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November 21, 1981
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.1 7F.aciz, For Release 2001/03/07 : CIA-RDP91-0090 NATIG?IAL 21. November 1981 DEFENSE REPORT Reagan's Effort to Reshape Mr-37 Revive Debate over Agt The President is about to sign an executive order on the Cl/ delicate question of how to balance national security wit BY DOM BONAFEDE he Reagan Administration, intent on revitalizing the U.S. intelligence ap- paratus, is seeking to assure that the changes conform to President Reagan's goals?to combat international terrorism and other perils to national security. After several false starts, Reagan will shortly disclose the revisions in a new executive order?the third presidential directive governing intelligence activities in the past five years. In addition, Wil- liam .J. Casey, director of the Central Intelligence Agency, has taken adminis- trative and organizational measures to further centralize operations under his aegis. On another front, the Administration is pushing legislation to exempt the CIA from Freedom of Information Act stric- tures and is supporting a bill that would prohibit unauthorized disclosure of infor- mation identifying U.S. intelligence oper- atives. Each of these steps is part of a con- certed effort to strengthen the nation's intelligence machinery in keeping with Reagan's hardline defense posture and his political ideology. Reagan's new executive order, cover- ing the CIA and a galaxy of sistcr intelligence agencies, could nonetheless provoke an intense national debate over the delicate balance between individual rights and national security. Two earlier draft proposals, leaked to the press by antagonists, were purportedly designed to expand the CIA's jurisdiction to include domestic counterintelligence, lawfully the province of the Federal Bureau of Investigation. That raised the specter of surreptitious entries, mail openings, electronic surveil- lance and iNIAPEOMelitoFtGlil Belifra and even legitimate business organiza- tions. It has triggered fears that the "new CIA" will be like the old CIA, which in a torrent of headlines in the 1970s was exposed for illegally spying on American citizens, exhibiting a cavalier disregard for civil liberties, participating or conspir- ing in overseas assassination attempts and masterminding a host of bizarre, costly and embarrassing James Bond-like plots. Adm. Bobby R. Inman, the deputy CIA director, publicly declared in March that while the reins on the agency may be eased, the scope of the proposed changes has been distorted and exaggerated. Yet, should Reagan persist in "unleashing" the CIA, the consequences almost cer- tainly would be to revive the highly charged dispute over the proper role of the intelligence community in a free society. The President has already been put on notice by the intelligence oversight com- mittees in the House and Senate that the overwhelming majority of their members are opposed to any proposals that would allow the CIA to conduct covert domestic operations. On Oct. 30, the Senate Select Commit- tee on Intelligence, headed by Barry Goldwater, R-Ariz., sent its recommen- dations on the proposed executive order to .Richard V. Alien, assistant to the President for national security affairs. Allen and an assistant, Donald Gregg, director of the National Security Coun- cil's intelligence cluster, are handling the issue for the White House. Although the committee's report is confidential, it is known that the members, in a bipartisan agreement, dissented from proposals that would permit the CIA to engage in domestic operations and offered several modifications. An addendum attached to nent sent that cond tiviti by poll( A men Pres theil can issul Hot Lea I nte tion The tiou tion orch Mei aga atio Hot mitt mai on t a a mei STATI NTL mittee on Constitutional Rights. Rodin() and Don Edwards, D-Calif., the subcom- mittee chairman, contend that the execu- tive order falls within their purview be- cause it would diminish the authority of the Attorney General and the FBI in domestic intelligence matters. Both the the report included the views, mainly in Justice Department and the FBI come opposition to particular provisions of the under the committee's jurisdiction. members. order goes," dwards said. "We're trying On the same day, Edward P. Boland, to let the American people and the nedia 90e200446 10178 Petei5ROP9403 0 getRO (getn0e018)3,4fa r the Approved For Release 2001/03/07 : CIA-RDP91-009 COMPUTER;IORLD 16 NOV,IBER 1981 APPEARD ON PAGE / Electronics Underworld Former CIA Agent Implicated in By Christopher Simpson Special to CW The amazing case of Ed Wilson arid Frank Terpil the two former Central Intelligence Agency agents ac- cused of shipping explosives to Libya ? has led to criminal investigations on three continents, a congres-1 siorial inquiry and a purge of senior U.S. intelligence ! officials in the last three years. But that may be only the beginning. Allegations of corruption in the traditionally