Service was known to have cameras and videotape
surrounding the conference for the protection of the president and
. . . . The operation was huge -- more than 300 locations were
bugged, including a chartered boat Clinton and other national
leaders used to visit Blake Island for a salmon feast and Indian
dance at Tillicum Village. According to intelligence sources, the
federal government privately contracted at least three security
companies to provide additional equipment. Nearly $250,000 was
spent on technical equipment alone, according to classified records
reviewed by Insight. Such equipment is a rarity in Washington state
because of severe criminal penalties imposed on those taping
conversations without a two-party consent or court order. Most of
the audio equipment was purchased from a New York City specialist.
"Normally, no one touches that stuff, but it was for the FBI, so
everyone figured it was okay," says an intelligence source with
. . . . The government paid for the sophisticated snooping devices
through a series of agencies, including Customs, the FBI Finance
Division in Fort Worth, the Justice Department, the Navy, the
Treasury Department and through sham invoices and purchase orders
supplied by hotels to purchase "special" cameras under a ruse that
hotel security needed to be brought up to federal standards. Other
payments came from personal accounts set up by FBI agents. "There
was a lot of creative billing done," says an intelligence source
familiar with the schemes.
. . . . Payments often were made in cash, leaving few paper trails
to follow. However, based on ledgers and other classified records
reviewed by this magazine, individual cash payments ranged from
$800 to $17,000. Treasury wrote some checks, but that was rare.
Sources tell Insight that most of the cash transactions were made
during the lunch hours. "They'd go out for lunch and come back with
thousands of dollars. It was quite a lunch."
. . . . In each case the FBI received "top-of-the-line" equipment.
Prices for microphones could be as little as $100 to thousands of
dollars for specialty directional mikes that fit in a salt shaker
or zoom in on target locations. The sensitive listening devices
sometimes were so tiny they could be placed inside someone's ear
with a plastic tube resembling a hearing aid. Other devices were
put into flowerpots, lamps, rental cars and hotel suites
--including one on the top floor of the Hilton where there was a
problem with a camera. Much of the equipment was wireless and
handheld. The monitoring stations usually were inside the Secret
Service perimeter where cameras and equipment already were in
place. "The Secret Service was not part of the operation but was
probably aware of it," says an intelligence source. In some cases,
monitoring stations were at naval facilities -- and much of the
information was real-time data bouncing from satellite to satellite
to the NSA. After the convention the FBI retrieved many of the
bugs, and recently some of the same equipment was spotted at a
Seattle Drug Enforcement Agency office.
. . . . Now, nearly four years after the operation, there is a
growing resentment among those who participated, as well as a
common thread of distrust. As one intelligence source puts it,
"These were good guys, doing what they thought was right in the
name of national security."
Snooping on Allies Embarrasses U.S.
By Timothy W. Maier
The Clinton camp ducks alleged bugging of Seattle summit, Insight
discovers State Department 'pimp' account and foreign embassies
express shock about FBI-led espionage caper.
B lackmail, lies and deceit may be the only fitting description of
the 1993 Seattle Asia-Pacific Economic Cooperation, or APEC, summit
where dignitaries from 17 countries are reported to have been
placed under electronic surveillance by American agents. As Insight
first reported last month, the Clinton administration is said by
intelligence and security specialists -- who admitted being
involved -- to have bugged the conclave and then provided
classified secrets to the Democratic National Committee, or DNC
(See "Sex, Spies and Videotape at Clinton's APEC Summit," Sept.
29). This in turn allegedly was used as bait to barter with
potential big-buck donors for large contributions to the Democratic
coffers, sources in and out of government
. . . . This week the story continued to develop with new twists
and turns. Former officials of the National Security Council, or
NSC, and high-level economic advisers tell Insight they remain
deeply concerned that classified information may have been leaked
for political purposes. "That would make it blackmail," says a
former senior-level Bush appointee who asked not to be identified
because of an ongoing business relationship with the Clinton
administration. "I find the story totally credible. I wouldn't put
it past this administration."
