The War Within The CIA

August 1978

by Edward Jay Epstein

IN 1975, under the directorship of William
Colby, the CIA found itself in a
state of unprecedented crisis. Its entire role had
undergone a dramatic change: from being a secret
investigative agency it had become a target of public
investigation, with no fewer than four government
bodies scrutinizing its past activities. A presidential
commission, chaired by Vice President
Nelson A. Rockefeller, was examining the CIA's
domestic activities over a quarter of a century to
ascertain whether it had violated its charter-or
the Constitution; a Senate Committee, under the
chairmanship of Frank Church, was investigating,
among other things, alleged assassination attempts
by the CIA against foreign leaders; a
House Select Committee, headed by Otis G. Pike,
was inquiring into other CIA operations; and the
Department of Justice was sifting through a 693-
page list of "questionable activities" of the CIA to
determine whether any such activity merited indictment
br legal action against past or present
CIA officers.
The impact of these investigations on the normal
activities of the CIA was "devastating," as
William Colby explains in his autobiography*:
"Apart from the fact that I and any number of my
senior associates were constantly being called away
from Langley to testify before one committee or
another, the agency overall was diverted from its
responsibilities by the deluge of demands from the
hordes of investigators, with literally hundreds of
CIA officers reassigned from normal intelligence
operations to handle the mechanical and clerical
chores of locating requested documents, sanitizing
them to remove names of agents and particularly
sensitive operational material, and then negotiating
whether or not the information could be publicly
released." According to other former executives
of the CIA, the multiple investigations did
much more than merely paralyze the CIA temporarily.
They resulted in completely demoralizing
its staff, disrupting its relations with other Western
intelligence services on whom it depended for
information, discrediting it with the public, and,
for all practical purposes, wrecking it as a viable
intelligence service.

The proximate cause of these investigations was
a front-page story in the New York Times on December
22, 1974 by Seymour Hersh which revealed
that the CIA had been engaged for some twenty
years in the sort of domestic surveillance that had
been specifically proscribed by the CIA's charter.
The Hersh story was based on a closely-held CIA
report done the previous year by the Inspector
General, which was a compilation of all the CIA's
questionable activities prior to 1973 and which
was termed by Colby the "family jewels."
Within forty-eight hours of publication of the
Times expos, Colby effectively confirmed the veracity
of the story by announcing the resignation
of James Jesus Angleton, the CIA's chief of counterintelligence, who had been mentioned in
Hersh's report, as well as Angleton's three top deputies
on the counterintelligence staff; and Colby
hand-delivered a lengthy report of his own to Secretary
of State Henry Kissinger. Though written
in a less sensational tone than Hersh's expose, this
report clearly substantiated the fact that the counterintelligence staff as well as other elements of
the CIA had been involved in questionable and
possibly illegal activities. Colby told Kissinger that
he had cleansed his report of agents' names and secret
operations so that the President could make it
available to the press. Colby also appended to the
report information Hersh had not divulged, including
a list of alleged assassination attempts by
the CIA. Confronted with this document, President
Ford had little choice but to initiate an investigation
of the CIA.
H ow had the "family jewels" ever
leaked to the New York Times in
the first place? This was a question put to Colby
in 1975 by Richard M. Helms, himself a former
Director of the CIA. According to Helms's recollection
of their conversation, Colby nonchalantly
replied, "I talked to Sy Hersh." At the time,
Helms did not fully comprehend what Colby
meant by this admission. It seemed almost inconceivable
to him that the Director of the CIA,
whom he had always found to be an intelligent,
discreet, and completely responsible officer, and
who had sworn an oath to protect the nation's
secrets, could have revealed such critical information
to a newspaperman for purposes of publication.
Yet the next time Helms saw Colby, lie again
asked him about the leak. and Colby reiterated
that he had confirmed the story to flersh and the
New York Times.
That it was Colby himself who had engineered
the leak had also become clear in the meantime to
members of the CIA's counterintelligence staff
who had been forced to resign on account of it.
Newton S. Miler, then Chief of Operations for
Counterintelligence, discovered that Colby's report
to the President had been prepared within a
day of the story's appearance in the Times. Analyzing
the research that had gone into the document,
he concluded that Colby could not possibly
have written it within such a brief period.
