FBI Consultant Was Demoted by CIA : Espionage: Former No. 2 man in clandestine directorate was demoted in aftershocks of Ames case. He now consults on international issues.

TIMES STAFF WRITERS

A former high-ranking CIA official who was demoted and later left the agency in the aftermath of the Aldrich H. Ames spy case has been hired by the FBI as a consultant and senior adviser on international issues, including counterintelligence, according to intelligence community sources.

John MacGaffin, once the No. 2 official in the CIA directorate that handles clandestine espionage, is now consulting with the FBI on Russian affairs, counterintelligence and other international issues as the bureau expands its role overseas, said the sources, who spoke on condition of anonymity.

Last October, MacGaffin was caught up in the aftershocks of the Ames scandal.

Although he was not punished for any actions directly related to the Ames investigation, he was disciplined by then-CIA Director R. James Woolsey for approving an unauthorized service award to Milton Bearden, a senior CIA official who had just been reprimanded by Woolsey for failures in the Ames case. MacGaffin was the highest-level official to approve the award.

The incident fanned the controversy surrounding the Ames case because Woolsey had already been condemned by key congressional intelligence committee members for not going far enough in disciplining CIA officials over the worst counterintelligence failure in agency history.

MacGaffin, who had broad experience within the clandestine arm of the CIA, served as associate deputy director for operations from January to October, 1994. He was approached by the FBI about becoming a consultant after he retired from the spy agency in March, sources said.

The FBI declined to comment on MacGaffin's hiring--even to the question of whether the consulting role was approved by FBI Director Louis J. Freeh.

Ironically, MacGaffin's new job at the FBI comes as the bureau has emerged victorious--thanks in part to its handling of the Ames case--from a decades-old turf battle with the CIA over which agency would gain the dominant role on counterintelligence issues.

Indeed, the FBI's successful handling of the Ames case has won the bureau praise even as the CIA continues to suffer from charges that it bungled its own investigation, allowing Ames to continue to spy for Moscow for years--even after leaving a trail of telltale clues in his wake.

But government sources insisted that MacGaffin's hiring by the FBI does not represent an affront to the CIA. And MacGaffin himself said in an interview that he discussed the move with CIA officials before accepting, and encountered no resistance.

"Before accepting the FBI offer, I consulted with senior CIA officials, with former heads of the CIA, officials at the National Security Council and representatives of the congressional oversight committees--all of whom said that they believed this represented a positive contribution," he said.

In fact, intelligence community sources note that MacGaffin's hiring is actually a sign of efforts by officials to improve cooperation and coordination between the FBI and the CIA on a range of international issues, including counterintelligence.

"I was struck by the fact that this represented a significant effort by the leadership of the FBI to reach out for expertise and experience in the intelligence community," MacGaffin said.

In addition to counterintelligence concerns, the FBI has made fighting Russian-based international organized crime a new priority and has opened an office in Moscow.

MacGaffin said he was initially skeptical of whether he would want to work with the FBI after more than 30 years with the CIA, but now has become convinced that the FBI is serious about trying to position itself to take on a larger international role in the post-Cold War world.

Still, the FBI's hiring of a former senior CIA official who left the agency in controversy offers a new wrinkle in the relationship between the two organizations, which in the past has often been mired in turmoil.

The rocky relationship dates back to the enmity that existed between longtime FBI Director J. Edgar Hoover and the CIA from its post-World War II founding to 1970, when Hoover ordered that the liaison with the intelligence agency be broken off over a relatively trivial matter.

To some extent, the tension is a natural one. The FBI investigates and collects evidence to use in prosecutions in an open courtroom. The CIA, on the other hand, collects intelligence that is provided to policy-makers in secret.

Moreover, the relationship was clouded by stereotypes. The CIA traditionally was an elitist organization, often associated with Ivy League style and intellectual shrewdness. In contrast, FBI agents in the past were viewed by their CIA counterparts as gumshoes, declasse types who had been educated at middle-brow schools.

President Clinton tried to end traditional counterintelligence clashes and poor collaboration by issuing an executive order mandating interagency cooperation and giving the FBI the leadership role in counterintelligence.

At first glance, the hiring of MacGaffin might look like a thumb in the eye of his former agency. But sources insisted that MacGaffin's beef with the agency was really one with Woolsey and that he has maintained close ties to other agency officials and his former colleagues there.

Woolsey reprimanded MacGaffin and Frank Anderson, then chief of the CIA's Near East division, for their actions in granting the award to Bearden, then the CIA's station chief in Bonn, Germany. The award recognized Bearden's contributions to intelligence in the Near East region.

Bearden was one of four officials severely reprimanded by Woolsey because of their roles in supervising Ames; other CIA officers received lesser penalties. Bearden headed the CIA's Central Eurasian division in 1989, when Ames returned there from assignment in Rome and was in the midst of his spying for the Russians. Ames was given added responsibilities and access to information valuable to Moscow after Bearden transferred him to counterintelligence.

At the time, agency officials described MacGaffin's approval of the award as "simply errors in judgment" but ones that were seen as "cutting across the grain" of Woolsey's attempts at reform.

Yet a new book on the Ames case, "Betrayal," by New York Times reporters Tim Weiner, David Johnston and Neil A. Lewis, argues that the granting of the award to Bearden was insubordination that helped doom Woolsey, leaving the impression that he had lost control of the agency. Woolsey resigned in December, 1994.

MacGaffin said, however, that published accounts of the incident have seriously misconstrued his actions, which were not intended to be insubordinate.

"The recognition of Bearden at the end of a 30-plus-year career was in no way intended to be insubordinate to Woolsey, but simply to recognize an extraordinary contribution to the national security," MacGaffin said.

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