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a background in investment banking. At the time of her selection she
was chief financial officer at Legg Mason Wood Walker, in Baltimore. Her
job, according to Hayden, was to develop a management strategy for the
agency and to "ensure that our mission drives our budget decisions" and


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not the other way around.
He also ordered the personnel promotion process streamlined and
even began taking the first baby steps to opening the door to the outside
world a crack. Hayden would announce these fiats in agency-wide
memorandums called DIRgrams.
Finally, in June 2000 Barbara McNamara received her long-expected
transfer to London, which paved the way for Hayden to name his own
choice for deputy. Ironically, rather than pick a young lion to help set the
course for the new century, he picked a retired agency employee who had
started work at NSA even before McNamara. Tapped was William B.
Black, Jr., an old hand with thirty-eight years of experience with the
agency. But the last ten were no doubt the reason for his selection; they
were spent in areas promising to be most important for NSA in the years
to come. These included chief of NSA Europe from 1990 to 1993; chief of
A Group, the Russian codebreakers, from 1994 to 1996; and then special
assistant to the director for information warfare from 1996 until his
retirement in 1997. He also served a tour as chief of the Special
Collection Service, the covert joint NSA/CIA organization that specializes
in worldwide bugging, black-bag jobs, and bribery in order to penetrate
foreign communications facilities. Finally, because Black had worked as
a senior executive with Science Applications International Corporation
(SAIC), a major defense contractor, following his NSA retirement, he also
brought some insight from the corporate world.
By 2001 Congress was so pleased with the way Hayden was steering
his ship away from the shoals that it was looking for ways to keep him in
place for up to five years”two years over the normal three-year term.


The rise of NSA's star since the end of the Cold War has been at the
direct cost of the CIA and its dwindling ranks of clandestine officers.
Human spies have proved no match when measured against the trusted
rapid-response eavesdroppers at NSA. No love is lost between the two
agencies; former NSA director William Odom, a retired Army lieutenant
general, offered a caustic view of his agency's rival across the Potomac.
"The CIA is good at stealing a memo off a prime minister's desk," he said,
"but they're not much good at anything else."
A former CIA director, Robert Gates, said that the Gulf War might
have proved a Waterloo of sorts for the clandestine service: "Perhaps the
most compelling recent example of the gap between our technical and
human capabilities was the Persian Gulf War. U.S. military commanders
had superb imagery and signals intelligence, but we had only sketchy
human intelligence on Iraq's intentions prior to invading Kuwait, Iraq's
ability to withstand sanctions, and the status of Iraq's weapons
program."


397
By 1998, the CIA had no more than ten or fifteen clandestine
espionage operations active at any one time around the world, and the
Directorate of Operations (DO), home of the spies, had shrunk to well
below 1,000 officers.
Reuel Marc Gerecht, an officer in CIA's clandestine service from 1985
to 1994, called into serious question not only the quality but even the
veracity of much of the reporting by DO officers in sensitive parts of the
world. Writing in the February 1998 Atlantic Monthly, under the
pseudonym Edward G. Shirley, Gerecht called the DO "a sorry blend of
Monty Python and Big Brother." "The sad truth about the CIA," he said,
"is that the DO has for years been running an espionage charade in most
countries, deceiving itself and others about the value of its recruited
agents and intelligence production." By the mid-1980s, he noted, "the
vast majority of the CIA's foreign agents were mediocre assets at best,
put on the payroll because case officers needed high recruitment
numbers to get promoted. Long before the Soviet Union collapsed,
recruitment and intelligence fraud”the natural product of an insular spy
world”had stripped the DO of its integrity and its competence."
Gerecht complained that even in critical field positions, the agency
paid little attention to matching skills to countries. "Not a single Iran-
desk chief during the eight years that I worked on Iran could speak or
read Persian," he said. "Not a single Near East Division chief knew
Arabic, Persian, or Turkish, and only one could get along even in
French." Another former agency officer pointed out that the CIA teams
dispatched to northern Iraq to assist the political opposition in the mid-
1990s "had few competent Arabic-speaking officers."
"The CIA's spy service has become an anachronism," argues Melvin A.
Goodman, a twenty-four-year veteran Soviet analyst of both the CIA and
the State Department. Now a professor at the National War College, he
gave a number of examples to show why the cloak-and-dagger spies have
become an endangered species. "CIA sources failed to decipher Leonid
Brezhnev's intentions toward Czechoslovakia in 1968, Anwar Sadat's
toward Israel in 1973, and Saddam Hussein's toward Kuwait in 1990. . .
. It's time," he concluded, "to jettison the myth that only clandestine
collection of information can ascertain the intentions of foreign leaders."
So far had the CIA's human capabilities dwindled by 1998 that it led
House Intelligence Committee chairman Porter Goss”himself a former
CIA case officer”to declare, "It is fair to say that the cupboard is nearly
bare in the area of human intelligence."
Over the 1990s, the CIA's staff was slashed by 23 percent and the
agency's slice of the intelligence budget pie became a narrow wedge.
When handing out about $27 billion to the intelligence community as
part of the 1999 federal budget, Congress gave NSA a "huge increase,"



