CASEY REALIZED THAT after the President, Secretary of State George Shultz was the most substantial presence in the Administration, the man of apparent moderation, the reasonable voice—thoughtful and articulate. That spring, Casey watched him go through a much-needed transformation. At White House meetings, his hands folded as if in prayer, Shultz crossed a threshold on the use of American force—covert or overt—in response to terrorism. After the failure of diplomacy in Lebanon, it was time to act. The United States had been driven out of Lebanon by terrorism. The problem could not be solved by diplomats. As the discussions went on, Shultz became excitable on the subject of terrorism and pushed for an active response. Retaliation or preemption was all that the terrorists, and the terror states, would understand.
Casey tolerated Shultz. The economist and businessman had a tough side, getting tougher. When Shultz turned to Reagan at the NSPG meetings and said in his deep voice, “Mr. President…” everyone listened. American credibility and foreign policy hinge on demonstrating that we can adapt and act against the new butchers, Shultz said. Our authority in the Middle East rests on it.
Under NSDD 30, which Reagan had signed in 1982, the State Department was in charge of antiterrorist policy. Shultz was indicating that he wanted the Pentagon and the CIA drawn in more. Someone would have to do the dirty work.
This initiative by the Secretary triggered a series of working groups and meetings coordinated by the White House and the NSC staff. Lieutenant Colonel North drafted a decision document for the President. In North’s language, it was time to kill the “cocksucker” terrorists. His draft NSDD called for CIA-backed and-trained teams of foreign nationals to “neutralize” terrorists known to have struck Americans or known to be planning such attacks.
McMahon received a copy of North’s draft at his office, but it was not until after midnight that he reached North at home.
“Motherfucker!” McMahon shouted. Did North have his head in the sand during the 1970s? Was he oblivious to the Reagan executive order banning any involvement in assassination? What was he trying to do to the CIA? What were the chances that they would ever have solid enough intelligence to allow a preemptive attack?
North said yes sir, and hung up. Every time they got something going, McMahon would step on it. “McMahon has lost his nerve,” North told a friend. “Maybe he used to be good, but he’s worthless to Casey now.”
Casey wanted strong action, and so he took the matter to his general counsel, Sporkin. As usual, he wanted an immediate answer.
Sporkin’s conclusion was that actions against terrorists would not constitute assassination—the prohibition referred to political assassination, to the old Castro plots. If the CIA had its facts right, and minimized any hazard to civilians, and if the President signed a formal finding, and if the proper congressional committees were notified, there would be no problem. If there was hard intelligence that terrorists were about to strike, Sporkin said, the right of self-defense would put them in the clear.
Casey was not as successful with the Pentagon. Weinberger was uncomfortable using battleships to fight terrorists as they had done in Lebanon, and the Pentagon was ambivalent about plans for the CIA to preempt terrorists’ attacks. Defense’s attitude was partly relief that the dirty work would be in CIA hands, as would responsibility for any failure. But its attitude was also proprietary and bureaucratic. Paramilitary action, any such training by the CIA, was in competition with the Pentagon.
McFarlane knew that when the President’s advisers were not unanimous, little would happen. He proposed a comprehensive study, and on April 3, when President Reagan signed the secret NSDD 138 on counterterrorism, it was little more than a planning document that called on twenty-six federal departments and agencies to propose how to stop terrorists. It endorsed in principle the notion of preemptive strikes and retaliatory raids.
That night, in a dinner speech in Washington, Shultz called for an “active defense” and suggested the need for “preemptive” moves. He spoke at length with somber conviction. And the Secretary spent the better part of the next month on the hustings with his message.
Casey was looking at the problem from a different angle. The brand of terrorism practiced in Lebanon by the Iranians and the Syrians was shadowy, hard to pin down. Though he was convinced that Iran and Syria were behind much of it, he did not have the kind of proof required by American law, or even by common sense.
Partly because of the emphasis that Casey had placed on Libya, regular intelligence showed Qaddafi’s brazen tactics. In March, communications intercepts, satellite photos and some human sources demonstrated conclusively that Libya was intervening in Sudan. Libya had sent a Soviet-built Tu-22 fighter to bomb a Sudanese radio station outside the capital, Khartoum. The intelligence had been so good that Shultz was able to declare publicly, without qualification, with his stern professorial, unsmiling gaze, “It is a fact” that Libya conducted the raid. What Shultz did not disclose was that the Libyan pilot had been captured and had admitted that it had been a practice run for future raids on Cairo.
