Vernon Loeb

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Back Channels
With Vernon Loeb
Washington Post National Security Reporter

Monday, May 7, 2001; 1 p.m. EDT

Washington Post reporter Vernon Loeb covers national security issues. His newspaper column, Back Channels, is also carried by this Web site.

In his latest articles and columns, Loeb writes about closing arguments in the embassy bombings trial; James Bamford's new book on the National Security Agency, Body of Secrets; and a lawsuit over a failed espionage prosecution brought against the Navy by Navy Petty Officer 1st Class Daniel King.

Submit your questions and comments before or during the discussion.

The transcript follows.

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Washington, DC: Louis Freeh's resignation announcement last week didn't come as a total surprise since he'd expressed concerns about a higher paying job in the private sector before, but I wonder about the timing of it. With two years left in his term, and a seemingly good relationship with the Bush administration, what's the real story here? Is this more fallout from the Hanssen case?

Vernon Loeb: Not being a Louis Freeh confidante, I have no clue as to why he has chosen to resign now. As you point out, he has previously floated the notion that he'd soon be heading off to make a bundle in the private sector. But for Freeh, now is probably as good a time as any to leave. Yes, there's going to be lots more fallout from the Hanssen case--and none of it is going to be particularly pretty for the FBI, or Freeh, from what I gather. The release of a four-volume study of the Wen Ho Lee case, which the bureau has kept bottled up for the past several months, won't be pretty either. Again, from what I'm told, it lays the blame for the Wen Ho Lee debacle pretty clearly on the FBI. So now's as good a time as any.

Harlingen, TX:
FBI and NRO directors Freeh and Hall seem to have been encouraged to pursue opportunities in the private sector.

Any idea why, what different policies the Administration wants their successors to follow?

Vernon Loeb: I know the Bush administration recently informed Hall that he would be replaced, but I'm not aware of Freeh being shoved toward the door. He's got two more years on his 10 year term, and I haven't heard of any administration dissatisfaction with him. Nor, for that matter, have I picked up anything indicating that Hall, over at the NRO, is viewed as any kind of problem who needed to go. The Bush people probably just have someone in their camp who wants the plum job. As for Bush policy designs on the NRO, I think that will become clearer as SecDef Rumsfeld rolls out his plan for reinventing the military. Rumsfeld being as attuned as he is to the importance of space, I can only imagine that the NRO will become more, not less, important and well funded.

Reston, Va.: What is the status of outgoing FBI Director Freeh and the commission to coordinate intelligence policies which he agreed to lead last December? In the New Yorker magazine released yesterday, Freeh was quoted as saying that the Khobar Towers bombing investigation was his last piece of unfinished business. Is it his intention to continue with the commission or was that work part of his duties as FBI Director?

Vernon Loeb: I think the position you're referring to is chairman of the board of high-level policy overseers of the new national executive for counterintelligence, David Szady (who is, by the way, Freeh's hand-picked man). Since this is a position that comes with being FBI director, Freeh won't be doing it. Indeed, a high priority for whomever replaces him will be trying to get a handle on counterintelligence, policy and operations.

Olney, Md.: Any word on whether Director Freeh took the polygraph before announcing his resignation?

Vernon Loeb: I don't know whether he did or not. Freeh, a former FBI agent, prosecutor and federal judge, strikes me as the kind of guy who would relish taking a polygraph, but gain, I don't know. (I think it's only a matter of time, by the way, before we get our first "polygraph spy"--that is, someone who is so pissed off at the way his career has been unfairly ruined by polygraphers that he gets his revenge by betraying his country, but this is a topic for another time).

Sacramento, CA: Can you tell us when the FBI will release its four-volume report on Wen Ho Lee? Eventually, will there be a similar report on Hanssen or was the Lee report ordered specifically because of all the negative publicity around that case?

Vernon Loeb: I wish I could. We've papered the city with Freedom of Information Act requests, and still no Bellows report. I was told by the Justice Department at the end of the Clinton administration that everyone (DOJ, DOE and CIA) had signed off on a marginally redacted declassified version, except the FBI. Now we're told by Bush Justice that the report is under review again by DOJ. This is a report former AG Janet Reno tasked veteran prosecutor Randy Bellows (the main, coincidentally, prosecuting Hanssen)to write when it became clear that the Wen Ho Lee case was a full-blown fiasco. In the end, I'm quite sure the Hanssen case will be even more intensively studied and critiqued. It is to be hoped that the prosecution part of the story goes better than it did against Wen Ho Lee. The Bellows report, by the way, covers a period that ends before the major prosecution screw-ups. Those are being investigated now by the Justice Department's Office of Professional Responsibility. By the time it's all over, there will be a lot of lawyers who need lawyers, I'm afraid.

