- A foreign spy service appears to have penetrated secret
communications in the Clinton administration, which has discounted security
and intelligence threats.
- The FBI is probing an explosive foreign-espionage operation
that could dwarf the other spy scandals plaguing the U.S. government. Insight
has learned that FBI counterintelligence is tracking a daring operation
to spy on high-level U.S. officials by hacking into supposedly secure telephone
networks. The espionage was facilitated, federal officials say, by lax
telephone-security procedures at the White House, State Department and
other high-level government offices and by a Justice Department unwillingness
to seek an indictment against a suspect.
- The espionage operation may have serious ramifications
because the FBI has identified Israel as the culprit. It risks undermining
U.S. public support for the Jewish state at a time Israel is seeking billions
of tax dollars for the return of land to Syria. It certainly will add to
perceptions that the Clinton-Gore administration is not serious about national
security. Most important, it could further erode international confidence
in the ability of the United States to keep secrets and effectively lead
as the world's only superpower.
- More than two dozen U.S. intelligence, counterintelligence,
law-enforcement and other officials have told Insight that the FBI believes
Israel has intercepted telephone and modem communications on some of the
most sensitive lines of the U.S. government on an ongoing basis. The worst
penetrations are believed to be in the State Department. But others say
the supposedly secure telephone systems in the White House, Defense Department
and Justice Department may have been compromised as well.
- The problem for FBI agents in the famed Division 5, however,
isn't just what they have uncovered, which is substantial, but what they
don't yet know, according to Insight's sources interviewed during a year-long
investigation by the magazine. Of special concern is how to confirm and
deal with the potentially sweeping espionage penetration of key U.S. government
telecommunications systems allowing foreign eavesdropping on calls to and
from the White House, the National Security Council, or NSC, the Pentagon
and the State Department.
- The directors of the FBI and the CIA have been kept informed
of the ongoing counterintelligence operation, as have the president and
top officials at the departments of Defense, State and Justice and the
NSC. A "heads up" has been given to the House and Senate Intelligence
Committees, but no government official would speak for the record.
- "It's a huge security nightmare," says a senior
U.S. official familiar with the super-secret counterintelligence operation.
"The implications are severe," confirms a second with direct
knowledge. "We're not even sure we know the extent of it," says
a third high-ranking intelligence official. "All I can tell you is
that we think we know how it was done," this third intelligence executive
tells Insight. "That alone is serious enough, but it's the unknown
that has such deep consequences."
- A senior government official who would go no further
than to admit awareness of the FBI probe, says: "It is a politically
sensitive matter. I can't comment on it beyond telling you that anything
involving Israel on this particular matter is off-limits. It's that hot."
- It is very hot indeed. For nearly a year, FBI agents
had been tracking an Israeli businessman working for a local phone company.
The man's wife is alleged to be a Mossad officer under diplomatic cover
at the Israeli Embassy in Washington. Mossad - the Israeli intelligence
service - is known to station husband-and-wife teams abroad, but it was
not known whether the husband is a full-fledged officer, an agent or something
else. When federal agents made a search of his work area they found a list
of the FBI's most sensitive telephone numbers, including the Bureau's "black"
lines used for wiretapping. Some of the listed numbers were lines that
FBI counterintelligence used to keep track of the suspected Israeli spy
operation. The hunted were tracking the hunters.
- "It was a shock," says an intelligence professional
familiar with the FBI phone list.
- "It called into question the entire operation. We
had been compromised. But for how long?"
- This discovery by Division 5 should have come as no surprise,
given what its agents had been tracking for many months. But the FBI discovered
enough information to make it believe that, somehow, the highest levels
of the State Department were compromised, as well as the White House and
the NSC. According to Insight's sources with direct knowledge, other secure
government telephone systems and/or phones to which government officials
called also appear to have been compromised.
- The tip-off about these operations - the pursuit of which
sometimes has led the FBI on some wild-goose chases - appears to have come
from the CIA, says an Insight source. A local phone manager had become
suspicious in late 1996 or early 1997 about activities by a subcontractor
working on phone-billing software and hardware designs for the CIA.
- The subcontractor was employed by an Israeli-based company
and cleared for such work. But suspicious behavior raised red flags. After
a fairly quick review, the CIA handed the problem to the FBI for follow-up.
This was not the first time the FBI had been asked to investigate such
matters and, though it was politically explosive because it involved Israel,
Division 5 ran with the ball. "This is always a sensitive issue for
the Bureau," says a former U.S. intelligence officer. "When it
has anything to do with Israel, it's something you just never want to poke
your nose into. But this one had too much potential to ignore because it
involved a potential systemwide penetration."