. . . . Insight also detailed in earlier reports a series of
alleged criminal activities, including the procuring of boys to
engage in sexual activities with diplomats; FBI agents accepting
thousands of dollars of kickbacks; and, the most serious offense,
the White House providing top-secret trade information to two West
Coast law firms working off the books for the DNC.
. . . . The covert mission was so large that the government
purchased about $250,000 in electronic surveillance equipment,
including Konica cameras, from at least three private suppliers,
according to classified records reviewed by Insight. American spies
then collected raw economic data on Asian businesses through agents
of the FBI, the Customs Service, Naval Intelligence, the Air Force
Office of Special Investigations, the NSC, and the National
Security Agency, or NSA, sources say.
. . . . The FBI is believed to have bugged more than 300 locations,
with electronic audio and video surveillance devices used to
monitor 10,000 to 15,000 conversations -- much of it real-time data
that was bounced from satellites to the NSA. The monitoring
stations usually were placed near a Secret Service perimeter or
Naval Intelligence facilities. And many of the targets concerned
large contracts with Vietnam, sources say.
. . . . Larry Klayman, executive director of Judicial Watch, a
private legal watchdog group suing the Commerce Department for
trade records, suggests the bugging may be related to a possible
surveillance operation on the late commerce secretary Ron Brown,
suspected of taking bribes involving Vietnam contracts. But that
alone doesn't explain how the DNC could have ended up with
. . . . Ironically, Clinton boasted that this summit was based on a
new spirit of trust in U.S. relations with Canada, Australia,
Brunei, China, Hong Kong, Indonesia, Japan, Malaysia, New Zealand,
the Philippines, Singapore, South Korea, Taiwan, Thailand, Mexico
and Papua New Guinea. Little wonder that exposure by Insight of
this covert mission has been met with outrage around the world.
. . . . "Is that what happened to our lumber deals?" asked George
Rioux, a frustrated Canadian diplomat requesting copies of the
story. Indonesian diplomat Hubudio Subardi says, "Everybody who
learns about it would be surprised to hear about it." Japanese
Embassy spokesman Tsuyoshi Yamamoto tells Insight, "Our government
has not issued any complaint," but notes Japan bitterly complained
to the State Department about another publicized incident. In 1995
NBC Nightly News reported the NSA had bugged the heads of state in
Miami at the Summit of the Americas to promote free trade. NBC news
also revealed that U.S. spies had intercepted a call made by a
Japanese emissary from a Washington hotel shortly before Clinton
was to meet Japan's prime minister in February 1994.
. . . . The New York Times reported in 1995 that the CIA had
eavesdropped on conversations in Geneva among Japanese officials
and car-company executives and then fed those reports to U.S. Trade
Representative Mickey Kantor, who had been pushing for better
access to Japan's markets for U.S. cars and parts. Kantor thus
learned Japan's bottom-line bargaining position.
. . . . Outrageous as it may be to Americans who believe in
openness and fair play, this sort of thing has been done regularly
by the Clinton team. What is new is that APEC appears to have
involved leaking of national-intelligence information for political
. . . . Many embassies of the targeted nations asked if Insight
knew who was compromised by the child-sex ring. No senior political
leader was involved --it was "secondary" people, such as assistants
to those responsible for cutting trade deals, intelligence sources
say. It still is unclear who provided the boys to the dignitaries,
but Insight has learned that the alleged sexual activities occurred
in rooms at the West Coast Vance Hotel in Seattle.
. . . . When Pete Shimondale, the general manager of the hotel, was
asked by Insight about the sexual allegations, he responded, "Oh
God. I didn't start here until 1994." He said authorities have not
been out to question him or review records of hotel guests but
declined to comment further.
. . . . The boys are believed to have been 15 to 17 years old. As
shocking as this may be, some say it's routine. A former Bush
economic adviser observes, "The sex? That's done all the time. If a
foreign diplomat wants a companion, the State Department provides
it. It doesn't matter if it's a man or woman. They have a special
fund set up for that." Another former NSC official who requested
anonymity says other countries also do it. "I was offered every
sexual favor you can imagine. I turned it down all the time. After
a while they left me alone and stopped offering me."
. . . . Government agencies alleged to be involved in this spying
responded to Insight with carefully crafted half-denials and
artfully dodged a series of questions with noncommittal answers.