top-se- cret procurement of computers and other sophisticat- ed electronics by U.S. intelligence agencies have been brought to light recently by new press and govern- ment inquiries. Such contracts are worth tens of mil- lions of dollars each year to U.S. manufacturers. The federal indictment of Wilson, Terpil and one other defendant has focused on their alleged role in supplying C-4 plastique explosives and mili.;:ary fuel thickener (the basic ingredient in napalm) to Libya's Muammar Qaddafi. Missing from the government's indictment, however, is the fact that Wilson was em- ployed by the U.S. government long after he left the CIA. ? Interviews with former Wilson associates and a check of government records reveal that between 1971 and 1976 Wilson was a top procurement officer for a secret naval intelligence group known as Task Force 157. Former Task Force 157 agents now allege that Wilson used his position on the task force both, to en- rich himself and to lay the ground- work for his later career as an export "consultant" specializing in _military technology. Along the way, according to Kevin Mulcahy, a former Wilson business associate, Wilson made a small for- tune in kickbacks from companies for which he arranged government , contracts both in the U.S. and abroad. Mulcahy, a former CIA com- puter and electronics specialist hired by Wilson for his technical expertise, also told a Washington, D.C., grand jury that one of Wilson's best custom- ers was Control Data Corp., the mainframe manufacturer. A spokesman for CDC denied that .charge. Wilson himself is presently a fugitive in Libya and could not be ? reached for comment. Approved For Release 2001/03/07 'Foreign In What exactly According to e from former na?, cers, it was a "human source roreign intelligence unit" staffed by "clan- destine intelligence Case Officers." ? Task Force 157's tasks ranged from systematically infiltrating interna- tional maritime unions to collecting ? intelligence on Soviet nuclear bomb shipments. It was involved in almost every major intelligence operation in the last 15 years, according to in- formed sources, from the bloody -overthrow of the. Allende govern- ment in Chile to Henry Kissinger's --I secret trip to Peking in 1971. One im- portant function of the group was providing secure communications channels and data processing sup- port for clandestine operations. Most Task Force 157 agents worked for front companies ? called "pro- prietaries" ? of the Naval Intelli- gence Command.. These companies were often "nonexistent corporate entities ... created by federal offi- cials under the guidance of U.S. Navy auditors," according to former Task Force 157 Agent Gerald Walters. Two such proprietaries of particular interest to' the computer industry. were Pierce Morgan Associates, a now-defunct 'computer systems consulting" firm whose offices in Al- exandria, Va., provided cover for Task Force 157 agents, and Consul- tants International, Inc., a Washing- ton, D.C.-based import/export con- sulting firm. ? Wilson's Navy Job Wilson had a desk and his own staff at Task Force 157 headquarters, ac- cording to eyewitnesses. His Navy assignment included the creetion of -i a network of corporations, many of 1 which he personally controlled, to provide cover for sensitive .Task : -tAtRUP911009041000601027 003-4 continued ATAFfsp:Iejease 2001/03/07 : CIA-RDP91-0090 TIME ON PAGE 16 November 1981 Gaddaffs Western GunsTingers A Colorado trial involves attempted murder, Libya and the CIA lor he only thing clear about the attempt- ed killing of Faisal Zagallai. a Libyan graduate student at Colorado State Uni- versity. is that. Eugene Tafoya. the beefy ex-Green Beret who shot him last year. was not simply acting on his own. Thus Tafoya wear on trial last week not only for attempted murder but also for conspiracy. although the prosecution is not yet sure who his co-conspirators were. Was he em- ployed by Edwin Wilson, the former CIA agent who is now a fugitive in Tripoli ar- ranging mercenary support for the Libyan armed forces? Was the murder attempt ordered directly by the Libyan govern- ment? Did Tafoya have any real con- nection to the CIA, as he claims, or only with renegade ex-CIA agent Wil7 son? As these questions are explored at Fort Collins, Colo., during Ta- foya's trial, which could last a month, authorities hope, or perhaps fear, that some light will be shed on the myste- rious web spun by Wilson that entan- gles former CIA officials and Western soldiers of fortune who are giving support to the radical government of Colonel Muammar Gaddafi. Zagallai. 