The intelligence also showed that Libya had signed an agreement with Greece for an exchange on naval matters. Since Greece was still a member of NATO, this could threaten secrets in the West’s most important alliance. Within the United States, the FBI had concrete evidence that a Libyan students’ committee in a Washington suburb was involved in intelligence and terrorist work. There were suggestions that the People’s Committee of Libyan Students be expelled from the United States, but the FBI argued that the group provided a window on Libyan activities in the country. There was particular concern because of the upcoming Republican and Democratic national conventions and the summer Olympics in Los Angeles. The conventions and the Olympics would be an opportunity for a spectacular terrorist act.
Qaddafi was so unpopular with his neighbors that Sudan, Egypt and Iraq were providing secret support to the opposition, the National Front for the Salvation of Libya (NFSL).
Casey kept pushing this sort of intelligence through the system; the NID, one day for example, said: “Satellite photography shows normal activity on Friday around Qaddafi’s compound.” The May 8 attack on the compound heightened a sense of opportunity. The NSC’s Terrorist Incident Working Group, middle-level officials from key departments and agencies, was on Qaddafi alert. Casey encouraged Shultz to take the lead; without State’s support, the Administration would not do much. Shultz’s deputy and old friend, Kenneth W. Dam, initiated a review of policy toward Libya.
On May 18, Dam received from the State Department’s intelligence branch a SECRET/SENSITIVE ten-page paper called “Countering Libyan Terrorism.” It brought together the several strands within the Administration—desire for counterterrorist action, anti-Qaddafi sentiment, good intelligence, and an opportunity.
The options were laid out on pages six and seven. They ranged from “do nothing” to the more positive option 8: “Establish a pattern of directly reacting to Libyan terrorism by going after carefully selected Libyan targets…” and then on to option 9: “Mount a program of covert actions to preempt, disrupt and frustrate Libya’s plans,” and finally option 10: “Seek a regime change.”
The next day, a Saturday, Dam held a meeting in his office with a handful of top officials. There were four options; number four was to “forcefully expand existing policy…For example, re-examine the feasibility of other military or covert options.”
On June 13, Bob Gates received a SECRET/SENSITIVE request from Hugh Montgomery, head of State’s intelligence branch: “In connection with the very sensitive policy review which he is now conducting, Ken Dam has asked for an interagency assessment of the threat which Libya poses to U.S. interests.” It set forth a tentative list of the subjects to be addressed, formally “the terms of reference.” Gates was to come up with a judgment on the exact threat posed worldwide by Qaddafi. Was he the archterrorist requiring a U.S. response? Was he merely a nuisance who had to be tolerated, as the Europeans generally believed? State asked for a reply within three weeks. “We have also been asked to emphasize the sensitivity of this subject and the need to restrict knowledge…”
The national intelligence officer for the region, the Near East and South Asia, had already undertaken a delicate top-secret review, addressing Qaddafi’s vulnerabilities. Where was Qaddafi weak? How and where might U.S. policy have an impact? Representatives from the CIA, the DIA, State and the NSA went to work.
In contrast to the pressure for action from the policy-makers at State, the intelligence representatives from State were intensely skeptical of the bits of information that suggested substantial unrest in Libya. Libya was something of a diplomatic black hole, and the State Department was more skeptical than the CIA of communications intercepts and source reports.
All agreed that the current U.S. policy of trade restrictions was laughably ineffective, though an abrupt withdrawal of U.S. and British oil workers might force a drop in Libyan oil production by 25 to 50 percent in the short run. There were some intelligence reports showing that a Qaddafi five-year campaign to instill a new revolutionary spirit in Libya had backfired, creating a climate conducive to his overthrow. Members of Qaddafi’s own Bedouin tribe had urged him to abandon his totalitarian policies, warning him that his tribe and his family faced isolation and disgrace unless he moderated his policies.
Qaddafi’s suspiciousness was a psychological vulnerability, the NIO’s group concluded, though it was also a form of protection. Intelligence suggested that Qaddafi wore a bulletproof vest, and that an elite, specially equipped military unit, a countercoup force, protected his Tripoli headquarters, where the main communications networks and the city’s radio station were located.
Clandestine reports, code-breaking and intelligence liaison reports showed that the anti-Qaddafi exile movement was getting support from six countries:
The list included three of the six countries on Qaddafi’s borders. He was at war with a fourth, Chad.
