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August 28, 1981
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Approved For Rele `PRESS STATEMENT RE ADDITIONAL FI'L It,GS WITH THE OFFICE OF GOVERNMENT ETHICS Mr. Casey's accountant and his investment advisor have reviewed, at his request, his trust, custodial and other personal records for the last ten years. This review brought to light additional security holdings, emanating from pre-1970 transactions. Most have little or novalue- Only one-produces any income. In addition, this review 3 revealed bank loans on which fir.. Casey and co-signers are contingently obligated. Fir. Casey also reported an interest, in a patent anda Computer- which is related to a business previously disclosed- STAT -Approved For Release 2005/11/28 : CIA-RDP91-0090'1R000400150001-0 STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R000400 LOUISVILLE COURIER-JOURNAL (KY) 28 August 1981 Co ection s s. a lot (a'- .CIA me U. SPY AGENCIES are supposed to be. able to keep secrets, but maybe the Central Intelligence Agency has gone. too far. Evidently, some who work at- the agency haven't--been told -.thaf~- the- Libyan regime' of Colonel Khadafy'is considered by the U.~~ S~~..--~ov~ernment= to be a band of troublemarer' tt ^terror- ists, not friends. That`s one explanation for reports that former CIA agents, and at least two who were then still, on the "Com- pany" payroll, have shipped explosives to Libya and trained terrorists there: The more likely explanation, however, is that CIA- management, because-.':of rapid turnover at the -top in recent years, has gotten dangerously- lax. Whatever- the reasons, the results have been shocking - and. disgraceful.., As The :New York Times reported this week, -active- and former. CIA., agents were even able to lure a; 'group of Green Berets, members' of the U: S.:- Army's elite Special Forces, ? to Libya- to participate in the ;terrorist training program. One sergeant. -told.. howv, he checked first with Army-counterintel-- 1 ligence - and was informed that- the mission was "legal and aboveboard." Neither the CIA nor the Army has -yet explained publicly how the mission came to be given a clean bill of health. But the sergeant, after arriving in Tripoli, meeting with the. head of :-Libya's.' spy agency and being shown an explosives factory,. got cold feet and returned to America. "I know the agency (CIA), does bi ?zarre things," he later-explained, "but working for Libyan -intelligence- was: too much." CIA Director William Casey has a ..bi job on his hands- He's got to find out what went wrong, and why. -And it would help, obviously, if he and con- gressional -oversight committees- could end the agency's reputation for doing "bizarre things." That reputation makes it. dangerously : easy for -.ex- agents, and others who claim "connec- tions"' with the CIA, -to con -honest folks -with unusual skills such as Green Berets. - into thinking they're serving their country, while- they're-ac: J tually abetting international thug&:_,,.:;` Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 20,~ /,1,1I423T(9 -RDP91-00901 R000400150001-0 C1",,' 114)=rva> Of Casey 'S t"o,rn-et? clients named i Associated Press VA.SH1NGTt)N CA Director rWilliam J. Ca- represented the Korean and1ndonesian gov- errnrnents as a lawyer before joining the Reagan A.dniinistration,,acxording to??information,filed `i'hursda)r with the Secretary of the Senate. :er 13airy Goldwater (R-.Ariz.) chairman of ; 63 Senate intelligence. committee:submitteda iie,toi ii7 clients arzd s-raid,it s;upiplemented a list:- subinitted o} aeyr at hlszconfirniation hearing; in :Januarys_f oldwater=.sa1dl -"the? names'were? supplied byj Rogers. &-Wel1s,R theNew,-York law, thrrtx;;with whirls.;.Ca sey`,was associated", from 19i4to 1981 he Intelligence Committee cortducted`a pre lr.minarvn;inquiryr;,into;"Casey's past. financial dealt ;s last'montti after l.hte,ClA chief`s hand-' pigk deputIY,;_- lax 1luget,^. resigned while deny- in of, ,of former=business iassociates thalihnkta~teu in ianjproiaf?r:i~racticess r Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R0001 ART-NIAPPEABE THE WASHINGTON POST 28 August 1981 STAT fiA's Cas~j )per 14)0 Clients, enate List Shows By Charles I1. Babcock CIA Director William J. Casey-'has filed a new "list with the Senate InteltigencE;Coramittee of more than 100 legal clients, including large cor iporations such as Pan Am, Kennecott Copper and; 'Merrill Lynch and the governments of Indonesia And South Korea Sen. Barry Goldwater (R-Ariz.), chairman of. he committee, sent the new listing to the secre tary of..the.Senate yesterday, noting that it sup- platnented what Casey had supplied, the commit' tee- at his -coiafirniation hearing 'early this year... The earlier submission covered only the 'last .,two years t _ -. Casey's former-law firm, ? Itcigers'"& ?: Wells- Of" Now York, told the committee the list represented' dients for which. Casey had billable time or oth-. erwiise received credit" from 1976 to 1981. Casey came under intense criticism in Congress last month after Max Hugel, his choice to run the CIA's clandestine- arm, was forced to resign be-`. cause of allegations of financial wrongdoing while ,.a,. businessman. Goldwater and' other senators --:called for Casey's resignation because of errors in.: judgment but, after a.heaxing July,29, agreed he was fit to sere.. A C.IA spokesman declined o comment'on the new list:yesterday. The committee staff is' check iiig Casey's records ? while . preparing'- a report` on' the.llugel affair that is expected to. be completed _sao softer the Senate reconvenes in two weeks.." 'Ar Justice Departuzent`afficial said yesterday that Rogers &.Welis was a registered foreign agent for Indonesia in-1977 and 1J78,.. trying to obtain "U.S. ? foreign'. tax. credits for. 'Indonesian income taxes paid by U.S. oil companies.'. Casey's r'ew list - of clients also included Pertaminay; the Indonesian '-.national oil company. It could` not be learned immediately whether ::Casey had registered separately as a foreign agent` ii.r whether he would have been required to do so. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R00040 a., L ivc:,,v !t :ttt 'i1.t a ,a. LE ',PP-E 28 AUGUST 1981 i aseyA e sList.of a in s -f --an ei on In te 117~9enl C10 WASHING T oN, Aug. 27-- Willians J. ' Casey, Director of Central IrrteIligence;a his provided information to a Senate ccrimittee Showing that he did not dis close Morethann70law clients in a finan_ cial statement filed at Senate confirma-..t lion proceedings earlier this year. . - In a statement submitted Jan:?27 to the Senate Select. Committee on Inteili- 1/y.EDWARDT. POUND S?pedal to Me Nero York Tt *, fence, Mr. Casey; who practiced law in -a1anhattan, listed 43 clients. However, he recently notified the committee that he had "billable time or otherwise received credit" from his law fir-M, Rogers & Wells; for 117 clients in the period 197U1, according to.a docu- ment filed in the Senate today by the panel. 1. A committee spokesman said today that the additional information was pro. vided by Mr.. Casey &t the request of the 'Committee. {he supplemental list of clients shows that Mr. Casey has done work for tiro foreign governments, those of South Korea and Indonesia, He also repre- 4=e,r.ted Pe,-1amisa, the Indonesian state oil company.. I irm Registsered as Foreign A3ent Records at the Justice Department show that Rogers & Wells registered as an agent for Indonesia for the period of July .1977 through July 1973. Mr. Casey did not register, and he declined through en intelligence agency spokesman to an- swer any questions about the supple- mental list that he had submitted to the co, mittee, "Mr Casey Is continuing to respond to the requests of the committee" and be- lieves it would be "inappropriate? to comment, said Dale L. Peterson, the agency spokesman.... ?'he Foreign Agents Registration Act of 1138 requires the registration of any- one who does business or public rela.- tions on behalf of a foreign government. Lawyers engaged in legal work for a for- eeign country, and not political activity or lobbying, are not required to register, according,to lawyers familiar with the art. '1 e nature of Mr. Casey's work for South Koreea, Indonesia and Pertamina A committee spokesmann declined to say whether the panel had sought addi- tional information from Mr. Casey on hi s work for the foei it rgnnerests. Headed Export-Import Bank port-Import dank from 1974 to 1976. In that period, more tran $54 million in United States-guaranteed loans were granted by the bank to help finance a na- ttonwide statellite communications sys- tem in Indonesia. The additional filing by Mr. Casey alsoshowed that he had performed work for two concerns that have been linked in the past to organized crime figures. T he companies are - Caesars World, which operates casinos, and SCA Serv- i ces Inc., a waste disposal concern. Spencer Davis, a spokesman for th e intelliigence committee, said today that in January Mr. Casey gave the panel a Iist of clients for the previous two years. Mr. Davis said that at the time the panel asked Mr. Casey for a five-year list and[ recently renewed its request in thowake of the controversy over the director's fi- nanees. According to Mr. Davis, Mr. Casey explained recently that he filed a two- year list of clients with the committee last January because he had submitted the same list to the Federal Office of Government Ethics. Mr. Casey said that the ethics office had asked for a two- year list and that he-had inadvertently given the same list to the committee, hl.r. Davis said. 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The following article is based on reportin,/by Philip Taubman and Jeff Gerth oc and was written Mr. Taubman. - Fo Special toTSeNowYnit7lmey`.`. tr4 HONOLULU, Aug. 24,.- Four years said, -wasthe lack of any Federai-Ia9 I ago, 10 men trained by the Army Special prohibiting the training of terrorists out-called Mr ? t.~mili. Forces to be Amer'ica's elite commands side the United States by American citi- -t Bragg to counterintelligence offi- trcops went to work for the Government erg; , vials at t Fort F report on the con verration. "I thought it might be some- of Libya, training terrorists thin e rive be a know ma b , y s g su Slow toAccept Responsibility re y According? to, participants ;in the foreign power trying-to lure us into operation, and Federal -lnvesti?ators 'I7ie Army and the intelligence: agen something, he said w o have since tried to reconstruct tile, c y investigator:; said, lave been slow to Talked Ml Night, He Say events, the men went to, Libya with the accept responsibility for the activity of tice Department morning, Mr. Thompson said.: Ni-ae were, retired. members of too Started its investigation,. ended incon- The next day, Mr. Loo.:niscalled Special r orces, better known as Green icfusively, according to I *.fense Depart- age this time to arrranae a meeting Berets. The :10th, who recruited the nexttofficials. with Mr. Thompson and the men he was othersJ'or the mission, wag a master ser_ ' Lieut. Col. Harold Isaacson, a spoke recruiting. They picked the Sheraton _veant in the Green Berets and was on ac- .man for the Special Forces, with head- Motor Inn in Fayetteville.T. e time wash tive du 13e had been recruited b y^^cf?sf rata.'IntelItgnc Committee, and r eve a lot of f lends and cot tact over here. Could you pare with- us your. thoughts about irector William Casey-and some of Ube problems hies hadat.the CIA, and also the business of Max.Hugel; the deputy. director who wound up almost running that ;: r ; say ,,- i[t F agency then quit" A_ Well, the deputy director of`operitions `the feltdw we refer to as DIX), is second only in importance to the director himself :It's a,-very sensitive 'position.' one. where the fellows who'are below the?'DDO-must have good. communication and complete- trust and confi-_ dence. Max Hugel on his own was .a successful busi nessman but he had no intelligence experience- The reason Casey wanted him, according to the testimony, was to use his background and connections as a busi- nessrnan, international busin ssman, so we can involve our--business--people--in-our intelligence gathering. Whatever that means Much of the campaign -'the campaign' against- Hugel - did not come- from the Senate nor did it come from the House.IL'must-have come from the agency. Somebody-must'havedone some bird-dogging and re- search, and looking around- snooping around, into files, because I don't havethe time and the inclination,.. nor do other committee. members, to check-"out on this fel- ` low. We feel if he's honest: and he "can keep secrets and if that's the fellow Casey-wants, then so he it. But then little things kept'sprouting up. I think these little things were leaked" to il:c:-press by some-of the-fellows. in the ..-~t:.emu: ~s..:wc a-.z:v.r.~, -:.:r.-F`-~-c+Y?ati~ - No r, Casey ; nomination was. approved because-we thought with?Casey,.being, as close as he is to the presi- dent;:?-it would be-a plus for the intelligence community. Thestories against Casey;: brought about by so-called exposes in the Washington Post and other papers, for the most part were- minor;: inconsequential,, and nitty. Now, for example, as-a lawyer Casey, must. have ha died hundreds upon hundreds of client, ; and he is-sup- posed t6 report as part,.of,his disclosure; the names, occupations and the nature, of the case of any clienN that-paidhim more than $500. So he h?d to go through J a. computer-printout.,-He- missed one, one-that had noth iri'to do with his integrity, just something it missed: But it hit the front pales. ' The articles suggested that somethin ; was being hid- den.: Secondly, he had a client whp- was friendly with Mr: So-and-so who had connections wit i the syndicate-i the eouation bein ; - therefore Casey was close to the i syndicate. Idly. God! If you use that kind of argument,, you can condemn me for anything you want_ I think in this case, the press people responsible went a bit overboard. I suppose.it's- part ,of reporting, but,: well.- - -----2 -' - 42' Sen. 'Barry Goldwatersaid Casey should quit;T though. Remember? A:.. Yes. But`afterwards he realized he was a- bit premature and should nave Waired.?Lntileverytl7jng came jn .i. EX CER _[ ED STAT Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 STAT Approved For Release 2005/11/28 : CIA-RDP91-009011R000400150001-0 `: D THE SPOTLIGHT 24 August 1981 'rei n afents no w have, dqy-to-day control io a e, and covert-artion /^_~~vp fir' o e -ati?/nsa' -.aExcyrlsI To 9Plfr1.)Girr.' A.-brazen attempt by influential "Israel-firsters" in the policy echelons of the, Reagan administration to extend their control to the day-to-day es- pionage and covert-action operations of the CIA was the hidden source of the controversy and scandals that shook the U.S. intelligence establishment this summer. The- dttal- loyalist,, whose domination over the federal executive's high planning and strategy-rnaking resoui'cc is now Just about total, have long meri con-of o the I t fi l h ' dd e e on 315 }Jo wanted to gra[. a Hi MU in t worldwide clandestine services. They want. thin control, not just for them Arabs Yet The SPOTLiGHT's best-inform- selves, but on behalf of the Mossad, -;chi brought to power Francois Mitter-'ed sources, several of them intelligence Israel's terroristic secret police. rand, the socialist communist candidate! officials with decides of experience, An exceptionally' well informed and I who had.. the. personal support of Israeli concurred in the view that gaining a responsible U.S. intelligence source --a Prime Minister Mienacherri Begin,. a bit- lame measure. of control over the "in- bri}}lint young attorney who quit a key ter foe-of former President Valery Gis-, nut" of America', global intelligence rational securit rr only a :-north ~t o y p Y card D Estaino. network was a prit e oal of the Israeli p-otes: the C1 ''' r -)L' niCr Olli i+ACSSAQAESlSTED govcrnrnerit and c1 its Inner.circle of ils whose first to}alty, is to lsrat,!--said But in ocher nations American CIS. the high-handed Intrusion of Yfos xd a ents and supporcvrs in Washington. station chiefs have resisted--and-, at I These experienced sources were inter agents into some of, the- most sensitive times- - bitterly protested-the brash viewed under a p edge of strictly pro enclaves of American statecraft has demands by. Mossad agents who expect- tected anonymity in the course of the ~rven ri se, ,for more than 'a 'year, to ed U.S. -intelligence support for their special inquiry-nttw 2'/z months long- growing concern, dissension and inter-! violent intrigues against'`the local devoted by.-The Si'OTLIGHT's investi-I necine conflict in the inner circles of government. f gative team to the crisis in American in- Washington's intelligence and security In Spain, Britain, Argentina and Aus_, - _, ; ! telligence caused by the unprecedented ! establishment. ' " ' ' r _ - - - trig, where the Mossad's saboteurs and ! infiltration of the Mossad_ The sources The resentment and. friction are event destabilization experts are hard at work assessed the situation, with visible con- more acute among?Arrierica.'s overseas against national leaders who have drawn tern.d against espionage and covert action stations:;In the. ire of Premier. Begin, senior U.S. , as extremely dangerous and France, the CIA contingent, command "unconstitutional and unlawful. "One clandestine--services officers have refus-, said it is `.`simply unbelievable .. there ed by Israel-firster--Aar n Meyer tacitl Rag1f av Fr~l-o el st2b' PM?tR 'ftb' :O?(i1 00r"59~ -1P3 it in our history, or, collaborated in the M it men. . - so far as I know in the history of any In'Spain, 'according to this source - who has had access to command-level intelligence memoranda before he quit and decided to talk to The SPOT- LIGHT's investigative team in strict coiifid nce-the three ranking officials of the CIA station have offered to resign rather than collaborate with the Mossad in replacing the legally elected govern- ; t with a regime "less friendly to the of'terror and disinformation that ousted ';~ the pro-American.. Giscard, government. other nation ? - STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R00040015 RADIO ICI REPORTSI INC*.m Issues & Answers WJLA TV ABC Net fork August 23, 1981 12:00 Noon Secretary of State Alexander Haig Washington, DC SANDER VANOCUR: Our guest, Alexander Haig, Secretary of State, who met with President Reagan in California thi past week to dealt with crises all over the world, with the inc easing militancy of Libya's President Qaddafi, with the continue; tur-, moil between the Israel is and the Arabs in the NiddIe East, and with the constant threat of a riuc:l ear war with the Soviet Union . Secretary of State Hai g w i I I be interviewed by i i p l o-. mat i c correspondent E3arr i e Dunsmore. And I'm Sander Vano::ur, ABC News chief diplomatic correspondent. Haig. VANOCUR: Our guest is Secretary of State Alexander Mr. Secretary, you were once Chief of Staff at the White House,. Had you been Chief of Staff at the White House last week, would you have gone and telephoned President R,:agan and told hirn about the engagement of.f the Libyan coast? SECRETARY OF STATE ALEXANDER HA IG : Wel l , it's hard to say. I think each situation has its own unique factors;, and no one is the same as before. I think, in this instance? Ed Meese was exactly right. I spoke to Ed very briefly after we first learned of the incident. And I think we both concluded that until we knew more, it would not be worthwhile to notify the President. And I think Ed did so before the issue became a matter of public knowledge, and when we had the full facts before us -- that is, both Cap Weinberger and myself and 131111 Casey. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 4701 WLLARD AVENUE, CHEW CHASE, MARYLAND 20015 656-4068 T Approved For Release 200510M I AEI F~tPP[PrRRR901R00040015 22 August 1981 THE. DIRECTOR o?:the CIA either has a aaoa_memory or moremoney:tnan tie-can unt o c b Wil . whos co ~ ;; oth liaaz . Ca y . , . e.. y c aree La the :CIA has' a1reaciy.taken. some. ' unfo tunate ,.turns, hasdi covered:he failed 4 to- acc}uainfAhe?Governmerit Ethics Office I` Vwi ssetstotalrngmoretl aguarterofa ::. i4iase hadlfiefrom the>w~'or Tanaw rememberingh~s"assetsfifi h Eth- ; is Governmen Act--,a f11978=:requir s 'more-than-$I,OOO ThetTiihes discovered that'd Casey, had bmittec l0uh'olding s. ry Wa ...Y~. ....vuuuai.c.u..d ationwb?-fet eraF jud ba xMr 'Cproinised it would follourup on points. ti 't Ca hadui~t#f eeasuffi`ciea#lvcarefulwitl ,, nee4 clarificatioin'~New.oolnts:keen ' r "- + ed $1 `5i?'d t ibalwefarOusedl qom= -^ ' ~0N? mueSi;t~r~u~.a.~aiesX r~nttua c.{ariiu~aurr nt8a :s#txt f Cf, lia6n investors: 'iyvrcan d"Dina even before-its'staff had' com-- %~rt tte an lnte}ltgeace whi'el did~a rather `tistrt7 g sense of :public respo~ sibtllty.~Mr '~ .S?tgzfr?maY~~.doesn't fitthat descnption ;~ - - ._4 a r. ..~. ..- ........ ....,...a.,.... ......aqua. a~ ? 4 ~-.~ -,':'; kF,L+.? i ~ ..: ..i. ~',' -r. for his C1 pos;tro shortlcibetheresponsibility of aperson.with Approved For Release 2005/11/28 : CIA7.RDP91-00901 R000400150001-0 ,uut`. ICLE A,~.Z-AxEA pproved For Release 2005/11/28 : CIA-RDP91-00901R0004001. h 01-n 0~1 ?kGS '41 01 `2 Ai i - STAT Show and Tell: When CIA Di rector William J. Casey sent 20 car= tons of documents on his past busi ness dealings over to the Senate in telligence Committee, it made an impressive show of full disclosure. flue it turned out that the mountain of evidence was a veritable molehill: One box of material, 19 boxes of copies. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R000400150 1iou3`?'G?a CH G?ilc:L"~ (TX) 21 Au-lust; 19131 Now I;'or an organisation that'-deals 'irk' Eisenhower in 1956 created a press secrecy, the Central Intelligence Ag= ` dential advisory board "to further the ency spends a lots f time-in~the lime availability of intelligence. of the high- Ii.ght- Entirely too;much time. est order: President Kennedy waited Early lr July,:CIA.Director William until after the 1961 Bay of Pigs failure. J. Caseysaid in an.agencyne vsletter to appoint: such: a- board:, Presidents that `.`the clifficalties o'f the "past;, are 'Johnson Nixon and Ford named advi-i behind us" and;that;-henceforth;.-.the .- sory boards;=but President Carter did C I:, iguisbedforrilerdiplomahc,military; and inte? lll$ecrce pfficlais ' ,. - ` ~ ~~ yReceri ly i k a x C Hale Foundation',a, pro-mtelIigence airizatit5n;r.1ubhshd a -u f study extopirg ~boai'd' ;teeos~ and; s e the- ma s rgutgts reyivat According to SeCe esttrx b a ' c y I1am J Ca sey'`t' - current LTA chter, -t fi"6ig~ reaps in:?U S tent..