Allen W. Dulles chaired the committee that wrote the 1949 "War Report: Office of Strategic Services". The opening paragraph of this official account of X-2 reads as follows: "Counterespionage is a distinct and independent intelligence function. It embraces not only the protection of the intelligence interests 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."
The reformers’ confidence that national technical means of collection and social science methodologies were not as susceptible to denial and deception techniques made these topics a lesser concern as well. Greater reliance on national technical means meant less dependence on human intelligence sources that could be manipulated and deceived more easily.48 Thus, Colby felt justified in forcibly retiring the CIA’s longstanding, eccentric, and “paranoid" master of counterintelligence, James Angleton, and most of his staff as well.
The end of James Angleton’s career marked a shift in the way U.S. intelligence agencies handled counterintelligence and responded to Soviet active measures. Angleton’s career in intelligence began during World War II while working in the counterintelligence branch of the Office of Strategic Services (OSS, which was the predecessor of the Central Intelligence Agency [CIA]). Angleton was one of the first Americans to suspect that the Soviets had penetrated and compromised anti-Soviet Russian émigré organizations in Europe before, during, and after World War II.
Such suspicions were later confirmed when, among other things, the Soviets revealed that the Wolnosc i Niezawislosc (WiN, the Polish anti-communist resistance army) had been a fake. During the war, Angleton served in London as an OSS liaison to British intelligence, which performed a remarkable counterintelligence feat by successfully turning every known Axis spy in England and sending false information back to Germany.
The British were less successful with Soviet spies, however. While in London, Angleton met the Soviet mole Kim Philby. Later, after a tour for the CIA in Italy, he met regularly with Philby in Washington, DC, where the British had assigned Philby in 1949 to liaise with the CIA.
Philby, who escaped capture by defecting to Moscow in 1951, was instrumental in helping the Soviets tailor the WiN lies to fit American perceptions.
Angleton’s experience with the British and Philby convinced him that the most effective strategic deception was only possible if the deceiver had reliable feedback from someone within the organization being deceived. He reasoned that the Soviets needed reliable feedback on the effects that their deception and active measures generated. In this regard, planting moles in a foreign intelligence service is analogous to what the military calls “bomb damage assessment."
Without rapid and reliable bomb damage assessment, the military can waste resources bombing the wrong targets or the same targets over and over. Similarly, without inside sources to provide “deception damage assessments," the Soviet Union could misconstrue the effects that it was creating with deception efforts and overemphasize or reinforce the wrong themes. By extension, good U.S. counterintelligence that prevented Soviet penetrations would limit the effectiveness of Soviet active measures.
Angleton had a chance to act on his belief that penetration and deception were inextricably linked when he was appointed the head of the CIA’s powerful and autonomous Counter Intelligence Staff in 1954. He thought the Soviets were using deception, disinformation, and other “active measures" to manipulate what the Western democracies believed about the Soviet Union, thus weakening the West’s unity and resolve.
More specifically, he worried that the Soviet Union was using layers of secrecy in its own government, and moles in the U.S. Government, to manipulate CIA assessments of the Soviet Union and deceive the entire U.S. intelligence apparatus.
During Angleton’s tenure, the CIA categorized Soviet active measures, including forgeries and agents of influence, as part of this counterintelligence puzzle, so his counterintelligence staff had primary responsibility for dealing with them.2 Over the next 20 years, he single-mindedly pursued the counterintelligence mission, enjoying close relationships with every director until William Colby in 1973.
Angleton’s complex theories of deception, methods of investigation, and zealous hunt for a mole in the Soviet Division of the CIA — which terminated careers and disrupted intelligence collection — alienated many CIA colleagues. The backlash was so strong that after Colby had relieved Angleton, the Agency stopped training for or analyzing strategic deception. The Directorate of Operations prevented such activity, arguing that an excessive preoccupation with deception had proven counterproductive.
KGB Major Anatoli Golitsyn defected to the United States in December 1961. He proved his bonfides by exposing Soviet spies inside Western intelligence services, but he also told the CIA that much of its intelligence data was simply disinformation concocted by the KGB. Golitsyn warned that the KGB would dangle phony defectors - double agents who would claim to expose "secrets", including false defectors intended to discredit Golitsyn himself. Golitsyn also warned that the whole Sino-Soviet split was simply a Soviet "disinformation" operation to lull the West into a false feeling of security. James Angleton, who was chief of the CIA's counterintelligence staff from 1954 to 1974, belived Golitsyn.