35, the son of a former mayor of Tripoli, originally came to the U.S: on a scholarship provided by the Gaddafi regime. But he soon soured on the dictator's repressive policies and became a leader of the anti-Gaddafi dissidents in the U.S.. and had been warned by the FBI that he was a prime assassination target. Fortunately for him, the man who called at his apartment pretending to be a corporate recruiter bungled the job. Tafoya, 47, a 23-year veteran of the Army and the Marines, who fought in Viet Nam, fired at Zagallai at least twice at pointblank range but succeeded only in blinding him in one eye. Four months later, the .22- cal. pistol used in the attack was found near by and was easily traced to Tafoya, who was arrested at his home in Truth or Consequences, N. Mex.. in April. Tafoya has variously claimed that he acted in self-defense after .Zagallai pulled his own gun. and that he was on a secret mission for the CIA to warn Zagallai to tone down his criticism of Israel. As Tafoya tells it. he was at that time a kind of double agent, working for Wilson even while spying on him for the CIA. The agency denies that Tafoya was. in its employ. his connection with Wilson is another matter. After the shooting. Tafoya lived for three weeks at a 17th century farm es Late in southern England owned by Wil- son. - His peisaMpers ifludeal Ftri- vate teleOM ing to one of Wilson's former business as- sociates. In a tape recording seized at Tafoya's house. a man believed to be Ta- foya tells a phone caller that he was re- sponsible for the bombing and is available for other jobs: "Do you know somebody that should quit breathing permanently?'' Authorities have identified the man he spoke to as James Clinton Dean, another former Green Beret. Wilson is a former covert operative for the CIA who helped organize the disas- trous Bay of Pigs invasion by anti-Castro Cubans in 1961. lie officially left the Gov- ernment in 1976, when the naval intelli- a a a it the STATI NTL Imes quo es some or tame in vol yen as saying that Americans have been sustain- ing Gaddafi's yearlong intervention into neighboring Chad. John Anthony Stubbs. a Bi itish pilot who worked for Wilson ta til he was asked to deliver arms to a ,:had air- field under siege. told TIME last week that as many as 45 Americans have also been recruited to help train Pales- tine Liberation Organization terror- ists in Libya. According to Stubbs, the training operation is based in Kufra, about 800 miles south of Tripoli, and run by former U.S. Marine Corps Pilot Robert Hitchman. who once worked for the CIA-financed company Air America and now lives in an apart- ment in Wilson's villa. Says _';tubbs: met Hitchman in Saigon in 1972. I never knew exactly which side he was working for. When I was in Libya, we used to play chess at Wilson's villa. He runs the P.L.O. helicopter tr _lining for the Libyan government, and he flies them himself. The Americans he hires are mainly Viet Nam veterans, and they work for about $4.000 a month." When testimony gets under way in the heavily guarded courtroom in Fort Collins, a cen- tral question will be whether Libya's World Revcgutionary Committee .was telling the truth when it initially claimed to have ordered the murder of Isa isal Za- gallai. If it did, it probably acted through Wilson. This possibility has spurred the Justio: Depart- ment, CIA and FBI to pursue more aggressively their investi- gation of the former operative's empire. An interagency task force has been set up to coordinate the cas,, and the' House Intelligence Committee will begin! public hearings by the end of the year. Thel result may be a fuller understanding of the, old-boy dealings between present and for- mer intelligence agents. There is a grow- ing suspicion, as well, that close scrutiny ofl Wilson's affairs will turn up embarrassing imtio ? both in the, ; II I; Ai IMW9 ve partici- pated in business deals with the entrepre- neur in Tripoli. ?ByWalterlsaacson. Eugene Taloya and John Stubbs, inset A web of violence and fntrigue. gence branch for which he was working, known as Task Force 157. was being disbanded by Navy Rear Admiral Bobby In- man. Wilson tried to persuade Inman to save Task Force 157 by offering what Inman took to be a bribe; the admi- ral, offended, immediately decided to abolish the operation. In 1980 Wilson was indicted on charges of illegally shipping explosives to Libya. He has been a fugi- tive, mainly in Tripoli. since then. In a se- ries of articles over the past five months, the New York Times has described how vaclx RA, Wilson in Tripoli, as well as notes from what appear to be conversations with him. 64-WitiiiairJUktieflb nology and trained personnel to the Liby- an armed forces. Much of their business ? t - ? t a r - ? ? ? - ? - ? - 0 Approved For Release 2001/03/07 : CIA-RDP91-00901R00 WILMINGTON SUNDAY NEWS JOURNAL (DF.,) 15 NOVENah_zt 1931 STATI NTL enottat'triteler information like /his 4 ' and that is what we did." -- , . to the prosecutors working the case ibyans .1. 