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Snooping on Allies Embarrasses U.S.

Insight Magazine
10-15-98 By Timothy W. Maier

Blackmail, 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.

Thanks. donna found another one.

1 Posted on 01/10/2000 21:14:12 PST by Uncle Bill
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