398
said one staffer, while leaving CIA's funding about level. A few weeks
later Congress awarded an additional $1.5 billion in emergency
supplemental funds. The technical spies received what one observer
called "a windfall"”nearly $1 billion”while less than 20 percent went to
the CIA's human agents.
Robert Gates thought his agency should completely scrap its covert,
paramilitary capability and make its analytic staff "much smaller." Noting
the irony, the longtime head of the agency's Directorate of Intelligence
pointed out in 1996, "I say that after having spent a good part of the
eighties building it up!"
Not only had CIA's status as an intelligence collection and covert
action agency hit rock bottom by the end of the century, so had the
director's role as chief of the entire intelligence community. Although in
theory the CIA director is responsible for all U.S. spy agencies, Gates said
that in practical terms this is no longer so. "We don't really have a
Director of Central Intelligence [DCI]," he said in a CIA publication.
"There is no such thing. The DCI at CIA controls only a very small
portion of the assets of the Intelligence Community, and there are so
many entities you don't have any director."
Nor does the DCI have any real power over the community's purse
strings. A commission on intelligence reform headed by former defense
secretary Harold Brown and former senator Warren B. Rudman of New
Hampshire noted in 1996 that the director of central intelligence controls
only 15 percent of the U.S. intelligence budget. Two years later even that
estimate had dropped. Speaking about the authority of the DCI, John
Millis in late 1998 said, "It is very difficult to exercise authority over the
National Foreign Intelligence Program and all its agencies because ninety
percent of them are funded and owned and operated by the Department
of Defense." That, in Millis's view, has led to another problem: "an
absolute and total fixation on near-term, tactical intelligence" at the cost
of strategic”political and diplomatic”intelligence. "Since Desert
Shield/Desert Storm," he said, "we have abandoned the strategic mission
in large part to meet the pressing requirements the military has made for
tactical intelligence."
In an effort to rebuild the Clandestine Service, the CIA, in the late
1990s, began the largest recruitment drive for new case officers in its
history. From 1998 to 1999 the number of job offers jumped 52 percent.
Director George Tenet also directed the rebuilding of the CIA's overseas
presence and the overhauling of the agency's clandestine training
facility”"the Farm"”at Camp Perry near Williamsburg, Virginia. The
number of clandestine and covert action specialists trained annually had
dropped to less than a few dozen. But by 1999 the number of students,
most of whom were between the ages of twenty-seven and thirty-two, had
jumped to 120 and was expected to rise to 180 over the next few years.


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At an average cost of $450,000 to train a case officer, rebuilding the
Clandestine Service is a significant investment. To further beef up the
human spy capability, Tenet has allowed the Defense Humint Service,
the Pentagon's human intelligence agency, to send its students to Camp
Perry for training.
Tenet made rebuilding the CIA into a significant intelligence agency
his top priority. In a speech at Georgetown University in the fall of 1999,
he clearly signaled that he preferred human spies over machines. "At the
end of the day," he said, "the men and women of U.S. intelligence”not
satellites or sensors or high-speed computers”are our most precious
asset."


In fact, the combination of human and machine spies may, in the
end, save both. According to senior intelligence officials, in 1978 a covert
joint intelligence organization was formed, which marries the clandestine
skills of the CIA with the technical capabilities of the NSA. The purpose
of this Special Collection Service (SCS) is to put sophisticated
eavesdropping equipment”from bugs to parabolic antennas”in difficult-
to-reach places and to target key foreign communications personnel for
recruitment.
The SCS, whose headship alternates between NSA and CIA officials, is
an outgrowth of the CIA's former Division D, established in the early
1950s by William F. Friedman's first employee, Frank Rowlett. Worried
about competition from the upstart NSA, Allen Dulles hired Rowlett away
to set up a mini-NSA within the CIA. At the time, Rowlett was upset
because AFSA/NSA Director Ralph Canine wanted him to switch jobs,
going from chief of Sigint to that of Comsec, the codemaking side of the
business. "As it happened," recalled fellow pioneer Abraham Sinkov,
"Rowlett was made quite unhappy by this suggestion; he wasn't very
keen about moving over to Comsec, and he transferred to the CIA." (After
about five years, Rowlett transferred back to the NSA.)
Over the years the mission of Division D was to assist the NSA in
stealing foreign cipher materials and recruiting foreign crypto clerks and
communications employees. After Rowlett left in the late 1950s, the
division was taken over by William Harvey, a balding, overweight, bug-
eyed veteran spook. Harvey had long been the CIA's link to NSA. In the
1950s he ran the CIA's Berlin tunnel operation, which succeeded in
secretly tapping a key East German telephone network.
In his work as chief of Division D, Harvey came up with a project
known as ZR/RIFLE, which was designed to locate agents who could
help him steal foreign code secrets and bribe cipher clerks. In longhand
on sheets of yellow legal paper, he outlined the joint NSA/CIA operation:



