Panel Blasts CIA Over Ames Case : Intelligence: Senators say agency was grossly negligent for allowing espionage to go on. Report assails Woolsey’s response, recommends steps to improve operations.

The Senate Intelligence Committee issued a scathing report Tuesday blaming the CIA for “gross negligence” that allowed confessed spy Aldrich H. Ames to operate freely and for a “seriously inadequate” response after the espionage disaster was uncovered last February.

The report, the most complete unclassified review of the Ames case to date, also generally describes a U.S. intelligence community in deep disarray.

It recommended 23 steps to improve the CIA, from monitoring alcohol abuse to overhauling computer systems so that information cannot be downloaded to portable disks or transferred. If many of these steps are not adopted, the committee will institute oversight measures or enact legislation, the committee warned.

The panel directed the CIA to report annually, beginning Sept. 1, 1995, on the intelligence community’s progress in responding to the report’s recommendations and on security and counterintelligence challenges generally.

“The committee found a bureaucracy which was excessively tolerant of serious personal and professional misconduct among its employees, where security was lax and ineffective,” the report charged. “And we found a system and a culture unwilling and unable to face, assess and investigate the catastrophic blow Ames had dealt to the core of its operations.”

The negligence has been both individual and institutional, the report said. Virtually all of the institutional breakdowns predate current CIA Director R. James Woolsey. But the report specifically attacks Woolsey for the limited disciplinary actions that he took against agency employees responsible for allowing Ames to flourish and for not putting tougher counterintelligence measures in place over the eight months since the breech was discovered.

None of the 23 current and former CIA officials held accountable for the Ames fiasco by the CIA’s own inspector general has been fired, demoted, suspended or even reassigned. Instead, Woolsey issued letters of reprimand to 11 officials, seven of whom are retired.

Woolsey has contended that the reprimands given to four of the officials would have amounted to dismissals if the employees had not already retired or been on the verge of retiring.

In response to the Senate report, the CIA issued a 10-page list of actions by Woolsey this year to tighten security procedures. “The overwhelming majority of recommendations in the report are reflected in the actions (Woolsey) has already undertaken or directed to be carried out,” Kent M. Harrington, director of CIA public affairs, said in a letter accompanying the list.

Sen. Dennis DeConcini (D-Ariz.), chairman of the Senate committee, countered in an interview Tuesday night on the MacNeil-Lehrer NewsHour: “We have not seen these changes.”

Ames caused greater damage to U.S. intelligence than any spy in the CIA’s history, the report concluded. During nine years of espionage for the Soviet Union and later Russia, 10 U.S. Soviet sources were executed, more than 100 intelligence operations were compromised and several thousand documents were passed to the Soviet KGB.

In that context, Woolsey’s response to “a disaster of unprecedented proportions” is a failure of accountability and a reaction “seriously inadequate and disproportionate to the magnitude of the problem,” the report charged.

More ominous, it warned that, unless a higher standard of accountability is established by the director of central intelligence, a repeat of the Ames tragedy becomes “all the more likely.”

“Management accountability within the intelligence community should be no less than the highest levels found elsewhere in the executive branch,” the committee wrote. “Director Woolsey’s actions do not meet this standard.” The report had unanimous support of the committee.

The report listed a series of serious intelligence flaws that it said have not been addressed:

* The CIA’s counterintelligence program is “weak and inherently flawed.” CIA officers view themselves as a “corporate elite,” for example, and too readily dismiss the possibility that a spy might be among them.

* The Directorate of Operations, which runs covert espionage efforts, is too willing to dismiss or ignore problems among its officers, from drunkenness to disregard for security regulations. Ames’ counseling for alcohol abuse was limited to a single session. Ames was let off when he told his superiors at the agency that his drinking was not serious compared to others in the CIA’s covert branch.

* The CIA has failed to fully monitor or evaluate its own operatives’ contacts with rival or enemy officials. Ames’ first contact with the Soviets was at their Washington embassy when he walked in the front door. He later failed to submit reports on other contacts, which should have raised suspicions.

* The U.S. intelligence community’s failure to investigate possible penetration by a Soviet agent is “the most puzzling deficiency,” especially since virtually the entire U.S. stable of Soviet agents was executed or imprisoned within a matter of months because of Ames’ spying.

In that context, the report also criticized several former CIA chiefs--including William J. Casey, William H. Webster and Robert M. Gates--and directors of covert operations from 1986-1991 for inadequately investigating the massive 1985 loss of U.S. Soviet intelligence resources.

* The joint CIA-FBI investigation launched in 1991 took too much time and was plagued by inefficiency. Although Ames was at the top of the list of 29 CIA employees under scrutiny, the investigation did not ask for financial records for 10 months.

* CIA procedures for dealing with assignments of employees under suspicion have glaring weaknesses.

* Serious flaws exist in CIA polygraph procedures, the agency’s control over classified documents and its security coordination. Ames passed polygraph tests, despite responses that appeared deceptive. He also managed to take bags of classified documents out of CIA headquarters and the U.S. Embassy in Rome.

The report’s recommendations called for more frequent polygraph exams with little or no notice and for variations in polygraph techniques; greater reliance on background investigations, psychological testing and financial reports to detect deceptions and reintroducing random searches of people and their possessions when leaving CIA facilities.

The report also said that anyone promoted to a senior position should have served in the counterintelligence unit. It said that poor performers should be dismissed, that all personnel with access to compromised information should be systematically reviewed and that the CIA should coordinate more closely with the FBI in counterintelligence investigations.