- Seasoned counterintelligence veterans are not surprised.
"The Israelis conduct intelligence as if they are at war. That's something
we have to realize," says David Major, a retired FBI supervisory special
agent and former director of counterintelligence at the NSC. While the
U.S. approach to intelligence is much more relaxed, says Major, the very
existence of Israel is threatened and it regards itself as is in a permanent
state of war. "There are a lot less handcuffs on intelligence for
a nation that sees itself at war," Major observes, but "that
doesn't excuse it from our perspective."
- For years, U.S. intelligence chiefs have worried about
moles burrowed into their agencies, but detecting them was fruitless. The
activities of Israeli spy Jonathan Pollard were uncovered by accident,
but there remains puzzlement to this day as to how he was able to ascertain
which documents to search, how he did so on so many occasions without detection,
or how he ever obtained the security clearances that opened the doors to
such secrets. In all, it is suspected, Pollard turned over to his Israeli
handlers about 500,000 documents, including photographs, names and locations
of overseas agents.
- "The damage was incredible," a current U.S.
intelligence officer tells Insight. "We're still recovering from it."
- Also there has been concern for years that a mole was
operating in the NSC and, while not necessarily supplying highly secret
materials to foreign agents, has been turning over precious details on
meetings and policy briefings that are being used to track or otherwise
monitor government activities.
- The current hush-hush probe by the FBI, and what its
agents believe to be a serious but amorphous security breach involving
telephone and modem lines that are being monitored by Israeli agents, has
even more serious ramifications. "It has been an eye opener,"
says one high-ranking U.S. government official, shaking his head in horror
as to the potential level and scope of penetration.
- As for how this may have been done technologically, the
FBI believes it has uncovered a means using telephone-company equipment
at remote sites to track calls placed to or received from high-ranking
government officials, possibly including the president himself, according
to Insight's top-level sources. One of the methods suspected is use of
a private company that provides record-keeping software and support services
for major telephone utilities in the United States.
- A local telephone company director of security Roger
Kochman tells Insight, "I don't know anything about it, which would
be highly unusual. I am not familiar with anything in that area."
- U.S. officials believe that an Israeli penetration of
that telephone utility in the Washington area was coordinated with a penetration
of agents using another telephone support-services company to target select
telephone lines. Suspected penetration includes lines and systems at the
White House and NSC, where it is believed that about four specific phones
were monitored - either directly or through remote sites that may involve
numbers dialed from the complex.
- "[The FBI] uncovered what appears to be a sophisticated
means to listen in on conversations from remote telephone sites with capabilities
of providing real-time audio feeds directly to Tel Aviv," says a U.S.
official familiar with the FBI investigation. Details of how this could
have been pulled off are highly guarded. However, a high-level U.S. intelligence
source tells Insight: "The access had to be done in such a way as
to evade our countermeasures =8A That's what's most disconcerting."
- Another senior U.S. intelligence source adds: "How
long this has been going on is something we don't know. How many phones
or telephone systems we don't know either, but the best guess is that it's
no more than 24 at a time as far as we can tell."
- And has President Clinton been briefed? "Yes, he
has. After all, he's had meetings with his Israeli counterparts,"
says a senior U.S. official with direct knowledge. Whether the president
or his national-security aides, including NSC chief Sandy Berger, have
shared or communicated U.S. suspicions and alarm is unclear, as is the
matter of any Israeli response. "This is the first I've heard of it,"
White House National Security Council spokesman Dave Stockwell tells Insight.
"That doesn't mean it doesn't exist or that someone else doesn't know."
- Despite elaborate precautions by the U.S. agencies involved,
say Insight's sources, this alleged Israeli intelligence coup came down
to the weakest link in the security chain: the human element. The technical
key appears to be software designs for telephone billing records and support
equipment required for interfacing with local telephone company hardware
installed in some federal agencies. The FBI has deduced that it was this
sophisticated computer-related equipment and software could provide real-time
audio feeds. In fact, according to Insight's sources, the FBI believes
that at least one secure T-1 line routed to Tel Aviv has been used in the
- The potential loss of U.S. secrets is incalculable. So
is the possibility that senior U.S. officials could be blackmailed for
indiscreet telephone talk. Many officials do not like to bother with using
secure, encrypted phones and have classified discussions on open lines.
- Which brings the story back to some obvious questions
involving the indiscreet telephone conversations of the president himself.
Were they tapped, and, if so did they involve national-security issues
or just matters of the flesh? Monica Lewinsky told Kenneth Starr, as recounted
in his report to Congress, that Lewinsky and Clinton devised cover stories
should their trysts be uncovered and/or their phone-sex capers be overheard.