But Egypt and, to a lesser extent, Algeria were the keys to bringing military and other pressure on Qaddafi. The intelligence representatives agreed on language for an assessment of Egypt and Algeria: “Both also would have serious reservations about cooperating with the United States in covert activity aimed at overthrowing Qaddafi. These reservations are based in part upon a perception of U.S. unwillingness and an inability to participate effectively and meaningfully, and upon U.S. inability to prevent such actions from becoming public.”
The CIA, DIA and NSA representatives concluded that there was substantial discontent within the Libyan military. Over State Department objections, they wrote: “Successful internal operations, on a relatively spectacular level and with some frequency, combined with other external pressures and setbacks, could serve to spark action against Qaddafi by some disaffected elements in the military.” Qaddafi’s deputy, Major Salaam Jalloud, and the chief of the armed forces and his deputy “probably have the strongest motives.”
The assessment was taking shape, with the State Department, ironically, on the outside objecting to conclusions that would support a covert operation to undermine or overthrow Qaddafi. But the others continued and on page five went several steps further, for all practical purposes arguing for strong action by the United States:
We believe the exile groups, if supported to a substantial degree, could soon begin an intermittent campaign of sabotage and violence which could prompt further challenges to Qaddafi’s authority. If exile activity were coupled with other factors—increased propaganda, visibly deteriorating relations with foreign countries and broad economic pressure—disaffected elements in the military could be spurred to assassination attempts or to cooperate with the exiles against Qaddafi. However, widespread military rebellion is unlikely.
It was nearly an invitation to assist in an assassination of Qaddafi, despite the President’s executive order banning any involvement, direct or indirect, in the support or planning of assassination. The 1981 Reagan Executive Order 12333 said: “Prohibition on assassination. No person employed by or acting on behalf of the United States government shall engage in, or conspire to engage in, assassination.” The assessment was, at minimum, an unusually provocative document, virtually urging coordinated action, warning against halfhearted efforts:
This paper concludes that no course of action short of stimulating Qaddafi’s fall will bring any significant and enduring change in Libyan policies. A fundamental conclusion of this paper is that Libya has significant vulnerabilities, but that these can only be exploited successfully through a broad program in cooperation with key countries combining political, economic and paramilitary, actions. Isolated paramilitary, economic or political actions are likely to have little or no effect.
It was a call for a major covert action, and the State Department intelligence branch disputed the very foundation of the conclusion—the underlying intelligence. In a footnote on the first page, State filed a stinging dissent, saying, “The paper rests too heavily on fragmentary, unsubstantiated reporting and fails to give sufficient weight to Qaddafi’s enduring popularity. Qaddafi’s security grip is so tight that no coup is likely to get off the ground.”
When it was finished the assessment was twenty-nine pages long and was classified as follows: TOP SECRET, with the code words UMBRA (containing information from decoded communications), NOFORN (could not be seen by foreigners), NOCONTRACT (contract, part-time employees could not see it), PROPIN (containing proprietary information from businesses), ORCON (the originator controlled dissemination, and all copies were numbered).
The document was issued on June 18. It was a source of controversy among the handful of government officials who were cleared to read it. The reference to and the virtual call for “paramilitary operations” and the suggestion that the United States spur the Libyan military to assassination attempts leaped from the pages.
On the Fourth of July, the CIA issued another TOP SECRET paper on Libya. This was the threat assessment; it stated that Qaddafi was continually acting against U.S. interests but that the only immediate concern was what Qaddafi might do in Sudan.
It continued: “An act of Libyan terror in the United States is possible, but we believe Libya would be hard-pressed to mount a successful operation.Libya almost certainly has a few agents among the approximately 1,500 Libyan students in the United States,” including “approximately 200 fanatic pro-Qaddafi students here.”
Dealing with fears that Qaddafi might obtain a nuclear weapon, the assessment noted on page 13: “We believe Libya will not achieve a nuclear explosive capability within the next 10 years.”
An interagency group at the White House began outlining plans for covert support to the Libyan exiles and an array of covert nonlethal and covert lethal alternatives. The rhetorical exchanges between the United States and Libya were at such a high pitch that the officials decided to consider an unusual question: “What is the impression when we don’t do something?” The pressure for action was immense. There was lots of tough talk. No one wanted to sound weak. Options were drafted and circulated.
