Career CIA Officer Is Charged With Spying for Russia

By JAMES RISEN

Nov. 19, 1996 12 AM PT

TIMES STAFF WRITER

WASHINGTON —

In what federal authorities Monday called the most damaging espionage failure since the Aldrich H. Ames scandal, a former CIA station chief has been arrested and charged with betraying American spies and passing a wide range of top-secret information to Moscow.

Harold J. Nicholson, 46, was arrested Saturday at Dulles International Airport in Virginia as he was about to board a flight for Zurich, where authorities allege he was to meet his Russian spy handlers. Nicholson appeared Monday in federal court in Alexandria, Va., to face espionage and conspiracy charges, as the FBI and the CIA announced the arrest.

Nicholson, a career Central Intelligence Agency officer who once served as the station chief in Romania and later trained new CIA spies for overseas duty, is the highest-ranking CIA employee arrested for espionage.

Officials believe Nicholson began spying for Russia in June 1994, just months after the arrest of Ames, Moscow’s longtime mole within the American spy service. CIA and FBI officials said that while Ames may have caused more havoc, Nicholson’s betrayal was still “very damaging” for Washington and would have severe ripple effects throughout U.S. intelligence.

For example, while the CIA has yet to begin a formal study to assess damage, an FBI affidavit filed Monday said that Nicholson had “access to biographic information and assignments for every CIA case officer trained during his two-year tenure” at “the farm,” the CIA’s training complex at Camp Peary, Va., where he served from 1994 to 1996.

The document said that “it will be very difficult, if not impossible, for the CIA to place some of these newly trained case officers into certain sensitive foreign postings for the rest of their careers.”

In an interview, former CIA Director Robert M. Gates said exposure of those new officers “can be overcome, but it will take time and will cost a lot of money, and may delay some careers.”

CIA and FBI officials said they don’t believe Nicholson was conspiring with Ames in a Russian spy ring, but they alleged that Nicholson betrayed his country in return for the same motive as Ames--cash. Nicholson received at least $120,000 from the Russian spy service over two years, authorities said, adding he foolishly tipped off his CIA bosses and the FBI by spending some of that money on cars and Hawaiian vacations with his girlfriend.

The money he allegedly received from the Russians would have been a supplement to his CIA salary of $73,000, but paled in comparison to the $1.5 million Moscow gave Ames. For Moscow, Ames was worth the money; he spied for nine years, and his treason led to the executions of 10 Russian spies working for the CIA and FBI.

Helen Fahey, the U.S. attorney in Alexandria who is prosecuting Nicholson, said the government would not seek the death penalty against him, in part because there is no evidence that his alleged betrayal has led to the deaths of any spies working for the United States. Nicholson, government officials said, was also caught much more quickly than was Ames--thanks largely to tough counterintelligence measures put in place by the CIA and FBI after that earlier humiliation.

Nicholson came under suspicion as early as October 1995 when, according to officials, he failed a lie detector test when asked a simple question: Was he working for a foreign intelligence service. After the routine test was administered on Oct. 16, 1995, he was given two more tests before the end of the year--and failed both.

During the third test in December 1995, the CIA polygraph examiner saw that Nicholson was trying to manipulate the test by taking deep breaths before certain questions, authorities said.

But Nicholson apparently did not become suspicious that he was given repeated exams and, officials said, instead continued his spying.

FBI agents began to scour his air travel and financial records early this year, and detected a pattern of twice-yearly foreign trips followed by unexplained deposits into Nicholson’s bank accounts.

At a news conference at FBI headquarters, CIA Director John M. Deutch stressed that the lie detector tests were just part of a more comprehensive, periodic background check that tripped up Nicholson. “The analysis was complicated and it involved the simultaneous attention to a number of variables--money, travel, security. So, I would not say that the polygraph was the initiating piece.”

Officials contended that if the charges against him were true, Nicholson would have proved to have been one of the most dangerous moles in American intelligence history, had he gone undetected. He had risen steadily through the ranks throughout his career, and so was likely to advance into the highest echelons of the CIA over the next few years.