- Specifically, she said that on March 29, 1997, she and
Clinton were huddled in the Oval Office suite engaging in a sexual act.
It was not the first time. But, according to Lewinsky as revealed under
oath to the investigators for the Office of Independent Counsel, it was
unusual because of what the president told her. "He suspected that
a foreign embassy was tapping his telephones, and he proposed cover stories,"
the Starr report says. "If ever questioned, she should say that the
two of them were just friends. If anyone ever asked about their phone sex,
she should say that they knew their calls were being monitored all along,
and the phone sex was just a put on." In his own testimony before
a federal grand jury, Clinton denied the incident. But later - much later
- he admitted to improper behavior and was impeached but not convicted.
U.S. District Court Judge Susan Webber Wright found him to have obstructed
justice. Curiously, Starr never informed Congress whether the Lewinsky
tale was true. For that matter, according to Insight's sources,Starr never
bothered to find out from appropriate agencies, such as the FBI or the
CIA, whether the monitoring by a foreign government of the president's
conversations with Lewinsky occurred.
- Insight has learned that House and Senate investigators
did ask questions about these matters and in late 1998 were told directly
by the FBI and the CIA (among others) that there was no truth to the Lewinsky
claim of foreign tapping of White House phones. Moreover, Congress was
told there was no investigation of any kind involving any foreign embassy
or foreign government espionage in such areas.
- But that was not true. In fact, the FBI and other U.S.
agencies, including the Pentagon, had been working furiously and painstakingly
for well over a year on just such a secret probe, and fears were rampant
of the damage that could ensue if the American public found out that even
the remotest possibility existed that the president's phone conversations
could be monitored and the president subject to foreign blackmail. To the
FBI agents involved, that chance seemed less and less remote.
- The FBI has become increasingly frustrated by both the
pace of its investigation and its failure to gain Justice Department cooperation
to seek an indictment of at least one individual suspected of involvement
in the alleged Israeli telephone intercepts. National security is being
invoked to cover an espionage outrage. But, as a high law-enforcement source
says, "To bring this to trial would require we reveal our methods
of operation, and we can't do that at this point - the FBI has not made
the case strong enough." Moreover, says a senior U.S. policy official
with knowledge of the case: "This is a hugely political issue, not
just a law-enforcement matter."
- 'You've Got the Crown Jewels'
- If spies wanted to penetrate the White House, a facility
widely considered the most secure in the world, how might it be done? For
that matter, how might any agency or department of government be penetrated
- "Actually, it's pretty easy if you know what you're
doing," says a retired U.S. intelligence expert who has helped (along
with other government sources) to guide Insight through the many and often
complicated pathways of government security and counterespionage.
- Access to designs, databases, "blueprints,"
memos, telephone numbers, lists of personnel and passwords all can be obtained.
And from surprising sources. Several years ago this magazine was able to
review from a remote site information on the supposedly secret and inaccessible
White House Office Data Base, or WHODB (see "More Personal Secrets
on File @ the White House," July 15, 1996).
- Despite the spending of additional millions to beef up
security when the White House installed a modern $30 million computerized
telephone system a few years ago, communications security remains a big
problem. Whatever the level of sophistication employed, there are soft
underbellies that raise significant national-security problems. And potential
for espionage, such as electronic intercepting of phone calls, is very
- Calls to or from the White House dealing with classified
information are supposed to be handled on secure lines, but it doesn't
always happen. Sometimes, according to Insight's sources, despite the existence
of special phones at the White House and elsewhere to handle such calls,
some don't use them or only one side of the call does. An Insight editor
recently was allowed for demonstration purposes to overhear a conversation
placed over an unsecured line involving a "classified" topic.
- Carelessness always has been a problem, but former and
current FBI special agents say that under the Clinton administration the
disregard for security has been epidemic. Many officials simply don't like
the bother of communicating on secure phones.
- In another instance, Insight was provided access to virtually
every telephone number within the White House, including those used by
outside agencies with employees in the complex, and even the types of computers
used and who uses them. Just by way of illustration, this information allowed
direct access to communications instruments located in the Oval Office,
the residence, bathrooms and grounds.
- With such information, according to security and intelligence
experts, a hacker or spy could target individual telephone lines and write
software codes enabling the conversations to be forwarded in real-time
for remote recording and transcribing. The White House complex contains
approximately 5,800 voice, fax and modem lines.
- "Having a phone number in and of itself will not
necessarily gain you access for monitoring purposes," Insight was
told by a senior intelligence official with regular contact at the White
House. "The systems are designed to electronically mask routes and
generate secure connections." That said, coupling a known phone number
to routing sequences and trunk lines would pose a security risk, this official
- Add to that detailed knowledge of computer codes used
to move call traffic and your hacker or spy is in a very strong position.