New York, NY: When DDCI McLaughlin was online a while back he mentioned a couple of steps that might be taken to improve the intel community in light of Rumsfeld's military review. What would you say are the top three or four things that should be done?

Vernon Loeb: Funny you should ask. I've just started hearing over the past couple of days that DCI George J. Tenet has recently made open sources one of his top priorities. This is quite a change for Tenet, who sort of dumped on the importance of open sources during his confirmation hearings, when he stressed how the CIA's business was fundamentally about stealing secrets! Well, I certainly don't see the two as mutually exclusive, and if Tenet is now focused on open sources--in a world where more and more information is publicly available, although not necessarily in English, and not necessarily on the Internet--I say good for him. I think intelligence is about being smart, not stealing secrets. Sometimes--perhaps a lot of times in certain fields--the only way to be smart is to steal secrets. But in a lot of other areas that policy makers care a whole lot about, you don't have to bribe people to commit treason in order to be smart. So open source should be a top priority. As for other top priorities, another key one would be re-engineering the NSA for the digital age. Languages continue to be a problem that needs to be addressed. And I, for one, think the analytical side of the U.S. intelligence community, at the CIA and its sister agencies, remains far too walled off from the outside world for its own good.

Washington, DC: Do you have any info from your sources regarding James Bamford's allegation, made in his new book, that Israel knowingly attacked a US Navy ship? The theory makes no sense to me -- that the Israelis wanted to cover up a massacre of Egyptians by killing the sailors of its closest ally. Thanks.

Vernon Loeb: I've been sort of jumping around in "Body of Secrets" (which is really good)and haven't read the USS Liberty part, but I think Bamford's basic thesis is that the Israelis attacked the ship because it had picked up advanced word of what Israel's attack plans were, and the Israelis didn't want anybody (even the U.S.)getting in their way.

Washington, DC: Have you read Jim Bamford's new book on the NSA? What do you think of it? What's been the reaction from the agency?

Vernon Loeb: As I just said, I love the book. I think it's a lot more readable than Bamford's masterwork, "The Puzzle Palace," mainly because of the way it's organized, which each chapter being kind of a thematic, free-standing narrative. Bamford's one helluva reporter, and he doesn't have an ax to grind. He is actually objective about the NSA--criticizing it for obvious failings, complimenting it for obvious strengths. From what I can tell, the NSA doesn't seem to have a problem with the book. The agency's director, Air Force Lt. Gen. Michael V. Hayden, is one of the smartest guys around, and he really gets the fact that the NSA needs to have a public persona beyond No Such Agency. I certainly haven't seen anything in the book that should give Fort Meade any kind of major heartburn. Most of Bamford's best revelations are historical, not current matters of operational sensitivity.

Spangdahlem Air Base Germany: Any words on the "new" defense strategy the SECDEF plans to unveil? We've heard about the abandonment of the "2 major theater war" strategy but have you heard anything else?

Also what are your thoughts on the impact of the national missile defense system on the rest of the defense budget?

Vernon Loeb: I would direct you to our lead story this morning, by my colleagues Tom Ricks and Walter Pincus, laying out all the latest thinking about what Rumsfeld is up to. As for how the budget plays out, it's early. Surely, if the Pentagon spends $100 billion on missile defense over the next decade, some other weapons systems have to go. But it's still very, very early in the process.

washingtonpost.com: To see the story by Tom Ricks and Walter Pincus that Vernon's referring to, you can go to www.washingtonpost.com

Alexandria, VA: I was wondering if you had heard any rumors about budget implications and priorities of the new administration vis-a-vis the intelligence community. Could we see a increase in funding - particularly for HUMINT and next-generation technical platforms like the FIA and Discoverer II?

Vernon Loeb: I haven't heard specifics, but I certainly can't see this administration cutting HUMINT,and there's strong support in Congress, from both parties it seems, for more HUMINT spending. FIA will soak up billions, but the defense-intel establishment is already pretty well committed to that. I think sooner or later some type of Discoverer II system will be developed. But the concern, obviously, is cost because so many satellites are needed for a Discoverer II constellation. If DARPA can show that the cost of space-based radar satellites can be significantly reduced (from, say, $1 billion to $100 million per satellite), I can't imagine why a Discoverer II-like system couldn't be developed.

