Botched French Mission a Cautionary Tale for CIA

It was the stuff of movies: A young American spy, operating under deep cover in Paris, fell for an exotic Frenchman. Soon her superiors at the CIA found out about the affair and began to worry that it might compromise her carefully woven cover story as a Paris representative of a U.S. foundation.

To make matters worse, she was working on a highly delicate case. If she were exposed, the operation could be blown. And she--as one of a small group of “nonofficial cover” officers who do not work out of an embassy and therefore have no diplomatic immunity--potentially would be vulnerable to arrest and imprisonment.

The agent compounded the problem by making mistakes in her espionage trade-craft, especially in the way she communicated with her CIA minders.

For the agent and her supervisors, Dick Holm and Joseph DeTrani, this story of international intrigue and romance was all too real. Its nasty ending ultimately torpedoed their careers.

And it has forced the CIA to rethink the way it conducts operations in the post-Cold War era.

The painful, unwinding fiasco continues to haunt the Central Intelligence Agency nearly a year after the economic espionage operation went horribly wrong. Now, as investigators sift through the events that caused a diplomatic scandal and forced the shutdown of U.S. intelligence operations in France, the case has become a cautionary tale for the CIA.

Without an overriding national security threat from a rival superpower, the U.S. government is in the midst of rethinking whether it needs the kind of massive intelligence apparatus that was built up during America’s long standoff with the Soviet Union. A new, skeptical attitude toward clandestine espionage at the CIA permeates the U.S. national security policy community--and strongly influences the thinking of CIA Director John M. Deutch and his new management team.

Ultimately, that means that tolerance for screw-ups--even for honest mistakes--by America’s spies is at a low ebb.

So the continuing investigation of the French case by the CIA’s inspector general--which was opened under prodding from the Senate Select Committee on Intelligence--has become a prime exhibit in a behind-the-scenes debate over the limits that Congress and the White House should place on the CIA.

Agency officials say the investigation and the inspector general’s report on the matter will not be completed until February, one year after the blown case first hit the headlines. The CIA refused to comment on the case or the ongoing probe.

But for CIA officers, the French case has sent a troubling message: If every failed operation is to be endlessly picked apart by investigators, Congress and the White House, then it may no longer be smart for America’s spies to take calculated risks to score secret intelligence victories.

On the other hand, no risks often means no results--particularly in economic intelligence, which has risen in priority as the United States feels itself increasingly threatened in the global marketplace.

“A lot of operations have risks where it is kind of 51%-to-49% whether you should do it or not,” one CIA veteran said. “If you turn out to be right, you are a hero and you get a medal. But if you fail, everybody can look back and see so many indicators of why you shouldn’t have taken the risks in the first place, and you can easily be made to look a fool.”

When there is little tolerance for error, CIA officers warn, the agency’s clandestine espionage service could become so timid as to be worthless.

“This case was like an airplane crash--it was a mistake,” complained one source familiar with the French case. “There were errors in judgment. But they are treating it as if someone did something criminal or illegal.”

As a result, the main players in the French drama were quickly relegated to a sort of espionage purgatory while the CIA’s investigators sifted through the wreckage of their secret lives.

After the female officer’s mistakes helped lead to the humiliating exposure of the CIA operation by French intelligence last year, she is believed to have quickly left the country; her current status could not be determined.

Meanwhile, Holm, who was the CIA’s Paris station chief and the agent’s immediate boss, retired earlier this month; sources say he had hoped to stay and fight to clear his reputation but grew tired of waiting for the completion of the inspector general’s investigation.

DeTrani, who oversaw the CIA’s French operations from the agency’s Langley, Va., headquarters as chief of the CIA’s European division, is now stuck in what sources describe as a career holding pattern, moving from one temporary task force to another while he awaits the outcome of the internal probe.

Last summer, DeTrani’s bid to become the CIA’s Paris station chief, succeeding Holm, was vetoed by Deutch after the exposure of the French operation. At one time, DeTrani was the chief public spokesman for the CIA and seemed to be on the career fast track; that has all come crashing down.

It is the CIA’s treatment of Holm, however, that has become a rallying cry for other senior managers.

Holm is a legendary figure within the CIA’s clandestine service. While working for the CIA in Africa in the early 1960s, he disappeared in a fiery plane crash in the Congo and was presumed dead. Actually, Holm was pulled from the wreckage by tribesmen and treated with natural medicines to nurse his severe burns and help him survive.

After word flashed back to the CIA that he was alive, a U.S. military plane was dispatched to bring him back for hospitalization and treatment. But despite several operations, he remains badly disfigured.

His plucky attitude endeared him to other CIA officers, as have his veteran service and work on difficult cases in several regions.

As a result, other managers were outraged that Holm had been forced into retirement with a clouded record.

Such anger erupted recently when the chief of a division deeply involved in intelligence in Bosnia-Herzegovina sent out a cable to CIA stations in his region complaining about Deutch’s negative public comments about the espionage service. If allowed to fester, says one intelligence community observer, the situation could become like a strike by Italian customs officials in which workers just do their jobs and nothing more.

While the disagreement smolders over whether the French case deserved to become the subject of a long investigation, no one disputes that major mistakes were made--both by officers in the field and by management--leading to the operation’s exposure.

The French operation was a politically sensitive one involving economic espionage against an ally--a high-risk case that could lead to recriminations on all sides if it went sour.

But the CIA decided to take the risk and conduct economic spying against the French largely because France had been so aggressive in spying on U.S. corporations. French intelligence had, in fact, been involved in bugging French commercial jetliners when American executives were on board, pilfering documents, sometimes even ransacking the hotel rooms of U.S. executives visiting France.

The United States had repeatedly, but quietly, demanded that the French stop. After the French said they would halt their activity, the CIA wanted to make sure they were living up to their word, sources say.

But the operation was compromised. Then it hit the headlines because French officials, in the midst of their country’s presidential campaign, decided to trumpet their victory over the CIA publicly. French Interior Minister Charles Pasqua in February asked the United States to recall four CIA officers from the U.S. Embassy and the female deep-cover agent.

The publicity made it much harder for the CIA to sweep this matter under the rug without an investigation.

The mission’s failure has raised new questions within the U.S. intelligence community over whether the CIA should be indulging in the expense and risk of setting up deep-cover agents to gain an edge in economic intelligence.

After the woman’s affair and her other errors were discovered by CIA management, but before the case was blown, DeTrani and Holm apparently had a debate over what to do with her. Engaging in such an affair could have been an offense that would merit her being fired.

But CIA officials say that firing troubled individuals is risky: They might later betray the CIA and the United States.

So DeTrani and Holm decided not to fire her, but to downgrade her to the status of an independent contractor for the agency.

DeTrani and Holm disagreed over whether to keep her involved in the economic operation. DeTrani argued that she had been so careless that she might lead French intelligence to the operation; Holm argued to keep her on the case.

DeTrani relented; the gamble backfired. The woman was identified to French intelligence--perhaps by her lover--and the French patiently watched her until they were able to roll up the entire operation.

It is not known yet whether the CIA’s inspector general will issue reprimands in the case, but it seems clear that no one involved will emerge unscathed. “I think you do have a case where two guys were on opposite sides of the case, but they are both still caught up in this,” one congressional source said.