In his autobiography, Colby gives a somewhat
more circumspect account of the incident. He
claims that tHersh telephoned him excitedly, saying
he was investigating illegal CIA activities, and
requesting an interview. Colby explains that since
Hersh had cooperated with him a few months earlier
in suppressing the story of the Glomar Explorer,*
"I felt I owed him the interview he requested
and could trust his responsibility...."
In the interview, Colby asserts, he attempted to
"explain-and put in proper perspective" both the
CIA's investigation of the anti-war movement in
the United States and the CIA's surveillance of
American citizens by "wiretaps, mail intercepts,"
and other means. He acknowledges confirming to
Hersh that the CIA had, in the case of the mail intercepts,
sometimes violated its charter (and the
law). He provided Hersh with incriminating details
about the CIA's program of intercepting letters
to and from the Soviet Uion, and about
other highly-classified and illegal surveillance activities.
Colby says that he did not realize the public release
of this information would have the "traumatic
consequences" it did. ''he only reason he
told Hersh about it, he writes, was to lay to rest
rumors which Hersh had heard of even more incriminating
activities on the part of the CIA. This
explanation, however, is not entirely convincing.
Whatever the "deal" Colby may have had with
Hersh to suppress the Glornar Explorer story, it
could not have been such as to require him now to
divulge details of a secret and closely held report
-so secret, indeed, that (as Colby admits) he had
not even briefed President Nixon or President
Ford or Henry Kissinger about its existence.
Colby's role in the "family jewels" affair turns
out to have involved a great deal more than talking
to a Times reporter, or failing to talk to the
President. The "family-jewels" report was no ordinary
CIA document. Although work on it had
begun under the sponsorship of James Schlesinger,
who briefly served as CIA )ircctor after elhms, it
was Colby who dafted the directive on May 9,
1973 ordering all CIA personnel to report any past
transgressions or questionable activity they knew
of; and as Schlesinger was nominated to be Secretary
of Defense, and Colby to be CIA I)irector, on
the very same day this directive was issued, it was
Colby who from start to finish superintended the
693-page report. It was also Colby who briefed
Senators Stuart Symington and John Stennis, and
Congressmen Edward Ilebert and Lucien Nedzi,
about the report, and who consulted the Department
of Justice on the issue of the legality of a
number of the "jewels." To be sure, any one of
these parties may have leaked aspects of the report
to lersh-or to other journalists---but the confirmation,
and the details, which turned it into a
front-page story came fromColby.

WHY woud a director of the CIA
reveal these, and other, skeletons in
the CIA's closet? When I posed this question to a
former colleague of Colby's in the CIA, he said
that there were three equally plausible theories to
explain Colby's behavior. First, Colby was a congenital
"confessor," who sincerely believed the
CIA should not be a secret service and therefore
freely disclosed information to all comers. Second,
Colby had become overwhelmed with guilt during
his long and grueling tour of duty in Vietnam,
and to purge himself of this guilt, he turned
against the CIA. Third, there was the astonishing
theory that Colby might be a Soviet "mole," or
penetration agent, who had been ordered to wreck
the intelligence service.
The very fact that such theories, and especially
the third, should be given currency indicates the
ferocity of feeling in the intelligence community
over Colby's going public. Yet none of these theories
even remotely fits the known facts about Colby's
career in the CIA. Far from being a born
"confessor," as the first theory suggests, Colby
served effectively as a CIA officer in Italy, Sweden,
Vietnam, and the United States for twenty-five
years, all the while maintaining whatever falsehoods
and secrets were necessary to preserve his
assigned "cover." Indeed, it was because of his discretion
and demonstrated loyalty that he was chosen
to be Director of the CIA. The second theory,
tracing his motives to his experience in Vietnam,
also seems inadequate; far from returning a broken
and guilt-ridden man, Colby was proud of his
accomplishments in the Strategic Hamlet and
Phoenix counterinsurgency programs, and even
regarded them as the high point in his career.
Finally, there is no basis whatever for the notion
that Colby is a "mole." If Colby were a Soviet
agent, one would have expected his career to be
studded with intelligence successes (which the Soviets
would have provided for purposes of his promotion).
But the fact is that up until Vietnam he
had few if any successes as an intelligence officer.