"That's why we have so many redundancies and security devices on the
systems - so we can tell if someone is trying to hack in," says a
current security official at the White House.
- Shown a sampling of the hoard of data collected over
just a few months of digging, the security official's face went flush:
"How the hell did you get that! This is what we are supposed to guard
against. This is not supposed to be public."
- Indeed. Nor should the telephone numbers or locations
of remote sites or trunk lines or other sundry telecommunications be accessible.
What's surprising is that most of this specialized information reviewed
by Insight is unclassified in its separate pieces. When you put it together,
the solved puzzle is considered a national-security secret. And for very
- Consider the following: Insight not only was provided
secure current phone numbers to the most sensitive lines in the world,
but it discovered a remote telephone site in the Washington area which
plugs into the White House telecommunications system.
- Given national-security concerns, Insight has been asked
not to divulge any telephone number, location of high-security equipment,
or similar data not directly necessary for this news story.
- Concerning the remote telecommunications site, Insight
discovered not only its location and access telephone numbers but other
information, including the existence of a secret "back door"
to the computer system that had been left open for upward of two years
without anyone knowing about the security lapse. This back door, common
to large computer systems, is used for a variety of services, including
those involving technicians, supervisors, contractors and security officers
to run diagnostic checks, make repairs and review system operations.
- "This is more than just a technical blunder,"
says a well-placed source with detailed knowledge of White House security
issues. "This is a very serious security failure with unimaginable
consequences. Anyone could have accessed that [back door] and gotten into
the entire White House phone system and obtained numbers and passwords
that we never could track," the source said, echoing yet another source
familiar with the issue.
- Although it is not the responsibility of the Secret Service
to manage equipm= ent systems, the agency does provide substantial security
controls over telecommunications and support service into or out of the
White House. In fact, the Secret Service maintains its own electronic devices
on the phone system to help protect against penetration. "That's what
is so troubling about this," says a security expert with ties to the
White House. "There are redundant systems to catch such errors and
this was not caught. It's quite troubling.=8A It's not supposed to happen."
- Insight asked a senior federal law-enforcement official
with knowledge of the suspected Israeli spying case about the open electronic
door. "I didn't know about this incident. It certainly is something
we should have known given the scope of what's at stake," the official
- Then Insight raised the matter of obtaining phone numbers,
routing systems, equipment sites, passwords and other data on the telecommunications
systems used by the White House: How hard would it be for a foreign intelligence
service to get this information? "Obviously not as hard as we thought,"
a senior government official said. "Now you understand what we're
facing and why we are so concerned."
- That's one reason, Insight is told, the White House phone
system is designed to mask all outgoing calls to prevent outsiders from
tracing back into the system to set up taps. However, knowing the numbers
called frequently by the White House, foreign agents could set up listening
devices on those lines to capture incoming or outgoing calls. Another way
of doing it, according to security experts, is to get inside the White
House system. And, though it's considered impossible, that's what they
said about getting the phone numbers that the president uses in his office
- Like trash, information is everywhere - and often is
overlooked when trying to tidy up a mess.
- - PMR and JMW
- 'So What, It's Only Israel!'
- There is a tendency in and out of government to minimize
the impact of Israeli espionage against the United States because Israel
is a friendly country. That overlooks the gravity of the espionage threat,
says David Major, former director of counterintelligence programs at the
National Security Council. "This 'don't worry about allied spying,
it's okay' attitude is harmful," he warns. "The U.S. should expect
that the rest of the world is bent on rooting out its national-security
secrets and the secrets that could subject its leaders to blackmail."
Minimizing or excusing "friendly spying," he argues, only discourages
vigilance and encourages more attacks on U.S. national security. "I'm
not outraged by nations that find it in their interests to collect intelligence
but by our unwillingness to seriously pursue counterintelligence."
- Major, now dean of the private Center for Counterintelligence
and Security Studies, asks: "What price should Israel pay for this?
My predictions are that there will be no impact whatsoever. Do we put our
heads in the sand or do we take it as a wake-up call?"
- Others observe that Israel has passed stolen U.S. secrets
to America's adversaries. The government of Yitzhak Shamir reportedly provided
the Soviet Union with valuable U.S. documents stolen by Israeli spy Jonathan
Pollard. "It's the security equivalent of herpes," says a former
U.S. antiterrorism official now at a pro-Israel think tank who requested
anonymity. "Who gets it [beyond Israel] nobody knows.... Once we let
it happen, the word gets out that 'you can get away with this.'"
- - JMW