400
1. IDENTIFICATION: THE PURPOSE OF PROJECT ZR/RIFLE IS TO
SPOT, DEVELOP, AND USE AGENT ASSETS FOR DIVISION D
OPERATIONS. AGENTS WILL BE SPOTTED IN SEVERAL AREAS,
INCLUDING THE UNITED STATES, BUT FOR OPERATIONAL
SECURITY REASONS WILL PROBABLY NOT BE USED IN THEIR
COUNTRIES OF RESIDENCE. PRESENT DEVELOPMENT
ACTIVITY IS BEING CONDUCTED IN THE WE [WESTERN
EUROPEAN] AND EE [EASTERN EUROPEAN] AREAS, BUT IT IS
ANTICIPATED THAT THIS WILL BE EXTENDED TO OTHER
DIVISIONS ALSO. THE PROJECT WILL BE OPERATED AGAINST
THIRD-COUNTRY INSTALLATIONS AND PERSONNEL.


2. OBJECTIVE: THE OBJECTIVE OF THIS PROJECT IS THE
PROCUREMENT OF CODE AND CIPHER MATERIALS AND
INFORMATION CONCERNING SUCH MATERIALS, IN
ACCORDANCE WITH REQUIREMENTS LEVIED ON THE
CLANDESTINE SERVICES, PRIMARILY BY THE NATIONAL
SECURITY AGENCY. SINCE THESE REQUIREMENTS ARE
SUBJECT TO FREQUENT REVISION, NO LISTING OF TARGETS
WOULD BE VALID FOR THE DURATION OF THE PROJECT.
SPECIFIC OPERATIONS WILL BE REQUESTED ON THE BASIS OF
NEED AND OPPORTUNITY. THE PROJECT WILL BE CONDUCTED
BY DIVISION D WITH ASSISTANCE FROM AREA DIVISIONS AND
STATIONS AS NEEDED.


3. BACKGROUND: IN RESPONSE TO THE INCREASING
REQUIREMENTS FOR THE OPERATIONAL PROCUREMENT OF
FOREIGN CODES AND CIPHER MATERIALS, DIVISION D IN 1960
BEGAN THE SPOTTING OF AGENT ASSETS AS A
DEVELOPMENTAL ACTIVITY. DURING THE SAME PERIOD
REQUIREMENTS FROM NSA BECAME MORE REFINED AND IN
MANY RESPECTS MORE SENSITIVE. BECAUSE MOST STATIONS
ARE NOT EQUIPPED TO CONDUCT THIS TYPE OF OPERATION
AND BECAUSE OF THE DESIRABILITY OF COMPLETELY
CENTRALIZING CONTROL OVER THIS ENTIRE EFFORT, IT WAS
DETERMINED THAT DIVISION D, WHICH IS IN CLOSEST TOUCH
WITH NSA ON PROCUREMENT REQUIREMENTS, COULD BEST
CONDUCT THE ACTIVITY.


Although ZR/RIFLE was designed to recruit "black bag" experts to
break into diplomatic facilities in order to plant bugs and photograph
cryptographic documents, in late 1960 a new mission was added.
Besides engaging in burglary, Harvey was now told, ZR/RIFLE was to act


401
as cover for "executive action" operations. The unit would become the
home of the CIA's assassination unit. Harvey, who carried a .45-caliber
pistol wherever he went and enjoyed tough-guy assignments, seemed the
right man for the job. And the joint NSA/CIA ZR/RIFLE project, buried
deep within Division D, was the perfect place to hide the new capability.
Eventually, however, the CIA's attempted assassinations were revealed
during congressional hearings and such activities were later banned.
Today, the SCS is the successor to Division D. As encryption, fiber
optics, the Internet, and other new technologies make life increasingly
difficult for NSA's intercept operators and codebreakers, the SCS has
greatly expanded and become increasingly important. Its goal, like that of
television's old Impossible Missions Force, is to find unique ways around
problems. "Yesterday's code clerk is today's systems administrator," said
one very senior CIA official. The easiest way to acquire many secrets is to
get into foreign databases, and the best way to do that is to recruit”by
bribery or otherwise”the people who manage the systems. Also, by
bribing someone to plant bugs in the keyboards or other vulnerable parts
of a computer network, NSA can intercept messages before cryptographic
software has a chance to scramble them.
The SCS is headquartered in a heavily protected compound of modern
buildings on Springfield Road in Beltsville, Maryland, a few miles south
of NSA. There, in what is known as the live room, the electronic
environment of target cities is re-created in order to test which antennas
and receivers would be best for covert interception. Elsewhere, bugs,
receivers, and antennas are fabricated into everyday objects so they can
be smuggled into foreign countries. "Sometimes that's a very small

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