4 4pT ex ra io ? selling transport aircraft and other military hardware to Libya. (It is 'illegal to lobby fora foreign power without registering with the -Department of Justice.) ? ? The investigation, by the Senate- : and ,the'Justice Department, ended last year: The ban on military , exports to Libya was never lifted - and Carter by that time had agreed to registef as a foreign agent, main- taining all along that the money :from Libya was a loan. 0 , . By JOE 'I'RENTO- . -- ? Staff reporter ? ? -.5. t Copyright 1931, The Neors?Journa1 cot ?.:.? WASHINGTON Federal prose- cutors ignored information.thai Billy Carter may have received $420,000, not $220,000, froth the" Libyan government and failed- to investigate reports that he had.dis, cussed a machine-guir?deal -with renegade CIA agent Frank Terpiii.7-, Carter Visited Libya _twice 1978 and 1979? and publicly advo- cated Libyan and Arab causes while his older brother, Jinarny,-was pre's- ident. While looking intcrwhether Billy. Carter's involvement-1;6qt Libya constituted- acting- as-an ? agent for A foreign government federal 'investigators,-determined that the Libyans had "loaned Billy :Carter ;200,000 and Tilifeitictlixi $20,000 more to coveraexpenseS related to a visit made by a'Libyan' delegation to the United States. The so-called loans. later_became:a media field-day briinght. ? embarrassment to the Carter White House. ? .- ;14?':?.7;."???77:?71:."-,',3 . - But- there are fresh`rePorts that Billy Carter got much more from the Libyans. The :Sunday News Journal was told last week that the: ? National Security Agency knew. in May 1930 that Carter had received , -arr addi tional? $200,000 from the Libyan government,. but that proof . of that payment was withheld from , investigators on the grounds. of ...national security, -Carter was AunderinVestication or. failure to- register as. a Libyan 4-,agentanaid allegations that he4t4d 'attempted tri'influerinea,theacarter admini3traticm to lif.a.baaa'against:: Tile information that-Carter was also involved with Terpil came last week from Justice Department documents_ The department did nothing to determine the extent of Carter's dealings with Terpil, and prosecutors in in the Terpil case say that his link with Carter was never adequately explored. ? ? Carter met Terpil at a dinner ? and was photographed with him watching a parade ? on his second visit to Libya in 1979. A few months later, in January 1980, Carter told a Justice Department official and an FBI agent that Terpil had recently contacted him about getting lots of machine guns for Libya. The Justice Department official, Joel Lisker, was interviewing Carter as part of the investigation of Carter's failure to register as a Libyan agent. Lisker, now chief counsel for the Senate subcommittee on internal security and terrorism, said he was "very much aware" of the investi- gation into Terpil and another CIA renegade agent, Edwin P. Wilson, and believed that the Carter's state- - ment was important enough to call him back to for more details. 'But Lisker said that when he did call back, Carter denied making his earlier statmentspbout Terpil. - Lisker sent the reports to Assis- tant U.S. Attorney E. Lawrence Barcella Jr' .the key prosecutor looking into the activities of Wilson and Terpil, activities that include gun-running-and training and recruiting terrorists for Libya. Barcella says he didn't follow up on the memos because he thought that it was Lisker's responsibility. Lisker said It is standard proce- . Details of Lisker's meeting with Carter and Carter's statements t . about ?Terpil are part of a report filed by FBI Agent Richard Fugate and Lisker obtained by the Sunday News JournaL ?- Carter; reached late last week in ? California, confirmed that he had met Terpil in Libya, but vehe- ? - rnent/y denied ever telling Lisker,--i .anything about machine guns: :,! Using expletives, Carter called Lisker,_now a lawyer for. a Senate". committee, `.`probably ;:a. one of 1 the biggest liars I have ever met in:; -my life. That memo was written 14 or 15 days after he questioned me, New findings reveal--.4---:: that probers over- looked new loan and -Carter's talks with - CIA renegade Terpil taking no notes. That document that Lisker, wrote is probably the big-: gest bunch of s--- ever printed by a ? - government official." ? - a ? ? a Carter said his laywer had:: instructed him not to say anything : about the gifts or loans he got from Libya. ? . _ - Through reliable sources at the highest level of the U.S. intelligence community, the Sunday News Jour- nal has learned that the National Security Agency, While monitoring ? communications involving Terpil-- and Wilson, found out about the sec- ond $200,000 checgaCarter had ? received from the Libyans, a check,. written on a London bank. - ? . Lisker said that he, too, had heard a6out the second check but. that this . and other details of the Carter case : were kept from investigators because the CIA and the National Security Agency claimed it could compromise intelligence sources. ::?7 The Sunday News Journal has learned that Bobby Ray Inman,' then head of the National Security Approved For Release 2001/03/07 : CIA-RDP91-00901R00050627 '131 0003-4 Approved For Release 2001/03/07 : CIA-RDP91-00 ARTICLE APPEARED ON PAGE ./Y, Lase)/ Ligh 7. By ROBERT C. TOTH, Times Staff Writer ? WASHINGTON?Despite an ar- rogant manner and a tendency to mumble, CIA Director William J. 1Casey has come a long way, even .his critics concede, in restoring mo- rale at the once badly shattered Central Intelligence Agency. ? 