Nor had he developed any secret "sources"; instead,
his career was built on his competency as an
administrator and a problem-solver. Furthermore,
it seems inconceivable that the Soviets, if they had
managed to bring one of their agents to the point
of being Director of the CIA, would then risk ruining
his career by having him leak secrets to the
Since these three theories are inadequate to explain
Colby's actions, it is necessary to consider a
fourth possibility-that the leaks were part of a
maneuver intended to relieve Colby of an extremely
vexing bureaucratic problem.
THEN Colby was appointed Deputy
Director of Plans by Schlesinger in
1973, and took charge of the CIA's clandestine activities,
he found U.S. intelligence virtually paralyzed
when it came to determining the Soviet
Union's military and strategic intentions. While
satellites and other technical devices did provide a
constant flow of data on Soviet economic, military,
and technological achievements, some form of
human intelligence-specifically, spies-was still
needed in order to acquire knowledge of how the
Soviets intended to use these resources. For nearly
a decade, however, the CIA had been unable to recruit
any agent with access to the secrets of the
Kremlin who was considered reliable by the CIA's
counterintelligence evaluators.
The recruitment of agents inside the Soviet
Union had always presented a problem for U.S.
intelligence. Since the Soviet Union is a closed and
rigidly compartmentalized society, with almost no
movement among the various sectors, the CIA had
decided that it made little sense to attempt to recruit
its own agents among Soviet citizens and
then maneuver them into positions where they
would have access to state secrets. Even if it succeeded
in making such recruitments, and even if
the agents escaped the detection of the omnipresent
security forces, there was no way of insuring
that they would ever achieve a position of value.
Therefore, instead of focusing on promising Soviet
citizens, the CIA aimed at recruiting persons who
already had access to Soviet state secrets; for all
practical purposes, this meant high-ranking Soviet
intelligence officers dispatched to the West. One
program in the late 1950's, for example, involved
simply telephoning Soviet intelligence officers attached
to embassies in the West and asking if they
had any interest in selling secrets. The idea apparently
was that even if 99 out of 100 hung up, a few
contacts would be made.
CIA officers of course realized that the prospects
for recruiting were not good. Soviet officers are
carefully screened before they are allowed to attain
positions of status in the elite intelligence
organizations, and before being posted to the
West. Moreover, their families are held hostage in
the Soviet Union, and any money the CIA might
offer for committing espionage would be of no
use to them at home. Nevertheless, the CIA did
have a number of early recruiting successes-most
notably Colonel Peter Popov in the early 1950's
and Colonel Oleg Penkovsky in 1961.
Yet the recruitment process involved considerable
risks. Since the Russians know that the CIA is
dependent on Soviet intelligence agents for information,
they can have agents contact the CIA and
feed it carefully prepared stories designed to provoke
and mislead Western intelligence. Such "disinformation"
operations, if clearly orchestrated,
can work disastrously well to deceive an enemy nation.

The responsibility for weeding out "disinformation"
and fraudulent agents still under Soviet control
from authentic information and actual spies
was vested by the CIA in a small counterintelligence
staff headed by James Jesus Angleton. It
was the job of the counterintelligence staff to suspect
every agent recruited by other divisions of the
CIA as being possibly a "plant" or double-agent,
and to challenge data from such sources as possible
"disinformation." Angleton's constant suspicions
naturally tended to frustrate those case
officers who believed they had recruited valuable
agents and those reports officers whose job it was
to produce a coherent picture of Soviet activities.
The suspicions of Angleton and his counterintelligence
staff were greatly heightened in 1961,
when a KGB officer, Anatoly M. Golitsin, defected
to the CIA and told Angleton in his debriefings
that the KGB was in the process of mounting a
major deception operation which would involve
"disinformation" agents posing either as dissident
Soviet intelligence officers or as outright defectors.
Golitsin further suggested that the Soviets
had penetrated both the CIA and the FBI-just as
they had penetrated British intelligence with Kim
Philby and West German intelligence with Heinz
Felfe-and that the Soviet "mole" in the CIA had
been activated in 1958.