-c,. - j colIectiartaai&tses'zs I1eiI fiorri..tz`re fhi_nking ot,such board . rnembnrs"'a~ r Edwin II-:' Land thel?olaioid camera v iza d r Tai dWilliam 0 Baker the great Bell Laor.atones j Tele2hon, e researcher } they board inseveral, ; header 4 `"b?e'xaie study says .. It was a pane)., ay dlfhattPrCMsedthefantastrcconcept of - 1-15 et o ? sful'rU spy FPIane ' " even i. Q Bence advisory board as. esiablisliec,r a, iIt-warsFa~l97~ board that Brought abouCa cb g in 4 _? C A-anaT . r Ysis'7?roEedares which m 'turn Produced a_~ E k and somber~estunate of the Soviet "'' ri,2dyd~ronounced ~change,' ,~, c -t r~,.cu~cza ?oursid~ .xh ~~ end xuifil a a ~, rs:. o will;; 7 , 6 nafnAr A moropol}r ors;truth and . ... ___... .r_.-,. ..a -~ Approve or f11 0901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400jQppa?.8 ARTlCL AT''EAWI~D THE WASHINGTON POST ON 12 August 1981 X d 1T.C~~........... emocratic Special Counsel-Quits Committee Investigation of Casey The Democratic special counsel of tlbtt, notified him that the firm had i the Senate Intelligence Committee done extensive legal work for Broth- i investigating CIA Director. William er International Corp. and its former J. Casey has resigned, citing poten- president, Max Hugel. tial conflicts. of interest, relating to Hugel, a Casey protege during the his New'York law firm and matters, 1980 presidential campaign, was, ap- under investigation by the commit pointed chief of the CIA clandestine' tee., service in. May and -, was forced to~ :'',Bernhardt K. Wruble, 39; wasap- resign .last month following allega pointed July 3t as minority counsel- tions of improper past business prac- to :assist- Fred D. Thompson,:: counsel tices,. which he, denied fog the Republican ? majority..Com Casey's" judgment in; appointing' mittee staff lawyer Peter M. Sullivan Hugel, the hurried background in- has . taken W ruble's place. vestigation that cleared Hugel and A. spokesman for the committee Casey's own past involvement in said that Wruble withdrew from the controversial business ventures all investigation after., a member of his .._ are under review by the committee law firm, Simpson, Thatcher & Bar- staff. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R0004001 ARTICLE APb..A p Ob1 PAGE /42 THE BOSi'sii JL,?8E 11 W:Just 19,31 - CIA chiefs plight The CIA certainly needs. lead" r, ship.: but leadership., history records, can only derive its authoci---- ty from the assent. of.those ?led. Ifs: by ,.the appointment-and:-resigaa" tion?_ of. Hugel, Casey, hhas", already lost the-confidence of the CIA staff, then Sen,-.Goldwater.is-.absoliitely--.correct.-that Casey should resign...ti His effort to-lead a resentful intelli-, Bence corps cannot endure under such circumstances. Whether Casey's business prac ~, tices are or are not free of fault-Is. = beside the point: GERALD E= MILLER Retired CIA C)ffiger,.;; Wes'port Point Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 -7 u- pproved For Release 2005/11/28: CIA Fq 71-0p 9p1 The Editor's Page 11 the Luck o Out? BY Marvin Stone 0460150 Just four years ago, people were saying what horse-trading have won him nearly everything a lucky President Jimmy Carter had been-:so he asked of Congress, including his latest barn- far. Now, the theme is what a lucky President burner victory on the three-year tax slash. Ronald Reagan. has been-and "so far" must But it will be a while before we know if he necessarily be added to that theme, too. asked for the right things. What if the benefits Reagan has not burdened himself with a Bay of painful cuts in spending are completely off- of Pigs fiasco, as John Kennedy did in his early months, nor did he inherit a nasty war in Viet- revenue losses fromtstax-rateereductio _by the and nam, as was Richard Nixon's bad luck. That's thus inflation takes off again? om u plain good fortune for this President. Only the coFt- But that is not all. The rate of inflation has ers are saying, and what computers say depends dropped substantially. International oil prices ori.the assumptions that are punched in. A are not all in how have declined. Production. totals had risen for tiontheecountry must orocan susttainh der the months before a recent slippage. The dollar has short run iii order to achieve eventual econom- gained value abroad. Unemployment has is health. Soon people will be feeling the cuts stayed within bounds. Reagan properly hesi- in food stamps, school lunches, medical care tates to claim credit for all these developments and parts of Social Security. Along with exci- because in large measure they derive from in- sion of waste there will be some, suffering. herited circumstances. Still, they add to the The high interest rates that Reagan defended President's stature. at the Ottawa summit meetin Headlines involving Hugel and Casey at the g get a major share -- asey a of credit for holding down inflation. But Ger- CIA stir memories of Carter's ain over Bert many's Chancellor Schmidt, who went home Lance. But this President so far has an led such muttering, is not the only one worried by them. family tempests wisely. And the new President Federal Reserve Chairman Paul Volcker, who was doubly blessed-or doubly wise -to find a presides over our tight-money policy, has had jurist as sound as .Sandra O'Connor for the absorb a lot of flack from congressmen upset opening accorded him on the Supreme Court. about what is ha et She was the woman appointee he needed. happening to the fund-starved auto and building industries. Ingenuity and If some of these events were luck as in a roll stamina are going to be required for a long time of the dice, it's well to observe that what lies h on of killing him. 1e5? owe really have things under control? Those same qualities of fortitude and happy. We all want the President's luck to hold, for optimism have added up to a talent for getting that bodes well for the nation. But it is dear his way. Those acid an unexpected aptitude for also that Reagan's big tests are still Approved For Release 2005/11/28: CIA-RDP91-00901R0004001500811 c -8me. ahead for Ronald Reagan will require a great It may be~ years' bef we t e monetary front. deal more than that. Fortunately, he has more to relax the drive foroaesyn synthetic-fuel ca acity to offer. He hits displayed the kind of luck and play down the need for oil conservation. recognized through . history: as a Prime attribute Much the same is true in the rush to throw off of a successful public man. The ancients environmental regulations. thought that it was conferred on individuals by There remain also the problems of coping the gods, and they spoke of being "born under with the rest of the world. When the give-and- a lucky star." In fact, his is a rare combination take with our allies proceeds beyond smiles and of personal qualities, which-foi? one thing-' communiques, can Reagan still make things go? enabled the President to rebound with aplomb And what of future relations with our adversar- from a bullet wound that'came within an inch ' I T% U-81. II'''iS it ':rQIiLD c PAGE Z Approved For Relea 200 ? C 1 R000 10 August 1981 Washington ~hu'@ ISTAT Why White House Went to Bat for Casey ... Fidel Castro's Corner-Up ... Americans Now Targets of adhati Hit Men? One reason that the White House went to bat for William Casey, the embattled CIA director, was the Pres- ident's feeling that if Casey had not been defended vigorously it would have been an open invitation for ad- ministration critics to try to destroy other controversial officials. Cover-up, Cuban style? Fidel Castro's explanation for a dengue-fever epi- demic that has stricken more . than 250,000 Cubans and killed more than 100 is bacteriological warfare by the CIA. But U.S. health officials say the i particular variety of fever is native to Africa, .not the Caribbean, and are . convinced it was% introduced into Cuba by _Castro's troops returning from Angola and Ethiopia. Will Senator Goldwater's criticism of CIA chief Casey sour the long friend- ship between the Arizona lawmaker and Reagan? White House aides in- sist not, calling Goldwater's action just a momentary lapse of judgment. U.S. officials fear that former CIA agents working for Libya's Muammar Qadhafi are getting bolder inside this country. Until recently, assassins had been dispatched to kill Qadhafi's Lib- yan opponents here, but now hit men are believed to be after Americans getting in the way of the Libyan strong man. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 STA T1 1'.R c, u.-,' R Approved For Release 200 &t'1I 8 CIA RDP91-00901R0004 0150001-0 10 August 1 ; 1 ,Nothing that as apeased a'oout :J7iiliaM-'X7-.caseg's wiiivolvement ixz business or hia'relations'with clients as = a : lawyer i wry new. -Anyone wao remembers { his chairman of the Securities:& Exchange .Commission in 1971 almady Imows about his. 'problems.witirMultiponics:Inc. and other companies m which e-invest or was involved. At the tnno~ysuss ? NESS WEEK (Mar. 4,' 1971) editorialized, that someone with that background should not serve as chairman of the agency that was supposed to police Wall Street- But Casey was confirmed and performed far better than we or anyone else expected. He was a good chairman of the. SEC and an effective watchdog of the exchanges and the securities industry. His investments and stock dealings were relevant to his service on the sEC. It is hard to see how they could have ariy bearing. on his qualifications to be director of the-:Central - Intelligence Agency., But if any senators had.tho'Ught they did, _the'time to bring the subject up was during. Casey's confirmation., hearings.: Something else had-'to, be involved in the sudden reopening of the ,:;.question by' theSenate Intelligence Committee. It is one: thing to put a political< candidate- through his paces before ;confirming~' him for = a':' st. i it - is ::. iegulat.orT Po :something altogether different to drag.out'old charges, :i and :use ,them asa`asubterfuge- for;_.openm up _ the nation's intelligence secrets -The comnuttee was right..1 h quickly judging-Casey fit to serve.` .:.The.. attack on Casey could play. into theVhands of'a' group in:.Washin,gtonthat believes thatthe.U. S. should have no intelligencecapability'andshouldnotindulge in'. '" covert operations. hi a-, world where civilized nations must deal with the. KGB and terrorist'i egimes in a. dozen countries; . that:view`is:a%naive-and;=stupid denial of reality As stories about suspected covert operations leak from the group that holds such a view, the real purpose of the attack on Casey becomes clear. It is intended to sabotage the whole U. S. intelligence operation. If that is.not.treason in the legal sense,ltCertainly gives aid .W. _;'{-,?fis 2,C~ -~., T7 ~.v .?r 11', yl; Approved For Release 2005/11/28 : CIA-RDP91-00901R000400150001-0 STAT Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 ST A,R,T ,CZSPORRig Release 2005MIF28 : CIA-RDP91-00901 R000400150001-0 o1 FAG L L2- 10 August 1981 Anatomy of a Sad CIA Affair Casey survives thefitror, -but suspicion and intrigue linger "It is the unanimous judgment of the committee that no basis has been found for concluding that Mr. Casey is unfit to serve as director of Central Intelligence. " i t was hardly it ringing endorsement, but that statement by a sour Senator Barry Goldwater nevertheless ended a two- week furor in Washington over the fit- ness of William Joseph Casey, 68, to stay on as head of the Central Intelligence Agency. The Senate Intelligence Commit- tee, which Goldwater leads, promised to push on with its investigation of Casey, but Ronald Reagan's former campaign manager clearly had won, on points, one of the nastiest brawls in Washington since the President took office. In a broader sense, however, everyone lost. Casey re- mained under suspicion. Goldwater and other Senators who attacked Casey pre- maturely had been forced to retreat. Ques- tions about secret CIA operations, and the character and judgment of the nation's top spymasters, had been raised around the world. The Casey battle involved a complex mixture of personal and institutional mo- tives, the springing of leaks and planting of misinformation, and a web of back- stage intrigue that tended to obscure the real reasons for the struggle. As pieced to- gether last week by TIME correspondents, the inside story reflects little glory on any of the participants. A central figure in the drama was the increasingly crusty Goldwater, who con- siders himself the Senate's leading expert on intelligence. The venerable (72) Ar- izona Republican was miffed when the Reagan transition team failed to consult him last January on who should head the CIA. He did not like the choice of Casey, a wily and tough Washington operator, to direct the agency. Casey made matters worse by virtually ignoring both Goldwa- ter's committee and the House Intelli- gence Committee, which take their duties to oversee the CIA se- riously. He even curtailed the CIA's congressional liaison staff. . Meanwhile, tension was ris- ing between the White House and the oversight committees on just how much flexibility the CIA should be given to conduct co- vert operations and plant under- cover agents abroad. The com- mittees want to retain their own close surveillance in order to prevent the kind of excesses that caused the CIA so much public grief in the 1970s. Reagan, how- ago" Casey on his way to a "cakewalk" with Senate Intelligence Committee Leaks and misinformation, not to mention a complex mixture of motives. tration would be lifted. The CIA, for ex- ample, might be able to use the Peace Corps and students abroad as undercover agents. This proposal has led some Sen- ate Intelligence Committee members, as one put it, to believe that "the White House :favors anything over at the CIA so long as it's not embarrassing." Within the agency, philosophical fights were brewing too. One faction, in- cluding Casey's top deputy, Admiral Bobby Inman (who had been Goldwater's choice to head the agency), advocates more emphasis on "pure" intelligence gathering and analysis-calling the world as the agency sees it, whatever the con- flicts with Administration policy. Other officials feel that the agency should tailor its reports to the decision-making needs of the President. Casey was seen by some as reflecting this view. When a CIA re- port failed to detect the degree of Soviet influence over worldwide terrorism that the White House is convinced exists, for example, Casey ordered the study to be re- done, and then redone again. The agency was also split over an in- ternal reorganization plan under which order under whicPpt Vdlfeor,Releas agency by the Carter Adminis- Goldwater, Thompson and Democratic Senator Moynihan all of its work relating to the Soviet Union would be consolidated in a single and probably dominant directorate. At pres- ent, responsibility for Soviet affairs is parceled out to directorates that deal with intelligence gathering, analysis and covert operations. The reorganization was first pushed by Max Hugel, the man whom Casey chose to head clandestine operations-a wheeler-dealer from New Hampshire who was widely viewed in- side the CIA as a political amateur and in- competent spymaster. Late last month two Wall Street stock- brokers,. Thomas and Samuel Mc- Neil, publicly accused Hugel of illegal stock manipulation in the mid-1970s. The timing of the McNells' attack, so long af- ter the events that had turned them into enemies of Hugel's, fueled suspicions that it may have been instigated by Hugel's CIA foes. When Hugel promptly resigned, his mentor, Casey, suddenly looked vul- nerable too. Goldwater, in particular, saw the Hugel fiasco as reason enough to re- place Casey for having chosen a misfit for the sensitive job. After the Washington Post published the McNells' charges, other papers followed up with a story about an overlooked May 19 decision by a federal judge; he had ruled that Casey and oth- er directors of Multiponics, a New Orleans agribusiness ven- ture, had misled investors about the finances of the firm. With that, Goldwater swung into ac- tion, ordering an investigation of Casey's fitness for his job. Even before the probe began, Goldwa- ter and two other. Republican Senators, Ted Stevens of Alaska and William Roth of Delaware, 1 4uGasey to quit. The anti-Hugel faction at the CIA, sometimes using mem- J V. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 bers of an "old boy" network of former agents, pushed for a quick Casey kill. It fed Goldwater the dubious information that Casey had emerged from Multipon-', ics' bankruptcy in 1971 with a profit of some S750,000; he insisted he had lost al- most his entire 5145,000 investment. The same CIA sources apparently spread a false report that Casey and Hugel had planned a covert operation aimed at the '`ultimate" removal of Libya's Strongman Muammar Gadaffi from power. Misinfor- mation was leaked to Newsweek that the I-louse Intelligence Committee had been so alarmed at the Libya plot that it had written Reagan to protest. (TIME had also learned about the alleged plot, but con- cluded that the report was untrue.) The White House- last week flatly denied Newsweek's story. But then, in another de- ceptive leak, apparently designed to stop the: Libya. rumor;. CIA.sources. suggested. that the West African nation of Maurita-- n.ia was the object of a somewhat similar- sounding operation. In fact, both congres- sional committees had objected to a much broader, proposed.. CIA operation-one that. did not involve physical attacks on any national leader-to shore up U.S. in- terests in.the Middle East. and North Af- rica. This hasty.scheme reinforced Gold-. waters.. view that, according., to one Senator, "he just. couldn't stand watching a bunch of amateurs running things." s the attacks on Casey mounted, Rea- gan kept asking aides: "Is there any- thing to these charges against him?" The White House began to qualify its back- ing of Casey. But them the old pro coun- terattacked. He made an effective series of calls on Senators, admitting that he had been wrong in appointing Hugel. Most surprising of all, the reticent, publicity- shy Admiral:Inmanwent on ABC's.Night- line TV program- to deny rumor& that he was leading a coup against Casey. De- clared one . astonished former- CIA. spook:. '`That's like seeing George Smiley appear on the Gong Show. " . Behind- the-scenes, Senate Majority Leader Howard Baker worked to keep Goldwater's committee. from appearing to lynch Casey first and give.him a hearing later. While publicly supporting- -Goldwa- fet, Baker urged him to appoint Fred D. Thompson, a longtime friend from Ten- nessee who was Republican counsel in the Senate's Watergate investigation, as. chief counsel in the Casey probe. Thompson ac- cepted the post,-promising a prompt but careful study. Casey supplied the commit- tee with volumes. of documents and, de- manded a quick hearing. - Walking into a Capitol elevator last week, Casey confidently. declared, "Its, going to be a cakewalk." During the five- hour, closed-door grilling, most of the Sen- ators, who had not had time to study the .Casey papers, were less interested in his business practices` tharr his- -leadership of the CIA Some Senators complained about dle East under. Casey. Others contended that the CIA's analytical reports were too "political." Mostly he was assailed on his appointment of Hugel. Casey took. Full blame for the ilugel choice, admitting that it "turned out bad- ly." He insisted that he was on the same' side as Inman in wanting a non-political. objective analysis of, intelligence- He agreed that many of the restrictions on the agency were proper. He promised to cooperate fully in helping congressional committees perform their oversight. Still, the Senate committee's final ii statement on Casey was a compromise. Some Senators, including Washington's Henry Jackson, Texas' Lloyd Bentsen and Rhode Island's John Chafee, had urged the committee to express its "absolute confidence" in Casey. Others, including Goldwater, New York Democrat Daniel Patrick Moynihan and Delaware Dem- ocrat Joseph Biden, wanted to avoid any pronouncement until the investigation of Casey's background was complete. In- stead, the committee found him merely not unfit" to continue. The Reagan Administration had hoped to free the CIA from controversy, stiff restrictions and stern oversight. In- stead, the agency is saddled with a di- rector whose every, major move now seems likely to be carefully scrutinized and with morale problems resulting from its own internecine plotting. Getting back to its real work, the mission of forewarn- ing the U.S. of its enemies abroad, may not come easily. -ByEdMagnuson. Reported by Jonathan Beaty and Johanna McGeary/Washington Ap ke8ffg8 tgffldd1 &1ditlA-RDP91-00901 R000400150001-0 STAT Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Z C;LE APPS Aj. E; P, Approved For Release ' ? CIA-RDP91-00901 R000400150001-0 10 Augus 'NATIONAL AFFAIRS hind the Casey Flap Based upon the staff review to date and Mr., Casey's lengthy testimony today, it is the unanimous judgment of the committee that no basis has been found for concluding that Mr. Casey is unfit to serve ... ith that, Senate intelligence commit- tee chairman Barry Goldwater last week hosed down the fire storm that had swirled around CIA director William J. Casey for a fortnight. It was hardly an enthusiastic acquittal, and a continuing in- vestigation by the committee's staff could still cause problems for Casey. But for the moment the CIA chief had ap- parently come through the Reagan Administration's first Cabinet-level political crisis with his job intact. The sudden turnabout in Casey's fortunes prompted a new examination of sorts. How could the con- troversy have boiled up so fe- verishly, then flattened out so quickly? What lay behind it- and what effect, if any, might there be on the CIA? In retrospect it seemed aclas- sic Washington drama involv- ing elements of high policy, hard-nosed politics, personal crotchets-and pure chance. Fora time all these factors com- bined to threaten Casey's job and that of CIA deputy director Bobby Ray Inman. And the whole flap . seemed to under- mine the efforts of some Ad- ministration officials to restore U.S. intelligence capabilities while still respecting the civil liberties of U S citizens and warning, but from Post executive editor Benjamin Bradlee. After a week of private stewing Goldwater went public with a tele- vised call for Casey's head. . The Oversight Committees. Many members of the Senate and House intelli- gence committees were eager to support Goldwater-and not merely out of respect or affection for the mercurial veteran. Casey had simply