In early 1962 two Soviets working at the United Nations - one GRU, the other KGB - almost simultaneously contacted the Federal Bureau of Investigation (FBI) and offered to leak Soviet secrets. The FBI assigned them the codenames TOP HAT and FEDORA. Among other things, these two assets were said to have supplied intelligence deprecating Soviet strategic missile capabilities. In June 1962 an officer from the KGB's Second Chief Directorate, Yuri Ivanovich Nosenko, defected in place. "Suddenly, in the spring of 1962, the CIA was awash with penetrations of Soviet intelligence - more at one time than during its entire history," wrote journalist David C. Martin years later.
In January 1964, Nosenko unexpectedly re-contacted the CIA, and told the Americans that he had had charge of the KGB file on Lee Harvey Oswald, who had assassinated John F. Kennedy only a couple of months before. Nosenko subsequently exfiltrated to the United States in 1964, offering "proof" that Oswald had no ties to the KGB. Tennent Bagley, head of a section responsible for counter-intelligence against the Soviet intelligence services, thought CIA was unbelievably lucky to have found Nosenko. Bagley added, "the key word in that last sentence is 'unbelievably.'" Nosenko was subject to "hostile interrogation" and "solitary confinement" while in CIA custody. But counterintelligence staff chief James Angleton, who believed Golitsyn and doubted Nosenko, wanted to "play" Nosenko like a prize trout, and thought that key to elicitation was to keep the subject feeling secure. The CIA kept Yuri Nosenko locked up for several years under prison-like circumstances. Nosenko was freed in April 1969 and put on the CIA payroll as a contractor.
TOP HAT and FEDORA corroborated Nosenko's bona fides. The basic reason for judging Nosenko to be truthful about Oswald was that his story was consistent with what the FBI already believed about the JFK assassination. The FBI's accepted Fedora, TOP HAT, and Nosenko, who were all suspected by CIA of being disinformation agents predicted by Golitsyn. After the end of the Cold War, a long line of former KGB officers - including Vladimir Semichastny, who led the KGB from 1961 to 1967 - insisted that Nosenko was a blowhard, but a genuine defector.
In 1977 the FBI reviewed the matter of FEDORA - Aleksy Isidorovich Kulak - and concluded that Fedora had been a double agent for the KGB for the previous 15 years. The KGB claimed to have failed to have detected the treason of Hero of the Soviet Union Aleksey Kulak until after his death in 1983.
During the Reagan administration, interest in the topic of Soviet active measures revived and senior leaders insisted on looking at Soviet strategic deception. They argued that Soviet active measures supported strategic deception and that both were underappreciated by the Intelligence Community. Thus, the debate over active measures and what to do about them was linked to the debate about strategic deception and U.S. counterintelligence.
In the mid-1980s, the argument in favor of taking counterintelligence and strategic deception more seriously was buttressed by the discovery of Soviet moles in the Intelligence Community. It became clear that the Soviet Union had an abundance of insider perspective on how their deception and disinformation efforts were affecting perceptions within the U.S. Government. One such Soviet mole, Robert Hanssen, attended and even led the Active Measures Working Group
for a short period.
TOP HAT - Dmitri Fedorovich Polyakov - was also said by some to have been conclusively demonstrated to have been a false defector. Rotated back to Moscow to head the GRU's China section, Polyakov photographed documents tracking Beijing's split with Moscow. CIA specialists on Sino-Soviet relations drew the rich details from this Soviet source to conclude confidently that the Sino-Soviet split would persist, helping Kissinger and Nixon forge their 1972 opening to China.
Despite détente and the intelligence reforms of the mid-1970s, some people remained convinced of the need to counter Soviet disinformation and deception. This view was not popular in the intelligence bureaucracy and even less so in academia, but in Congress it found fertile ground in a number of offices. Several congressional staff and investigators on the Senate Intelligence Committee and House Permanent Select Committee on Intelligence, notably Herbert Romerstein, Angelo Codevilla, and Kenneth deGraffenried, were interested in studying and exposing Soviet deception and active measures.