Whether or not a penetration of the CIA by
the Soviets had occurred, Angleton became fully
convinced that the Soviets were involved in a "disinformation"
game when a number of other Soviet
intelligence officers began volunteering highly suspect
information to the CIA and FBI. These included
Yuri Nosenko, whose story partly collapsed
when Soviet cable traffic was intercepted; "Fedora,"
as he was code-named by the FBI, who supported
Nosenko on elements of his story which
Nosenko admitted were fabrications; and Yuri
Loginov, who, after confirming Nosenko's story,
redefected from South Africa to Russiatt Angleton
and his staff thereupon stiffened their resistance
to information from Soviet intelligence officers
-and to the distribution of such information
among other Western intelligence services. Quite
abruptly, the recruitment of agents ground to a
Tension also developed between the CIA and
the FBI over this issue. The CIA's counterintelligence
staff, which served as liaison with the FBI,
had concluded that among Soviet "disinformation"
agents were three officers working under UN
cover in New York and passing information to the
FBI. Since J. Edgar Hoover had built a large part
of the FBI's spy-catching program on what these
Soviet agents had provided, he chose not to believe
the counterintelligence staff. By 1970, the resulting
friction between the two agencies led Hoover
virtually to break off FBI contact with the
T HE intelligence community was thus
"a house divided against itself," as
Helms later put it. At the root of the problem was
the question of how seriously to assess the Soviet
capacity for deception. Angleton believed that the
Soviets not only had such a capacity, but used it
consistently to mislead the CIA. Moreover, his
counterintelligence staff attributed the CIA's failure
to recruit worthwhile Soviet agents to the
presence of a "mole" or to some other form of penetration.
Those opposing this view argued that
Angleton and his staff had overestimated the Soviet
use of deception, and the failure to recruit agents
stemmed from his staff's unmerited suspicions of
every potential recruit.
Colby had long sided with the latter point of
view. He resolved, even before he became Director,
that he "would try to shift our major effort to
contacts between our officers and Communist
officials and take the chance of making a few mistakes
in return for recruiting a lot more agents
than [Angleton's] ultra-careful approach allowed."
In early 1973, he notes in his autobiography,
he "recommended to Schlesinger that Angleton
ought to be let go, reiterating my long-held
feeling that his ultra-conspiratorial turn of mind
had, at least in recent years, become more of a liability
than an asset to the agency." Schlesinger refused
to accept Colby's advice. Three months
later, in the Watergate crisis, Colby took over
from Schlesinger as Director, and again maneuvered
to force Angleton out by cutting off his liaison
with the FBI. But, Colby notes, Angleton
"dug in his heels," and Colby then yielded, "because
I feared that Angleton's professional integrity
and personal intensity might have led him to
take dire measures if I forced the issue." (Presumably,
that is, Angleton might, if it came to a power
struggle, attempt to go over Colby's head to the
President.) Firing Angleton was obviously going
to require more than a mere request or even a
It was at this point that Colby realized that Seymour
Hersh was interested in doing an expose of
the CIA for the Times. In his autobiography,
Colby gives the following chronology. December
17, 1974: Colby decides "to face up to my responsibility
to remove Jim Angleton" before the end of
the year; Angleton again "resists" Colby's suggestion
that he retire from counterintelligence.
December 18: Colby speaks to Hersh on the telephone-
a call Colby claims Hersh initiated. December
20: Colby meets with Hersh, tells him
about Angleton's role in the mail-cover program,
and "confirms" his expose. December 21 (this particular
entry does not appear in the Colby book):
Colby tells Angleton about the upcoming Hersh
expose on counterintelligence, and insists on his
resignation. December 22: the Hersh expose appears
in the Sunday Times. December 23: Colby
announces Angleton's resignation. December 24:
Colby submits his lengthy report to the President.
Colby succeeded in his objective of removing
Angleton. He also forced the resignation of the
three top deputies on the counterintelligence staff,
and transferred a number of other officers on the
staff, which never numbered more than twentyfive,
to other parts of the CIA. The new appointees
came mainly from the Far East Division or
Vietnam. For all practical purposes, Colby had obliterated
the counterintelligence operation which
Angleton had developed over a twenty-year period.
Files were shifted to other departments, and,
in some cases, destroyed. In a matter of weeks, the
institutional memory was erased.