failed to keep them briefed in a full and timely fashion. "There was a perva- sive feeling across the [political] spectrum that we weren't being kept as well informed as we should be," said Democratic Sen. curbing some of the agency's Casey with Senate intelligence panel: Chastened? wilder cloak-and-dagger im- pulses. A guide to the key players, their Patrick Leahy of Vermont. In fact, Leahy motives and roles in the drama: said, the Senate panel found the CIA brief- Goldwater's Gripes. The senior senator ing on Israel's bombing of an Iraqi nuclear from- Arizona was more responsible than plant "so poorly done" that two encores anyone else for Casey's two weeks of tor- were required-the last by Casey himself. ment. From the start Goldwater was dubi- There also was a growing concern about ous about Casey's appointment, much pre- "harebrained" schemes approved by Ca- ferring Inman for the top post. He was sey-such as that. against Libya's Muam- outraged when Casey, without consulta- mar Kaddafi (NEWSWEEK, Aug. 3). tion, put bantamweight businessman Max The Intelligence Community. Some Hugel, a pal from the Reagan Presidential past and present members of the nation's campaign, in charge of the agency's super- intelligence agencies also were unhappy sensitive covert operations. And he was with outsider Casey. Intelligence sources nearly apoplectic when two former business were widely suspected of leaking stories associates of Hugel decided to tell The about covert plans approved by Casey. * "To Washington Post that they had collabo- No evidence linked the CIA or its "old boy" network to rated with him on improper stock deal- the incident that began Casey's problems-the decision by inchar that Hugel denied even as he former stockbrokers Samuel andThomas McNell to accuse gs-- ges Max Hugel of financial improprieties. The two brothers influence it this way is appalling," said Re- publican Sen. Richard Lugar of Indiana. Some factions of the intelligence com- munity, however, were coming to Casey's defense. According to one well-placed source, the director had become a valuable , asset in opposing the urgings of "right- wing ideologues" in the White House and the Senate. Casey speaks frequently by telephone with the President, and that channel proved useful to Attorney General William French Smith, FBI director Wil- liam Webster, Inman and others in block- ing efforts by the ideologues to ease restric- tions on the CIA's domestic use of electronic surveillance, mail openings, physical searches and infiltration tech- niques and surveillance of U.S. citizens overseas. They also opposed a plan, NEWSWEEK learned, to give the National Security Council supervisory control of all domestic counterintelligence operations traditionally run by the FBI and the Jus- tice Department. "The idea of controlling counterintelligence from the White House has the potential for providing a Water- gate-style political nightmare," said one Administration official. The White House. When news of the Senate committee's lukewarm endorsement of Casey reached Ronald Reagan,. he was already celebrating his big tax victory. "You know why they cleared him?"joked one staffer. "They had five hours of his mumbling and they didn't want to have to listen to it any longer." Reagan laughed heartily. The President and his top aides had not been sure how the committee's investigation would turn out. And aides undercut the director by expressing a cau- tious wait-and-see position on the original charges that he had mismanaged the agency and acted improperly in private business dealings. Eventually, supportive statements by the President and his closest friend on Capitol Hill, Sen. Paul Laxalt of Nevada, buttressed Casey's position. So did a signal i from the White House that if Casey were, pressured to step down, his job would not go to Inman-the Congressional favorite- and that Inman himselfmight be forced out. Through the Week White House officials also tried to help Caseyby denying that there had ever been a CIA plot against Libya. They put out word that Mauritania was actually involved, but NEWSWEEK con- firmed that schemes against Libya had been discussed with House intelligence commit- tee members and that a second operation was planned for anotherThird World nation as well. It was not Mauritania, Administra- tion aides later conceded. When a majority, of the committee protested to the President about the plan, most had the second opera- tion in mind, though some thought the letter they signed referred to Libya. Senate sources said that it was the lack, of fresh evidence against Casey, more than resigned. Adding todii ruti hrjpWtwMIPa ' e &fta'p9 ' r4%_1'f$ ?I'L:9ttft q1:2(1i h4# .h6t prompted the intelli- tee to ease the pressure. nt not from Casey, who had several days' was s connected nneeccted with the he charges a against aginst Hugel. Goldwater alone felt that the appointment U:r Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 NATIONAL AFFAIRS of Hugel was sufficient cause for the CIA boss to resign; but when a proposal was made to pledge "full confidence in Bill Casey," another senator said, only a mi- nority raised their hands. What rriost of the senators expected was that a chastened Ca- sey would now maintain closer contact- probably taking up former CIA director Stansfield Turner's practice of briefing the panel personally, especially on covert operations. By referring to "the team of Casey and Inman," many of the senators seemed to be warning the White House to make peace with the deputy CIA director despite their differences over the proper role of the CIA. There was also talk of legislating a fixed term for CIA directors to insulate them from political pressures and proposals to form a single Senate- House intelligence committee to reduce the chances of leaks about covert oper- ations in the future. For Casey himself, the fact that he is 68 years old made many suspect that he would probably not serve a long term as CIA director in any event. But given the peculiar dynamics of Washington politics, Casey's recent trials may stiffen his determination to stay on the job at least as long as it takes for the controversy to fade completely. And that may take some time. DAVID M. ALPERN with JOHN J. LINDSAY, HENRY W. HUBBARD and ELAINE SHANNON in Washington i Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R00040 150001-0 li . s . -0,1S AND WORLD REPORT lo August 1981 CIA's Casey Weathers a Storm William Casey is staying on as direc- tor of the Central Intelligence Agen- cy-but not without the close and con- tinuing scrutiny of Congress. The Senate Intelligence Committee questioned Casey for 5 hours on July 29 and unanimously concluded that there was no reason to remove him as CIA director. Only days before, three Re- publican senators-including commit- tee Chairman Barry Goldwater (R- Ariz.)-had called for Casey to quit. How did Casey pull through? Some help came in a statement of support from Ronald Reagan, a Casey backer ever since the New York lawyer direct- ed his presidential campaign. But even more important was Casey's personal promise to keep the committee fully informed about CIA operations. The clamor for Casey to quit had been prompted by his failure to tell committee members two things about Max Hugel, the outsider he appointed as CIA spymaster. He had neglected to inform the senators in advance that he was naming Hugel to the key job, and he failed to tell them about accusations of financial misconduct that forced Hu- gel on July 14 to resign. There also were claims that Casey himself had questionable business dealings. Congressional oversight of the CIA has been a touchy issue ever since Con- gress learned of abuses by the agency during the Watergate era. Those dis- closures led to tight rules requiring the CIA to account for its actions to eight committees of Congress. Later, at the CIA's request, that number was trimmed to two-one in each house. One Senate panel member noted that Casey's reticence with Congress was not unprecedented. Stansfield Turner, Jimmy Carter's CIA chief, also told lawmakers too little, the senator: said, but later developed "the skill of rapport." He added: "I think Casey now has caught the spirit of consultation." ^ Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 NEW YQlxt{ 1'.r,~GA7.DE j ; A, -11- Approved For Releasq (309?a'/R81 MA-RDP91-00901 R0 The National Interest/Michael Kramer Grist for the Probe WI! LIAM PROXMIRE ONCE DESCRIBED the William Casey problem this way: "Mr. Casey has cut corners when he considered it to be necessary to business profit, He has wheeled and dealed his way into a personal fortune, sometimes at the expense of his clients.... And he has made less than a complete and ac- curate disclosure of his activities to Con- gress." Senator Proxmire isn't a member of the Select Committee on Intelligence, which is currently considering whether Casey should continue as director of Central Intelligence. But if he were, I think Proxmire would be up in arms again. In fact, I think he'd be reading the very same words into the- record. Be- cause Bill Casey appears to be a creature of habit-and the latest Casey imbroglio (which involves Multiponics, Inc.) re- veals irregularities similar to those that so enraged Proxmire. - It's an imbroglio, by the way, that hasn't much impressed the Senate Intel- ligence Committee. Last week,. the com- mittee gave Casey a clean bill of health -although it was qualified to the extent that the committee's staff is 'still in- vestigating the director. Proxmire's original assessment of Casey was offered ten years ago. At the time, Casey had been nominated by Richard Nixon to be chairman of the Securities and Exchange Commission, the agency charged with protecting in- vestors from securities frauds and -mis- leading stock offerings. Proxmire-as one would guess from the tenor of his remarks-voted against Casey, and in so doing he adopted a standard promul- gated by the New York-Times. "The is- sue ." said the Times, "Is'not whether Mr. Casey has committed illegal acts- the Senate is not a court of law-but whether in view of the record he can command the highest public respect. The S.E.C. chairmanship is an unusually sensitive and important position." If anything, the CIA directorship is even more important, and certainly it is more sensitive. If Casey finally falls, it will be because he misled the Intelligence Committee when he claimed lie knew little or noth- ing about the activities of Multiponics, a company he co-founded and which he served as secretary and counsel. In the law, it's called "scie tp~rr layman's -lingo, it's 1N29e!"?YM may recall it from the Nixon days-it's the question Howard Baker loved to put to the Watergate witnesses: What did you know and when did you know it? Here's the problem: . Multiponics was founded in 1968 by a group of people, including Casey, in or- der to engage in various farming opera- tions in four southern states. Within nine months of its birth, Multiponics raised additional capital by way of a private securities offering. Multiponics went bankrupt in 1971, and those in- vestors Who purchased the corporation's debentures-via the private offering sued Casey (and his fellow directors) for mis- leading them. The true nature of the company's financial condition, said the investors, was not disclosed in the circu- lar that offered them the opportunity to acquire a piece of Multiponics. On May 19, 1981, a federal judge in New York issued a memorandum de- cision concluding that Multiponics-in its offering statement-"omitted and misrepresented facts that would have been material to a reasonable investor in determining whether to purchase Multi- ponics stock." The court also held that Casey di t deny knowled a of the 47f J/A QA-RDA91-0090 denied knowing that the offering circu-. far was misleading, and he continues to do so. Immediately after the court's de- cision was first made public by colum- nist Dan Dorfman on July 15, Casey tele- phoned the Washington Post and said, "I didn't mislead anyone. I didn't prepare the circulars." Casey's attorneys have filed a motion to reargue the case, and Casey has in- dicated that he views the court's action as only an intermediate decision and that eventually it will be appealed. As of now, Casey's stance has had the political effect of muting criticism of his actions pending a final judgment. In addition to phoning the Post, Casey has maintained his defense of non- knowledge in a more formal way. In his official submission to the Intelligence Committee--a copy of which has been obtained by New York-Casey, through Stanley Sporkin, the CIA's general counsel, has said "he was not actively involved in [the] management [of Multi- ponics]," that he was "an outside direc- tor [of the company]," that "his position as Secretary of the Company was largely ceremonial," and "that he did not attend many Board meetings." (Incidentally, to buttress the notion that he was not intimately involved with the goings-on of Multiponics, Casey ad- vised Senator Goldwater by letter, on July 26, that his $145,000 investment in the corporation represented "less than three percent of my total investment portfolio at that time." And, indeed, r Casey is a very wealthy man. The financial statement he provided the committee shows his net worth to be $9,652,089. Of this amount, Casey has $7,505,013 in securities.) The preliminary investigation by the Intelligence Committee's staff wasn't really an investigation at all. In general, the committee staff accepted Casey's thesis without exploring its truthfulness. But a check of court records, includ- ing the sworn testimony by Casey during the Multiponics bankruptcy proceed- ings, in New Orleans-.vhich neither the committee staff nor the FBI has both- ered to acquire, and which Casey failed to deliver to the committee even though he was asked to produce all "relevant" documents-clearly reflects that Casey was intimately involved in Multiponics and had knowledge of the offering that the New York court has determined was ~iiisleadiing, Its' fact, the sworn affidavits b t~ 44t C APs1 fglow directors state Yet Casey has done just that. He has the following: "The Offering Circular STA Approved F-~- R Tease 005/11 8 : Il1~-iii'Dbu917APgrl RQ Qr~c~`eQiQp1-0 was prepared by t iam asey an Lawrence Orbe [another Multiponics basis with ivlr. Wartels and Mr. Friedman director]"; "the Offering Circular was [Casey's law partners] with reference to the re aced by comp etent counsel . (an affairs of [Multiponics) while you were a Director ob obvious reference to Casey ...)'; that of [tilultiponics]? A: Yes. Stanley Barkley [still another director] Q: As a director, Mr. Casey. you feel that "relied on William Casey (our New York you were able to keep reasonably well in- counsel)." formed of the corporation's activities and 11 Beyond the sworn affidavits of Casey's have the information that was necessary in fellow directors confirming his involve- order to function as a director of this corpo- ment in the circular's preparation and in ration? Multiponics in general, here are some A: Yes, I did.. excerpts from Casey's own sworn trial Q: During the term of your directorship, how. often were you in touch with other testimony: directors in order to acquire information 1 about [the corporation]? Q: Mr. Casey, how much time did.you I,' A: Well, that has to be an estimate. It spend in reviewing the affairs [of Multi- would vary from time to time. I would think ponies] before you showed up at one of its that 1 had an opportunity to talk to members A Well, that's kind of hard to answer, meeting and the subjects that were coming say during most of this period of time Mr. f about what was discussed, what came up at Orbe, Mr. Moran [other Multiponics direc= I the. meeting,. and we would discuss any tors], would be in New York and I would see aspects of it that I wanted further informa- them perhaps twice a month. Mr. Wartels [a tion on when they wanted. my views, and affairs of the company in detail, he would brief me from time to time. 1 had frequent telephone conversations with the manage- ment and when they had something to dis- cuss with me they would call andwhen I had a question I'd call them, I didn't keep track of my time but it was a considerable amount Q:_ Well, do you know how many meet- ings you attended in yourtenure as a Direc- tor? A: Oh, four or five, but I don't think that means anything because I had many meet- ings in New York in which these things were thrashed out. My opinion was always re- flected either by Mr. Wartels or somebody else, that was my style of operating. and I think the record will show that I had.a great deal to say and a fair amount of influence in the basic decisions that the Directors made. Compare this answer with- Casey's submission to the committee, in which he sought to show that he was unin- volved in the affairs of Multiponics by saying that "he did tickt attend many board meetings." of the management or other directors twice a month on the average, and I would have. telephone conversations with them more frequently than that, maybeon the average. once or twice a week. Mr. Wartels and Mr. Friedman attended a good many meetings which I was not.able to attend, and, they usually, if he needed my advice or wanted my opinion, he'd either talk-to me ahead of- time or talk. before in front of me, and we would talk about things that had occurred at the meetings that I couldn't attend.... Mr. Friedman or Mr. Wartels brought back a re- port, and I talked to them if necessary to raise questions about transaction[s):I'think I kept very. much on top of the important things that the corporation was .doing.. As to_ whether the. offering circular (and the debenture sale it concerned) was an important thing. there can be lit- tle doubt..Casey _ testified. that, he in- troduced his fellow directors to the firm that would handle the sale. This was.'i before Multiponics was even incorpo-, rated. The record reveals it was always ! the intention of the founders of the cor-1 poration to raise additional funds from outside investors-a plan they set in mo-' tion even before they had formally in- corporated. What could be more impor- tant than the implementation of that scheme?And, by extension,Caseyhad to Q: Now, sir, did you or any member of be vitally. concerned with the plan's your firm. to your knowledge, ever review 1; progress-just as the New York court ! the minutes of [Multiponics] ... with refer- il determined. ence to determining any legal problems or It would be wrong to dismiss this rec f legal issues with reference to the contents o those minutes? The minutes of the corporation clear- ly reflect that the offering- circular was discussed at board meetings. A: Well, certainly I read the minutes reg- ularly and followed the affairs of the corpo- ration and the lawyers who worked on the registration statement would have read those minut to 4te ine w or 1rj~ZS~ILgIFi 4c44;1s i It registration statement.... ord as too trivial to bear on Bill Casey's! fitness for the CIA. This case-and there are others-goes directly to the question of Casey's probity and truthfulness. And, if the country and the president and the congressional committees charged with overseeing the CIA don't know for a cer- tainty that they can always trust the word of the director of Central Intelli- gence, then the director should not be in : q61RDP91-00901 R000400150M1-0 ON PAGE, ved For Release E(G5/j1i EV4JRDP91-00901 R 9 .August 1981 Yes- But Using Businessmen As Agents S In the shadowy world of espionage, noth: ina is more dangerous to an agent than to have his "cover blown." As any fan of spyj novels or adventure films knows, this mean having the seemingly innocuous occupation of the secret agent revealed- to-be-a sham only a "cover" to his real work-spying. Recently, the cover for many present and future intelligence agents was blown during a network television newsprograrri_ Not b a. reporter, or by someone-, hostile to- the agency, such as ex-CIA agent Philip Agee, but by the Central Intelligence Agency's own deputy director, Adm Bobby Ray In- man. During an - interview on ABC's "Night- l:ne," anchor Ted Koppel asked why busi?- nessman?Max C. Hugel had-been named to~ head up the most secret-and sensitive of all CIA units the one responsible for covert operationsoverseas. Inman casually.replied that Ijugel had xff years of experience abroad and "could. be helpful in rebuilding the clandestine service ." Then, in a shocking gaffe or. terrible lapse of judgment, Inman proceeded to ex- plain just where America's enginies, inter- national terrorists and foreig f ritics might look for CIA agents. In the cryptic, jargon of the. intelligence professional, he said that in the future the CIA would "rely far more on non-official (than on official) cover, the use of commercial drops to provide the necessa- ry cover for clandestine agents all over the world." What is meant by "non official cover' 7 According to a CIA spokesman, it is.. some _; one who works undercover, for a comrner, cial enterprise; an intelligence person who might ostensibly.,be working for a. business, enterprise:' . Inman's remark was no slip, then. Infact, earlier in the Hugel a?fair,-CfA director WiI liam'J..Casey said,- ::'.Hugel'sbackground1 in business overseas 'would-be' useful in ar~ ranging cover for security agents." In short the CIA seems to be 'ready to, plant more agents.in U.S.' companies=abroad and probes ably to send more operatives out-as busi-?i nessmen and women.. That,_of course,' isn t new. Putting it on the record is. ,j3- MURRAY FROMSON and NOWAN SKL Approved It has been` a. long-standing but almost- never- acknowledged practice for some American businessmen and U.S.-owned companies overseas to cooperate with the. .CIA. The individuals took on occasional '::part-time -:assignments,. -while major corporations permitted agents to operate in the guise of sales representatives, engineers and the-like::In such roles, the operatives could move` with relative freedom about, a country, gathering information and perhaps directing-the activities of local agents. "The=question is not so much one.' of In- man's candor or the agency's morality, but rather the. effectiveness of such a practice. The CIA's-use of commerce as a cover-raises doubts: about the legitimacy of all bona-fire= businessmen, big or small, who choose to .,work overseas: As .foreign correspondents- in Asia for many", years,' We' and. our colleagues often. Wondered 'about some'-of the suspicious characters we encountered.