CIA whistleblower complains of seven-year inaction by Agency’s inspector general

CIAA contractor for the United States Central Intelligence Agency has complained in an interview that no action has been taken in the seven years since he revealed a “billion-dollar fraud” and “catastrophic intelligence failure” within the Agency’s ranks. John Reidy argues that his case illustrates the unreasonable delay that impedes investigations by whistleblowers like him inside the CIA. Individuals like him, he argues, are forced to seek justice through leaks to the media, something which could be avoided if the CIA’s Office of the Inspector General addressed concerns more promptly.

Reidy, 46, from Worcester in the US state of Massachusetts, joined the CIA in 2003, after graduating with a law degree from the University of San Francisco. But he left the agency soon after joining, initially to work for a security contractor before setting up his own company, Form III Defense Solutions. He continued to work with the CIA by subcontracting his services, focusing on Iran. Reidy’s company developed an intelligence study guide for Iran and advised the CIA on the use of human intelligence (known as HUMINT) in the Islamic Republic.

In 2010, Reidy submitted two complaints to the CIA’s Office of the Inspector General, the Agency’s internal watchdog that is tasked with investigating whistleblower allegations. The first issue related to what Reidy describes as large-scale “fraud between elements within the CIA and contractors”. The second issue involved a “massive [and] catastrophic” intelligence failure “due to a bungled foreign operation”. When he filed his concerns with the OIG, Reidy was hoping that attention would be given to his claims right away. However, seven years later, his case is still “gathering dust” at a CIA office, he says. When he realized that no progress had taken place in several years, a frustrated Reidy forwarded his case —which includes copies of 80 emails and nearly 60 other documents— to Senator Chuck Grassley, chairman of the US Senate Committee on the Judiciary. He also reached out to the McClatchy news service with his concerns.

The secrecy rules that apply to those who work for the US Intelligence Community prevent Reidy from disclosing details of the alleged fraud and intelligence failure, or from specifying the country in which these incidents took place —though it seems from his intelligence résumé  that they probably involve Iran. But in an interview with McClatchy news service, the intelligence contractor voiced grave concerns about the internal investigation process in the CIA. “I played by the rules [and] they are broken”, he said. “The public has to realize that whistleblowers [like me] can follow all the rules and nothing gets done”, added Reidy. He went on to warn that if the CIA does not improve its internal investigation system, leaks to the media “may grow worse”.

McClatchy contacted the CIA about Reidy’s concerns and was told by a spokesperson, Heather Fritz Horniak, that, “as a general matter, [the CIA does] not comment on ongoing litigation”.

Author: Joseph Fitsanakis | Date: 14 July 2017 | Permalink

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Russian aid center in Serbia rejects claims that it is an intelligence base

Russian-Serbian Humanitarian CenterStaff at a Russian disaster relief center in southern Serbia have rejected claims by American officials that the facility operates as an espionage arm of Moscow’s foreign policy in the Balkans. The Russian-Serbian Humanitarian Center was built in 2012, at a cost of nearly $40 million, following an agreement between Belgrade and Moscow. Its stated mission is to “provide humanitarian emergency response in Serbia and other Balkan states” through the provision of humanitarian assistance to those in need and training local emergency response crews. The center is located in the outskirts of Serbia’s fourth largest city of Niš, not far from the country’s border with Kosovo, a former Serbian province that unilaterally declared independence in 2008. Serbia refuses to recognize Kosovo’s independence, a decision that is strongly backed by Russia. It is also close to the headquarters of the North Atlantic Treaty Organization’s peacekeeping force stationed in Kosovo, which houses 4,000 international troops, including 600 Americans.

Western officials have raised concerns that the disaster relief center is in reality an intelligence base, from which Russia conducts some of its espionage operations in the Western Balkans. It has also been suggested that the center could operate as a military base in a potential Russian military operation in the former communist state. In June, the United States Deputy Assistant Secretary of State for European and Eurasian Affairs, Hoyt Brian Yee, publicly described the compound as “the so-called humanitarian center” in Serbia. Speaking during a US Senate hearing on southeastern European politics, Yee said the Department of State was concerned about the center’s unofficial use. He also expressed reservations about Moscow’s request that the Serbian government grants the center diplomatic immunity, similar to that which covers the activities of the Russian embassy in Belgrade.