Unlike Ames, Nicholson was not pegged as a problem employee. He had already been promoted to GS-15, one grade higher than the level Ames reached. Nicholson was just one step below the “Senior Intelligence Service”--the highest level available for career spies at the CIA. He was not privy to the CIA’s “crown jewels”--the names of all Russians working for the agency, but he had held some of the most sensitive posts the CIA had to offer, officials said.

Nicholson, a divorced father of three, followed a well-worn path from the military to the CIA.

He was born in Woodburn, Ore., in 1950 and went to Desert High School at Edwards Air Force Base and Novato High School in Novato, Calif., before earning an undergraduate degree in geography at Oregon State University.

After graduation, he entered the Army as an officer, rising to the rank of captain before being honorably discharged in 1979. He joined the CIA the next year, and by 1982 received his first overseas posting to Manila.

As a CIA station chief in Bucharest from 1990 to 1992, Nicholson was in charge of U.S. espionage in Romania in the immediate aftermath of the collapse of the Soviet empire in Eastern Europe, and had access to the identities of every spy on the CIA’s payroll in that country, officials said.

From 1992 to 1994, he was the CIA’s deputy station chief in Malaysia. The CIA believes Nicholson went onto the Russian payroll as a spy while he was serving in Kuala Lumpur, Malaysia.

Nicholson’s alleged treason was said to have reached beyond his normal duties, in that he tried to obtain every bit of highly sensitive information that he could get his hands on.

In a search of the files in his notebook computer, for example, the FBI found a document naming the CIA’s new Moscow station chief and other secret staffing information; a document on how many Russian recruitment pitches had been reported by CIA officers to CIA headquarters; a secret CIA report on Chechnya; and notes from a secret CIA report on the 1995 expulsions of CIA officers from Paris.

He also allegedly gave up the names of Americans returning from Russia who were debriefed by the CIA, and gave the Russians access to secret information stemming from the CIA’s debriefing of Ames.

Chechnya was apparently a high priority; Russian intelligence, U.S. officials said, had specifically directed Nicholson to find out whatever information the CIA had about the bloody civil war that had bogged down thousands of Russian troops in a struggle with Muslim separatists.

Nicholson’s computer hacking became so blatant, authorities said, that CIA computer security personnel finally listed him as a “surfer” to be closely monitored.

By early 1996, as the counterintelligence case against him was building, Nicholson and the Russians began to make more mistakes, U.S. officials said. In March, an officer for the SVRR--Russian intelligence--asked for information from the FBI about Chechnyan terrorism.

Nicholson allegedly traveled from “the farm” to CIA headquarters in Langley, Va., and asked other CIA employees for background information about Chechnya, claiming that he needed the data for a training exercise.

Before long, the FBI and CIA had Nicholson under full surveillance. They followed him on foreign trips, had his phone wiretapped and his office covered by a hidden video camera, and watched as he allegedly photocopied classified documents.

He was brought back to CIA headquarters for a new job in the CIA’s counter-terrorism center so the FBI could keep him under closer surveillance, officials said. Meanwhile, the FBI discovered that Nicholson was using foreign post office boxes and coded postcards to communicate with the Russians, officials said. His requests for new overseas postings were repeatedly denied throughout 1996.

In June 1996, the FBI followed him on yet another trip to Singapore to see a Russian agent. The FBI arrested after intercepting messages for what officials said was a planned meeting with Russian spies in Zurich this month.

Times staff writers Robert L. Jackson and James Gerstenzang contributed to this story.

* AN ‘AMAZING’ SUSPECT: Experts call alleged spying unbelievably brazen in wake of Aldrich H. Ames scandal. A14

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Comparing Spy Cases (Southland Edition, A1)

Spy suspect Harold J. Nicholson had a higher ranking than Aldrich H. Ames, the CIA employee involved in the most-damaging spy case in U.S. history.

THE TWO CASES

NICHOLSON

POST: Station chief, instructor

CHARGE: Charged with selling secrets to the Russians for $120,000; may have revealed names of all new agents in the last two years.

STATUS: Held without bond; faces life term if convicted

****

AMES