U.S. Agency Has Plan to Catch Spy Turncoats

The chief government agency responsible for keeping potential spies off U.S. government payrolls believes it has a better way--one that would cost less money while improving the odds of identifying potential turncoats.

But others involved in the spy-catching business fear that instead, traitors might be able to elude capture for longer because of new, less-exacting techniques.

Unclear is whether the new procedures might have mattered in the case involving Douglas F. Groat, a fired CIA officer who was arrested Friday. Groat, a disgruntled member of the CIA unit that breaks into foreign embassies to steal code books before he was fired in 1996, and who was charged with tipping off two countries that the CIA had cracked their codes, had long been regarded a security risk, sources said.

More careful interviews with co-workers and superiors, however, might have caught Aldrich H. Ames and Harold Nicholson, two mid-level CIA officials who began selling secrets partway through their careers.

With spy-catching budgets being squeezed, reformers at the Defense Security Service, the agency responsible for checking the reliability of workers in jobs with access to sensitive information, are pushing the efficiency plan. They would substitute quicker--but less thorough--telephone conversations for many of today’s in-person interviews of neighbors and social acquaintances.

These efforts to gather information from nongovernmental sources yield little, the reformers argue. What’s worse, they keep investigators from devoting enough time to talk to employees’ bosses and co-workers, who--in a series of major spy cases--have been much more likely to have leads on the traitors in their ranks.

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Officials at other agencies, including some within the Pentagon, view the plan as a misconceived product of the Clinton administration’s cost-conscious push to “reinvent government.” Agencies that safeguard security will have hell to pay, they warn, if it appears later that new spy cases have gone undetected because of such corner-cutting.

“The best way to guarantee security is the slow, careful way--the way we’ve been doing it for 40 years,” said one official of the Air Force, which so far has resisted efforts to change procedures.

A government task force of representatives from all the agencies in the business of granting security clearances will first address whether the Defense Security Service can adopt the proposed reforms. Only later will the task force determine whether the new approach should be implemented government-wide.

Despite the Cold War’s end, the issue is not just academic. High-profile spy cases have continued year after year, and security officials believe many people with government secrets will be tempted by countries that are economic as well as military rivals.

About 3 million federal employees and contractors have security clearances, with ratings of “confidential,” “secret,” “top secret” and even higher.

The Defense Security Service carries out more than 250,000 background clearances a year for the military services, defense contractors and some other defense organizations. It investigates all prospective hires for sensitive jobs, and every five years it reexamines those already on the job.

Investigators check government databases for criminal records and also ask about marital and other family problems, drug and alcohol abuse, financial difficulties and mental afflictions. The CIA, FBI and Office of Personnel Management undertake background checks in other parts of the government.

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In the first decades after World War II, the security agencies put great emphasis on initial investigations, which they hoped would spot prospective employees who might have sympathies with Communist governments or other adversarial regimes.

But today, spies are far less likely to be ideologically driven and more often simply mid-level government workers who, because of financial, family or other problems, decide they want to cash in on their confidential information. It is in such cases that the periodic reinvestigations are particularly important.

Because of its long emphasis on initial background checks, the Defense Security Service for years has had huge backlogs, often numbering in the tens of thousands, of incomplete five-year update investigations.

To spend more time gathering this kind of information, officials of the Defense Security Service are proposing to stop interviewing neighbors and to use telephone interviews with the references offered by prospective employees. They would like to do the same with the secondary sources whose names are derived from those interviews.

Margaret Munson, the agency’s director, said that interviews with neighbors have in the past taken up about 12% of the agency’s resources yet generated only 0.1% of the unique information.

“That’s a significant amount of resources devoted to an area that really netted us very little,” Munson said.

The agency proposal, which it hopes to make government-wide policy, largely follows recommendations issued in 1997 by a special commission on government secrets chaired by Sen. Daniel Patrick Moynihan (D-N.Y.).

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Others in the government security business--including some veterans within the Defense Security Service itself--take a more skeptical view. They contend, for example, that in recent high-profile spy cases, neighbors and friends knew information that could have been key to grabbing spies.

In the case of Ames, for example, neighbors in the Washington suburb where he lived knew that Ames had paid $540,000 in cash for his home--a tip-off that he had financial resources beyond his CIA salary.

Likewise, Washington neighbors of Theresa Marie Squillacote, a Pentagon lawyer nabbed for espionage with her husband and another man in October 1997, said in interviews after her arrest that they were aware of the leftist convictions that drove her to leak secrets. Pentagon co-workers of Squillacote said in interviews at the time of her arrest that they thought her to be a liberal Democrat but hardly a committed radical.

There is no substitute for in-person interviews, according to this camp, even if they are expensive. “When you sit down with people and watch their faces, when you visit neighborhoods yourself, you’ll always pick up a lot more information,” said a veteran defense investigator who asked not to be named.

This investigator said his office had been scaling back the number of in-person interviews conducted in background checks, unbeknownst to some of the federal agencies that would employ the subjects of the interviews.

Officials of the Air Force, the National Security Agency and the office of the Joint Chiefs of Staff are resisting the drive to streamline the background investigations and scale back the number of in-person interviews. Other security agencies are expected to follow suit when the procedures are formally proposed later this year to a group that sets federal security policies.

And some lawmakers have looked askance at the proposal. The reform “poses some concerns for us,” said a staff member at the Senate Select Committee on Intelligence.

Officials of other security agencies, speaking with a guarantee of confidentiality, attribute the proposal to pressures for streamlining that have built up on the Defense Security Agency for years.

Formerly called the Defense Investigative Service, the agency became a target for reductions at a time when defense contractors and federal officials complained that cost and time involved in background checks were crimping their performance. A few years ago, then-Defense Secretary William J. Perry called security a “barnacle on the ship of acquisition.”

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The agency has shrunk from a peak of about 4,300 employees in the mid-1980s to about 2,500 today, and it was recently reorganized as part of Defense Secretary William S. Cohen’s drive to streamline the defense agencies.

John Donnelly, who retired two years ago as director of the agency, said that as the defense budget shrinks, the agency must either lobby for more money or “find ways to cut these face-to-face interviews that are expensive and take up agent time all over the country.”

But, he acknowledged: “If you have to compromise, there will be some loss of quality.”