1; And spending for U.S. intel-. ligence activities has been in- r.eased 10%. even though Ameri- pn agents overseas have not exact,- ly been "unleashed" as President Reagan promised during the -MO cc lion campaign. . U.S. agents conducted about 10 undercover operations in the final year of Jimmy Carter's Adrhinistra - Lion. the same number as are now in progress. "There is certainly more enthusi- '3srn for (intelligence). operations now." one official said. "But they arc limited by budget constraints. congressional oversight and the faCt that this Administration does not yet have a coherent ,foreign policy which covert operations would be used to supPort, ? "When they get their policy act tegether.'' this official predicted. "there will probably be more opera- tions. The Carter ? Administration needed a moral rationale for such things. Until Afghanistan. they had none and there . were virtually no clandestine activities for the .first !lime Carter years. Excuses Not Needed . "They saw the Soviet invaSton as immoral, so gun-running (of So- I viet-made arms from Egypt) to the ! Afghan rebels was justified. These (Reagan). people don't need such I excuses." the official said. " But even as Casey and Reagan.; have moved to reinvigorate the na- tion's intelligence agencies, new problems have cropped up and some lingering, old problems have taken on new twists. For instance: ?The sordid "gun for hire" ex- I ploits. of such former:Central Intel- heence. agents as Edwin P. Wilson.. who is accused of exporting terror- ist equipment to LilAya,etiave raj.geA questions about th~ltirg90 men once they leave- the agency. especially, those who use expertise LOS An-lZ,LSE; TIIIi 15 Noveesh,,_.,r 191 ing a FilT.,UpOr but: toblems l'Or. revived speculation about Russian "moles" inside U.S. intelligence agencies. ?The leaking of U.S. secrets to ' the press, although greatly reduced, has yet to be stopped. The most recent case of leaked secrets found White House "hard- liners" pitted against CIA "liber- als," reversing mast patterns, amid altriost comic confusion.' The case involved a CIA plan, ap,- . proved by the White House, to pro: vide several hundred thousand dol- lars to political activists in Maurita-, an Arab country in northwest- ern Africa, to Counter money fun- neled to Mauritania by Libya. It was laid before the House and Senate . Intelligence committees in June. . House Democrats objected to the :. operation and wrote a rare letter of protest to Reagan. whereupon the proposal was killed. ? ? ; Existence of the letter was leaked. a month later by White House offi cials, sources said, in an attempt to embArrass CIA leaders, including ? Casey and Deputy CIA Director Bobby R. Inman; ,who opposed ef- forts Co give the cIA. ? domestic spying authority. / The White House Officials, led by Richard V.. Allen; national security adviser to the PresIderit; have puShed for a "stronger", executive. Order to the intelligence agencies to satisfy the "unleashing" promises made in the campaign and to im- prove U.S. counterintelligence Ca- (1 pabilities. The comic aspects then began. A ,Democrat on the House Intelligence Committee, based on second-hand knowledge, told a reporter the CIA plan- was aimed at overthrowing, perhaps even assassinating, Libya's Moammar Kadafi. A White House official told a reporter, wrongly, ? that: the target country was Mauri- tius, which is a black southeast African country. The correct coun- try then was identified to calm the infuriated citizens of Mauritius. "We shot ourselves in the foot with three countries over a plan 'that was never_approyed," one in- r. Redeaseolifialde*.LOWea.Ctik-R KGB must still be.laughing." Radic ,order o ,cies, WI sought, made. N officials ,thority I ated do on the y better di getting I spying fears alai prospective gain. , Moreover, the FBI's counterin- telligence division "does not need, any unleashing," a senior FBI offi- cial said. "We have all the scope and range of authority we need to per- form our mission." He also implied that he thought the FBI did not need any help from the CIA in its work. ' I Among congressmen on record against such moves are all ? the members of the Senate Intelligence Committee, both Republicans and Democrats.. As Sen. Malcolm Wat- lop (R-Wyo.), put it, Reagan will be "pilloried': if he exposes "law. abiding Americans' to CIA scrub- fly." Concerns.of Congress , , At least one more draft of a Rea- gan executive order for the CIA. which is intended to replace the 1978 order issued by Carter, is being written "to reflect the concerns of Congress."