CIA to Require All Employees to File Financial Reports

CIA Director R. James Woolsey, his agency and leadership under fire in the Aldrich H. Ames spy case, said Tuesday he plans to compel all agency employees to file detailed reports of their finances as one of several steps designed to catch agency “moles” at an earlier date.

At an unusual public briefing for several reporters in his office, Woolsey pledged “to get to the bottom of what happened” that caused Ames to go undetected for eight years while he sold national security secrets to the Russians for an estimated $2.5 million in cash.

Woolsey said he will seek congressional legislation or voluntary waivers so that banking information can be used to investigate employees without the bank being required to notify them.

Woolsey also said he intends to freeze promotions for a small group of executives who may be at fault in the Ames case. His remarks follow closed-door congressional testimony last week that left some leading lawmakers angry and questioning his commitment to solving security problems.

Rep. Dan Glickman (D-Kan.), chairman of the House Intelligence Committee, said this week that Woolsey, who has been director for only 13 months, “is in danger of falling into the trap” of being perceived as an apologist for past CIA shortcomings.

But Woolsey declared Tuesday: “We will do whatever needs to be done to get this system fixed, both in the long haul and the short term. There’s nothing more important than that we learn the right lessons from the Ames case and make changes we need to get made.”

Among criticisms leveled at the CIA were its alleged failure to follow up on sudden signs of wealth by Ames and his wife, Rosario, including purchase of a new home, a luxury automobile and more than $400,000 in credit card purchases. The lapses occurred despite currency reports his suburban Virginia bank filed with the Internal Revenue Service showing a series of cash deposits totaling tens of thousands of dollars.

CIA officials initially refused comment on the matter, but Woolsey said Tuesday that his agency sometimes has declined to act on such information because banks, by law, then are required to alert their customers of such official interest.

“You want to conduct investigations without alerting the suspect,” Woolsey said. But he conceded that generally “there has been a lack of attention to financial data.” He said he hoped that could be corrected with the waiver requirement and new legislation “permitting the government to make inquiries whenever it wants to.”

At the same time, Woolsey said he believes such actions must be designed “to guarantee the privacy of government employees, so it will take some balancing here.”

Acknowledging that “obviously a spy may well lie” on his financial disclosure forms, he said interrogations must be tied into an improved use of lie detectors.

Turning to the planned freeze on promotions, Woolsey said the move would affect “a selected group of individuals” until the CIA inspector general, Frederick Hitz, finishes an inquiry aimed at assigning blame for the Ames fiasco.

If it is determined “that someone has performed poorly,” that employee will be permanently frozen or dismissed, he explained. But if they are cleared of misconduct, promotions will be retroactive, Woolsey said. He refused to identify the targets, but lawmakers have questioned the recent promotions of Hugh E. (Ted) Price and Thomas Twetton, former senior officials in the CIA operations directorate who directly supervised Ames.

Woolsey said more long-term tasks will involve assessing the extent of damage caused by Ames, who rose to the rank of chief of Soviet counterintelligence in the CIA’s Soviet-East European division. Officials have disclosed that he and his wife were arrested Feb. 21 on the eve of a government trip planned by Ames to Moscow.

The FBI had them under surveillance for nine months before that.

Woolsey said a longer term study of CIA security will be studied by a special commission that will have independent advice from Brent Scowcroft, national security adviser to former President George Bush, and former Defense Secretary Harold Brown in the Jimmy Carter Administration.