Casey was out of town when they arrived at the CIA. McMahon received the paperwork and lost his aplomb. This was madness.
McMahon knew some of the CIA’s history concerning Libya. In the years immediately after 1969, when Qaddafi had come to power, there had been discussions about trying to overthrow him, but the State Department had opposed an attempt and had won. Director Helms had agreed with State that there was then no way to accomplish this. During the Carter Administration, Turner had asked once what might be done about Qaddafi. McMahon, then the DDO, had answered, Not much.
McMahon felt that the group that had drafted the option had no handle on the exile groups. They were little more than Boy Scouts in his book. The intelligence suggested that they couldn’t land a rubber raft on the Libyan coast, let alone overthrow a government, let alone take Libya over and run it. Qaddafi had penetrated the movement and followed every step its members made. Qaddafi would have had a potentially strong leader in that movement bumped off.
McMahon knew how to kill a covert operation with questions, demanding details he knew no one had. Did the CIA have penetrations? How many security guards did Qaddafi have? Were they loyal? What were the chances for success? The answers, as expected, were vague. McMahon said that even if there were a half-assed chance they could not go forward, but they weren’t even that close. If you don’t have the tools and the people, don’t screw around, he argued. And what about the prohibition on assassination? he asked. This would not be an operation against a regime. It would be against an individual. There was no conceivable, credible way to set something like this in motion and then tell the exiles not to kill Qaddafi.
When Casey returned, he backed McMahon on a number of grounds. First, America’s allies, especially in Europe, would not agree. It infuriated Casey that Qaddafi was gaining, rather than losing, respectability in Europe—the secret Libyan-Greek agreement was only an example. Without the coordinated support of the Western Alliance, there was no way for covert pressure or operations to work. If the CIA went ahead anyhow, the United States would end up isolated. Second, there was insufficient political backing for such an operation within the Administration. The May 8 coup attempt had only shown that there was an opportunity to unseat Qaddafi, but he had done nothing immediately threatening to warrant such a move.
With the Nicaragua operation in trouble with Congress, Casey was in no mood for another fight. The 1984 presidential election was several months off. There was no way Casey wanted to step off a cliff, though he was sure that an operation against Qaddafi would be very popular with his two most important constituencies—the public and Ronald Reagan.
On June 22 Casey found a highly classified letter from Attorney General William French Smith in his in-box. It was trouble. The letter contained a summary of a very sensitive FBI leak investigation that was nearly two years old. On July 13, 1982, the NSA had intercepted commercial communications from the Mitsubishi office in Washington to Japan. To the great alarm of the United States, Mitsubishi had detailed, verbatim information from the top-secret National Intelligence Daily of July 7 and 9. Mitsubishi’s communiqué reported on Iran and Iraq troop movements, including the massing of 120,000 Iranian troops to oppose 80,000 Iraqis at a particular border location. There was sensitive intelligence that the Iraqi leader would have to fall before there would be peace talks. Mitsubishi sourced its information to an unidentified member of a U.S. government intelligence agency who had told it to a Washington consulting firm that Mitsubishi had hired. A second NSA intercept of the Japanese company’s traffic out of Washington on July 29, 1982, had contained extensive quotes from the NID of three days earlier. NSA Director Lincoln Fauer had been anxious to find the leak and had asked for an investigation.
The FBI had zeroed in on one of Casey’s senior analysts, Charles Waterman, vice-chairman of the National Intelligence Council. Waterman, a thin, balding, nervous former operations officer with twenty years’ experience, had been authorized to deal with the Washington consulting firm that published a bimonthly newsletter which often contained terrific material on the Middle East. In fact, Waterman had gathered good intelligence from the consulting group.
Waterman had not made it through a barrage of FBI and CIA polygraph examinations in 1983, and Casey remembered the episode as a glorious mess. The CIA security office had recommended that Waterman resign. Waterman was a good man who denied leaking, and Casey was of the opinion that everyone the agency sent out to gather information and maintain contacts around town talked more than he should. Some goddamn numbers about Iran and Iraq troop strength were nothing—typical garbage from the NID. A firing would send the wrong message internally at Langley. So Casey, with McMahon’s agreement, overruled the CIA’s own security office recommendation. Waterman would receive a slap on the wrist—two weeks’ leave without pay.
But the FBI hadn’t dropped its investigation and had opened a criminal espionage case. Waterman had been placed on leave with pay in December 1983 as the FBI continued working.