- according to senior in- telligence officials. Its release is ex- pected within a few'weeks ; Casey must take some blame for , the controversy. ? Although he' -backed the intelligence communi- ty's view against the White House , in the end, he long failed to heed warnings that Congress was not prepared to loosen the reins very ? much on intelligence activities. ? This was .part of Casey's larger failure to take Congress seriously during his first six months on the job, congressional and other sources said. He usually sent Inman, a con- gressional favorite and highly re- DPIalspected_pboie.sai lawmakers, 11:14M7403-4 . "It was a mistake to rely too , ? Approved For Release 2001/03/07 : CIA-RDP91-00901R ARTICLE APPEARED THE WASHINGTON POST 10 November 1981 ON -PAGE )4-1 Morocco Seeks Defenses Beyond Wall of Sand' By Howard Simons- and Edward Cody.' WastLigtort Yost Foreign servfee RABAT, Morocco J---'-iFrom the air, the sand walls built by Morocco to keep out Polisario guerrilla raids seem to stretch across. the- western- Sahara desert without endr, puncttne ated every three of:Jour :miles by forts that look like those children make on beaches. . ? Most of Morocco's Army in the contested territory 'of the, former Spanish Sahara 600 Miles south of here sits dug into the-miniforts, be- hind 400 miles of land mines and surrounded by barbed 'wire and ra- dar. Its mission is to protect the, 103.000-square-mile s,. territory, claimed by the Libyan- and Alger- ian-backed Polisario as the Saharan Arab Democratic Republic but ab- sorbed by Morocco as its rightful:; heritage from precolonial times. :I "The security belt is not a i'vlagi-? not Line, but rather an obstacle to infiltration," said Col. Naji Mekki, French-educated professional who fought against Israel on the Golan Heights in 1973 arid now commands. troops guarding a large chunk of the nine-foot-high wall. As an obstacle, in the assessment of Moroccan and foreign military specialists .in this North . African: country, the wall has indeed halted, most infiltration into the main pop- ulation centers that King Hassan II has defined as the "useful Sahara." La the last few weeks, however, the six-year-old war for control of this Arab waeteland has shown signs' of expanding beyond infiltration and Polisario's traditional hit-and-nn raids.' As a result, Hassan is seeking increased military and diplomatic help from the United States. And the Reagan administration, in re- ponse, is considering providing U.S. training that would add search-and- destroy commando tactics to the Moroccan military's niostly static defenses. ; Francis J. (Bing) West Jr., assist- ant secretary of defense for interna- tional security affairs, said during a . visit in Morocco with a 23-member U.S. military team that the admin- istration will, try to provide U.S.. , radar detection and jamming equip- . rnent, which is used to defend egainst ground-to-air missiles, for Hassan's American-made F5 and French-made Mirage I warplanes. In doing so, West appeared to ac- kept Morocco's charge that Polisario has deployed Soviet-made SAS mis- siles since a major battle Oct. 13 at the desert outpost of Guelta Zem- mour, gaining the capability of downing even high-flying Moroccan ground support or reconnaissance plane-s for the first time Since the conflict began. Western military experts. who have been following the war raised the possibility that the five Moroc- can planes shot down around Guelta Zemmour might have been hit by SA9s ? beat-seeking missiles that do not use the radar guidance de- vices that the U.S. equipment is de- signed to. thwart. ? , Polisario guerrillas previously had used only ? shoulder-fired SA7 mis- siles, which are unable to hit high- flying Moroccan reconnaissance air- craft. The SA9, according to U.S. experts, is an upgraded version of the SA7, with greater speed:and al- titude. Its introduction, along with .T54 .tanks reportedly used at the STATI NTL Guelta Zemmour battle, represents! What Moroccan and foreign military' experts here view as a significant increase in the quality of Libyan- supplied weaponry for the guerrillas. In a conversation .with the head of , Morocco's Air Force, Col. Maj. Mo- hammed Kabbaj, West strongly eug-1 gested that part of the respense should also be a shift to more aggres- sive and mobile tactics by Morocco's 150,000-man armed forces and that .the United States is prepared to offer training to meet this end. "We can train General Dlirni's forces," West was overheard saving to Kabbaj in the bar of Fez's best hotel. He referred to Gen. Alened Dlimi, chief of Hassan's armed forces. As an example of. what should be! done, West cited an Egyptian be- hind-the-lines raid in which r om- mandos destroyed a Libyan air base ? during the brief Egyptian-Libyan! border war of 1977. ? Thenecalled to a telechone in the' Fez hotel bar, West was overheareL talking with an aide in Rabat and: refer:ink, to CIA Deputy Director! Bobby Inman. Deputy Secretary or; ,Defense Frank Carlucci and 'the! station chief," the designation given' the to CIA officer in embaisies roa It was not clear wheen-er! ,these references meant the CIX-!, would play a role in any U.S. Milltary aid. - I - - - Alth-diFig the extent arid nature of U.S. help are still under negotiation, Hassan has urged increased U.S. i help for the- war, particularly eince last May's defeat of president Valery Giscard d'Estaing in France robbed him of a personal friend and reliable