Bogus reports to White House heap new shame on CIA

RUPERT CORNWELL

Washington

For the CIA these days, just when it seems matters cannot get worse, they do. After being numbed by the Ames affair, excoriated over Guatemala and caught red-handed spying against two US allies, the agency now admits supplying a succession of presidents with intelligence on the Soviet Union and Russia which it knew almost certainly came from agents controlled by Moscow.

Such is the latest - but in all likelihood not the final - chapter of the case of Aldrich Ames, played out before aghast congressional committees, which at one point came close to eliciting an unheard-of formal reprimand by John Deutch, the CIA director, of no fewer than three of his predecessors.

It has been more than 20 months since Ames was arrested after being unmasked as the most damaging mole in CIA history. Since then one embarrassment after another has been heaped upon the agency, as it attempts to gauge the full extent of the havoc wreaked by its former Soviet branch counter- intelligence chief, now serving a life sentence without parole in a federal prison in Pennsylvania.

None though has matched the admission of Mr Deutch on Capitol Hill last week that a new, post-Ames internal investigation by the CIA's inspector general, Frederick Hitz, had shown that "tainted" information - i.e. data supplied by Soviet agents installed by the KGB to replace those betrayed by Ames during his nine years of treachery, between 1985 and 1994 - was contained in top-secret "blue border" intelligence reports, delivered by hand to a president.

On the basis of this bogus information, purporting to show hitherto unsuspected weapons advances by Moscow, the US may have decided to go ahead with fresh arms programmes of its own. The Pentagon is launching a study to assess the damage, and officials say "billions of dollars" may have been wasted on weapons the country did not need.

If so, and by a fine stroke of irony, Moscow would have successfully imitated one US strategy in the closing stages of the Cold War: of trying to bleed one's superpower opponent dry by forcing him into an ever more costly arms race. The US may have won in the end, but the Kremlin may have scored smaller victories along the way.

For Mr Deutch, the CIA's blundering was "an inexcusable lapse in elementary intelligence practices" - so inexcusable that Mr Hitz is said to have sought reprimands for three former directors, William Webster, Robert Gates, and James Woolsey who resigned at the end of 1994 amid congressional fury over his refusal to mete out stern punishment to agency officers involved with the Ames debacle.

For the time being, the trio have wriggled out of trouble by sending a joint letter to Mr Deutch protesting that they were not informed that suspect information was being passed to the White House. Indeed, they say if anyone is to blame it is Mr Hitz, who failed to mention the practice in an earlier report. Not relishing such invidious judgement of his peers, the current CIA director let them off the hook. But Congress many not be so easily satisfied.

One influential Democrat, Bob Kerrey, vice-chairman of the Senate Intelligence Committee, insists that unless the three are held personally accountable, "I don't know how the CIA will ever recover credibility with customers who are basing billion-dollar and life-and-death decisions on that intelligence." Mr Kerrey's chance may come this week, when the three are expected to be summoned to testify at fresh hearings into the fiasco.

One thing though is clear, that Mr Deutch's task of restoring the prestige and morale of the battered CIA is harder than ever. Quite apart from the Ames affair, the agency was forced in September to discipline a dozen officers for covering up human rights abuses in Guatemala in the early 1990s. Similar ructions concerning Honduras are reportedly imminent. Separately, the CIA has been caught this year conducting industrial espionage against France and Japan, close allies of the US.