` There were times when we also looked askance at some so-called journalists who would mysterious- ly appear in the midst of some crisis but who never seemed to file their stories. Following an unwritten journalistic code, however, most reporters rarely, if ever, dis- closed what' they knew or suspected about business people or innocuous-looking trad in- companies that were quite likely "fronts'! for clandestine CIA activities. Especially in the 19509 and early '60s, during the height of the Cold War,. it was just not thekind of story one reported. For ,,instance we.. all. knew that Air- America,' - which went through a. half-dozen name . changes as a contract airline in the Far East, was owned and operated by'. the CIA Yet' none of us wrote about it until the Vietnam- Warwhen government duplicity itself be- came a major issue. . But in- the-1allout-.from the- recent con- ~:troversy over".CIA Director`Casey and his former deputy director for operations, Hu- gel-, plans to. step up use of American busi-- ' jnessabroad as spy network covers have '' Adra..Inman is a career specialist -in.intet- ligence, widely regarded by his peers as one of the best imthe.business. But after what he said on TV. one could easily-imagine terror- ists and KGB operatives around the globe rubbing their hands in=glee Moreover, the ec -ba'rrassment to friendly. governments ;Havana ignite the hind of prapaganda-ft s-1 RAM yet help U.S. adversaries frorct:Mosco to For V,a$ nra1vi The admiral's gratuitous remarks' also stunned the business community. A. senior vice-president of a multinational corporation operating in the Middle -East. Asia and Latin America put it this way-"`It jeopardizes the credibility of American: companies that want to do. business abroad --as well as the lives of their employees who have- absolutely-- nothing-..to . do - with:-the CIA. An aerospace executive said;=!'Even,ihe hint that a major.U.S_ firm- might, bes. in- volved in espionage would have a chilling effect on the ability of corporations to-do business overseas.': Richard King, former director of Califar--. nia's Office of International Trade. and now an international business adviser,said,'_TTle multinational firms depend on a veryy Open exchange'of information with foreign fisrns in connection with joint ventures aria for market research. To have any sort of suspi- cion of a CIA connection .would most. as- suredly cut back on that kind of free ex change.,. And a senior officer for one F ortune'500; company cited the more profound implieq-t ?tions for. U.S. entrepreneurs and corporate; representatives abroad. '"The possibility; of stepped"=up terrorist activities agaiiist; American businessmen ;is: frightening."- tiey ... said. In fact, the number of politically inspi d killings or kidnapings for ransom of foreign businessmen has grown dramatically in ie- -cent years, prompting some American f& ms 'to increase armed protection of their oven-: seas representatives No question; the nation requires an efre'c-- tive . intelligence` agency: as -well as (:lie -means _to _"ebver"'its clandestine activities. The CIA. cannot realistically be expecteci:tor hang out ,a sign on a storefront in Bangk6k or Karachi, proclaiming it as the office of,the resident. agent. But the .19806 are. not "tile .1950s. The increasing need to have Ameri- can businessmen. create jobs,' expand trade and help to correct-our:balance of payrnei7ts deficit makes the use of .these same tiusi- nessmen by. the: CIA seem,. at the least, _e:K- tremely counterproductive- Such, pracfKeos Murray Fromson,'a former CPS .News ta? - respiriulent and-Nornutii'Sktareirnta h Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 BEST COPY Available Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 proved For Release 2005/11/28 CIA-RDP91-00901R000400150 Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Releaite.'12IO:b/1r1%'~cf-=C1A-RDP91-00901 9 .iu tts 195111 W 311[ivC.i{11 T-1t lnol ed At first ifke~, another steamy sum- mer capital scandal, the jowly CIA director besieged on every side by snapping congressmen trying: to bring him, "to earthe ~. { But beneath. the very public battle over .William Casey's tenure in the top CIA spat lies a far more important tug of war . about what sort of a spy agency the United States wants to itin.,` Will the CIA once again turn to.covert operations as the way' ,, to solve U.S.' problems in ,the world, or wlli, it go the bight technology . route,) emphsslzinsl electronic data collection and quality ana(ysis~ 1 y;' t `l In; the public. areda, this :?undarnental questioninevnr gott'"J debated. Insteadi tlie.conta'nversy cantered on;the free-wheeling ? financial dealings of, Casey ..' 1 , ; ,::1 t ';; + i.l . With; ne-new evidence of Any' Caney wrongdoing: at ;hand, .;, staunchlycdrisdrvatlve 15en.'Barry Goldwatet,(R.','Ariz );star-;-1 tied everyone, possibly himself, by publicly calling on Casey; [o .quit. Goldwater's -statemei1t?'-fo1lowed"by` about 10 days a mini-s'catidal iii Which' Casey's chbicc tb ;head'the'rlandestine operations division of-the CIA, Max itugel, jvas, forced out of . -! office by discIosures Ill shady business dealings WII..T DIf) Goldwater'have? against,,Casey"Publicly,: the. charge sheet against' Casey listed two items:, a lapse ? o? % judgment in hiring Hugel, who lacked any professional qualifi cations, and Casey's past financial dealings,: which already ,b,sd been sifted through by several congressional'cornmittees When Casey previously served if government Regarding the IHugel~,,appointment,iG01dwatercharged.,;,,I "That in itself constitutes the worst thing Casey has dbrie ;.I Welly not quite 'the worst think Casey'did In the eyes o?'-many' intelligenc coinmi nity'watehers here was to land.the,top jobatthe CIAO Casey represents ttie "old school!, of, intelligeAcet works and. S served in the predecessor'to the' CIA; the Office df Strategic Services (OSS) during Works PreKidenli (as y,denandd this C A jWaba.r as71,repa yu m e nt fron`9 4"'t fleagan fothis suceessful,tescue.efforts as,Reagan a campaign v mahager, pulling tbgethera badly,di 'lded staff into aJyvinningf team. S t y'the'Iiacstility=of Seri Barry'Goldwater, i"The-W'hiteHouse'hadto-do it for Casey,'ssass chairman-of-the`Int.elligence Committee, wasneut `,,,.one~Lrinh-American' Democrat, "because of his ralized byword-fr,om-the lhfte' house that Gold ;,- association with. Reagan,and because the agency: waters dream Ciao tlirectoe 'lkdirr Bobby' Inman, ?-was the _CIA ";They may noL-feel.sa obligatecl'to Inman went.on television andpledgedhis fealty It i riicCann's-ilI fortune to be order considera= Casey,Naixl:itrwas aIl'over +'% tion-fora"post.that becomes politically more r_on- Casey was on his..owm .abut'~they`did not'forsake , i Bet er for 1'fcCann, at the moment anyway, if he Approved For Release 2005/11/28 : CIAk 1, IDP91-00901R000400150001-0 STAT c'.LE A PEJU3proved For Release J005(1I ;. ,IA-RDP91-00901R000400 ITIVU -14 11 Six days after Sign. Barry Goldwater (R.-Ariz.), Rather than making $750,000, Casey said, "I lost the chairman of the Senate. Intelligence Com- my investment=and materials being submitted will mittee, called on William. J. Casey to resign as substantiate that -fact-". ;:Those materials were Director of Central Intelligence (DCI), Goldwater delivered to the Intelligence Committee on Sun- and the other-members of the Committee unani- day, July 26- mously declared that "no basis has been found for But Goldwater, Sen. Roth, and Sen. Stevens concluding that .Mr:. Casey is unfit, to, serve as weren't willing to wait for an investigation into the DCI." The statement followed the panel's five- matter. On - July 24 Stevens,: the majority whip, hour closed meeting with Casey on July-29 and a said Casey should leave "for the good of the agen- review by the committee staff of the charges that cy." On the same day, Sen. Roth, up for reelection had been made against the.CIA Director.- next year, declared that "The Director of the CIA must be above suspicion, and to borrow a phrase Although. the inquiry into Casey's business deal- ings and his appointment of Max Hugel is not at an from President Eisenhower, `cleaner than a end-a few points will be followed up by the Coin- hound's tooth.' " He said, "I believe it is impossi- niittee:- staff----the events of the last week or so ble for Mr. Casey to effectively discharge his represent a vindication. of Casey, who,, by all ac- duties," adding, "He should go-now." counts, has moved assertively to strengthen the Adding his voice to the: chorus, Sen. Biden CIA, and a slap in the face to. three. members of (D.-Del.) told the New York 7:mes, "I hope he's the Intelligence Committee-Goldwater, Joseph not on the job Monday." Biderr (D.-Del.), . aiid., William -Roth (R.-Del.)- It was left to a Democratic member of the com- and Sen.'red Stevens (R.-Alaska), who called on puttee, Sen. Henry M. Jackson (D.-Wash.), to ex- Casey to resign press the sentiments of many who believed that Perhaps, the most curious aspect of the af- . Casey was being railroaded. In a July 26 ap fair was the performance of Sen: Goldwater, a pearance on "Meet the Press," Jackson said, "it stalwart. of the GOP and a long-time favorite looks like they're trying to lynch him in public," of conservatives. The Arizonan, wvho recently . adding, "I think very clearly they are trying to do pushed the appointment of Sandra O'Connor Mr. Casey in without an opportunity to be heard." to the`Suprerme. Court and labeled the Moral Jackson said the Hugel appointment was a Majority, her' strongest opposition, as mistake, but that he was unable to explain the "fascist," grabbed front-page headlines by other "so.-called issues" coming to the fore "all of:'' ,. leading the assault on Casey, a personal friend ;a sudden of President Reagan. The truth is that the Hugel appointment, as Sen.' On July 23, while- the -"Casey affair' was Paul. Laxalt (R.-Nev.) pointed out in a July 25 heating up Goldwater- called- a news conference to news conference called to defend Casey, was a deny,-a CBS report that he had privately urged matter of intense consideration within the'agency Casey to resign. He had called the item a and the consensus was actually developed within "malicious lie." Under the impression he was go- the agency to go with Mr.- Hugel." CIA' Deputy Gold- Director Admiral Bobby Inman; who was ing to defend the CIA 'director, White House of- water's first choice to head the CIA, has stated ficials were-dumbfounded when Goldwater public- ly- called for. Casey's- ouster, saying the. appoint publicly that he supported the Hugel appointment. ment of Max Hugel was sufficient cause ?"for', Furthermore; although? Casey has taken full either Mr. Casey to decide to retir. a or . for the Presi responsibility for the Hugel selection,"Casey also dent to ask him to, retire "`Goldwater also ques says - Ctha officials It was thou posed bu el stexr tioned Casey's involvement-in a New Orleans firm p g called Multiponics. "I believe he's made the-state- ` penance as-an international businessman could be went that he? lost $150,000- We had been told he I extremely.valuable to the CIA. . - made over $7150,000r," Goldwater said- : ( In light of the facts in the case, the Hugel ap- The next day, Casey, who had the strong sup pointment, according to Goldwater logic, was suf- port of President Reagan throughout the con ficient cause for the entire top echelon of the CIA troversy, issued a statement saying that Goldwater to be dismissed. But Goldwater only wanted Casey had been prA &' c#iFmra gltp~pAi dtjM 81: CIA-Rf9P?9ilBII #RbONDI I$ "PlOecplained that E August 1981 "Goldwater's performance was rooted in his feel-. "professionals," rather than outsiders, to top ing that he know filly --FAreFi L ateri2llW1/28pbC1i%tRDPB[t:-QSISOIR Q 1?Cit>; experi- will ever know." ence consists .of his work as Chief of Secret In- The other "so-called issues," as Sen. Jackson telligence for-the Office of Strategic Services, the referred to them, were reportedly described by World War Il predecessor to the CIA. He has, President Reagan as "old news." The May 19 rul- however, closely followed intelligence matters Jng by a New York judge in the Multiponics ~ since then.), case--a ruling that mysteriously "came to light" There is no doubt that Casey has stepped on a only after the Hugel affair-was based on actions number of toes in the agency. In a July 27 speech that Casey or his associates took back in 1968 and to CIA employes, he acknowledged that he had 1970. The White House noted that the issues in- refused to accept intelligence estimates prepared by volved were not new and that they came up in a the National'Foreign Assessment Center (NFAC), number of 1970's hearings leading to Casey's con- the agency's analytical unit. One of those estimates firmation for other government jobs was alleged to be a report that failed to cite `the As curious as the new focus on Casey's financial Soviet Union as a primary sponsor of international dealings were the news reports that.the CIA had terrorism. planned an elaborate covert operation against Explaining why he had not' accepted those Libya or Mauritania, and that in a "rare" move estimates, Casey told the CIA employes, "My job the House Intelligence Committee had objected to is to see that estimates reflect the full range of the operation in a letter to the President. In fact, threats which our policymakers need to protect according to informed sources, only a few against:`Far example, estimates have been pre, Democrats on the- committee-not the full com- pared on Africa and Latin America which have not mittee-had sent a letter objecting to a CIA covert addressed Soviet interests, activities and influence operation. Such a protest is not unusual and, fur- there. Worse still, I have seen drafts of estimates thermore,, the operation did not involve what prepared a year or more ago by analysts in this Newsweek called a"'classic CIA destabilization buildinb which accurately predicted what has hap- campaign" against a foreign country. The purpose of the "leaks," sources say, was to portray Casey and Hugel as concoctors of hare- pened in Nicaragua and Cuba's new agressive polices in Central America. We had this work at a time when those developments certainly would brained schemes who wanted to return the CIA to i have been carefully considered. Sadly, :.these the days of "dirty tricks" and assassination plots. I analytical insights were strangled in the clearance In a column that appeared last week in the Baltimore Sun, Institute for Policy Studies associate Garry Wills harped on this theme, claim- ing that President Reagan "wants Casey to restore . the CIA to its good old days of assassinations and such." The false. report that Democratic and Repub- lican members of the I-louse Intelligence Commit- tee had objected to a CIA -covert. operation was designed to make it appear that-Casey's compe- tency and judgment were under bipartisan attack, these sources said.... Perhaps the. basic issue in the -"4Tasey af- fair" is the question of what kind of a CIA we want for the dangerous decade ahead. Sen. Goldwater, it is known, wanted Casey out and wanted Admiral Inman, the CIA deputy di- rector,in. There was a great deal of suspicion that Inman, , considered a member of the "old boy" network of the Soviet Union were interested in combatting ter- intelligence operatives, was orchestrating the cam- = n r' ?r h. LL { i?O LL .3. i S i?a ?i La r n. .. ., ~. - .. ? a . r. ,i. ... .. L. II -. 3 3 -. r. -. 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C LS LiR~s~'i.'vIT- d'!I~'_r ~ ~~.so {L INTEL L IGENCE SERVICES I _-2FTEN ESSENT-Tr.i' TO r?r.i TTTt??RL' T t - 4;nL T~t~~ !':2'Sr?d 0y --. ?~ ii r'~n e{T!iry [CE ?~?k'!?rr-trt !~ ~'t~._'.' ^~_IVE A L ~i._t. L.r"!?T iri M.. -:4. it r4 rZi= SIEGE r?.if T`A:..L~ j _? z==. i?: 1:E- r?r,ltitrrrr ratT 1sr?r r x ..? .. L> L r s i yt LL u L L L r L?? Lt f? I - `t Lt .t ri L2 `!'S o . Lrt. T 3'. itT iii 3y RL{'r v?.L E. P LONG TIME EFCRE ANY FORE '!a 1 1 I EN E 4% r E . ?Y1 - k ?: S:. L. lF ^ :.t Ti : E ' r ^ ~ ~ fir! A Z ?{ i\ It ONLY AFL Yr ~'-`.: yTy 4 E r n m Cc }r 'rt }L ?.Y'i sir. Y'r PRO Tr.r L~tr'.iN WER I rtE ONLr ? RECEN. ?! L2 r L T.T JLr.I 1YL ;' k. `L... JI GHT TT - Approved For. Release 200511/28: CIA-RDP91 Q4901R000400i50001-0 Approved For Release 20QSA11/28 : CIA-RDP91-00901 R000400150001-0 +1 ri ,r: r: i I r Ti r. is r - ~S a ~ ~" ir. r. :: r. r ? t T r. t r r. =~. r r. r. r Y ~i r. a t xrL, ~ 4 i '? w. r, i n - V [' L x!, 'vL *: L?'C iti n l'; s to ?? .?, 'r ; !. r ?- - ~? 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'?"1~ t ny u e several ble newspapers led off the editorial pages with headlines that. read Casey A LL IN ALL, IT WAS an unhappy experience. who had been backed for the CIA directorship by on -ABC television to deny that he had been -.y his ships and let the CIA muddy-its own--waters. Before Casey was cleared by the In .;Committee;:. CIA secrets were revealed. And possibly two plans, more likely CIA dreams _ . e f4t-, ?;. - -. va Luc ~.cuuul 111LC111t,Cuee Agency-ft also did the country no good. Casey, who ran SIGNS OF WATER ATE were dancing in have been rewarded with a purely domestic many a. journalistic noodle; And it was not a position. That's the way it used to- be. Campaign slow waltz, either, after the Republicans on the managers, who were successful, ran the Post Senate Intelligence Committee recalled to duty Office or the Department of Justice. Then any Lawyer Fred D. Thompson- He had. served them errors made. would have no repercussions .. . ay_ lSla s ago o ersea yi ar terg Commit v s on the As a news story, hobo ly can fault its As' it was, Casey was treated most unfairly_ beginning.. Two Wall Street stockbrokers accuser! Libel and innuendo were heaped "upon- him Max Huge), who was Casey's cbiof for clandestine around the clock. Out of envy McCarthy must be operations of financial hanky-panky in the mid rolling in his grave. If Casey had been in charge '70's. They may have been motivated by patrio- of poverty and not intelligence, I'm' sure the tisin but one can still wond Aicserica r wh it t Ci il L k h e y n v oo t em so iberties Union would have many years to demonstrate it:, rushed to his defense long before. now. ; Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R00040015 q T :~r1TivLa iii%tL4~ y THE T; 'yT c: y (GI E{ L i ..y_a .1. Cz 6 August 19c3 i se ' r .y : wasn't exactly a ' whitewash ? but it certainly was a graywash, mixed.in some respects with a splash.or.two of hogwash. It was the sort of episode, menacing to-the professionalism and maybe also the effectiveness of U.S.,intel-. ligence; thatis:to be.expected when so sen- sitive a position as the directorship of the in telligence establishment ,is confided to: the president's. campaign manager.. It is.-difficult to imagine a worse slot for the adm'inistration'ssometime.political man- . ager than the-attorney generalship, where fi-,,- nal decisions about the. enforcement of the The recent mini-uproar over Mr. William law are cleared and where Presidents Ken- Casey, director of Central Intelligence, had nedy and Nixon installed campaign .manag- a seasonal flavor - it resembled midsummer ers: But the Reagan people managed to find heat lightning. There were startling flares of it. The directorship of Central 'Intelligence light, too brief for illumination, followed by- is such a. slot. It ought to be filled, quietly,'] neither thunder nor rain., by a professional intelligence officer of deep The Senate Intelligence Committee, some and contemporary experience, with a passion of whose members..: were? baying for Mr. for anonymity; and not the shadow- of any sus- Casey's scalp one day, were declaring almost -petted political or-partisan interest.; the next that, no,`there would be no scalping: In Britain, if. we. are=not mistaken; it is a Those whotcondemne' his appointment of crime punishable by- imprisonment e en to the unsatisfactory. Max Hugel as director of `- publish then identity of!. the head of intelli- CIA operations- (i.e.; clandestine activities; pence:: Perhaps that-is-Why British:' intelli- i.e., spying) as "dangerous" on Friday were gence --.even,though it has been.rocked by clapping prudenthands over their, mouths by scandals like the Burgess-McLean spy infil- MMIonday morning.,It.was-strange. But there tratiom-in some ways worse: thane the sup- is undoubtedly an explanation , ,ifs; only we posed;,EIA'.'scandals:of themid=1970s "- contin-. knew it: ues to function quietly and professionally, Mr. Casey F appears,; :from what 'little is without political flamboyance.. known, to have benefited from-.a- political In a'country. that-took. a sober view of the counterattack on his'.Senate detractors 'by business of. intelligence, the appointment of powerful friends - and also from ? leaked a campaign manager to head it -(even one word from the White House to the effect that with a long-ago background in intelligence if Mr. Casey.were forced out his successor of World War II vintage) would beinconceiv- would not be the professional sought by those able. It would be an instantaneous scandal, detractors. Meanwhile, we are diverted by be the appointee ever so competent. It goes theories that the Casey affair is a strugglebe-... without saying -- that ? the-: frivolous -ap-! tween certain "old boys" of the CIA who want pointment of a political amateur as spymas-' to keep._the chain of command chummy and ter, following upon the first, would blow the certain "-new boys", who want to horn in. It top off. Moreover, the committees. of Con- seems a bit schematic to -us. 'frankly., gress charged to oversee intelligence oper Maybe=-what.-'happened.it the Casey case ations would not present the mixed-up spec- tacle presented a week or so ago by the Senate Intelligence Committee. They would look be- I fore leaping, and having leapt would not, plummet mysteriously, into the.. gorge they were.