Now, seven months later, Attorney General Smith was saying that the Justice Department might not be able to prosecute Waterman because sensitive sources and methods would have to be disclosed at a trial. But, he said, the investigation had reached a stage where it would be appropriate for the CIA to take some action; dismissal and a public statement about the reasons would serve as a substantial deterrent to others; finally, the Attorney General would like to know what final action is taken.
“God damn Bill Smith,” Casey yelled. The letter obviously had been written by the Justice Department or by the FBI bureaucracy, both bent on protecting their ass. They hadn’t been able to find the leak, so they would try to get Casey to shove Waterman out the door as if they had. Smith had signed the letter blindly. Copies of the letter had been spread all over town to the departments and the agencies.
“This goddamn thing isn’t going to leak,” Casey said. But he knew that the Smith letter making Casey appear soft on a senior leaker was likely to get out.
Casey summoned Sporkin and showed him the letter and a Justice Department report on the investigation. Sporkin believed Waterman was innocent. Under oath, Waterman had denied leaking, and his calendars had not shown any meetings with the newsletter people at the time of the leaks. The newsletter people had also denied that Waterman was the source. Sporkin felt sorry for Waterman. When he had been put on administrative leave, Sporkin had helped him find a lawyer. Three months before that, when Sporkin had gone down to the FBI’s Washington Field Office to try to straighten the matter out, FBI agents had suggested that Sporkin might be obstructing their investigation.
He disagreed with Casey on the efficacy of lie detectors. They turned the presumption of innocence on end: if the operator says the machine shows deception, that’s it; there is no way to disprove it. The result was a stalemate. The Attorney General’s letter was proof of that. They weren’t going to prosecute because they didn’t have a case, not because a trial would possibly disclose sources and methods, Sporkin said. Justice wanted Casey to kick some ass. The polygraph was no better than a medieval rack or thumbscrew; it was a mind-basher rather than a body-basher, that was the only difference, Sporkin felt.
In an atmosphere of leaks and spies, Casey felt that every tool, even the polygraph, had to be used. It had come up with some impressive results: it scared people, it led to confessions, it warned the agency off hiring unreliable people. Casey phoned Waterman and asked him to come by the next day.
Waterman, as he drove to Langley for the meeting, was glad that something was at last about to happen. It had been a terrible seven months waiting, the worst of his life. He had been in some awful holes for the CIA, bumping around the stations in the Middle East, beginning in 1964. He had served in Beirut, Cairo, Jordan, back to Beirut, and was finally station chief in Saudi Arabia. He had used and taken polygraph tests before. He had no faith in them. There had been four miserable half days strapped to the box over the Mitsubishi incident. The FBI polygraph operator had said to him, “You’re in big trouble,” but the results of the polygraph, Waterman felt, had been a measure of his inner turmoil. He had talked with one of the newsletter people about the Iran-Iraq war; he may have used the internal CIA figures about the troop strength, but they were virtually the same as those in news accounts. He had not leaked. The idea that he would provide something verbatim was absurd. Waterman suspected that John McMahon believed he had leaked something, but he felt he had a chance with Casey.
When Waterman arrived at Casey’s seventh-floor office, he was happy to see that the DCI was alone.
Casey explained the letter from the Attorney General and handed Waterman the Justice Department report.
It’s untrue, Waterman said as forcefully as he could. He had big, innocent eyes.
So what can we do? Casey asked.
The leadership in the analytic, open side won’t continue an aggressive interchange with the outside world if you terminate me, Waterman said.
My hands are tied, Casey replied.
“I didn’t do it,” Waterman said, staring directly into the eyes of the DCI.
Casey said he believed him. But there are three reasons, he said. “Your usefulness around town is ruined. You are in a box because of the FBI conclusion that you did it. And if it leaks I’ll be charged with coddling a leaker.”
Everything that the FBI had done in the investigation had been designed to prove that the polygraph was accurate, Waterman said. There was no real investigation. Someone else had leaked and had gone undiscovered.
I’ll think about it, Casey said finally, postponing the decision. Waterman left.
Casey was in agony. He didn’t want to violate his own principle about risk-taking. If his people were going to be out there gathering information, they were going to have to exchange information—give some to get some. It was the way the world worked; no way would some newsletter people meet with Waterman if it was a one-way street. A pro like Waterman knew the limits, knew what was truly sensitive. Casey had to back his people if they made mistakes. If he didn’t, they would stop, retreat back into the shell as in the previous Administration. In 1977, in the first months of Stan Turner’s directorship, Turner had fired two CIA men because of contact they had had with renegade former CIA operative Edwin Wilson. Turner had paid a horrible price in morale, Casey knew.
