Behind the Recent CIA Espionage Indictments

By Joseph Fitsanakis* | intelNews | 01.31.2009
Harold James Nicholson
HAROLD JAMES NICHOLSON (photo) had a remarkable career at the CIA. Having joined the Agency in 1980, he rose to the rank of station chief in Bucharest, Romania, in only 10 years. However, in 1996, Nicholson, who specialized in espionage operations against foreign intelligence services, was arrested by FBI counterintelligence agents for working on behalf of the Foreign Intelligence Service of the Russian Federation (SVR), the successor to the Soviet KGB. Nicholson avoided a death sentence by cooperating with US government prosecutors, and admitting that he sold SVR agents information on the codenames and actual identities of all CIA operatives stationed in Russia, as well as biographical profiles of several CIA trainees. He also said he gave the Russians information on CIA covert activities in Chechnya. In 1997, Nicholson was jailed for 23 years, becoming the highest-ranking CIA officer to be convicted of spying on behalf of a foreign agency.

LIKE FATHER, LIKE SON

Last Thursday, it emerged that 24-year-old Nathaniel James Nicholson, Harold Nicholson’s youngest son, was arrested by FBI counterintelligence officers and charged with repeatedly contacting Russian officials on behalf of his imprisoned father. According to the court documents (.pdf) released Thursday, the purpose of Nathaniel Nicholson’s contact with the Russians was “to collect moneys from the Russian Federation for his [father's] past espionage activities”. According to the documents, James Nicholson “utilized his CIA training”, including tips on avoiding counterintelligence detection, in instructing his son to make contact on his behalf with officials in the Russian Consulate in San Francisco. Following this initial contact, which was made in October of 2006, Nathaniel Nicholson traveled on several occasions to Mexico, Peru and Cyprus, to collect almost $36,000 the Russians reportedly owed to his father in payment for his espionage services in the 1990s.

The FBI was allegedly tipped off about the Nicholsons’ conspiracy by an inmate at Oregon’s Sheridan federal penitentiary, where Harold Nicholson has been held for the past several years. It appears that the convicted CIA agent, who knew his communications were being monitored, had unsuccessfully tried to enlist the inmate, a former bank robber, as a mediator to contact his former Russian handlers. After the inmate’s refusal, Nicholson turned to his youngest son for assistance. The latter had his telephone and Internet communications monitored by the FBI and was followed by counterintelligence agents during most of his trips abroad. He was arrested last December, soon after returning from at trip to Cyprus, where he had received nearly $10,000 in cash from Russian Embassy officials.

NEITHER SENTIMENTAL NOR STUPID

In reporting on the Nicholsons’ indictment on conspiracy, espionage and money-laundering charges, The New York Times quoted an anonymous “intelligence official” who “played down” Harold Nicholson’s importance for the Russians and suggested that “[t]his just shows that the Russians are either sentimental or stupid”. In fact, the Russians are neither, and The New York Times‘ sources should know better than to downplay Nicholson’s continued contact with his Russian handlers.

To begin with, it is a tacit rule of espionage that intelligence services look after the needs of their foreign assets who fall into enemy hands. When Harold Nicholson was arrested in 1996, the Russians knew that the attention of all of their other double agents around the world was fixed on their handling of his case. Taking financial care of Nicholson’s family was anything but a “sentimental” move on the SVR’s behalf. Rather, it was a message to other Russian-handled double agents around the world (as well as to potential candidates) that Moscow will not forget them if they happen to be captured in the line of duty. If anything, the public revelation of Nathaniel Nicholson’s capture by the FBI actually increases SVR’s street-credibility, by showing that the Russians will go out of their way to assist a captured agent’s family.

Secondly, Nathaniel Nicholson’s periodic trips abroad to receive portions of his father’s Russian “pension” had an obvious twofold purpose. Technically, they were designed to shelter the covert financial transactions from the prying eyes of US counterintelligence agents. Operationally, however, they were intended to cultivate and maintain an active channel of communication with Harold Nicholson, who still holds plenty of privileged information deemed valuable by SVR. Indeed, one of Nathaniel Nicholson’s clandestine tasks was to deliver to the Russians information from his father on the precise details of his 1996 arrest. At that time, the FBI alleged (pdf) that Harold Nicholson first raised suspicions about his activities after failing several times to pass his annual CIA polygraph examination. The Russians apparently consider this to be a CIA cover story and suspect that someone from within their ranks, possibly a CIA-handled double agent, betrayed Harold’s identity. Their ongoing interest in the exact circumstances of Harold’s 1996 arrest is a clear indication that they are still actively trying to decipher how they lost one of their most valued CIA moles, as well as to understand how to avoid similar losses in the future.

AN ASSET OF CONTINUING VALUE

Last, though not least, as The New York Times itself reports, Harold Nicholson is said to have confided to a cellmate that “he had a ‘pension’ awaiting him in Russia and planned to repatriate there after he was freed”. This would indicate that Nicholson’s collaboration with the SVR is not ephemeral in nature, and that the former CIA agent has sensed continuing Russian interest for his services. In fact, Nicholson’s value as an instructor to SVR agents after he is released from prison becomes apparent when one considers that he was a CIA station chief only 10 years ago, and that he actually trained CIA recruits at the Farm –the agency’s main training facility at Camp Peary, VA. It is thus plausible that the Russians utilized their periodic contacts with Nathaniel Nicholson to maintain an open channel of communication with their former CIA asset, whose role in assisting SVR’s work is considered to be far from over.

It is understandable –though not necessarily excusable– that the CIA, which has repeatedly come under public criticism since 9/11 and the beginning of the so-called “war on terrorism”, would try to downplay the importance of the Nicholsons’ case, by attributing it to “the Russians [being] either sentimental or stupid”. In reality, the Nicholsons saga demonstrates the resolute nature of Russian intelligence in the 21st century, as revealed by SVR’s attempts to utilize their espionage assets even through several rows of US federal prison bars.

* Dr. Joseph Fitsanakis has been writing and teaching on the politics of intelligence for over ten years. His areas of academic expertise include the institutional analysis of the intelligence community; the interception of communications; and the history of intelligence with particular reference to international espionage during the Cold War. He is co-founder and Senior Editor of intelNews.org. His latest writings for intelNews.org are available here.

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4 Responses to Behind the Recent CIA Espionage Indictments

  1. analyst says:

    Great Great read Joseph. You know I just finshed watching Breach about Richard Hanson, also was reading about Oleg Polensky. Ironic.

  2. intelNews says:

    I presume you mean Robert Hanssen? His case has a lot in common with the Nicholson case –a curious blend of personal arrogance and religious piety being one interesting link.

  3. Pingback: Snippets: Death of A Corrupt Senator, the ‘Efficiency’ of the Sociocrat Government, Et Cetera « Lighthouse Patriot Journal

  4. S says:

    I wholeheartedly agree with the analysis that Dr. Fitsanakis provides — an espionage service requires “street credibility” if it wants to be able to successfully recruit agents. It can be argued, for example, that the CIA’s lack of human source intelligence (HUMINT) inside of Iran, despite the best efforts of Persia House, are because of previous embarrassing CI and operational tradecraft lapses that led to the blowing of the Agency’s Iran agent network. Lapses like that make it very hard to recruit new agents in target countries as they know that they can be blown by Agency incompetence. It will be interesting to see how the case of the Pakistani doctor who aided the CIA track down UBL (and got promptly arrested by the ISI) will effect future agent recruitments in the area.

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