I military ally. In additiert, the admin. I istration in Washington has signaled its readiness to back- U.S. friends in the region. "The leadership of the Reagan administration has stated that your i country's concerns are, my country's 1 - nere. Approved For Release 2001/03/07 : CIA-RDP91-00901R000500270003-4 ARTICLE APPRAY9ved For Release 2001/03/07 : CIA-RDP91-00901R ON PAGEc ALL 5 November 198.1 , Sometime soon, CIA Director liarq Casey will hand President Rea4;;;; gan !a] draft executive 'order setting new ,operational guidelines for 'U.S. in- telligence agendas. Ostensibly, it will Suppression at the CIA fulfiKCandidate ..Reagan's, campaign promise. last year tci erect =restrictions" that .shackled U,S., intelligence in the Carter:Church 'era; In truth. thanks-tO .:SOtrie:-adroit structionism from. Within the CIA it, self, it will undo very little. The under-. mining of an - earlier' draft which bor- ' rectly stressed the-.vital -mission arid objectives of the.intelligience agencies represents a cautionary tale. Scheduled for - overhauling is Jimmy Carter's Executive Order No..; 12036,..' which grew' out of Senator Church's witchhunts of the early is,rife withrconfUSing legal re-., strietions. For. instance, an American ? cititen entering a Soviet embassy can- not ;be .investigated without a priori knoWledge that ' he is 'engaged in a crime against the U.S. This limitation no :doubt facilitated the passage of . U.S. satellite secrets to the Soviets at their Mexico City embassy. by an: American citizen not long ago... Re- stribtions on counterintelligence oper-. atinns-by the FBI, CIA and military intelligence have made it easier for the?Soviets and their surrogates, such as the Cuban DGI, to operate within - the:U.S. itself.'U.S. ability to conduct- coVert action abroad was almckst elim- inate& One of Mr.. Reagan's campaign prtimises was to get U.S. intelligence bade into business. It was felt that a turn of the knob on the door to the CIA director's crffice would do the trick. It wasn't that easy. - ? Mr. Casey said at the Start that he wanted to move slowly and asked for no immediate changes in the legal re- strictions. He kept many of the top- ranking officials appointed during the Carter era, who were at ease with the STATI NTL legal restrictions and saw little need to improve the agency's performance. In May, a new executive order was drafted and ready for the President's consideration. Gone were the "shall 1 emphasized in positive terms the role . and. responsibilities of the intelligence cominunity.. It pledged that the agen- cies would uphold the laws of the U.S. T. and act in the least obtrusive manner in gathering intelligence. It also prom- ised to guard against the infringement , nots" of the Carter era; instead, it ? of American national security and 'constitutional rights by Soviet and other hostile agents. In a short five pages that draft order would have closed the hook on the 1970s witch- hunts and given much needed direc- . tion to our intelligence services. The May draft, however, was never - shown to President Reagan -to our knowledge. Many holdovers from the Carter administration opposed the changes. According to one close source, CIA. Deputy Director Adm. Bobby Inman?originally a Carter ap- pointee?threatened to quit if Presi- dent Reagan was even shown the May draft order.. Faced with such opposi- tion, Mr. Casey told the policymakers . to go back to the drawing board. . The latest draft, our sources tell us, merely sticks some positive improve- ments into the "can't-do" format of the Carter order. This plays into the hands of the anti-CIA forces in Wash- ington. who v.111 make a shooting gal- ? lery of any loosening of the Carter- Church fetters, dragging out their standard claim that "abuses" will oc- cur. The President will stand far-less chance of being picked apart if he is- sues an order telling the- intelligence agencies to get busy gathering intelli- gence to counter the world-wide secu- rity threat that is posed by the Soviet KGB and its terrorist offshoots. We urge him to send Mr. Casey back to retrieve the May draft. If anyone in the CIA wants to resign, so be it. Approved For Release 2001/03/07 : CIA-RDP91-00901R000500270003-4 Approved For Release 2001/03/07: CIA-RDP91-00901 ARTICLE APPEARED ON PAGE .351 WALL STEET JOUT.:.