Casey felt that CIA people shouldn’t get fired except for gross, deliberate, incompetent performance. This didn’t fit. That night Casey debated with himself. It was one of the hardest decisions he had faced in nearly four years. Waterman was the kind of dedicated man who had done his job; he was the embodiment of the determination Casey needed.
Next day Casey called Waterman and set up a meeting in the EOB office. Waterman arrived. He looked so vulnerable.
I’ve searched and searched, Casey said, and we can’t come up with anything. Sorry, nothing we can do about it.
Waterman choked a bit, and paused. Yes, sir, he said. He saluted and left. On the way out Waterman reminded himself that they all served at the pleasure of the DCI. It had to be that way. That meant that twenty years as a CIA man were over. He could remember his first clandestine meeting—in 1964 in Kuwait. They had sent him out in the awful heat and uncertainty. His instructions had been to locate, at a particular time and place, “an Arab who looks like he just jerked off.” What did that mean? He hadn’t known. But he had found his contact.
Casey wouldn’t have let Waterman go in his first year as DCI. Working on his fourth year, Casey felt he had no choice. Leaks were a bigger problem than morale.
The visibility and controversy surrounding the Nicaragua operation had put a crimp in the Directorate of Operations. There were fears that Congress, the media and the public might once again turn on the CIA. Casey decided it was time to air the directorate, replace DDO John Stein. The post of inspector general was better suited to his temperament. Stein was a good, solid officer but a little too cautious, and Clair George needed to be rescued from the Hill. George, like Casey, had been burned badly in the mining flap. But George had stood his ground. Casey liked the way he had handled it—seasoned, loyal, direct, willing to take and give heat, recognizing the absurdity of congressional meddling.
The difference between a Stein, who had joined the agency in the 1960s, and a George, who had joined in the 1950s, was the margin of difference for Casey. George was a survivor, prudent enough but with instincts born of the Cold War. Daring intelligence work—bribery, betrayal, electronic penetrations—were natural for him. He possessed the covert sensibility. He knew that the work was dirty and that they all had to live with contradictions.
Casey announced the changes at the end of June. The ongoing operations were a mixed bag—the application of money and manpower was progressing easily in some places but was stalled in others.
In July, Congressman Charlie Wilson obtained another $50 million for the Afghan covert operation. With the money he had gotten earlier plus the CIA’s request, that meant $120 million, and there was talk of doubling that next year. With the Saudis matching dollar for dollar, soon a half billion would be going to the Afghan rebels. That was fine with Casey, but as he surveyed the globe he concluded that it was not rational to put virtually all the covert eggs into a single basket.
There were two other covert support operations that were important, not because of the amount of money, but because of the principle. Casey had still managed to keep them secret. One was the $5 million in the budget for the Cambodian-resistance support operation, and his plan was to add another $12 million at the end of the year, even though this helped the Khmer Rouge indirectly. The second was a limited nonlethal support operation of about $500,000 a year for the Ethiopian Marxist regime’s opposition, which was also supported covertly by the Saudis. This group had a leftist orientation. In both cases, Casey was willing to dance cautiously with the devil. He saw the anti-Communist resistance movements as a unit—Nicaragua, Afghanistan, Angola, Ethiopia and Cambodia were the battleground. This was the “Reagan Doctrine.”
Casey had greatly increased the covert budget for propaganda operations. There were now about two dozen, providing money abroad for newspapers, think tanks and institutes. As with the covert paramilitary operations, he had to contend with congressional micromanaging.
In the 1950s and 1960s, the CIA had run pro-NATO propaganda very successfully. Now the Reagan Administration was trying to gain backing for placing the Pershing II missile in Europe. In 1983, Casey had budgeted several million dollars to promote the missile in the European press. Predictably, the intelligence committees had cut the funds. In 1984, Casey tried again to persuade the committees to give him several million dollars for this purpose. The Democrats argued in secret sessions that such efforts could be construed as interfering in the internal affairs of NATO allies. The Pershing II missiles were the subject of hot debate in Britain, West Germany and Italy. If it should leak that the CIA was propagandizing our allies, the impact could be devastating both to relations generally and to the efforts to deploy the missile. There was also concern that the propaganda might “blow back” into the U.S. news media.