-leaping over. Here is- another of those affair's"- that - as- tound friends and allies who entertain the exotic view that a great nation's intelligence operations should not be vulnerable to`poli tics and gamesmanship. It is not the, first. And so long as politicians are assigned to manage central intelligence, it obviously.will not be the last. >~ . Approved For Release 2005/11/28 CIA-RDP91-00901R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R00040015 .'w_... '2?' R D THE' Sf1 :G'I'oINi ) L"ir'T%*T T T`.r ) -cz 6 August 1981 There is a disquieting familiarity. about The Star's recent editorial (July 25) concerning William J. Cas? ey, director of the Central Intelli gence Agency. Calls for circumspec-. tion in a presidential appointment,, or the resignation of a key govern. mental official like Mr. Casey, seem to trip far too easily from the mouths. of congressmen and the pens of edi- tonal writers. Pious judgments bear- iag little relevance to Mr. Casey's fit- ness for office are most. definitely not in order. As one who has served in govern-. men z with Mr. Casey but was not ap- pointed or otherwise dependent upon him for my position, I can per= sonally attest to the fact that Mr. Cas- ey is a remarkable public servant. He is bright, astute, decisive,-.under under- -_ ,Stands Washington life. and: tore full, and is a dynamic and effective leader. Contrary to press sugges- tions. Mr. Casey is no political'pay- off; he is the right man to revitalize an agency badly- mishandled-by-the last administration. The attacks on Mr. Casey's past' business dealings are even more dis-. appointing. The recent Multiponics' decision hardly reflects new'infor ration about Mr. Casey; nor. does:it . suggest adverse conclusions -abort cision has been misconstrued. to the, contrary. This letter is written on behalf of Mr. Casey, but without .his prior knowledge or request; by one who is familiar with Mr. Casey's profession- al achievements and capacities and some of the nuancesof the federal securities laws. From,, that vantage point, I can assure you that it would be a tragic loss if Mrs Casey were to, resign. or. be hounded :from. office. The nation can ill afford to lose such a valuable public servant and might find it more difficult in the future to attract men of high stature and com petence to government service:- Harvey L^Pitt Mr. Casey and his .fitness for public- _' s office. The lawsuit, now more than a While I m not,usualljroa the '-Sam' decade old and concluded without a side-of issues_as;CharlesBartletr,.I= :[Glut. involves.na-personal,,,:direc tr.have.io_:express:agr greementwthhis.'. wrongdimpose i viaMr. riouliabilier it July 29 Continent art1c e, 4"Cold seeks4 ty water's Outburst. a corporate director who, along with - kir.`Casey's exonerationby Sena; ,other investors,, was injured by,.the.,, Goldwater's committee shows that -,wrongful-actsof others-The prelimi the senator exercised badjudgment.: nary f i nding of liability on the part.. in Ietting. fly at Casey in ""a clumsy of the directors of the company is kangar0Q--court fashioti" not a finding of personal wrong- doing by ,.,I?. Casey, although the'de- H B,", go Ma ~t Sri 10 Lj~ Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-009018000400 ARTICLE APP : D THE WASHINGTON STAR (GREEN LINE) ON '. GY-a,-- 5 August 1981 &ser ProbBy Henry 'S. Bradsher Casey, including a federal judge's.. Washto3rou star staff writer' finding that he had misled investors in the case of a New Orleans-based Democrats on. the .Senate- Select ing agricultural business: Committee-on.Intelligence are look- again. fora special counsel to in- The intelligence committee began vestigate CIA Director William J. an investigation into both the ap- Casey after _ dropping .-their . first pointment of Hugel, because of the choice because of a 'past law firm absence of normal security checks, connection:with former CIA spymas-, and the business background of Cas- ter Max C. Hugel. eY? The6&year-old CIA director; who z, ..' ran president- Reagan's' political: Sources on Capitol Hill said yester- 'campaign. last year; testified before. day that the: committee had planned the committee for five hours :last to announce ..Monday.-.the,. ap-. Wednesday.:. pointment of; Bernbardt .K. Wruble, After his testimony, some Demo who on -an interim basis had, been .rats on the committee wanted- to- the first head of._the.federal- Office continue the investigation,. while; of Government Ethics. in- the Office some Republicans believed it should of personnel Management be wound up: As a compromise,. the But. Wruble' toldr the.r, committee committee issued a .cautious- state- staff that the,law.firmthewas with ment that "no basis has been found.. before he.todk the government.eth- for concluding Mr..'Casey is unfit to ics job had represented Hugel, a. New serve" in his job, but the investiga- Hampshire millionaire business- tion would go on. man. Hugel resigned from the.sen The Republican majority-on the sitive post of CIA deputy director for. committee had earlier hired a spe- operations after. two former busi cial counsel for the investigation. He tiess associates publicly accused him is Fred D. Thompson, a Nashville. of questionable stock market prat lawyer_and friend of Senate Majority tices.. Leader Howard Baker who had been The Hugel case led to new'ques- a Republican lawyer for the Water- tioiis about past business practices of gate inquiry. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 4 August 19131 .._.._.. .. Via.. :.T ^i? :ate.^.. .. ,.. ... 17 14 f`1 Z- 7 t. ?:? r+9 t. .. '_ . r? i^ r. r. :+ 1 r. .. ; - ? ._ r. r. - r. ? r Y r. t r r. _ a - t :'~ - ^~Triti Yr~_: ii . .. .. k .r y,,.. .. : n it ? !..:_ .a. ?? :. _ _ - .. _. S - .... _ _ r "? .i^.. _ .tai r.r_~. t r a .?..- t.:. rr ... Y_. .. i?.. t:~ - - _ 31.. ._ - _ r-'- z: ? i~ :r--t !14 1 t:? ^. .,,? r i ti.?.. :. ti R?~.y -. is ~i .. .. .. - ..._ '. ^' .T?.i -FM. A~t?~ - :.. .:?^=~i rti...~ _.:t ^?r`r.-?? "i.iy r _ t'r_ r'` 10 --O ~i?? L::? r.at? I ~~Y y1 r. 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".?... ) L^ _i~l 1 t ~ -..._ '`i wviZii =i ;-: i tt .?1 }r.r _.. _ ~` r y x'r. 31 } .. _ :' r- :tttr ?t'??r t:~?'T~r?7. ??r.: r r -? -~ : sN _ Yiir WM1 ti; itt; urtt:,i~ _ir rr. to r. r. r.u Y,'~r -rt ea r:t :Y'- Tr? ?LYtt = ;e--_r^ .- -. . -: _ .... t.V3. f!S.?Yi i r.t_a :? r sa r.??i- ri \?- i i ttn ^}.^Y r ..?,? r. e- +t: r. - r rr.:? r :t ?? ?. ~t:? - _ ??r - ?- T - rr?. .. _ _ s... .. rn_. ._^. 'i r - 1?L at r `in _ .. Yi Lt .. a... 1 _ t)s-_ 1 .0)-XIIAVUE,a Approved For Release 2005/11/28 : CIA-RDP91-00901R000400150001-0 L ttr; .. _. ?i ti C- i_ iz \ r: i?i e r_..-~ i a- Y riii ?rr-' ?J_ r? i~:^= .: F.-.."', ~. "'1 ?r :: 5.: ri i,-i n r?i .i^. ~ r- .^_ .. .. .._ ' r .r ~ . ^ } _ .. - .. _ _ .... _ Y2 :'! LL ~ o P,- ?`. r- " t - t r Y. ! \: 'r - r. - r _ : t H r. - - -. -r - . - ri Y .. .7' . . r. i, u ' _ .. s} - - n ,i n =f F R ' va U r '.4 ! - T r. ; t "t :: ?- r r.:_ ... Y :/ r. Y' T - Y *: ... .. T T 5 ... ... ? L \ ti ~?~ t T _a ~ 1 Tl . ? - . . . 1 5 t . . t t: i _-._ ~$i.e-- }1'?i-. !>~f!.i Li\'-- ~^. f~'t ~'~7 _~ r'". r. -.~Ttit i-i ~~'ii:i~ -r r.~'!~. T -; RYE ..:.... :.- Tr. ic- was'.-^_~r~,~ -.. `r. _ _ - is :i P.? 't.:~??rs ~..\ .? - c ii r - , ~ i R ~ t ? s ?L ei ~ Y 71 .. S ? . l} 'f t -'r T r ??_T ?f _ _ _ M '7- .. L _ _ : i~ I? ~ E ... - n .... to F! .\ _ - _ Y! F is - - -r ~. _? ! r _ .... .S L 4L L -.:: ? :... . ...^ -. .. T. 'l iG T- - T^_ ~. t : r L -i t` /? :i Y` _?- `? T .. .. !: L r. ?r r ..... T :: T. t : - T :: r Y:~:i 1:Y ty L I?'4- MLf TS .:T a1 M ... ._ t- .._~ _. ... '.~ ?1 Ii~_? T. tl\ _.. rY. r\.' ^. !':'? Y. -'9 - -Y T rY?:: !ter rl tT4: r r P. :_'; 7 r r.Y -, 1? r a . ..._ ~ 1 . s: ~-s ?~ .. .. :... _ .. ~ ~ ~\ 1 .T? - ! ...: r :- .. .... .. ~' ' ... ~' !? `.. _ ~ ~ r1 n - _t > c'i - - r L?~ -t n '~_ t-is:~. ~}.. ! ~r. ~SC.iu'.T_~ i ??ri~'~ei~ .t'T = _ ^._a ^. 4-rir-:Y S:r y ~sj ij ~t "' .. ...~ _.. _ T.' ?ti j a. .. `4 7-- Z. ....... _'. ?.t .. N . '.= ^i :'tL Lid C. _strz_ rr _ ~. .. _- jx '~ i r. ''i :,. L'?ii?r' :i~T ~? _- - - ^T. .? ^-^_yr r-? - .r _-_ i r -7 r r - 4- t..-....Y ..~,.. T n~ :i?. T~ T.T t~'? r.?. - .- r. r _. -. Yt ....t Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901 ROD0400150001-0 STAT - ARTICLE APPS ABProved For Rel p 1;5/V DP91-00901 R0004001500 0 ON PACE S 5 August 1981 ;I 0n says: Casey's safe This is a tale of two cities, New York and Washington, and two luncheons canceled by former Treasury Secretary William Simon and his good. buddy William Casey. The luncheons, :set for last; Monday, would have brought hundreds . of - Casey supporters together to; urge President Reagan to keep him as CIA director. Simon was chairman and main speaker of the,, session to be staged. at. the Waldorf-Astoria and George Shultz, also. a former Treasury secretary,. was to star. in, the D.C.-luncheon. "My speech 'would-have'been angry and I. would call Sen. Barry Goldwater and-others who called for Casey's -ouster as a. bunch- of gutless: wonders," said Simon."I' flew in from Milan for the, luncheon, but after Goldwater l?acked':off:,and. it`s- obvious that Casey-,will stay, we agreed to cancel the luncheons." Simon and Shultfrallied:to;Casey'a 'side .'after the White House upset. a'planned rally'of former OSS agents ?who served under"Casey, in-" World War II. "Our.. plans were bigger, not, just -OSS. people but friends of. Casey from everywhere' : said Simon. "I would have called the Casey investigation ridiculous. Then- I 'Planned to.. say. that we have made` public we'll soon be run'by-'aead'emicss and neuters." ~ !;~ Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 ARTICL; AP' ON PAGE C oved For F ~a~ 0 1 81y' c iA-RDP91-00901 R00040 Say McMinn out as v , Ireland At least_one pair of Irish eyes will soon stop But a top administration source yesterday told smiling aft* .a Reagan nominee gets the word that the People Page: "The President is set to pull his the administration has pulled the rug out from nomination. It should come down in a couple of under him. William E. McCann of Short Hills, N,J., . days. McCann no longer has a chance." will. riot be named President Reagan's ambassador McCann, president of the Foundation Life to Ireland, despite all the tough talk in administra- Insurance Co. in Chatham, N.J., was one of the top tion- circles that the Prez would hang tough and-r. Northeast fund-raisers for the Reagan-Bush team: send his name to the Senate, His main sponsor, said the. source, is Central Allegations -have recently surfaced that Intelligence Director William E. Casey, who re- McCann's- New. Jersey insurance company had cently survived a firestorm of his own involving done business with a convicted stock swindler. some of his past business practices. It =was back on St-Patrick's Day that Reagan So, who-will Reagan now tab for the Irish post?, Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 "t'GI,a&l.EBpproved For Release 2005/1.,18 P91-009018000400 cy s reported schema :to- get rid .of- Libya's strongman,`?'Muammar: El Kadafi:: On.EI Salvador, much of what was said by Secretary of State Alexander meat could-be toppled -ashandily as I was Mr. arbenz's 27. years ago, there are a lot.more governments now in- , eluding many with diplomatic-or eco- nomic significance to the U.S.. that would be angered or threatened-.and would have.n& inhibitions about say ing sa it; worth rernembering,;too, that, the triumphs of the past don't always= look quite so beneficial from the van- { p,,tage point of history. ernment, they have a habit. of holdinx;l 'afterward, as we-have recently been .nected- with the detonations that ..Proved so damaging to American pur- , ...poses a quarter-centurylater n .,_ 21-1 y e a za on prog a ;. Haig and by other top-level spokes- which reportedly v'oa the' endoise- that the CIA's shenanigans in Guate- men was breathtakingly unconnected nlent of CIA Director-William Case malain the 19 Os were-ultimately for with any of the real issues in that un- and of a White House panel, under the goodof'either Guatemala or the happy country Vice -President Bush before .protests United States T - r r few kno-vledgeable journalists from alarmed, members of the House a Virtually Without interruption` tried to explain' some of the signifi Intelligence.. Committee` forced- the since--the Arbenz ' regime foes=ousted'> cant background, and do.did -Robert ' administration to take a secondlook- ' bY, CIA-backed -rightists- in 1954, White, the holdover U.S. ambassa- White the plan '-- was still alive, Guatemala has'been misgoverned b y doe. Mr. White could have explained; succession 'of right-wing if anyone werelisteniag, that military though. 'it must:have had great ap- a military aid wasnunlikely'to strengthen a well pear. Consider: No more fighting the governments while being : brutalized aid waig but weakocivilian regime like ,. - Cold War with one hand behind the by terrorism from both fight and left back; no more Mr." Nice Guy. The that has: taken: tens of thousands of - the Salvadarari 'junta; in Latin CIA as representative of Anterican lives. In the violence, all efforts at so America, arr2iies have traditionally Will and powetwould againbefeafed;.'.. ,:cial and.,political reform have-been- seem ther;zselves-riot'as-servants of Ct l; . as when it arranged the overthrow of -stunted,. and the country is being pro vilian authority but as protectors of a t _ pellecl . toward a grim da national, mystique-: that must Le &iohanuaed II!iossadegh. in Iran or the D Y nf' reckon-' guarded against' the grubbiness'?f cr t IeftistJacobo Arbenz inGuatemala. ir+g. vilian politics. `:: It-sounds.tea~ptin;,-Butthe'zvorld ti~hatever. `the: real or`-.imagined ~r outcomes . cjf those, -past,,episodes Such- inconvenient realities were changed since the heyday of clan = however, and whatever the fantasies not welcomed by-Mr. white's . supers '_ destine operators. In the early 19aOs ors * 'the United States was unchallenae of old and new cold warriors in the '& however: Fromall available evi a . Reaggaan. administration,,. there is no-? dence, what concerned Mi. Haig was -,.. b13' dominant in the non-Gommu :going back.'. Those who do- not showing that America h recovered' = nist world: Even when the CIA's foot remember the past are condemned to from Vietnam and is'agaisa-prepared ' prints were too large to'be hidden; as relive it,. George Santayana- wrote: to intervene-ire the, world against. g ' happened in Guatemala, few coup,The same can be said, perhaps, or'. Soviet mischief= For that purpose no tries of any, importance to Washing those who remember, but do not uu one need care about Salvadoran cir -ton had the inclination to protest the derstd an ,rL7rftsfance_s '7 he uprising rn?ifl ust agency's aetiona or were in 1 po its ,.. s -Burundi. gene jor t'ne bun in Asia and Leifer Toda?that is no Ionper true E y First' we-- had'E1.'Salvador-:where T-IELIVING the past in order to come to terms with it may be acceptable- therapeutic technique- but it's hardly the way to conduct foreign af`,'airs. Yet that's what the. Reagan- ad- ministration often seems to be doing. .It ;caches into'tha;paest fbr'foreiarr policies as if everything.. that went wrong in the last 25 years or so can be - erased by doing the same things over again. to prove that.they can work of- rAr~iolc~l~~ Isaacs} -~.;_ _ 5 August 19;1 Iviost"ot"th'e'press;nieanwhile;':was as 'with- facile but, misleading compari As soon as the single word "advra the secretary of State gave the' ins e ra' entered'the-story; with its-inerr event;.- obviously... But _. Iranians` pression he wanted -to; try Vietnam':; table echo-of America tip-toeing into =-remember, even if most Americans in to maker it come out right. Now,. Indochina; :most other --issues that -.don't, that it was the CIA-run coup in, _;there's the Central Intelligence Agen should :have ` been explored in. the ' `?' 1953 that let the Shah rule as well as ' press and on television were-smoth= The same policy as-psycotherapy impulse seems to have- inspiied. the `= Lib an "d st bili ti ;: r m `_ bin. Isaacs,. a: former -c'orresp6n-mt en Amenca, is writing a book on Wit- For his efforts- to relate policy to if a dangerous ?r unfriendly govern .... -, .'?`!:",a._,..r. .a es...._L 'X .L.,l- ...-. ~::. - i l;'i. .. ..~'am Approved For Release 2005/11/28 CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11ff28t tQi4,-2D EDITORIALS F- ANY doubts remained about Wit - Ilan"Casey's manifest ineptitude as rhncn as clear from the time Mr. Casey'- rs , Agency~po(CIs A), they' should. note ;,with- stand"'- totally without qua if..operations A man ex; to Mr"' ure` r s for the icat on Casey s Iatest .,. ost n 4 p \ r Case ..~.. a blunder _,. y s.,choice-.for that lob, H el ug , was a? New Hampshire=buss ?: Incredibly, at the ve scandal threaten ed.to guif? h m, when about vJrnHug Istpossib y. j egal,-past_. senators were calling for his' head be- business Practices 'forced his resignation cause' of: his, demonstrably bad judgment d an ,speech - LEI_ into IEicus' 313x2 # fie which}he- gaveiaway- niiinerous' secrets about about' the CIA ,;n' doinb ?so She violated M Casey's awn involvement in -legal` l o. 'n.. ... nr., At .,. challenges to his mist i.,..... ,.__. ._. r m - y c o ic er b ' ""y,` duds to--suspicions; about his; judg-~~ ofo sen se a3W i l ' ` the-agency's headquarters oW.July27.-to -'adefrimenttohisagencylegal.charges F defend- himself.- before:: them ,regarding M .- ntl ~ y 14 nis Tpost demonstrates his lack of con- was intended to be a kind of pep talk.- corn for what damage he may inflict ori That In itself is unobjectionable ' a thg genc hhd ye .eas. _His speech: I st' For reasons known only to him, how- week, in:which he.blabbed away,. agency ever, Mr. Casey saw. fit in. his speech to se refs __ ~t as . wnice House political muscle~succeed- CIA directo r.;to nom ft. . previously undis ed in.clamping a muzzle onrthe.:Senate. closed?'names of key..agency'.personnei I . - Mr asey-d speech;:alleserves.:no more oppoit assu overcapitnl 1Ytlt,ntgits nitres io shoot himself in the foot andhis:.. Fubh disetosureM - ~ a" SS; n A Taordsrs 'Mrs ass .', CIA s,: nor are the nation's L y'.therz:;`distr~uted qv; ,. whether the: ng ,we l-served by the continuation of P3 t Is obeying its Cased tin cu rrentipost' nor*ore 'charts Iixiiitsi gainst spyjn'E'insid_- 5 th , ties:; That reference. "raises: questions' of-- bei ire.. Houses best interests , are, : not } agency's "domestic colie tidn activi-~` h eve effort.was misguided. Clearly Elie Caseys fitness for office. :That pr Live. and-:.disturbing:..jefer-encer.:.to-4-the t? - and their duties; and to make a provoca- telligence Committee's `inquiry.--I:nta. The? case against M agencyiir the heart He is clearly not;`the Casey centers oil ersou` w bad d d en a' he natio 's;"i tell r p g } n rc t enrust to gua d this not on'a most sens g cy; after atll. the 'Inc* pl e.. ..- ac t ' o euuust toa 1 a mn 4 who, resented .45 ,,~ ;bah} at1 p He?shoutd resign The"Senate d';. should J?'* Nooses the wr j ong insistutand,o .ipon i,'soshuld:=.the?,W hite option l~et`it s clear chat Mir Gassy f su houseThe lger:a h ,onWiilirn Caseyeads` ~fe.frri this.affircirlon.x _~' ' the CIA, the greater the nick t + s- .t. .. ~?'.Ckt?" I i ... : tZ... 4i ti `: Approved For Release 2005/11/28 CIA-RDP91-00901 R000400150001-0 1-00901R000400150 off"`' A . Approved For Release 2005/11/28 IA-RC~P9~ff901R00040015 ugus ._ ... 4: . .._s. r, 7 i y R T .ft~ .. :A .~ie- ?t r 4: r _ .. T.- . r t r . s?, ... .. - w _ _ _ ! i-tr 'v- :Lt .. .. r-.:, h r:r rr.ra r r.-? r. ?. ?, - .i .. 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T l ..{r l_.. .. i^ '.fy ~?= .a ,., _i ?1 ?'?, -rti? 1:Y ?? - _ ...+r.ftr r?"? r- r. r r; L -t iaT r is i . s ti f.. . Y -,... .. .t - ..^:; t{?_vir :.. n r~ i i ?r r :: e- .- L L i ri t?.:. 4. C; 'VI _ ..ii= .. trig ,` - ... v i-= 1L ~'t C ? a _ - _ _ .. y10~i~n ~? r. ~....n rvzr{: :. tr .tf iv;i.... ^ L_r ~? tz is L yi _. rT:-.-EGR -l: =- C f'F_CTi2E .. ..'?~nii fr_.;TE rfl'r .r i r t? l d ant tt _ ~ t }, Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R000400150001-O JACKSONVILLE FLORIDA TIMES-UNION 4 August 1981 Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 CHICAGO SUN-7-DE'S Approved For Release 20O51,111R8T CI&RDP91-00901R000400 "I had him in my sights until he cut in his afterburners. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 A I roved F lease 2005/11 /28 : CIA-RDP91-00901 R000 >3 TIC ?' '` '' THE WASHINGTON POST t,).I C'+E C._ _ _ - 4 August 1981 '. `u I If Accolades at the Folger for Helene von Damm By .Joseph McLellan At 10 la:3t night, some of the most p,."' erful men in the United States stood in the Great Hall. of the Folger Shakespeare Library, greedily inhal- in tobacco fumes between the entree and dessert of.a. dinner in the Reading Room, where cigarettes and cigars have never (well, hardly ever) l;s n ignited before. `The waiter took. away my ash- tray," said 0MB _ Director David Stockman (whose ashtray must have been stolen from the .Great Hall to reappear on his dinner table). "What else could I do?" inside, offering a token resistance to social pressure, presidential assist- ant Lyn Nofziger puffed on one of the cigars without which he would be unrecognizable. It was unlighted (the waiters at the dinner-dance were truly formidable), but one end f intensive chew i d gns o s of it showe Mouse OIL your-l like a Who's Who in the Reagan as-i t :Micke h y a s t i reck;.ie`.'? asked an admirer ministration, including Attorney. s~auirting at the small _ fiuure?+ General William French Smith; Sec- ed oil on his black tie. "Certainly, -retary of Transportation Drew Lew- said painted on and indeed it was the, is, who appeared briefly and left sr-ialt Disney hero, mitigating the early to deal with the continuing cri- severity of a black-tie affair in they sis of the- striking air traffic control- depths of Washington's dog days. lers; CIA Director William Casey, Stockman, Nofziger. and a whole: fresh from his battle with conares- siona invests at ors; Defense- Secre- inistration d s , g m f Reagan a battalion o%vialcolm Baldrige was busy defend-~ heavies gathered last night the tares chief ' of staff tiVembJame e s $aLcer;White ing ,ms efforts to t et people in his; r olger Reading Room (a sanctuary, Douse cchhief of Ja usually reserved for literary scholarsi FBI Director `Villiam Webster; department to writ:r clearly. "All I'm" at or near the PhD level) to pay tri-t White House protocol chief Lee~eAn.-) trying to do," he smogs, "is get them tot hate to one of the most formidable: nenberg and her husband, say what- they mean on one page. , figures in the current; power struc~ The guest of honor, w'no cams to I Then maybe we e n get something s ecial as1 done. Stockman listened sympathe- i tare. Helene von Damm, p the United States from Russian` sistant to the president, whose desk occupied Austria after World'War Il tically, then moved off to a quiet is just outside the Oval Office ands and had her introduction to Amer, corner for a private conversation whose scrutiny is imposed on all wha scan politics working for the Political -with an aide. aa into the inner sanctum. Thel Action Committee of the American Being held at the Folger, in a pa _J 1... 1',vn- ntr~l H4..]:nnl Aaanriation, was happy V_. A;?or -gar-? Yu - Joe D.