Cited under fair use for non-profit educational use.
Snooping on Allies Embarrasses U.S.
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By Timothy W. Maier
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The Clinton camp ducks alleged bugging of Seattle summit, Insight
discovers State Department 'pimp' account and foreign embassies
express shock about FBI-led espionage caper.
B lackmail, lies and deceit may be the only fitting description of
the 1993 Seattle Asia-Pacific Economic Cooperation, or APEC, summit
where dignitaries from 17 countries are reported to have been
placed under electronic surveillance by American agents. As Insight
first reported last month, the Clinton administration is said by
intelligence and security specialists -- who admitted being
involved -- to have bugged the conclave and then provided
classified secrets to the Democratic National Committee, or DNC
(See "Sex, Spies and Videotape at Clinton's APEC Summit," Sept.
29). This in turn allegedly was used as bait to barter with
potential big-buck donors for large contributions to the Democratic
coffers, sources in and out of government
claim.
. . . . This week the story continued to develop with new twists
and turns. Former officials of the National Security Council, or
NSC, and high-level economic advisers tell Insight they remain
deeply concerned that classified information may have been leaked
for political purposes. "That would make it blackmail," says a
former senior-level Bush appointee who asked not to be identified
because of an ongoing business relationship with the Clinton
administration. "I find the story totally credible. I wouldn't put
it past this administration."
. . . . Insight also detailed in earlier reports a series of
alleged criminal activities, including the procuring of boys to
engage in sexual activities with diplomats; FBI agents accepting
thousands of dollars of kickbacks; and, the most serious offense,
the White House providing top-secret trade information to two West
Coast law firms working off the books for the DNC.
. . . . The covert mission was so large that the government
purchased about $250,000 in electronic surveillance equipment,
including Konica cameras, from at least three private suppliers,
according to classified records reviewed by Insight. American spies
then collected raw economic data on Asian businesses through agents
of the FBI, the Customs Service, Naval Intelligence, the Air Force
Office of Special Investigations, the NSC, and the National
Security Agency, or NSA, sources say.
. . . . The FBI is believed to have bugged more than 300 locations,
with electronic audio and video surveillance devices used to
monitor 10,000 to 15,000 conversations -- much of it real-time data
that was bounced from satellites to the NSA. The monitoring
stations usually were placed near a Secret Service perimeter or
Naval Intelligence facilities. And many of the targets concerned
large contracts with Vietnam, sources say.
. . . . Larry Klayman, executive director of Judicial Watch, a
private legal watchdog group suing the Commerce Department for
trade records, suggests the bugging may be related to a possible
surveillance operation on the late commerce secretary Ron Brown,
suspected of taking bribes involving Vietnam contracts. But that
alone doesn't explain how the DNC could have ended up with
top-secret information.
. . . . Ironically, Clinton boasted that this summit was based on a
new spirit of trust in U.S. relations with Canada, Australia,
Brunei, China, Hong Kong, Indonesia, Japan, Malaysia, New Zealand,
the Philippines, Singapore, South Korea, Taiwan, Thailand, Mexico
and Papua New Guinea. Little wonder that exposure by Insight of
this covert mission has been met with outrage around the world.
. . . . "Is that what happened to our lumber deals?" asked George
Rioux, a frustrated Canadian diplomat requesting copies of the
story. Indonesian diplomat Hubudio Subardi says, "Everybody who
learns about it would be surprised to hear about it." Japanese
Embassy spokesman Tsuyoshi Yamamoto tells Insight, "Our government
has not issued any complaint," but notes Japan bitterly complained
to the State Department about another publicized incident. In 1995
NBC Nightly News reported the NSA had bugged the heads of state in
Miami at the Summit of the Americas to promote free trade. NBC news
also revealed that U.S. spies had intercepted a call made by a
Japanese emissary from a Washington hotel shortly before Clinton
was to meet Japan's prime minister in February 1994.
. . . . The New York Times reported in 1995 that the CIA had
eavesdropped on conversations in Geneva among Japanese officials
and car-company executives and then fed those reports to U.S. Trade
Representative Mickey Kantor, who had been pushing for better
access to Japan's markets for U.S. cars and parts. Kantor thus
learned Japan's bottom-line bargaining position.
. . . . Outrageous as it may be to Americans who believe in
openness and fair play, this sort of thing has been done regularly
by the Clinton team. What is new is that APEC appears to have
involved leaking of national-intelligence information for political
fund-raising.
. . . . Many embassies of the targeted nations asked if Insight
knew who was compromised by the child-sex ring. No senior political
leader was involved --it was "secondary" people, such as assistants
to those responsible for cutting trade deals, intelligence sources
say. It still is unclear who provided the boys to the dignitaries,
but Insight has learned that the alleged sexual activities occurred
in rooms at the West Coast Vance Hotel in Seattle.