Casey argued that the several million was just enough to keep the propaganda network of writers and others active. The committees pushed hard with what Casey thought standard arguments: several million was not enough to get the job done, so why start it? The money was removed from the budget, and the CIA was told to use maintenance funds to keep a few European writers in readiness. Once again, Casey thought, the CIA was being told, Be ready but don’t do anything. The committees were combing through the line items in the three-foot-thick stack of highly classified budget volumes, and others in the Congress, especially Senator William Proxmire of Wisconsin, who was always looking for waste, were picking on intelligence operations.
At an overseas U.S. Army facility regularly made available to a Soviet inspection team, there were hot tubs for off-duty relaxation. Army intelligence had installed sophisticated eavesdropping devices and was in the process of upgrading the monitoring equipment. The high cost had been buried in the military budget, the line-item entry listed as improvement of hot tubs. This was an open invitation for Proxmire’s monthly Golden Fleece Award for wasted taxpayer money. Army Intelligence chief Lieutenant General William Odom had to intervene and explain that an intelligence-gathering operation of some delicacy was about to be jeopardized.
The U.S. intelligence agencies had space in a high-rent district in New York City that was also targeted for Proxmire’s Golden Fleece Award. Someone suggested that the award could provide a perfect cover because the government would never allow a sensitive operation to receive so much publicity. In the end, however, the intelligence agency set up a phony proprietary company out of the reach of Proxmire’s investigators.
There was something else that summer that worried Casey. The Catholic Church in Nicaragua had emerged as the most powerful force opposing the Sandinistas. Archbishop Miguel Obando Bravo, who oversaw its nine bishops and all Catholics, was organizing the church to warn the people about Marxism-Leninism. La Barricada, the official Sandinista newspaper, had charged that he was involved “in political activity aimed at overthrowing the Nicaraguan government.” He was described as a drinking buddy of Somoza. A cartoon showed a bishop twisting a cross into a Nazi swastika.
Under the general finding for Central America propaganda, the CIA was flush with extra money, and at a lower level in the DO some officer had decided to allocate $25,000 to be funneled through a private U.S. foundation to help the Catholic Church in Nicaragua. It was an explosive connection.
Senator Moynihan thought at first that it had to be a joke. When he found out it was not, he summoned a senior official from CIA and plunked him down by the fireplace in his private office. “Don’t do it. That man, the Archbishop, is a moral force down there, and under no conditions can he be compromised.” Casey agreed with Moynihan, and the $25,000 was cancelled.
Trying to get rid of its propaganda funds required many avenues. When funds went to private organizations, the CIA lost control, but Moynihan was pondering not just control but the basic judgment. That $25,000 could have been a drop of poison. Where was the care? Who was conducting a risk assessment? Where was the moral dimension? It was precisely the sort of thing that fostered the image of the Ugly American. Was it just a matter of shoveling money out the door? Had Congress increased the intelligence budget too much? Didn’t someone ask these questions?
Casey replied that the Archbishop would never have known the source, because the money would have been buried in with other funds. But his main effort was to make sure the story did not get out. It would inevitably be misunderstood. In its worst version, it might look as if the CIA, having failed to get its contra funding, was trying to funnel money to the rebels through the Church. Not true, but Casey didn’t trust anyone to get it right.
The story, though, began to circulate, and in due course Casey called the Post. He said that if the story was printed, the Archbishop was “dead.” The story did not run.
An examination of other propaganda funds was launched, and a minor secret channel through a Catholic Church organization in Poland to funnel CIA funds of $20,000 to $30,000 to benefit the Solidarity trade union was closed down because of political risk.
As the 1984 campaign started, Casey was sidelined. The Director of Central Intelligence could not possibly attend campaign strategy sessions. On his frequent trips to the White House, Casey was left to nibble at the edges of the campaign. He would stop by to see Edward J. Rollins, a blunt right-wing Californian who was the master strategist of Reagan’s reelection campaign. It looked like a win, for sure, both agreed.
The three briefcases Casey usually took home at night contained stacks of newspapers, clippings and magazines. He followed the media with an intelligence analyst’s eye. Public information, or “open sources,” could provide some of the best clues about the continuing maneuvering within the Administration. On August 30, a story in The Washington Times merited attention: “Five Being Considered for Casey’s CIA Job.”