- Miller,. deputy ex- d i f s en r ecutive vice president of the Amar- ican Medical Assaciat olr land Roy von Damm's first employ" Pfautch, proprietor of an organize-, tion in St. Louis called Civic Service Inc. If anybody: thinks von Damm is l, f d u er less than spectaculari;y won -- ere _-_ _ they w their last night, or they were keeping mouths prudently shut., "Helene is one of the finest ladiesI Von Damm said that the now sees I know," said White House counselors Reagan, on an average day, "some- Ed Meese, "and has been a continual times an hour, sometimes half an help to the president for 15 years. hour, sometimes never. But we have It's a great pleasure to join in hog- known each other gong back to oring her tonight." Nobody regis- 1968, and we can read each other; it tered a dissenting opinion, though a is a very comfortable relationship few were willing to talk about other - a totally comfortable and very, subjects. Stockman, fresh from a se- easy relationship." Her husband ries of stunning congressional victo- since May, Byron Leeds, .."knows, ries, said he is "still working" on his i that Ronald Reagan w is here before next major proposal. Meanwhile, he he was, and he is something differ- said, "My next suggestion for the ent and special," she sit. mcanS'using,?hitsiness is a cover not from thewrath`of Hugel and 1iug.c s nb.iective, Aecoid"in?trt all ..aside; d.ictrultfuF hs'ester bf for CIA operations, " It is out- the CIA-but from an %nvectiga Newsweek m-igazine lit blon- the standard shapes of human ra, cows," said at US oil executive Lion. into tile' $3' million (fi:6 ` day,'ava5 Libya. Ile .prepared a' motives. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R0004001 RTZC E A PE ..RED OYP. 53 ' s 2 miss ,r. i3 i Y0-' i L)ATLY :dam; 5 2'.uusL 1981 i stocks war to rj. ffe 01' them missing, the- third dead. - _; It has-tainted the-spy-chief of the Central Intelligence Agency and has touched the director of the?CIA, a trusted associate of the President of the United States.-It has raised questions about the judgment of the director who, after all, heads-one of the most sensitive agencies in the Western-world. The story reaches into the Labyrinths of. the Washington bureaucracy, the monied halls of Wall Street and the congressional committee rooms on Capitol Hill. It has led to the little town of Bridgton, Maine, where-the body of a Queens man is buried.' And, perhaps as bigger mystery is unfolding. Queens-District Attorney John Santucci expects' to announce this week whether to order the exhuma- tion of the body of Dennis McNeil, the 42-year-old brother of Samuel and Thomas McNeil, to determine if he died suspiciously on June 1-two weeks before his older brothers disappeared.. The brothers are, being hunted nationwide. by the Federal. Bureau of~ Investigation. WHERE'.. ARE,' SAMUEL and Thomas McNeil? And, where is .-the more than $3 million in assets mysteriously taken from the Triad Energy Corp.,- a New York-based company that Samuel founded-and headed; where Thomas-was a consultant, and Dennis an administrative assistant? The saga exploded like a bombshell July 14, when a copyright story by The- Washington Post quote,1 Samuel and.Thomas McNeil's allegations of financial improprieties- of Max Hugel, the deputy director of the CIA and its head of. clandestine operations. -The two McNells'charged that Hugel had supplied them with inside information on two companies. in 1974, when they were managing a'small brokerage firm. The use of inside information, corporate se- crets not known to the -general ; public, to make profits on stock. deals. is illegal 'under securities regulatidns. Hugel. denied, the allegations, Jcharging the brothers were trying-to blackmail hirer.-But he resigned ban b *.* ftjL GO5 4d embarrassing the CIA_ , s f The bantam-sized -Hugel had- been -a surprise Where- are - Samuel nd Thomas 1cNell and the more than $3 million taken from the Triad Energy CG- Computer Corp. in New ampsnire. A good tr1enc1 o William Loeb, the powerful, conservative publisher. of the Manchester (N.H.) Union- Leader, Hugel had run President Reagan's successful campaign in Nashua, N.H. Along the way, Hugel became the protege of'-William Casey, Reagan's campaign direc- top. When Casey. became CIA director, Huge[, 5$, got the' CIA post.-: APPARENTLY,-THERE HAD been.a-.lonj and bitter relationship between the McNells and Hugel. The McNells charged he drove'an earlier company of theirs into bankri.iptcy_ jI But what was the real reason why the bicNells wanted. the -downfall of Max Hugel? Were they simply doing their duty as citizens?_ Or were theirs sinister, reasons? . Samuel and Thomas McNelthave not appeared at: Triad's small office- at Ill Broadway since before, their-,charges ? against .Hugel appeared,- although Triad associates said they have received phone calls from Thomas McNeil after the death of his brother, Dennis.. The death was attributed to a ruptured spleen, along with intestinal bleeding as a result of' :sWAI6RDP9100901R000400150001-0=._ - Here the mystery takes a macabre turn- Dennis McNeil was thought to have been suffering from; STAT STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R000400 NEW YOR?; i -I'ES 2 AUGUST 19e I~ f 'kill -1 1~~U~5e Reii S S-11 ByJUDITHMILLEI? ~ l j WASHINGTON ~" w u ?Olt a while, it seemed all too familiar. A newspa per account raised questions about a well-known public official. Influential senators called upon him / .M ap k ;'. ` to step down for the good of the country. A commit 1 m? fY, tee investigation was launched; probers and prey are fol- q~: lowed around town by troops of reporters. r 1 ; But beyond that, the drama of William.. Casey failed ~~ry ~r c to follow the script. Last week, there was no terse resigna a w lion announcement. Rather, the momentum seemed to dis- sipate as rapidly as it had built, leaving many genuinely !y purdled. Virtually all Democrats and Republicans of the t d Senate Select Committee on Intelligence, which is st ill offi f~` r Yf . cially investigating charges of financial misconduct raised against Mr. Casey, agreed that the affair was un- usual in large part because the object of the inquiry was the Director of.Central Intelligence. ' i F y "Another important difference," argued Senator Richard G. Lugar, Republican of Indiana,, "was that it ?heNewYorkTune Ca ey was the Senate Intelligence Committee . that was in . William J. . Casey charge." The panel, Mr. Lugar noted, is unusual because the agency, but on allegations of impropriety in his former it is handpicked by the Senate leadership to reflect a range . business dealings and on the lack of due process being af- of "responsible" ideology and because of the sensitive na- forded him. They were outraged at colleagues who called tureof the activities it monitors. for Mr. Casey's resignation before an inquiry had begun. The Casey affair, however, has demonstrated that in Mr. Lugar said that the committee had last week in- at least one critical respect, the intelligence panel seems vestigated the matter sufficiently to issue the preliminary to have become similar to other Congressional panels. . judgmentexpressed byMr.Goldwater andMr.Moynihan. "`The committee has become more like the Senate as a But Mr. Biden noted that the panel had not yet interviewed whole," observed Senator Joseph R. Biden Jr., a Demo- a single former business partner of Mr. Casey's nor had cratic member- "The separation of powers has been the staff reviewed the transcript of the court cases at muted in every aspect under Republican control." issue. Nevertheless, committee members all agreed Like the community it watches, the intelligence panel was essential to the agency's stability that thy issue at operates in an atmosphere-of secrecy unparalleled on i least some statement; ,the price of Ivir. Biden's'support Capitol Hill. So, while panel members burned about Mr. was a Democratic counsel to assist in the investigation and Casey's appointment of Max C. Hugel, a campaign aide acommittrnenttoexplore -loose ends." ' and intelligence novice, as head of covert services, their The committees were not always so attuned to their sentiment was not publicly aired until Mr. Hugel was constituencies. Established in 1975 to investigate allega.. forced to resign in the wake of a financial scandal. tions of substantial improprieties, the Senate panel then But when it did blow up, it became what Senator Rob- headed by Senator Frank Church, concluded after, a 15, ert Packwood, private of Oregon, called a "one-week month inquiry that while the national intelligence system p grumbling of the panel chairman, was a "permanent and necessary component of our gov- Senator Barry Goldwater, that his choice and the agency's ernment," the agencies had committed abuses. Rather deputy director, Adm. Bobby R. Inman, had not gotten the than rely on the previous practice of sporadic conversation top agency job erupted in a suggestion at an impromptu with favored House ano Senate leaders, the Church com- - press conference that Mr. Casey step down. Only four days mittee recommended permanent oversight committees. later, aftera five-hour closed meeting with Mr. Casey, Mr.. Initially, the agencies, stunned and angered by the i Goldwater.and the panel vice chairman, Senator Daniel public rebuke, resisted cooperation. But with the conser- Patrick Moynihan, said "no basis had been found forcon- vative tide sweeping the country came the call for a rein- { clad ng that Mr. Casey is unfit to serve:" } vigorated intelligence capability. Indeed, commmit-:.- Whgt had happened? For one thing, Mr. Casey and . members are among the most vigorous propon-n:; ,:ne Admiral Inman both visited members to assure them that agency's requests for greater resource, t.,cre flexibility the agency would respond more quickly and fully to com- and exemption from public d sclosure laws. of the. ' mittee calls for consultation. Friends and supporters of Biden, for instance says a thorough investigation sphator Mr. Casey called committee members on his behalf. charges against Mr. Casey is needed precisely because i Also important was whispering from the White House Congress might resist unleashing the agency if it lacks and the "Intelligence community" - former and current confidence intheoversight panels- intelligence officials and their friends'- warning that The staff inquiry, therefore, is likely to continue. Pri- scandal and a prolonged inquiry would deny the agency vately, however, some senators are concerned that Mr. the morale and stability it requires to do its job. Even if Goldwater's quixotic and mercurial behavior may impair Mr. Casey were to step aside, White House aides said that the effort. Others think he has been chastened by the Casey the top job would not go to Admiral Inman, the commit- affair. "It's going to tone him down a little," a Republican tee's favorite, and that he might even lose the deputy's committee member predicted. Perhaps. Still others are post because proposed nominees for chief had former or nabout Mr. Case s con curry t3$~Ef4 il Ib~s~ i2 Ae4/I8tYv0Al+R P'~1c MON dal over a failed covert tary pnnel to occupyltap jobs at the agency. Finally, operation may again trigger calls for an inquiry - or ac- the White House and Senate leadership successfully fo- cueations that thepanel failed to do its job. , cased the controversy not on Mr. Casey's management of AR '1CLE AArrnctf or Release 29W1 J .i 1 ADPVT00901 R0004001 o1i F.A Gr__._j__._..._._j 2 August 1981 :David Wise I 'I Will Control we O~tsideEs or the William J. Casey has survived as CIA director, at least for the moment, but the wrong conclusions will probably be drawn from the Senate investigation of his activities and the pratfall from power of his spy-. master, Max Hugel. The moral of the story, some will assume, is that the CIA should be left' to the professionals. That, of course, is precisely what the powerful network of Old Boys, both inside and outside the CIA, would like the public to think. The intelligence professionals, the ca- spies, prefer to regard "the agency" as their pri- reer vate preserve. Outsiders are poachers. While the controversy may have appeared on the surface to be a struggle between the Senate intelli- gence committee and Casey, the real struggle was over who will control the CIA. Arrayed on one side were Casey and the president, who gingerly sup- ported his CIA director. On the other side were the Old Boys, the present and former CIA professionals, and their allies on Capitol Hill. It was an old battle played out again. with a new . cast of characters. Back in 1965, President Lyndon Johnson appointed Adm. William F. Raborn Jr., the man responsible for the development of the Polaris missile, as CIA chief. The Old Boys were annoyed. Within weeks, stories found their way into print re- porting that at CIA meetings Raborn was a muddle of: confusion, "so unlettered in international politics," as Newsweek put it,. "that he could" not pronounce 'or even remember the names of some foreign capitals and chiefs of state." Six months laterRaborn was out as CIA director. With the admiral piped ashore, John- son named a professional, Richard Helms, to the post. Besides Raborn and Casey, at least two other out- siders who served as CIA directors were targeted by the professionals. President Nixon named James A. Schlesinger to the job in 1973. Schlesinger fired a number of Old Boys, 'arousing much ire within the agency. Under Jimmy Carter; Adm. Stanfield Turner managed to survive as CIA chief, but many old agency hands refer to him mockingly as "the Admiral." The current flap had its unobtrusive beginnings late in March when Casey quietly moved John McMahon out as deputy director for operations (the CIA's covert side) to head intelligence and analysis. Then, on'May 11, Casey tapped Hugel, who had worked with him in the Reagan campaign, to be the DDO. Only four days later, on. May 15, Cord Meyer, the covert-operator-turned-columnist, surfaced Hugel's name, revealing the appointment of "a rank ama- teur" to head the agency's cloak-and-dagger direr- torate-The drama had begun. i . Two brothers, former business: associates of the Brooklyn-born Hugel, went to The Washington Post. On July 14, within hours of the newspaper's publica- tion of charges of improper or illegal business activities by Hugel, he 'had resigned. There were those who argued, albeit not seriously, that the disclosures only proved Hugel's superior qualifications for the job. Ac- cording to the Hugel tapes and other revelations in The Post, the spymaster had threatened to kill a law- yer who got in his way, warned his business associate that he would hang him by the testicles and admitted (in' his unpublished autobiography) that he was a liar, infoirrier and a bunko artist. To top it all, he beat the CIA lie detector. What finer background could any- one have to head the CIA's dirty tricks division? But Hugel went quickly down the tube. Perhaps; one anonymous White House official speculated, with some help from "former intelligence officials." Whether anyone, inside or outside the CIA o eased the ways for Hugel's fall, remains, like so much t it is er B clo ded in mi b th e are-q, . u u out, a c-.Y i lear that Casey's appointment of Hugel, a one-time sewing machine manufacturer, rankled the CIA pro-- fessionals like nothing in recent memory. From the tree-shaded lanes of Langley to the Fed- eral-style homes of Georgetown, the sputtering could J be heard wherever old spooks gathered. It was as though a busboy had suddenly been made a Mem- ber of the Club. Unheard of! On the very day that Hugel resigned, stories mys- teriously surfaced noting that a federal judge-two months earlier on May 19-had ruled that Casey and-others had "omitted and misrepresented facts',' to investors in Multiponics, Inc., a company that owned farm acreage' in the South. In succeeding days, Casey's. image came to resemble nothing so much as a series of ducks in a carnival shooting gal- J lery. One duck carried a sign reading "Multiponics." Others read "Vesco," "ITT," or had similar labels of cases in which the CIA director's name had figured, in the past. No sooner would one duck be shot down than another would pop up.. _ .. Casey had concealed a $10,000 gift, said one story. Casey had links to a New Jersey garbage . man who might have links to the Mafia, said an- other. Soon Barry Goldwater and other influential Republicans were calling for Casey's resignation. In the midst of it all, Samuel and Thomas McNeil, ~ Hugel's accusers, vanished. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved ForRiIhea 2005/11/28: CIA-RDP91-00901R000400150001-0 We i o..,-remembering President Car- ter's difficulties with Bert Lance-gave Casey only lukewarm support, but the CIA director rallied his friends and supporters and had gained ground by the time the Senate committee held its one day of hearings into the affair on Wednesday and found Casey not "unfit" to serve. 'I Here was some feeling in Washington that Goldwater and other senators, in their earlier calls for Casey's resignation, had rushed to judgment. But Goldwater is clearly the CIA pro- fessionals' favorite senator. "I don't even like to have an intelligence oversight committee," he said recent- ly. "I don't think it's any of our business." Complicating the struggle was the figure of Adm. Bobby Inman, Casey's deputy, who went on ABC's "Nightline" in a rare appearance to defend his chief and to deny that he, Inman, was "orches, trating" the scandal in order to succeed Casey. Inman, who was undoubtedly Goldwater's choice. for the job of CIA director before it relent to Casey, is an intelligence, professional--he formerly headed - the National Security Agency-who is often surprisingly outspoken. "Clearly," he told Ted Koppel on ABC, "those inside the agency would prefer that all the promo- tions come from the inside." As Inman suggests, the Old Boys would have us believe that covert operations and clandestine cot lection should be run by the professionals. The difficulty is that the CIA professionals are, the same wonderful folks who brought us the Bay. of Pigs. They also produced Operation CHAOS, the illegal spying on Americans who opposed the war in Vietnam, as well as MKULTRA, the drug-test- ing program in which Americans were lured from bars by i.he CIA and given LSD,-without their' knowledge, and HTLINGUAL, in which the agency steamed open hundreds of thousands of first-class letters in violation of federal law. It was the professionals of the DDO who tried to kill Patrice Lumumba by poisoning his toothbrush, who wanted to make Castro's beard fall out by dust- ing his shoes with thallium salts, who tried to cap- ture a crocodile and hire an African witch doctor to brew its gall bladder into a special posion, who at- . tempted to"use dogs as mind readers and cats as. eavesdroppers. And' who hired two Mafia thugs to put botulinum in Castro's food. (The CIA tested the. poison on monkeys first. The monkeys died.) Casey does seem in his checkered career to have walked very close to the edge of impropriety. An. awful lot of people seem to have sued him over the years. And his appointment of Hugel; who was ob- viously modeled on Maxwell Smart; did show poor judgment. But,'in principle, there-is no reason why. reputable outsiders should not be appointed to the i top jobs at CIA. At the very least, they will save us. from the professionals. David Wise writes frequently about intetii Bence. His most recent book is-,,Spectrum," aJ novel about a power struggle inside the CIA. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 STAT Approved For Release 2005/11/28 : CIA-RDP91-00901R000400150001 ARTICLE A ' F ED PO N YOLK:( TT S : T 1981 ON PAGE` w ;syy' 2 AUGUST A portfolio from around the nation T N= SENATC ;STARTED !N 'DEGEMOq, SEC9ET PEALS, 0r4 iE NNo( :U~r o~ FCurICAL PAYOFFS D3n`s1iMTfll1 ( Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 ARTICLE . 3 diFor Release 20?' " 2BW 01R000400150 ON PAGE. is Qul''et, orb ' over uase not hi e Demands for the resignation of Mr. Casey did go he would be replaced Central Intelligence Agency chief Evil- not by Sen. Goldwater's favorite, Depu- ham J. Casey, ,it appeared at week's ty Director Bobby R. Inman, but by end, had blown over, as it had begun, someone from an informal White much in the manner of a midsummer House list that was taken by committee lightning storm. The sudden calm .may members to be unattractive. mask, for the rest of the.,Summer at least, discontent with Mr, Casey's stew- The most telling case. against Mr. ardship of the United States"intelli- Casey, of"course;was his appointment, gence apparatus: Beneath that discon- without consultation with the Senate tent are sugstantial reasons for doubt- committee, of 14fax C. Hugel as chief of ing his fitness for the office: covert operations. Mr. Hugel, who had n o experience whatever in intelli- After several days- irr,which Sen: Barry Goldwater (R:; Ariz.), chairman "fence operations was subsequently of the Senate Intelligence Committee, publicly exposed as having been in and others were calling openly for bir: volved in business dealings that were, Casey's resignation; the committee met : in the kindest light, intolerably shod- in secret, examined some records of . an. r Mr. Casey stood firm, Mr. Casey's past business indiscre- tions, talked to Mr. Casey at some In the course of the open controver- length and issued .a formal statement sy, no significant new information was that lie is hot unfit to serve. Sen. Jo- brought to light -- or apparently dug seph R. Biden Jr. (D., Del.), no fan of - up by the committee's staff - on Msir. Mr. Casey's, explained that the state- Casey's questionable business deal- anent reflected "the overwhelming--. ings? .Certainly; nothing came forward sentiment by the vast majority of the that suggests ' that his choice of Mr. committee to get this matter behind us Ilugel was anything but gross bad judg for the good of the agency:":::.. ment. So much for that. The fact is that The Congress is exhausted from its neither the committee nor the full budget and tax debates and most of its Congress has the authority to fire him. members are looking forward to a Having confirmed the appointment, summer recess, suspending serious the only power over the matter which business. Perhaps that is just as well. remained on Capitol Hill was. that of- But in the meantime, Mr. Casey's back- moral suasion. ground clearly has not been. exhaits Another fact a political one 'is that tively_ examined.. It; should be, by the: had the committee-flatly- concluded committee, which has pledged to do so; thgt Mr. Casey was unfit,.the.likelihood . -_atid by the.White. House,. which would would have been. that: President- Rea-..-.serve ..Mr...Reagan and the effective` gan and those around. him would have administration of the CIA by digging- -been moved, as.a.