A series of Americans in trusted intelligence positions were arrested for spying. So many traitors were caught in 1985 that it was referred to in the media as “the year of the spy." Perhaps the most shocking case was the FBI’s arrest of John Walker, a Navy chief warrant officer. The Walker spy ring was run by a low-ranking Sailor, operated undetected for 18 years, and gave away an astounding array of secrets that did incalculable damage to U.S. interests. The case highlighted how damaging spies could be and also how poor U.S. counterintelligence was at catching them, but news inside the U.S. clandestine services was even worse. “In 1985 and 1986," it was revealed, “the United States lost every covert intelligence source it had on Soviet territory." Soviet moles in the U.S. intelligence services seemed the most likely explanation for this unprecedented intelligence disaster.
Thomas Powers reports that TOP HAT - Polyakov - was exposed by Rick Ames [others say Robert Hanssen] in 1985, and subsquently executed. [Source] Some say that Polyakov was a double agent who had metamorphosed into a triple agent. In January 1990 Pravda, the Soviet Communist daily, reported that Donald F., "one of the most important" spies of recent years, had been captured on March 15, 1988, executed for espionage. Donald F. was senior Soviet Army officer, Lieut. Gen. Dmitri Fedorovich Polyakov, who last served as a lieutenant general in the Soviet Army Air Defense Command. Of all the secret agents the US recruited during the cold war, CIA director James Woolsey said, "Polyakov was the jewel in the crown."
In April 1985 CIA officer Aldrich Ames walked in to the Soviet Embassy and volunteered to go on the KGB payroll. Viktor Cherkashin was the KGB's man handling Ames. Soon thereafter, a rapid succession of losses in American human intelligence assets had to be explained. Vitaliy Yurchenko, a senior Soviet intelligence official, defected to the West on 01 August 1985. Like Nosenko, Yurchenko came with the message that there was no big mole in the CIA. Yurchenko provided information to the CIA on Edward Lee Howard, a CIA officer who worked for the KGB. Howard fled the United States after he was exposed. Yurchenko also furnished leads pointing directly to Ronald W. Pelton. In both cases Yurchenko only told US intelligence Soviet intelligence presumed it already knew. Aldrich ("Rick") Ames, as the relevant CIA counterintelligence officer, was assigned to debrief Yurchenko. According to Cherkashin, Yurchenko did not know that Ames was a KGB asset.
On 01 October 1985, FBI agent Robert Hanssen approached Cherkashin, and offered to work for the KGB. On 02 November 1985, three months after his arrival in America, Yurchenko redefected. Not only wasn't Yurchenko shot, but he wasn't even fired. Yurchenko returned home to a hero's welcome. It seemed reasonable to some to conclude that Yurchenko defected to spread disinformation as a way of distracting attention from Ames and Hanssen.
Cherkashin was awarded the Order of Lenin for his work in Washington, and returned to Moscow in 1987. Ames was arrested by the FBI in February 1994. The FBI arrested Robert Philip Hanssen on 18 February 2001, on charges of committing espionage.
The FBI's penetration efforts in the late 1970s and 1980s suffered from a lack of cooperation with the CIA and from inattention on the part of senior management. In 1985 and 1986, the CIA and FBI lost nearly every significant human asset then operating against the Soviet Union. These losses were unprecedented in scope, quantity, significance, and timing, yet the FBI undertook no sustained effort to determine their cause. Senior management was almost entirely unaware of the scope and significance of these losses, and throughout the 1980s the FBI failed to work cooperatively with the CIA to resolve the cause of these losses or to thoroughly investigate whether an FBI mole could be responsible for these setbacks. Hanssen compromised many of the assets and operations lost during the mid-1980s.
The early 1990s saw significant improvement in FBI/CIA cooperation, with the two agencies undertaking a joint investigation concerning the cause of the 1985-86 asset losses. The FBI drastically increased the number of squads and personnel devoted to espionage investigations, and the FBI's senior management took a much more active role in supervising penetration investigations. The energized penetration efforts led to successful espionage prosecutions of CIA officers Aldrich Ames and Harold Nicholson, FBI Special Agent Earl Pitts, and NSA detailee David Boone. While the FBI worked closely with the CIA's Special Investigations Unit (SIU) on most of these cases, the SIU was not an equal partner.