Counterintelligence at CIA
Since its inception, the discipline of counterintelligence has been a murky and controversial business, plagued by a persistent perception of failure, whether spies are caught or not, and an inconsistent level of attention and resources that have contributed to a lack of strategic perspective toward hostile intelligence attack.
Within the US government, the first centralized, non-departmental counterintelligence entity was established in March 1943 when OSS Director William “Wild Bill” Donovan created the Counterintelligence Division within the Secret Intelligence Branch—the forerunner of CIA’s Counterintelligence Staff and Counterintelligence Center. Soon renamed X-2, its offices relocated from New York to Washington, DC. The various entities within X-2 soon began amassing hundreds of thousands of files on foreign espionage and sabotage operations. The inherently highly secretive nature of CI work, combined with the exclusivity of processing the ULTRA intercepts of German military communications during World War II, gave X-2 a distinctive culture of security and compartmentation that characterized CIA counterintelligence for the next three decades.
Any appraisal of the Office of Strategic Services must begin with the fact that the best intelligence available to British and American commanders came from intercepted and deciphered Axis messages. Without ULTRA and MAGIC, the war might have been lost. OSS shared in only a small portion of this intelligence bounty, chiefly because the Army and Navy (backed by the JCS) refused to give General Donovan a role in procuring or analyzing enemy signals. There was, however, an important exception to this ban. OSS’s counterintelligence branch, X-2, made good use of German ULTRA intelligence and by the end of the war had established itself as a formidable practitioner of clandestine operations.
William Donovan created the X-2 Branch in early 1943 to provide British intelligence services with a liaison office in OSS for sharing ULTRA. Using ULTRA intercepts, the British security services had captured every German agent in the United Kingdom; some agents were even “doubled” to send a steady flow of plausible but bogus reports to Berlin. British intelligence wanted American help in this campaign, but London insisted that the Americans imitate British security practices to protect the vital ULTRA secret from unauthorized disclosures (even to other OSS personnel). X-2 was the Branch that resulted from this deal; it had its own overseas stations and communications channels and operated in partnership with the British foreign and domestic intelligence services.
Headed by attorney James Murphy, X-2 swiftly became an elite within an elite. Its officers possessed the secret keys to many wartime intelligence puzzles and could veto operations proposed by SO and SI without having to explain their reasons for doing so. In consequence, X-2 was able to attract some of the best talent in OSS, but it also earned a reputation for aloofness that the other OSS Branches resented. James J. Angleton, X-2 station chief in Rome for the last year of the war, proved a model of an innovative, activist counterintelligence officer whose contributions exceeded his job description. He cultivated Italian liaison contacts (hitherto shunned as former enemies by the other Allied agencies), reported on political machinations in Rome, and devised ways to make ULTRA information usable by US Army counterintelligence officers who were not cleared to see the actual intercepts.
X-2 did well in Europe, but OSS headquarters in Washington might have profited from more counterintelligence scrutiny. OSS had a dismal security reputation. Established agencies like the FBI and G-2 believed that Donovan’s oddball outfit, built as it was from scratch with not a few corners cut in the hiring of its staff, had to be riddled with subversives and spies. This rap was not wholly fair; OSS headquarters was not in fact penetrated by Axis agents, and its field security (at least in Europe) was adequate. Nevertheless, X-2 hunted the agents of Axis—not Allied—services. Soviet sympathizers and even spies worked in OSS offices in Washington and the field. Some were hired precisely because they were Communists; Donovan wanted their help in dealing with partisan groups in Nazi-occupied Europe. Others who were not Communists, such as Donovan’s aide Duncan C. Lee, R&A labor economist Donald Wheeler, MO Indonesia expert Jane Foster Zlatowski, and R&A Latin America specialist Maurice Halperin, nevertheless passed information to Moscow. OSS operations in China, moreover, were badly penetrated by Communist agents working as clerical and housekeeping staff, or training in OSS camps for operational missions.
On December 20, 1954, the Counterintelligence Staff was created with James Angleton as its chief, a post he would retain until his abrupt dismissal two decades later. During those years, Angleton accrued a substantial amount of resources and influence for counterintelligence inside CIA, built good working-level relations with the FBI, and cultivated effective ties with liaison services. In the 1960s, he became preoccupied with tracking down Soviet penetrations of CIA and allied services—an effort that grew increasingly controversial inside the Agency.
During the Agency’s “Time of Troubles” in the 1970’s, CIA’s counterintelligence effort suffered greatly. Angleton’s forced departure was part of DCI William Colby’s housecleaning following what the Church Committee’s later report would refer to as the December 1974 “end of an era in CIA counterintelligence.” Not only was Colby not enamored of Angleton personally, he also harbored doubts about the efficacy of the CI Staff. As he later commented, “As far as I was concerned, the role of the Counterintelligence Staff was basically to secure penetrations into the Russian intelligence services and to debrief defectors…. As far as this business of finding Soviet penetrations within the CIA … we have the whole Office of Security to protect us.”
Severe budget and personnel cuts resulted, with the workload dispersed to other offices and the tenure of the CI chief reduced to rotational assignments. Working in counterintelligence was increasingly viewed as not career-enhancing and would-be employees found other places to light in the Agency. Perhaps not surprisingly, in the decade to follow, five current or former CIA employees engaged in espionage, in an environment of reduced CI emphasis, arguably culminating in “The Year of the Spy” (1985). However, in 1988 the pendulum swung back as a result of sharply critical assessments by Congress of CI across the Intelligence Community—the CI effort had “serious flaws” and was “poorly organized, staffed, trained, and equipped to deal with continuing counterintelligence challenges.”
As a result, on March 23, 1988, DCI William Webster issued a directive which established the Counterintelligence Center (CIC) as a successor to the CI Staff. In 2015, the CIC was transformed into the Counterintelligence Mission Center (CIMC). The head of CIMC now serves as the DCIA’s chief advisor and advocate for CI issues and as the Agency’s mission manager for CI, as well as its senior CI referent with the Community, the Executive Branch, and Congress. The CIMC, like its predecessor, includes personnel from throughout the Agency and the Community. In addition to providing senior Agency management with CI-related expertise and advice, the CIMC also provides CI oversight, guidance, training, and awareness to the CIA workforce, including on the critical topic of the insider threat.