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Correction to This Article
A Jan. 10 article about a lawsuit by two defectors against the CIA misstated the relationship between former KGB officer Viktor Sheymov and his attorney, former CIA director R. James Woolsey. Woolsey represented Sheymov at no charge.
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Court to Hear Arguments of CIA Spies

The payments peaked at $27,000 in 1987, at which point John Doe took the bank job. He and the CIA agreed that, as his pay increased, the CIA stipend would shrink accordingly. It was at zero when John Doe suddenly lost his job in 1997.

And that is where the dispute begins. Doe says the CIA repeatedly assured him that it was required by U.S. law to guarantee defectors lifetime financial stability, so it would resume payments if he lost his job.

An agency official, however, submitted an affidavit in the case asserting that there is no such law, regulation or internal CIA policy.

Such disputes have been all too common between the CIA and the perhaps hundreds of Cold War-era defectors under CIA supervision -- who sometimes have a higher opinion of their value to the United States than the United States does, former intelligence officials say.

In the 1980s, complaints about purported CIA stinginess received a sympathetic hearing from then-CIA Director William J. Casey. They were partly answered by the formation of the Jamestown Foundation, a private organization backed by Casey that helped defectors earn money lecturing and publishing articles.

In the 1990s, former KGB major Viktor Sheymov, unhappy with his treatment, hired former CIA director R. James Woolsey as his attorney and hammered out a secret settlement with the agency.

"One of the toughest jobs in the agency is managing the defector resettlement program," said Milt Bearden, a former chief of the CIA's clandestine operations in the Soviet bloc. "You have to keep everyone happy without making everyone millionaires."

The agency has instituted an internal review process to resolve disputes, former officials said.

But the Does' complaint alleges that, for them, the process consisted of little more than a bureaucratic runaround. So, in 2000, they sued in a Seattle federal court.

The CIA asked the court to dismiss the case, arguing that it was barred by the Supreme Court's ruling in an 1875 case known as Totten v. United States, which held that a dispute over a contract between President Abraham Lincoln and a Civil War spy could not be litigated because the arrangement was supposed to be kept secret.

"Both employer and agent must have understood that the lips of the other were to be forever sealed," the court noted, so the very bringing of a suit would violate the deal.

The CIA has historically relied on Totten, and to change that "will hamstring the flexibility the CIA will have to deal with the people it is trying to recruit," said Jeffrey H. Smith, who served as CIA general counsel under President Bill Clinton.

But both the Seattle district court and the San Francisco-based U.S. Court of Appeals for the 9th Circuit ruled that the Does' suit could go forward.

The case involved issues not only of contract enforcement but also of constitutional due process, the courts said. They also noted that the CIA's sources and methods could be protected by alternative means.

In urging the Supreme Court to reverse the 9th Circuit, the Bush administration argues in its brief that exposing the CIA to such a lawsuit would open the door to "graymail" by legions of disgruntled defectors.

But the Does' brief -- noting that the court recently asserted the judiciary's power to review the detention of accused terrorists in the prison at Guantanamo Bay, Cuba -- urged the justices to reject "the Executive's extreme position that the Executive Branch has absolute and unreviewable power to unilaterally terminate a judicial case."

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