-matter.of practical unrelentlingly. Mr. Casey is vulnera politics and administration,, '_to have ble;' by his own misjudgments. That ,demanded thatMr.'Casey step down. In vulnerability cannot responsibly` be `a flashy- 'political move,: the, White allowed to undermine the national House ha& made it quietly clear' that if interests of the United States. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R00040 ART I C:L APPEARED ON :PAGE._x ESSAY WASHINGTON Boris Grishinurn, ace operative. of the K.G.B. in Wash- ington, who works undercover as hors d'oeuvres specialist at Ridgewelt's NE;`I YORK TIMES 2 AUGUST 1.981 means to replace Casey, too. (C.I.A. In, Spector General Charley $riggs will be asked by senators to investigate any contacts with McNutts and C.I.A. per- sonnel, and. any aid that subsequently may have been given them in skipping country with millions When huge headlines appeared accus- ing dirty-tricks boss as a man who may have experience : n dirty tricks, Not Our Kind fellow had to quit. But Goldwater was prodded by John Blake, oh-boy net member now Senate Intelligence staff chief, to say, "Casey's gotta go too.-: `. 1.% Pared by C I.A. last year and was wrongly squelched within agency; also criticized a recent analysis of Cuban ac- tivity in Latin-America that failed to take Soviet activity into account. Oh- boy doves in the room, who already stimulated stories through Hill allies to stop formulation of Libyan plans, saw hardline handwriting on wall. Upshot: coup attempt has fizzled. Goldwater seems out to prove "sena- " " pr ess o e wanted `td'` Casey, Goldwater was pushed " forward by, S ""t"e wnicn- nsfield Turn- called _nress conference: to deny_it- But---- er. '-- ~: . instead ofdenying, confirmed.'Confu-._. `At' dinner party in McLean other sion attributed by gossipers to various=:. night, where my pickled- water chest- causes; by other senators to need-for' nuts wrapped in bacon made big hit, drugs to relieve intense pain in hip. agency doves were distressed at "burn- Combined with well-timed release of old ing" Inman -- who did not know how he story about Casey civil lawsuit. led to was being used but hopeful that firestorm asking for Casey resignation. Casey and Reagan too will Catering Service. is filing this report explaining the Casey case to Yuri An- dropov, his boss in Moscow Isplot*byct~c}ueanC.IArbureaucra ? y cY using liberal media and. befuddled Re- publican : senators to throw out hard- - liners appointed by Reagan to toughen up agency-Is being called Golderwater. gate Began iat, lasts year cvhert dovishr - clique who make up what I overhear them call "oh-boy! network"-got Sena. for Garry Coldwater to push forAdmi. rod Bcbby.(am not being familiar, that's his name) Inman as Director of Central . intellig-m _.. Instead, Reagan : chose "Wild Bill" Casey, throwback to Cold War Donovan era, who in turn ap. pointed as dirty-trick boss a man the oh-boy network considered..a pushy: street fighter from Brooklyn and Not Our Iand. . Inman operated the "Big Ear"'of the National Security Agency and protected the Establishment by never releasing:'. embarrassing "Kissinger withholds.".. Ile is seen by right-wing Madison Group as soft on SALT,'and was made Casey's- deputy as sop to Goldwater.;,( Coup was then plotted. Coupleof Wall. Street operators, ttee McNutt brothers (if I overheard that correctly) may have gotten in- contact with C.I.A. oh-boy net,-.: who urged them to go to the media to dis- credit new dirty-tricks boss and become Republican Senators Stevens and - are proud of demonstrated influences f Roth, thinking only of tax-cut fight, pan.. Senate and House intelligence conunit- icked only Democrat Jackson kept tees. and think they can obstruct, cool.. White ; House realized . that get- through Congress, any covert opera. Casey-maneuver was intended to put j Lions that might aid Savimbi, the Kurds, { Inman in-to restore method of national the Afghans, anti-Qadaffi Libyans, anti- intelligence estimates preferred by oh- Khomeini Iranans, or anti-Sandinist boys, and to smooth feathers of station Nicaraguans. chiefs ruffled by Casey. -f Comrade Annd.ropov! The public expo. National Securit bos s ult e ' h y s ra ardI sure of the dettikli i I-- .enn cquen C.I.A. liners sore at Casey for approving rela- controlling the Intelligence Overseer in tivelymildversion of upcoming Execu- III the Senate is unhelpful to us. Watch my five Order on intelligence operations, reports for further details. And keep an recognized they are better off with eye cn your own Number Tvo. Case th ith I y an w ,,e nman who is no softi either but the candidate of the C.I.A ` Beginning today Wiitiam Satire' f s co detentniks. To show Goldwater his coup umn will appear every Sunday and could not succeed, they put out to News. Thursday. Anthony Lewis who is n , ow week the names of potential Casey re-. an vacation, will appear every Mon- placements - definitely not Inman: [ day and Thursday. Inman is now Outman. ' When Casey refused tocave in, and no new revelations added fuel to firestorm,' and'Casey allies George Shultz and Bill Simon got to. Reagan, the coup attempt' Iost: momentum. Sneaking suspicion about instigation and motive of original country-skipping accusers cooled off,. some media:;. In speech to C.I.A. operatives, ,givene' to Senate in knowledge It would then net of detenteniks. Said that an accurate assessment of Nicaragua had been pre - tor and senile" have same root, and has shown he can be easilymanipulated " nf i n-l_- by what he thinks ar Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R00040015 2 r.u~ st 1951 Thniss .tca.xemaricabYe series- of -maneuvers"` gone. the-mostdramatlcshiftin basic-economic,.- ' policies it has: exper eneed V im;nearly-half_ a centaryw. Ainif that; among other things; is a sharp remindetof justhow badly Reagan's-Democratic- 71 -opponents haver- underestimatedi-him . f .In judg1ng a.; would?Y :president; politica} factnWi`nformatlaa about.foreign policy. or the, political philosophy::On. alL..these counts, Reagan DroL":'srateanoti hfgher ` than Franklin' Poosevelb=whom` thewlatei Walter Lippmann. 0nce~disnaissed as sim ljc as amiable man with Actuallsr though, the most important-quality E 3~.adershlp--~vhieh;=~ia::=turn; rests `'heavlly~:ion.: . persuasiveness:And in this respect; Reagan, like. FDR, has shown himself a standout. The common Democratic putdown of Reagan In -his. pro-Whitw,House clays,.was-that he was A "Just an actor". Butth,at isn't true; he had also had a whole:second-career_as-=a -pitchman_for-, -_Gener*-Eleetri~? lot-which,oftea-.tooIs- him before, skeptical. blue-collar audiences + T h-13, experience, helped glve-.hhn the'cast of minds- of- a good.'. sales es czaa:: insteadE of getting- angry- at people who disagree-with- him,, he tries : - - - to figure--out- what. motivates:. could change their minds Perhaps most important of all,, Reagan has an uncanny Intuition aboutwhat is-politically possi bie,. And- that' doesn't- always-.lead- him j o, com pram: Only aa_week ago, the wise-:money in %Ilashington:was (saying: that-CI1 ";Director Wit -. liarnCasey wash dead duck A , on the-other . ha. sniffed the -windd,--concluded;that it. svgs possibleto.save Casey-andalmostovernlght the;, wise money was proved :wrong. q- - Litte?FDR`Tagain; eagais is; a ::true= political in.xaovatorirThe traditional:"rewardx'aadTpunish- mentswith .whiciz *a_,7President-used'sto. sway C4 ngr have lost semze~-thoughtby no" nears- a11=oL their'effeciiveness But,as--apionee_r in the age _of mass- communications, Reagan knows : that he;cat bring :differrewards and-punish-=: m$nta ta..beaz=oascongresaznea by going over,' The' ury is -sill onion whether the programs- Reagaaad sitilltully sellesr the.wisest-possible for.the broblemswe fA_ce~Hut hfs;abilitytQ rally, Approved For 14_.p9@9.~{i0150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R00040015 s't 191 .are,,, Iiavittg`wun c.Ii- imn? the CIass:.'Reanion;;? salooii+ gaunt for poI~ticaana and journalists:- -ne~h1ock from faced and 4AitlY.:4 vo fingers missing; parachuted into Dierf.1 Another ,11a5r ~;th'e biggest yoeri`ever aiv ind a` hands reputation-=that ncrone oes tions-fork distiosua;.. silently. of severa1`"of Ilhcle? Sam's .enemies around the world Today the topecr, is the future of CIA director Bill Casey. flow lonycatr he stay, in- his Job ?-Calla forhirn. to; step-,down started- two weeks ago: after the.resignariort:of -d:vcnase-is?ilone to toe image) in tne= wake of Rogers since nhe . famous Congre?s- eionaL'revelaxioas about The .a-ency's-dirtytricks depart train hveyears agc> 'i~lv:`ooe-.really;thnrks the -"The three men"iiffer some{ `WlLLIA 1; CASEY-. rind to Bobby -I man, an-d , r ~,eryarie grees; have;played miral':witlr~z liavtrnrnnnri ,ri _t. .._._.:..a i- ,. c a r-J t hn,r intelligence' work." Inixian< is, nr t-ifork. But rhnsha4 beerr-no brilliant analyst -lie is? the in the wake of iii: network goavgabaut its ~ lams `S, t a t'art.e d when the. ing ,for A d'rn t> a 1 Inmain Neworicy businessmen: will a g-a i" n st ilia', bel.regvered iig >tve :,evidence of Qasey It i 2freretix3 `uf a: ur ?.`fluge!s:'stock'?manapulatiens. zeaE'-:week 's nhett Americans They :were.'-S'a mue i.: and L*are svatcdied Casey,' their Thomas - lleNlell; tshe :=save chne?:: spy, `- maue~? at harm he ,Post' reeordin s of their. Capitol flidly vP~3F1 `cony rsations with Hugel trhato raa Ifers as hr tn,0; , y and then' almost' immediately rtivesiigaterl `fot' slrady'busi, disappea?rc d '-They took with tress deals _ Sys s d them, apparently, S3.3 million No== one is.clui,te sure 110-W from the family litr.[, Triad it -1 turn; out: or ~di at the Energy Corp., of New York, imtlirence of the old.a-bo;y and have,not been seen since. network willcbe '" ~ 1 week rate, a third Yau ask 'me what thi, isl ~ broCher,i I)enrhis -Nell, 41, a1Y:about arrcl I sag; tn.at is a died ri .inysterious circum- good.::guestioh,' .si, 4 s ay.. 'stanceshn June 1`Some people say it iy:7 The second question posed Russians A_Jot of pal ole say{ by the ; Caseyraffair.is more I arn.?stu~ricL 'Some pecple, profound. It is whether the 'tliink~ ,tt ?ts; politics ,''Stir tee United:'States .-and..particu- t`I?eo rkth;trilF;itrs ilte aa~: bo.gl -1-ar1y.'the: CIA,, has:- tried to 5 ,.. u k++ '; s ll kurr'aacovf.rt.. action campaign a ,Casey'surv,ves,the izty sti to, topple,the regime of gations but the searcFr'cori-{ one dhafr of. k a times tar t a inatj Ve(s s@ ri n Al rhose-who-have-tried to-bring =liberals:?-have.:suspected,' but hinr dorrri 'ibleanwh'iF&. more ;_?never,be'en, able to prove resignation senior-7'Repub- lica is- on Capitol Hill called for Casey to step do vn, essen- tially for 'bungling, Hugel's } 'appointment. "Amon -:them, ironically" - wasHarry'. Gold- water;:- the 1, conseryande - Re- ,publican friend oLLhe-CIA, .,who is:-head` pfthe.`~Senate :-Intelligence Committee prompted by...members:of the CIA's old. boy network on his staff, had always wanted Admiral . Inman, -a ..former head':, of. the super, secret National Security Agency, to ruin the CIA.. His choice re- flected the classic split''in the at eney'.s ? activities -. Inman be Levies= the., prime task of the.CIA:is intelligence analy- sis,"not,'covert actions. Casey is -cover action man. The next day the -White House deniE d - ibva :was the target and, a upport of the d e n i a 1, Administration ` sources' tc Id the Washing= ton-Post the African country was in-.fact h'auritania. Mauritaui, has. a' tiny population rf one;:a id a half million. and -ecently went through . .t military -. coup shifting its allegiance-,from Morocco (friendly-- to America) 'n : Libya :.,_ (un- friendly).- Ni a;' this worth. a full-scale, ' costly' cover action ? If - u was this -part of a ' larger plan `to topple Qadhefi ? It is car r ,Iy true -that Washington -,:Tripoli rela- tions hay deteriorated sharply sin e Mr Reagan came: to ott e. During May a whole set,:-; of diplomatic When the-llTasheington Post' exposed'-'Hn,~ei.'s business deals, Goldwarer pounced. Hugel was Casey's man and so -Casey' should resign, the Senator demanded. Demo- crats joined him. The' : Senate.. Intelligence .Committee demanded an in- ,vestigation- into-: Casey's busi- ness ;dealings'especially one affai'r'in which he is-alleged to'?'have hniowingly =misled investorsi agricultural concer-n in%I963;?But the com- United Sta-asclosed- _the Libyan Miss,on in. Washing- ton and told i American - oil executives 'e th operations in Libya to hewn an.:` orderly .According to 'some press reports, 'senior government officials 40e,-,an . obviously would love to forget the whole The committee,- chaired by Republican thing. The committee absolved Mr. Casey S n H ld G e . arry o water, talked with Mr. Ca-?- say for a while Wednesday and concluded, that he was fit to serve as head of the CIA? despite the allegations of slick dealing in his; - business enterprises and. poor judgment in. picking his deputy Mr. Casey was Installed at the CIA by President Reagan, an old friend, after he served as campaign manager for the presi- dent In last fall's Republican sweep. Mr. Casey is also former secretary and director of Multiponics Inc., a farming enterprise that In 1968 milked $917,000 from Investors for the benefit. of its own officers and directors. President Reagan says the Multiponics Incident happened a long time age and, anyhow, It was merely a technical violation on Mr. -Casey's part- The matter, was not before its staff had even finished investigat- Ing the situation, but it has promised to "follow up on points that need clarifica- tion, " and issue a final report sometime in the future. Mr. Casey's choice for CI9, deputy direc_ tor, Max Hugel, has already resigned fol-, lowing accusations that he passed inside Information about a firm he once headed to some Wall Street brokers. The selection of Mr. Hugel, a man with no credentials to be a spymaster, has been cited as proof of Mr. Casey's own lack of experience in the intel- ligence business. But the Intelligence Com- mittee had no taste for further embarrassing the administration at this time. Its members have given Mr. Casey a clean bill of health I for now, but chances are his problems are i not going to go entirely away. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 STAT w T' fY.. , '~ 3 v.U APP S 11 ;1) I':f; L ;~J O i 1` _Q__Approved For Release 2905~11/u?,~` tCl .QP91-00901 R0004001 0001-0 The CIA's feud by leak Mr William Casey should be quickly cleared or fired, but not subjected to long trial by innuendo Damage will be done to America's Central Intelligence Agency if the accusations against its present director, Mr William Casey, are not immediately cleared up. Neither the CIA nor America can afford such damage to be done at the very moment when the agency hoped it could put a dark decade behind it. There are only two ways for the CIA to be able quickly to get on with that job of recovery again, so that it once more becomes the major prop it should be in America's defence effort. Either Mr Casey should go. Or his critics on Capitol Hill should conduct their inquiry quickly and, if they exonerate him, as quickly still their sniper fire. On Wednesday the senate intelli- gence committee unani::nously decided there was no need for him to resign, but distinguished senators were still muttering that some points needed clarification. Scrutinised to death? . Mr Casey is an old fighTer, and he has been fighting rather than giving up easily these past three weeks. His careless mixture of lumbering old Republican gentility from the top east-coast drawer and rasping commands in the voice of a New York cab driver do not endear him to many. He is impatient, highly political. He was clearly slow to take seriously charges against him (see page 30), some of which date back to before senate confirmation hearings for other distinguished govern- ment jobs he held in the Nixon years, at which they were disclosed; and others which seem not to have been disclosed when he was confirmed earlier this year in his present job but which hardly seem to have involved financial dealings of major consequence to a man of Mr Casey's background. Indeed, it is unlikely that much would have been made of any of these charges against him had he avoided the crashing mistake of appointing as his director of clandestine services at the CIA a small-time millionaire who then had to resign in a hurry when the Washington Post revealed questionable deal- ings in his own business past. Now that a lot is being made of the accusations against Mr Casey, the issues raised are far more serious than the actual charges. Can good and generally honourable Iawyer/businessmen like Mr Casey afford to accept ministerial challenge in Washington when activities dating from before the Simon-pure era of post-Watergate may be scrutinised to death? Can 'Washington's post-Watergate taste for "trial by innuen- do", as Senator Henry Jackson calls the present campaign, and trial by competitive press leaks, ever be put to rest? Can the CIA itself ever stop the debilitating internal wars which the Watergate era and the power- shyness of the Carter-Mondale era are jointly responsi- ble for? At present too much of the inside knowledge that the CIA exists to procure is being used as ammunition in its faction fights, instead of against Mr Brezhnev's friends. Mr Casey gets high marks from some intelligence insiders for his tough way of managing the agency, his efforts to eschew press briefings and yet to undercut the agency's internal wrangling by bringing political choices into the open. Others on the losing end of his ministry detest him for his toughness, and leak their detestation. Whether Mr Casey stays or goes, senators and con- gressmen must squelch this habit of feud by leak in the agency. Both congress and the White House must back Mr Casey, or his?successor, to the hilt. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 A.R T I C IJE APPEA i~.ED ON Approved For Release 2005/11/28 : CIA-RDP91-00901R00 400150001-0 THE WASHINGTON POST 1 August 1 981 ailed Lisi J. Client 0 man-cial Diselosw re -,,Kooorl By George Lardner Jr. amendment submitted this week showed holdings. Washington Post scarrWriter valued at $50,000 in Vanguard Ventures, $15,000:1 CIA Director William- J. Casey failed to list a in the Energy Transition Corp. and $10,000 in New Jersey waste-disposal firm and other clients. SW'C Information Co. Scott said his office was in in his financial disclosure report to- the Senate_ Intelligence Committee despite a rulecalling-for disclosure of. all- but minor sources of income over the past. five years. after'a closed-door session with Casey that it had Instead, Casey apparently duplicated a list of na basis "for concluding Mr. Casey is unfit to clients he had submitted to the Office of Govern- serve". as CIA director. But it, also decided, as. merit Ethics, whose rules call only for the disclo- sure of clients who had paid him $5,000 or, more- in the last two years. The- intelligence committee had asked hi:n in January; in connection with confirmation proceed- ings, for an accounting of all salaries, fees` and other items of income over $500, and their sources, during the past. five years. As part of its effort to wrap up the Senate in- quiry-into Casey's business affairs-that it started last-month, the committee staff now has report- edly asked Casey to dig back into his. records for the last 10 years... Casey had represented the waste disposal firm, SCA Services Inc., a company with alleged ties to organized crime, in.,1977 in an unsuccessful. effort to head off Securities and Exchange Commission action against the- corporation and some of its top officers.. Although. SEC lawyers went ahead with the. complaint, which alleged 'the diversion of some $4 million in company funds for personal-use- by its officials, Casey reportedly negotiated a settlement of the. case; whereby SCA neither admitted nor denied the -charges. A- former chairman of the SEC, Casey was affiliated at..the, time with the New York-based law firm of Rogers & Wells.. Officials it the Office of Government' Ethics said yesterday that CIA lawyers also had notified them' on Casey's-'behalf that he failed- to :disclose stock holdings in three corporations on any of his financial disclosure forrin. David R. Scott, chief counsel of the ethics of- Lice, which is part of the executive branch, said an the process of obtaining more information about the companies. - Chairman Barry Goldwater (R-Ariz.) unenthusi- astically described it, to "chase down some of the loose ends" before wrapping up the inquiry and writing a final report. Goldwater had called for Casey's resignation . only last week, but he did an abrupt turnabout. By Wednesday, the senator "wanted to shut it, [the inquiry] clown" altogether, one source said. Several committee members such as Sens. Jo- seph R. Biden Jr. (D-Del.) and Daniel Patrick Moynihan (D-N.Y.), however, maintained that ? there were too many questions still unanswered, concerning Casey's business dealings and Casey's appointment of Max Hugel, a Reagan campaign. -.colleague, as the CIA's chief of covert operations.' "Hugel resigned July 14 after disclosure of alleged financial misconduct of his own. Still to be checked, for instance, are court records.concernirig Casey's involvement with Mul- tiponics,Inc., a bankrupt agribusiness firm based in New,Orleans. Casey, who was an officer and a - - director; played down his role in the company in representations to the Senate committee, but, ac- cording to trial testimony cited in a forthcoming' New York magazine. article, Casey, said that "I kept very much on top of the important things; that the corporation was doing-", . Although committee members have said they want to complete the inquiry this month, it could stretch into September. A minority counsel, Bern- hardt K. Wruble, 39, began work yesterday in tan- dem with special counsel Fred D. Thompson, hp G wose apointmentoldwater announced Mon= day Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001 -0 OTNT PACE-_,, CIA proved For Release 2005/11/28 : CIA-RDP91-00901R0 THE c;C: IST 1-7 August 1981 ever for that job, with the possible excep- tion of having learned Japanese many years ago. "Max was very, very unsophis- ticated and unknowledgeable, and he thought he was a lot smarter than he was", a former superior told the Wash- ington Post. Just a few weeks ago, the Post broke the story of NIr Hugel's ques- tionable (and possibly illegal) business dealings with a family of New York stockbrokers. Mr Hugel was cut loose by the White House within hours, and Mr Casey lost no time in disavowing any truly close acquaintance with this man whom he had during the Nixon administration, includ- ing his candour on matters relating to the fugitive financier, Mr Robert Vesco. Then there is the