What the shit, he thought. The Washington Times, started by the Reverend Sun Myung Moon of the Unification Church, was plugged into Reagan’s conservative Washington. Several of its staff writers had worked at the NSC. The Times was must reading for keeping on top of the plots at 1600 Pennsylvania Avenue.
Casey read with alarm and anger that he “had made known his intention to leave government service” after the election, no matter whether Reagan won or lost.
At one time, Casey had seriously considered asking the President not to reappoint him, but John McMahon and others in the building had gone to work on him, persuading him that he was the only one who could keep the momentum, insure continuing support from the President and continue the flow of money and good relations with other foreign-intelligence services. Their appeal had touched Casey deeply. They had convinced him that even if the CIA or he himself took a whacking in the press, his directorship demonstrated that the CIA had not lost its authority in government, or with the President himself. That authority and credibility were vital if the agency was to continue on the road back. He had agreed to stay.
The article was attributed to “well-placed administration officials” and “White House insiders,” and one of the authors was a former NSC staffer, Jeremiah O’Leary. The story stated that the White House had begun to assemble a list of possible successors. At the top of the list was “White House Chief of Staff James A. Baker III.”
At such moments, Casey’s lower jaw would sink. He went deep into thought. A single newspaper story was like an untested source, it needed backup. Five days later he noticed the “Inside Washington” column in the New York Post: “CIA Boss Casey Turning In His Cloak & Dagger.” The article portrayed Casey as the initiator, having allegedly “informed” the White House that he wanted to return to private life. Again, Jim Baker was at the top of the list of possible successors.
This was delicate. The polls put Reagan’s lead over Democratic nominee Walter F. Mondale at about ten points and growing. A second administration was almost inevitable. What was the play? Any departure of a major Cabinet officer or a White House staffer would set off a chain reaction. George Shultz was the key. Weinberger, Jeane Kirkpatrick, Jim Baker, Casey himself would like State. But it seemed pretty clear that Shultz was planning to stay. That meant that Weinberger would probably remain at Defense. State and Defense were still the only other jobs that interested Casey.
And he liked the CIA, now more than ever. In a second term, White House politics would play a lesser role in decisions, Casey believed—especially decisions about foreign policy and CIA operations. Reagan would feel more inclined to follow his instincts.
The Washington Times and New York Post articles were being taken seriously in Administration circles. Casey was getting some questions and some ribbing.
Over drinks one evening, Tony Motley prompted him. “So Jim Baker’s going to get your job.”
“He’s the last fucker that will get that job,” Casey replied harshly.
It was Casey, together with Weinberger, Clark and Kirkpatrick, who had stopped Baker from moving to NSC adviser the previous year, but it wasn’t clear what could be done to keep Baker from becoming DCI. If he were asked to leave, Casey would have a say about his successor, but not a veto. Baker had won Reagan’s trust and might have elicited a promise from the President. Nonetheless, it didn’t sound right. Casey knew that Baker wanted to get foreign-policy experience. His ambitions were probably limitless—Secretary of State in a future George Bush administration, or elected office. The CIA didn’t seem to fit his agenda.
Casey’s rule was that leaks can often be traced by answering the questions: Who benefits? Who wants the story out? The answer in this case had to be someone who wanted his job or just wanted him out. His efforts to find the leak were unsuccessful, so Casey decided to ask his benefactor directly. Casey called this “Irish” and “tough.” He wrote a letter to Reagan, voicing concern about the stories allegedly coming out of the White House. As the President knew, he had not requested to return to private life and had no plan to, unless, of course, the President so desired. Casey explained that he would gladly serve for the duration of the Reagan presidency. There was, he added, as again the President knew, important, vital work still to be done in the intelligence agencies. He enclosed clips of the two newspaper stories, saying that such reports hurt morale at the CIA, created an air of uncertainty, undermined the stability they had achieved. Nearly four years of work could be set back. These false reports should be stopped.
Casey had crafted his letter to strike Reagan’s anti-press, anti-leak, pro-CIA bells. Almost immediately, Reagan phoned. He expressed total, unwavering support. Of course, Bill, I want you to stay if there is a second term. “You’re my man at the CIA as long as I’m President.”
Casey was satisfied. It was all but a guarantee, a signed contract. Casey felt almost like running down to Pennsylvania Avenue and kissing the President. Damn, he admired this man. It was a good lesson in management: pick and stick. Select your people and hang with them.