Olney, Md.: Has the President announced the composition of PFIAB (President's Foreign Intelligence Board) and is there a role for it to play in the various investigations, i.e. Hanssen and Wen Ho Lee?

Vernon Loeb: I was just asking somebody about PFIAB this morning. No one seems to know what Bush is planning for the panel. I can't imagine he'd get rid of something that's been around since Ike, especially given the Bush family reverence for intelligence. But I recently called up the PFIAB web site (yes, PFIAB has a web site!)and noticed that it was basically blank. It listed former GOP Sen. Warren Rudman's (Clinton's chairman) tenure as having ended in 2000, so he is apparently gone. But it said nothing about any replacements. (Rudman, you may recall, was a big McCain supporter during the campaign). As for a PFIAB role in the various investigations, I don't know. I personally think there are too many of these boards and commissions. I suppose it would depend upon who is on the panel. If it remains a high-prestige place to park politicos and campaign donors (Zoe Baird was on Clinton's PFIAB), I really don't see the point.

Harlingen, TX: The Chinese have recently been hinting that one of their "asymmetrical responses" to US military superiority is going to be an anti satellite weapon, probably using a variant of the new DF-31 ICBM. If so, this could make life more interesting for the NRO and US military space activities in general.

Any indications that these Chinese statements are being taken seriously around the Beltway?

Vernon Loeb: I have never seen Chines indications of all sorts being taken MORE seriously inside the Beltway. I mean, there was a story floating around last week that the Pentagon had gone to something called Infocon Alpha--some heightened state of computer network alert--because some Chinese hackers threatened to deface some web sites.

Deale, MD: What do you think of the flap a week or so ago where CNN put on the air a guy who claimed to be a former CIA operative. Apparently it was later revealed that the fellow might have been delusional. Would you use information from a "source" like that without checking? And if you checked, would the CIA let you know if you were being hoodwinked?

Vernon Loeb: That was quite an embarrassment for CNN. I actually saw the guy and thought to myself, after listening to what he was saying, that he had to be a fake. It was as though the producers at CNN weren't paying any attention at all. Because if they had been, they would have realized that either a. the guy was a fake or b. he had just revealed possibly the largest intelligence scandal in U.S. history. Whenever I quote somebody who claims to be former CIA, I check out their claims with the CIA. This is not rocket science. And the CIA is usually pretty cooperative in saying Yea or Nay. But with this guy, it was pretty obvious from the get go that he had never worked for the CIA.

San Diego, CA: Quite some time ago the Depts. of State and Commerce began a review of 16 space related items in order to determine export licensing jurisdiction. Word has it that the review is complete and has been signed off on by the other agencies. As noted in the Post and elsewhere the U.S. telecommunications and satellite industries have suffered greatly under DOS licensing and here we still sit ...

Any word on when the decision will be published?

Vernon Loeb: Good question. I do not know, and I apologize. But the commercial satellite industry has certainly been harmed by "reforms" over the past two years, in the name of national security. What a joke. How will national security benefit from European dominance in the commercial communications satellite industry?

Washington, DC: What's the latest with the Hanssen case? Will he be appearing in court anytime soon? I was appalled by the recent article by your colleagues about Hanssen's involvement with a stripper.

Vernon Loeb: I think the government has until the end of this month to formally indict Hanssen. I wouldn't be surprised if it never comes to that, and a deal is cut. I will certainly be surprised if Hanssen ever ends up going to trial. But stranger things have happened. I hope you were appalled by Hanssen's cavorting with a stripper, and not our article about the same. He is, shall we say, an interesting man.

Raleigh, NC: Is it possible to infer anything about American intelligence of the Russians from the fact that the FBI disclosed so many of the documents it had pointing to Hanssen? If the U.S. had an active agent wouldn't it have wanted to avoid calling attention to them?

Vernon Loeb: I would infer that Russian intelligence has some very major security problems. And, as you suggest, I can't believe the person or persons who gave us the Hanssen file and the plastic bag that allegedly bore Hanssen's fingerprint is still an active agent. That would be far too risky. My hunch is that the person/persons are now living the good life in the U.S. of A., on the U.S. government's dime.

Vernon Loeb: Well, it looks like I'm out of time. Thanks for all those really good questions. You folks often make me look pretty stupid, but I'm trying my best to keep up with you. In a month, we should have the Hanssen indictment, the Rumsfeld plan and a verdict in the Osama bin Laden trial in New York to talk about, if not a whole lot more. See you then.

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