. . . . When Pete Shimondale, the general manager of the hotel, was
asked by Insight about the sexual allegations, he responded, "Oh
God. I didn't start here until 1994." He said authorities have not
been out to question him or review records of hotel guests but
declined to comment further.
. . . . The boys are believed to have been 15 to 17 years old. As
shocking as this may be, some say it's routine. A former Bush
economic adviser observes, "The sex? That's done all the time. If a
foreign diplomat wants a companion, the State Department provides
it. It doesn't matter if it's a man or woman. They have a special
fund set up for that." Another former NSC official who requested
anonymity says other countries also do it. "I was offered every
sexual favor you can imagine. I turned it down all the time. After
a while they left me alone and stopped offering me."
. . . . Government agencies alleged to be involved in this spying
responded to Insight with carefully crafted half-denials and
artfully dodged a series of questions with noncommittal answers.
Confronted with questions about whether Naval Intelligence
purchased or used electronic equipment from private consultants and
suppliers for the operation, the first response by Navy spokesman
Lt. Joe Walker was, "I don't know." But later Walker insisted, "The
Navy was in no way involved in the bugging of hotels or
restaurants. We did not purchase equipment."
. . . . The FBI, which first declined to comment, insisted after
the story broke that "we used no physical surveillance at hotels or
restaurants" and "we used no microphones" but repeatedly refused to
say whether wire tapping or wireless surveillance took place. And
the FBI says information regarding its agents taking kickbacks has
been forwarded to the Bureau's national security office for
investigation. Pressed to answer whether the FBI is denying that
the operation happened, an informed agent replied, "Listen, I don't
want to go to jail."
. . . . Told about the half-denials and vague responses, Insight's
intelligence sources say that was to be expected. "But the bottom
line," says a high official in the alleged operation, is this: "The
FBI is lying. The FBI was there. Period. They used microphones."
. . . . If true, the Clinton team crossed well over the line when
it decided to bug hotel rooms, rental cars, popular waterfront
restaurants including Salty's, and even the chartered boat that
took the conferees to Blake Island.
. . . . Sources confirm to Insight that the operation produced
real-time data that after being moved to the NSA were sifted
through by 20 to 30 NSA specialists and handled by a senior manager
at NSA. The information then was passed to a senior NSC member and
two NSC staffers. >From there it landed in the hands of at least
one San Francisco attorney and another West Coast law firm working
off the books for the DNC. Attorneys were used because they can
claim client confidentiality if ordered to reveal the nature of the
information, its origin or destination, according to sources.
. . . . The operation was approved by the "Secret Court," which
clears such national-security operations, according to intelligence
specialists. This court legally may authorize wiretapping, and all
its writs and rulings are permanently sealed.
. . . . In fact, monitoring of G-7 economic summits under prior
administrations was approved through the Secret Court, says a
former National Security Council official under Reagan, but never a
fishing expedition on this scale. "We did it through the
embassies," says the ex-NSC official. "We never bugged hotel rooms,
and no physical surveillance was ever used."
. . . . Former CIA Director R. James Woolsey claims no knowledge of
the bugging of the APEC conference and insists if it was bugged the
CIA would not have participated because it deals with a domestic
situation. "We wouldn't have anything to do with that," Woolsey
tells Insight. "The U.S. should not engage in industrial espionage.
The CIA should not be doing intelligence on behalf of an American
company that requests it. For one thing, it's a mess to figure out
what is an American company these days."
. . . . Woolsey acknowledges that the CIA collects intelligence on
dual-use technology -- businesses violating sanctions with Iraq and
foreign entities giving bribes for contracts -- operations that
save American business billions of dollars a year. The companies,
Woolsey says, are never aware of the CIA's involvement. "We
preserve a level playing field and the American company has no idea
why all of a sudden a contract is rebid," he says.
. . . . But Woolsey insists that U.S. intelligence agencies "should
not work for political parties," a situation that appears to have
existed during the Clinton administration. For example, the DNC and
CIA have been revealed in sworn testimony to have pushed White
House access for $300,000 donor Roger Tamaraz. Likewise the DNC
requested the White House to conduct security checks on alleged
Latvian organized-crime leader Grigori Loutchansky, who had been
formally invited to attend a $25,000 a plate DNC fund-raising
dinner in 1995. He was uninvited under pressure after the DNC
received classified information about Loutchansky's alleged Mafia
ties, according to the Washington Post's Bob Woodward.
. . . . Congressional investigators say that, if the Woodward and
Insight stories continue to develop, these security leaks could
turn a campaign-finance scandal into an impeachment hearing. Taylor
Lawrence, majority staff director of the Senate Select Committee on
Intelligence, says, "If the [APEC] allegations are true, we would
be very concerned and we would look at this, but we need hard
evidence." The APEC surveillance tapes might provide the smoking
gun. But at the moment investigators tell Insight they have no plan
to secure those tapes until someone comes forward to testify about
the covert Seattle mission and connects the dots. Stay tuned. It
might happen.
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