\1, 2 Novembr 1981 STATI NTL Reagan's Plan to Loosen Reins on CIA Raises Fears of Corporate Infiltration By GERALD F. SEIB st(,frnep.rterof THK WA1.1. STREKT JOURNAL WASHINGTON?The, Reagan adminis- tration has kicked up a fuss by proposing to give the C,entral Intelligence Agency new freedom to infiltrate and influence do- mestic organizations..To worried civil, lib- ertarians, the proposal conjures up images of CIA agents joining and subverting dissi- dent political groups.s ? ? ? - But some lawmakers. and analysts warn ' that the Reagan plan would open the door to CIA infiltration of some other. important organizations: U.S. corporations. In itS quest for information about for- eign countries, these analysts say, the CIA could be tempted to plant agents in U.S. companies with overseas operations. Or the CIA might decide to place an agent to sabotage business deals abroad that the. government decided weren't in the nation',s. best interest. . Such moves would be possible under the controversial proposal made by the Rea- garsdministration, critics say. "The focus of much of the corrunentarY liaa been on s the threat it poses to' political groups." - safs Kenneth Bass, who oversaw intelli-' gence policy, for the Justice Department during the Carter administration. "My ex- perience makes me- think the most likely targets for that activity would be multina-- tionals." Members of the Senate Intelligence- Committee share his concern. The commits tee has recommended that the Reagan ad- ministration change its plan, and Senate staff members say that worries about busi- ness privacy weighed heavily in the Sena- tors' decision to protest. "Their concern is, wide and deep,." says- .one Senate aide.., "This is a big issue, this business infiltrae, lion." ? ?? .??-? Economic Intelligence The proposed changes are part a a draft executive order on intelligence agen- cies the Reagan administration has sub- mitted to Congress-for comment. The pro- posed order would allow the CIA to join do- mestic organizations and, with the Attar- , ney General's approvals try to influence . their activities. ? ? '1 The current executive order on intern- i gence, signed by President Carter, specifi- cally bans attempts by intelligence agen- ) des to influence domestic organizations. It allows infiltration of domestic groups, but : only under carefully defined procedures, that are eliminated under the Reagan; p posal? CIA officials assert that they generally aren't interested in domestic spying. And Mr. Bass acknowledges that the Reagan administration mightn't have infiltration of businesses in mind, "It's probably much more innocuous ? than is its intention." he says. But he notes that U.S. foreign-policy makers are increasingly concerned about international economic matters. ? Eventu- ally, he worries, the CIA "would find that it-was being asked increasingly to provide - economic intelligence to policy makers, , and would find that the easiest way to re- spond would be to come inside. into Amen- can corporations." For example, intelligence analysts say,. the CIA might decide it would like informa- tion about the Soviet Union's probable food needs in future years. One way- to get in- formation would be to have an agent in a grain-marketing company that does busi- ness with the Soviet Union. 'Or, congressional aides say, the CIA . might decide that it would like to stop sales of U.S. products to unfriendly countries. It might be tempted to hire operatives inside , a company to try to sabotage such transac- tions. ?- . 'Not Far-Fetched' "It's not far-fetched," says Jay Peter- zell, research associate at the Center for National Security Studies, a research group that has warned in the past of the risk of business surveillance. "Corpora- tions go against what .the government 'thinks is the national interest all tile time.'! Over the years. though, some compa- nies have cooperated with the CIA volun- tarily?and very quietly. They have shared information or allowed CIA analysts to talk to employes who have, been abroad. ? But cut. infiltration of companies would be dramatically different, analysts say, be- cause the businesses wouldn't be aware of the CIA's activities. "No matter how pa- triotic the business concern, there has got to come a point where it feels there is in- formation it can't share with the CIA,"....Mrs -Bass says. The Reagan administration's proposals still could be altered before they take ef- fect. The draft executive order won't be of- ficial unless President Reagan signs it. And there are signs the administration may heed the objections Congress is ex- pressing over the domestic,-infiltration pro- posal and other plans to loosen restrictions on domestic CIA actlyities.s .- Late last week, Rep. Edward Boland D., Mass.), 'chairman of a House Ir telli- gence subcommittee, sent a letter to sdru. Bobby R. Inman, the CIA's deputy direc- tor, urging that the agency's domestic cov- ert action be restricted in scope, appsoved by the President and reported to Congress. Rep. Boland also objected to allowing the CIA to infiltrate domestic organizations. Among other things. he prefers maintain- ing a distinction, between the CIA, which conducts intelligence-gathering operations overseas, and the Federal Bureau of Inves- tigation's domestic activities. . Rep. Don Edwards .(D., Calif.), chair- man of a House subcommittee on constitu- tional rights, said last week that he has "reason to believe" the administration soon will propose a new draft reflecting some of the changes recommended by the Senate Intelligence Committee. But, notes one Intelligence Committee staff member, "there are no guarantees" that Congress' suggestions will be followed. Approved For Release 2001/03/07 : CIA-RDP91-00901R000500270003-4