Confronted with questions about whether Naval Intelligence
purchased or used electronic equipment from private consultants and
suppliers for the operation, the first response by Navy spokesman
Lt. Joe Walker was, "I don't know." But later Walker insisted, "The
Navy was in no way involved in the bugging of hotels or
restaurants. We did not purchase equipment."
. . . . The FBI, which first declined to comment, insisted after
the story broke that "we used no physical surveillance at hotels or
restaurants" and "we used no microphones" but repeatedly refused to
say whether wire tapping or wireless surveillance took place. And
the FBI says information regarding its agents taking kickbacks has
been forwarded to the Bureau's national security office for
investigation. Pressed to answer whether the FBI is denying that
the operation happened, an informed agent replied, "Listen, I don't
want to go to jail."
. . . . Told about the half-denials and vague responses, Insight's
intelligence sources say that was to be expected. "But the bottom
line," says a high official in the alleged operation, is this: "The
FBI is lying. The FBI was there. Period. They used microphones."
. . . . If true, the Clinton team crossed well over the line when
it decided to bug hotel rooms, rental cars, popular waterfront
restaurants including Salty's, and even the chartered boat that
took the conferees to Blake Island.
. . . . Sources confirm to Insight that the operation produced
real-time data that after being moved to the NSA were sifted
through by 20 to 30 NSA specialists and handled by a senior manager
at NSA. The information then was passed to a senior NSC member and
two NSC staffers. >From there it landed in the hands of at least
one San Francisco attorney and another West Coast law firm working
off the books for the DNC. Attorneys were used because they can
claim client confidentiality if ordered to reveal the nature of the
information, its origin or destination, according to sources.
. . . . The operation was approved by the "Secret Court," which
clears such national-security operations, according to intelligence
specialists. This court legally may authorize wiretapping, and all
its writs and rulings are permanently sealed.
. . . . In fact, monitoring of G-7 economic summits under prior
administrations was approved through the Secret Court, says a
former National Security Council official under Reagan, but never a
fishing expedition on this scale. "We did it through the
embassies," says the ex-NSC official. "We never bugged hotel rooms,
and no physical surveillance was ever used."
. . . . Former CIA Director R. James Woolsey claims no knowledge of
the bugging of the APEC conference and insists if it was bugged the
CIA would not have participated because it deals with a domestic
situation. "We wouldn't have anything to do with that," Woolsey
tells Insight. "The U.S. should not engage in industrial espionage.
The CIA should not be doing intelligence on behalf of an American
company that requests it. For one thing, it's a mess to figure out
what is an American company these days."
. . . . Woolsey acknowledges that the CIA collects intelligence on
dual-use technology -- businesses violating sanctions with Iraq and
foreign entities giving bribes for contracts -- operations that
save American business billions of dollars a year. The companies,
Woolsey says, are never aware of the CIA's involvement. "We
preserve a level playing field and the American company has no idea
why all of a sudden a contract is rebid," he says.
. . . . But Woolsey insists that U.S. intelligence agencies "should
not work for political parties," a situation that appears to have
existed during the Clinton administration. For example, the DNC and
CIA have been revealed in sworn testimony to have pushed White
House access for $300,000 donor Roger Tamaraz. Likewise the DNC
requested the White House to conduct security checks on alleged
Latvian organized-crime leader Grigori Loutchansky, who had been
formally invited to attend a $25,000 a plate DNC fund-raising
dinner in 1995. He was uninvited under pressure after the DNC
received classified information about Loutchansky's alleged Mafia
ties, according to the Washington Post's Bob Woodward.
. . . . Congressional investigators say that, if the Woodward and
Insight stories continue to develop, these security leaks could
turn a campaign-finance scandal into an impeachment hearing. Taylor
Lawrence, majority staff director of the Senate Select Committee on
Intelligence, says, "If the [APEC] allegations are true, we would
be very concerned and we would look at this, but we need hard
evidence." The APEC surveillance tapes might provide the smoking
gun. But at the moment investigators tell Insight they have no plan
to secure those tapes until someone comes forward to testify about
the covert Seattle mission and connects the dots. Stay tuned. It