bizarre incident in Mr Casey's past involving his plagiarising two and a half pages from a book written by someone else. All these matters aroused the senate intelligence committee enough to make it hire a former Watergate inves- tigator, Mr Fred Thompson of Nashville, as a special counsel for the Casey affair. Mr Casey said he was eager to testify and clear his name, Three of his support- ers, including a senator and the CIA's Casey's Casebook WASHINGTON, UC There is a theory that if an American politician is going to get into trouble, he is far more likely to do so in the summer It takes less of an event then to make the news, and less of a scandal to shock the public. and the press. Into the? breach this summer has come Mr William Casey;.the director of central intelligence. Mr Casey has been fighting a very public battle to keep his job. Such conservative Republi- can lights as Senator Barry Goldwater of Arizona have called for his resignation (though Mr Goldwater has also with- drawn his call). And the White House, apparently trying .to avoid the sort of fulsome and foolish backing given by President Carter to his one-time budget director, Mr Bert Lance, who stood ac- cused of financial shenanigans, has been measuring out its declarations of support very carefully indeed. Although he had served in the office of strategic services during the second world war, Mr Casey was not an automatic choice to run the CIA and co-ordinate American intelligence efforts generally. But that was the job he wanted, and Mr Rcagannwas so grateful to-him for-reor- ganising his campaign for the nomination after it had faltered early in 1980 that he did not hesitate to go along. The White House also gave Mr Casey a .virtual carte blanche for the selection of his closest aides and associates, and there Mr Casey made an undoubted mistake: the choice of Mr Max Hugel as deputy CIA director for "operations" (the. agen- cy euphe.niisux for clandestine services and covert action). MrHugel, a rich, self- made New York businessman who was "100% Reagan"-as one of his friends told the CIA during a background inves- tigation--had no qualification whatso- entrusted with one of the most sensitive general counsel, Mr Stanley Sporkin jobs in the American government. But it was too late. The appointment of Mr Hugel raised such profound questions about Mr Casey's judgment that the di- rector's own record as a Wall Street lawyer and businessman. came under new, more careful examination by mem- bers of congress and the press. Some embarrassments have ensued. A federal judge" recently ruled that Mr Casey and other directors of an agricul- tural company that went bankrupt many years ago had misled investors in docu- ments they circulated about the com- pany. Mr Casey was a lawyer for a waste disposal company that has been linked in sworn testimony to organised crime. And during his confirmation hearing for the CIA job this year he neglected to tell the senate intelligence committee about one of his investments (as required) and about the gift of a $10,000 interest in a business venture.. Questions also remain about Mr Casey's performance as chairman of the Securities and Exchange Commission (who previously worked with him at the SEC), took the extraordinary step of holding a news conference at a Washing. ton hotel, arranged by a private public relations firm, to express their confidence in him. Several of Mr Casey's prominent and most unimpeachable friends from former administrations have announced that they will give lunches in support of Mr Casey in New York and Washington. Meanwhile, as if to fulfil a prophecy by Mr Casey's leading opponent, Senator Goldwater, serious questions have now arisen in congress concerning a secret plan for some covert CIA action in Africa drawn up by Mr Casey and Mr Hugel. Initial reports (leaked by Mr Casey's opponents within the agency?) suggested that the plan was directed at Colonel Qaddafi of Libya, but the White House denied it; it was then said to involve Mauritania and the struggle in the west- ern Sahara. Members of the house of representatives select committee on intel- ligence took the unusual step of writing to. the president to suggest that the plan was poorly thought out and unwise. Mr Casey may recover from these exposures. The senate intelligence com- mittee agreed on Wednesday, after meet- ing for seven hours, that there was no need for him to resign. But the CIA, where it should be said that there are also many strong supporters of Mr Casey's cause and whose morale and effective- ness Mr Reagan and Mr Casey hoped to improve, has not been helped by this latest bout of probes into its rulers. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 STAT MI t 1111&, S (FL) Approved For Release 200$/1 V2&4dClKi bP91-00901 R00040015 ".4-.. Casey survives, for now By its handling of the current investigation of Central Intelligence Agency Director William J. Casey, the Sena e Select ommi xee on n lligence is perpetuating and :.refining the pattern of tunnel-vision and ineffectiveness it began to weavj during Casey's c this year. r. ?~ . Just a few daycs?ago?comrnittee,Chairman Sen. Barry Gi idwaterand two'other prominent Republicans surprisingly calleorrasey's. resignation. Casey was .CIA,'s`c adestineouerationsaftex+ ItageLsesigned in the ', wak , cusationsrthat he hadibeeir1nv6lved in improper financiaLpractices:while in-private business. Casey also is shadowed. by. recelit~revelations that: he and others had knowmgiy misl thvestors in.a N w Orleans-based '-- . ngri~business?irt!r1968~s Why Goldwratersuddenlyr turned on Casey would make a good=story. Certainlyitis reasonable 'ta wonder what Goldwater's real^m~'otiveswere,`;especally since neither the committee he-heads=nor the .fullSenate made-any-serious attempt?to:?probe*.Casey'sbackground.during the rAs President Reagan's allies'rallied behind Casey to stenxthe cries-for his resignation, the intelligence committee; which`had ordered a staff investigation of Casey's financial difficulties, decided to meet privately with Casey. A curious It certainly is puzzling for the committee to meet with Casey and then, with Goldwater concurring, give him a vote investigation of..Casey's financial dealings was completed- . As one committee member was quoted as saying; the panel...,.. Despite the questions about Casey's judgment'in hiring Hugel1and-about his own financial problems, the reasons for entirely treat;. Neither are the reasons for the intelligence committee's premature support of- Casey, except for the fact . shat the White'House obviously wants to do everything l o kee C le _y - p. i asey on 1.110 jV V.' ostiIn`all this behind=the-scenes:i aneuvenng xe the a ..luestions,.hat a e;most basic to the'public interest -= the matterof Casey?s fitness to head the CIA; the effect his leaderslilpwight haveon that agency's effectiveness; and the absolute truth. about~his financiaLhistory Those issues' tj.c u1g tfalc~[lvii Auw=is wneCner'tne intellig_ence'-=:`'_'= committ ~'s staff nvestig ti -wil v g : i a on l re eal aIl-the facts abou Casey's financaa problems and his fitnessto serve.in the t ;public ra er t,or.whethertnewhitewashthatseemstobe. on the-bards will be added tathe Senate's earlier .1. 1 eLLk. 1.tg-a _ ti: ^,wki~~tib!'~..?rfi!?f.. y.~f::-..ti._f.-.,: t,.. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Approved For Release 2005/11/28 : CIA-RDP91-00901R0004001 MIAMI IIERAI,D (FL) 1 AUGUST 1981 ever and the Senate for abdicating.its.resport- fdrtheUintelligence job.'; sibility to check and balance the EYeci ... The focus 0.1iftAd r? r,r r __-- p e amaged goods in a position, so meet dealings was his decision to use the critical that continued suspicion", and u- key post of deputyarncharge. of spies as a ture'scandals are certain to ari's'e.--'- Political -patronage plum. The job. went When they do, the. public rightly wilt to Max-Hugel,'a crude Reagan-cainpai:gn ''blamethe President forbad 'judgment .crony with 'no- qualifications what Lou", tnv es- that Mr- Casey's effectiveness, which Ligation during: the recent scandal. _ was questionable from the start, ' now 'is Mr. Casey's own bad judgment is evi- impaired even further. The Adrhinistra- dent in the decade-old business entangle tion won a political fight at the cost-,6f ments that still must divert his energy retreating on the front of sound gover- and attention, f rom%,,the nation's critical nance. In pursuit of political solidarity, it interests. Worse- even than:_his invest- acre t d d e na- the wnite~House maneuvered to-avoid tion's intelligence operations, he would the political embarrassment of'havirikn resign. If the Senate's top; priority were- key appointee forced out. Senior senaa - its Constitutional responsibility to give tors who ought to know better partici- advice and consent on major Presidential pated in politicizing the- decision on the appointments, it likely- would not have .fitness of-the director of the CIA. confirmed _him originally and certainly_.. The inevitable result of that fiasco is would have conducted a tho oh ar pp er,.-r.alternately attacked - and peek continually over his shoulder, to see feinted, calling for IvMr., i .Casey's resigna- his fickle friends are falteringor his tion_twice and then concluding that he political enemies gaining? fi should star on - It was clear that_.a num Probably not. If William Casey s first : ber of Republican chits were called in as concern were for the vielfare of i-1, r tively by a 68-year-old who has personal en'u ' ould constitute fraud. t Goldwater, a chief CIA court battles-yet.to fight.and. who must su .ti t --- - --_ -.. ua1culbullGC agency &1r:'.Hugel was forced to resign because ta# is perhaps the-most sensitive of all of- allegations of business practices that, . Federal bodies. Can it be run effec- if d Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 STAT Approved For Release 2005/11/28: CIA-RDP91-0090 - ,ARTICLE A.I'PI,,1RED NATIONAL SECURITY RECORD ON PAGE, __ THE HERITAGE FOUNDATION AUGUST 1931 :, .: ;~ 0 jh~rsi ?Tracking'the Issues-throng 1 Diverting Attention from to ? The outcry which icti to the resignation of Max Hugel, third ranking official at the Central Intelligence Agency, and which has badly weakened the prestige and effec- tiveness of William Casey, Director of Central In- telligence, is rooted in public and congressional concern over the effectiveness of the intelligence community. The fact that both of these officials lacked contemporary in- telligence experience and were appointed because of their work in the 1980 presidential campaign has been publicly deplored by prominent public officials, and there has been pressure for "intelligence professionals" to fill both posi- tions. Mr. Hugel's successor, John Stein, is such a profes- sional, a veteran of the operations directorate of the CIA. There is a strong consensus both in Congress and among the general public to improve the quality of American in- telligence, and a feeling that this can best be achieved by removing restrictions from the professionals in the com- munity. This interest is demonstrated by the careful man- ner in which the Senate is approaching the issue of exempt- ing the intelligence community from the provisions of the Freedom of Information Act. Currently two bills, S.1273 introduced by Senator John Chafee, and S.1235 sponsored by Senator Alphonse D'Arnato, are being considered by the Senate Select Committee on Intelligence. Both of these bills are designed to help the intelligence community preserve necessary secrecy while doing as little violence as possible to the principle of freedom of information. In other actions, Congress is moving closer to adopting the Intelligence Identities Protection Act (S.391 and H.R. 4). This act is attempt to frustrate a number of groups com- mitted'Io destroying U.S. intelligence, which among other efforts publish names of individuals which they claim are CIA agents. Opposition to this act has come primarily from the American Civil Liberties Union, which contends that careful study of State Department records will reveal the identity of CIA agents and that hence this information is in the public domain. The recent Supreme Court deci- sion, Haig vs. Agee, which ruled that the lifting of Philip Agee's passport in 1974 was constitutional, concluded: "Agee's disclosures, among other things, have the declared purpose of obstructing intelligence operations and the recruiting of intelligence personnel. They are clear- ly not protected by the Constitution." This Supreme. Court decision is evidence that any effort to challenge the In- telligence Identities Protection Act on constitutional grounds will not be successful. It is unfortunate that upgrading the performance of American intelligence has become so firmly identified with insulating the intelligence bureaucracy from outside com- petition. This identification has been reinforced by the Hugel affair. Before the election there had been recogni- tion that within the intelligence community there were severe problems with the analytical bureaucracy, and that any effort to reform this would require at the very least competitive assessmenko~ ggsFt8~-wei'69 reo2 1t P18 : dIA 1901 R000400150001-0 community. As the We will ree telligence Advis ministration, a distinguished Ar..~...H. tv ractivtttt u t,t?i~tant autlrr 01 national intelligence research and performance. We will propose methods of providing alternative intelligence estimates in order to improve the quality of the estimates by constructive competition. Yet Mr. Casey's commitment to the competitive estimates process has been lukewarm at best. In his first address to the CIA staff, he stated: I found in SALT I, for example, that some of the judgements were soft. They leaned toward a kind of benign interpretation rather than a harder interpretation of assessing or viewing a situation as being more dangerous.... At the PFIAB I supported a competitive assessment process, but I am open as to how that can best he done. Like anyone else I am in favor s,} improv- ing our analytical capabilities-that is something easy to be for. Mr. Casey's actions since this address was made have confirmed its tone. None of the important critic:, of the in- telligence analytical process has been appointed ~o the CIA staff. A special National Intelligence Council at the CIA, formed to "upgrade the system under which, national intelligence estimates are produced," is dismissed by many as decorative. They note that the chairman of the new panel, Henry Rowen, was associated with many c F the in- telligence failures of the 1960s and early 1970s while presi- dent of the RAND Corporation, even though in the late 1970s he criticized the "CIA's optimistic assessments of Soviet military strength." They also point out that the panel is empowered only to make minor changes in the existing system, rather than radical improvements. Of even more concern are the persistent reports that the plans for reconstituting PFIAB will no longer give it direct access to the President. Instead, it will report to the Direc- for of Central Intelligence. The "A-Team/B Team" ex- periment in competitive analysis would not have been car- ried out if PFIAB had not had this access to the President, and there are real concerns that if PFIAB is so constituted it will become a prisoner to the intelligence bureaucracy. It would appear as though the result of the Hugel resignation and the criticism it brought upon Mr. Casey has been to increase his dependence on the intelligence bureaucracy. His ability to challenge established institu- tions and mental patterns within the CIA has been under- cut, and any confrontation with department heads or na- tional intelligence officers would have a detrimental effect on his image If leaked. Firm action is needed by the White -House in this situation. PFIAB should be immediately re- established, `etnd with its backing Mr. Casey should be given the authority to make some badly needed institu- ::i :E_._= + rrrrn,r:~rr 7iT1rrrTq THIS WEEK'S NEWS FROM NA TO Alliance at Stake Can Reagan Derail Soviet- German Natural Gas Deal? The most important topic brought up at the Ottawa summit was not U.S. interest rates, which many money men predict will soon begin to fall if the President sticks to his economic; and monetary ic trade with ti a Soviet Untori t st program b te , .. ra g u The President 'and his aides, including Secretary or! State 'Alexander Haig, are said to have strongly ,counseled the allies -to unite behind a` far more restrictive --technology transfer, policy ard specifically:'warned German'. Chancellor ' Helmut Schmidt not to go ahead with a deal in which West Germany would become increasingly dependent on ~ the Soviets for energy supplies; So firm was the U.S. position that the final com munique, though a compromise, did incorporate language calling for the allies to take economic ac- tions that; "continue to be 'compatible with our political security objectives.:" Moreover, `at- U.S. insistence, 'leaders- of 'thee seven major nations at Ottawa agreed to another high-level meeting for the purpose of arriving at "a better definition of what things should and should-' not be sent" . to Moscow "in light. of Soviet expan- What particularly concerns the Reagan Ad- ministration is Chancellor Schmidt's apparent determination to cut a deal with the Soviets on natural gas. This deal, which Schmidt suggests. is innocuous, may, according to Soviet experts here, result in the Complete neutralization of Western Europe. Under the terms of this on-again, off-again- project, which was initially okayed by President Carter, the West would supply the Soviets with materials and money so they could lay down a 3,600-mile pipeline extending from the rich gas fields of northwestern Siberia's Yamal Peninsula, across Eastern Europe, to the Federal Republic of { Germany. At that point; it would be linked to an existing Western European pipeline network for: distribution. Once completed, the Soviets would be able; to deliver an estimated 40 billion to 70 billion cubic meters of gas per year' into Western Indeed;- so dangerous is this plan considered to, be for. the West that Sen.' lake Garn (R.- Utah), along with Representatives John LeBoutillier (R.-N.Y:)-and James Nelligan (R.-Pa.), addressed! a letter to, the President on June 5 in which he` outlined his deep concerns. With Garn in the. forefront, some 43 senators and House membersi dispatched another -letter to Reagan three weeks later asking for an "immediate" halt to any U.S. participation in the pipline construction. Further- more, Garn outlined several ideas-which the 'President ,used, at the Ottawa summi -which would provide i~Vesfern.laurope . with alternative sources Ofeliergy: The President's decision to raise the subject at the summit was also bolstered by a recent study put out by two vice presidents of the Chase Manhattan Bank. In their paper, called, "Soviet Gas to the, West: Risk or Reward?" Miriam Karr and Roger W. Robinsoti:Jr.. Underscgre, the grave dangers in' the pipeline deal bit'. Under the proposed project, they say the Soviets. would, be mainlining gas to 10 European coon-! tries--Germany, France, Italy, Austria, Finland, $elgium,: the Netherlands, Sweden, Switzerland and Greece. The largest variant of thg plan envi sions deliveries to Britain and Spain as well ~s= , ,` By 1990, according, to ' the authors, 1-"it:, is estimated that the USSR would supply 35 per cent' of Western Europe's gas requirements;'': thus mak.' ing most of NATO increasingly reliant on Soviet energy,sources. Whereas today. the Soviets supply.just about 18 per cent of what West Germany consumes - in natural gas, for instance, by 1990, assuming the' pipeline is in place, the Soviet share will have more: than doubled.' (Other studies show that France,'; which now receives 7 per cent of its natural gas sup ply from the Soviets, will be relying on Moscow for more than our times the quantity in 1990'. Aus= tria, now receiving 55 per cent of its gas, supply from the Russians, will be getting 70 per cent at': the end of the decade.) Moreover, note the authors,. many areas of Ger- many are already overwhelmingly dependent on the Soviets for natural gas. "For example, Bavaria at j present depends on the USSR for 80 per cent to 90 per cent of, its total gas consumption. Major f European markAPproved, For.Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 ~`ONZ[1rL~D Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0 Bavarian industrial consumers linked to Soviet gas are the chemical, petrochemical and automotive industries. "The Saar and Rhineland regions rely on Soviet sources for about 50 per cent of gas consumption, while for Baden-Wuerttemberg and Hessen the share is somewhat less than 50 per cent. It is estimated that two-thirds of' Soviet gad goes to of President:- Leonid I. Brezhnev ' i ... The. ac celerated development and exploitation of Siberian' natural gas: testiurces > is a matter ofd; highest. economic and political [note: emphasis.ours[_pri ority.' t) . With his own gut reactions bolstered by the Garn4 letter and the Chase Manhattan study, t e resi- dent,.Say informed sources, went to Ottawa intent German. industrial users with the remaining one- Not only would Western Europe, be' far more; dependent. on,the Soviets for energy. supplies, but the Russians would be earning enormous. amounts of foreign currencies. Moreover, they would be. in a perfect position' to blackmail NATO... govern- ments with potential cut-offs in natural gas. While the Soviets are .said to have- a good _ track record for observing commercial undertakings, disrup- tions in Soviet gas deliveries to Europe have, occur- red as recently as this year. The authors of the Chase Manhattan study also say. A Jess apparent dimension to-.East-West resource `projects; is Moscow's long-term strategy. of transforming economic dependencies. into tools of international diplomacy; In the words, the des . The President was a M vigorous y sup- porte in is effort y enago c e r r irger~ U.N. Ambassador Jeane Kirkpatrick Nyg ant IAcliteftait Wi ltam Casey. wc!n erger and Casey, reportedly, pus. - - or the President to e an exceptions ly tough stance with Schmidt, while Secretary. o State exan er aig and -pectal `I ade epresentatrve William Brock pressed for t e sot" line. ~evert.iless Reagan brought up the subject at Ottawa; much to Schmidt's discomfiture. Whether' the President can eventually force Schmidt to back down is problematical, but a goodly number of strategic trade experts in Washington think it's ab- solutely essential if NATO is going to survive as an anti-Soviet force. Approved For Release 2005/11/28 : CIA-RDP91-00901 R000400150001-0