With the termination of Angleton and the key
men on his staff, the bureaucratic impasse to the
recruitment of new agents was resolved. Under
Colby's new policy, the CIA could take higher
risks in accepting volunteers among Communist
officials, and distribute the information from them
as well as the data that had long been bottled up
on the suspicion that it was from "disinformation"
agents. But while this led rapidly to the production
of new information, it did not solve the counterintelligence
problem. Indeed, it led to new

EARLY in 1975, one of Angleton's counterintelligence
deputies, who had
stayed on for several months to assist with the
transition, was informed that the agency had just
made a major recruitment in Moscow. Colby's policy
of accepting all volunteers had obviously been
put into effect.
The agent whom the CIA recruited was Sanya
L. Lipavsky, a forty-two-year-old neurosurgeon of
Jewish descent, who was employed by the Drivers'
License Bureau in Moscow as a medical examiner.
Lipavsky claimed that he had previously been a
surgeon in Murmansk, and in that capacity had
treated Soviet personnel attached to the nuclearsubmarine
bases in the area. When this information
was conveyed back from Moscow to CIA
headquarters at Langley, the case officer in Moscow
(presumably working under diplomatic
cover) was authorized to recruit Lipavsky. The
CIA then supplied Lipavsky with the espionage
apparatus necessary for him to pass along information
he might acquire, and he was assigned a
"dead drop"-reportedly a hollowed-out cable
from which his messages could later be retrieved
by another courier for the CIA.
Colby's new man in Moscow was also heavily involved
with a group of Jewish dissidents who were
leading the human-rights movement in Russia. In
fact, he shared a room with Anatoly Shcharansky,
a young engineer who was the spokesman for the
movement; and he had ingratiated himself with a
number of other Jewish activists, including Vladimir
Slepak (who had received a telegram of
support from Jimmy Carter during the 1976 presidential
campaign), Vitaly Rubin, and Aleksandr
Lerner. During the period of his service to the CIA,
Lipavsky continued to maintain, and to intensify,
his contacts with Jewish dissidents, who of course
had not the slightest idea that Lipavsky was anything
but a member of their group.
Some two years later it turned out that the man
the CIA supposed it had recruited was actually in
the service of the KGB. Apparently he approached
the CIA only after the KGB had arranged to release
his father from prison, in exchange for which
Lipavsky agreed to act as a provocateur. In March
1977, Lipavsky published an account of his CIA
activities in the government newspaper Izvestia,
identified the "dead drop" the CIA had assigned
him, and went on to denounce Shcharansky and
other Jewish activists as traitors, claiming that
they had cooperated with him in collecting information
about how technical equipment supplied
by firms in the West was being used for counterespionage
against dissidents. The Soviets then
moved to arrest Shcharansky and other dissidents
on the charge of cooperating with the CIA.
It quickly became apparent in Washington that
the KGB had planted Lipavsky on the CIA in
order to compromise the human-rights movement
in Russia. This was also embarrassing to President
Carter who, even though he had been briefed on
Lipavsky's CIA connection, had publicly stated
that Shcharansky was in no way involved with the
CIA. The degree to which Lipavsky (and the
KGB) might have framed Shcharansky and entrapped
other dissidents by manipulating them
into assisting him was not known; but the Soviets
clearly held the trump-a "CIA" agent willing to
implicate other Soviet dissidents-and President
Carter, to preclude further embarrassment, as well
as to lessen the damage to the victims of the unfortunate
CIA recruitment, entered into secret
negotiations with the Soviets to make the best deal
he could under the circumstances.
Whatever may be the outcome of the secret
deal, the action of the CIA in recruiting Lipavsky
in the first place seems inexplicable. Lipavsky had
no access to secret information; he had no persuasive
motive to risk his life for the CIA; and he
was involved in a movement whose integrity and
credibility were extraordinarily important to the
United States. At best, he might have been able to
identify other possible targets for recruitment by
the CIA. The point of the exercise may have been
only bureaucratic: to prove that without interference
from Angleton and his counterintelligence
staff, the CIA was capable of recruiting agents
even inside Russia. Yet no matter what the rationale
may have been, the Lipavsky affair demonstrates
that the difficulties inherent in American
counterintelligence efforts have not been solved.
On the contrary, it seems clear that Colby's new
bureaucratic methods not only have so far proved
useless, but have given rise to problems of an even
more delicate and possibly dangerous kind.