Moscow responded to American allegations of espionage by inviting local and international media representatives to the center on Wednesday. The center’s co-director, Viacheslav Vlasenko, told reporters that the center was “very open”, adding that its staff consisted of 15 Serbs and five Russians who were dispatched to Serbia from Russia’s Ministry of Emergency Situations, known as EMERCOM. Vlasenko said that Moscow’s request for diplomatic immunity for the center was solely aimed at reducing the annual taxes that the facility had to pay.

Regular readers of intelNews will recall allegations made last October by authorities in Serbia’s neighboring state of Montenegro —later repeated by Britain— that nationalists from Russia and Serbia were behind a failed plot to kill the country’s then-Prime Minister Milo Dukanović and spark a pro-Russian coup in the country. The allegations surfaced after 20 Serbians and Montenegrins were arrested by police in Montenegro on election day, October 16, as Montenegrins were voting across the Balkan country of 650,000 people. In response to allegations that the coup had been hatched in neighboring Serbia, Serbian Prime Minister Aleksandar Vučić said that he would not allow Serbia to “act as the puppet of world powers”, a comment that was clearly directed at Moscow. Russia has vehemently denied the allegations.

Author: Joseph Fitsanakis | Date: 13 July 2017 | Permalink

Russia allegedly planning to expel 30 American diplomats in a few weeks

US embassy in MoscowRussia is planning to expel approximately 30 American diplomats from its territory, and seize buildings and property belonging to the United States Department of State, according to Russian media reports. The expulsions will be in response to the expulsion last December of 35 Russian diplomats stationed in the US by the administration of President Barack Obama. In addition to expelling the diplomats, Washington also reclaimed two “recreational facilities” (in reality intelligence outposts) that were used by the Russians in New York and Maryland. The White House said that the expulsions were ordered in response to alleged efforts by Russia to interfere in the 2016 US presidential election.

Observers, including the present author, were confident at the time that the Kremlin would respond in kind. In a surprising move, however, the Russian President Vladimir Putin said he would not respond to Mr. Obama’s move, in the hope that US-Russian relations would improve with the arrival of the new president in the White House. He added that Russia reserved the right to retaliate at a later time. Moscow’s response was met with praise by the then-president-elect Donald Trump and his transition team.

But Russia’s hopes for warmer relations with the US under Mr. Trump’s leadership do not seem to be materializing. A recent article in the daily Russian newspaper Izvestia reported that the Kremlin thought it was “outrageous” that the Trump White House had not yet returned the two seized compounds to the Russian Ministry of Foreign Affairs and not rescinded the expulsions of the 35 diplomats and their families. It also claimed that President Putin raised the issue with his US counterpart during their July 7 meeting in the German city of Hamburg. The Moscow-based newspaper quoted unnamed senior Russian officials, who said that Russia was preparing to expel dozens of American diplomats and seize US diplomatic facilities soon.

It appears that Russia will wait until the upcoming meeting between the US Undersecretary of State Thomas Shannon and the Russian Deputy Foreign Minister Sergei Ryabkov, which has been scheduled for later this month in St. Petersburg. If no US assurances for the return of the compounds and diplomats are made at that time, Moscow will proceed with its tit-for-tat plan. When asked about Izvestia’s article, the Russian Minster of Foreign Affairs, Sergei Lavrov, replied that the Kremlin was “weighing specific measures” in response to last December’s expulsions of Russian diplomats from the US. However, Mr. Lavrov said he did not want to elaborate at the present time, while also refusing to deny the newspaper’s allegations.

Author: Joseph Fitsanakis | Date: 12 July 2017 | Permalink

Ex-CIA contractor says Pakistan’s leaders helped him escape murder charges

Raymond Allen DavisA former contractor for the United States Central Intelligence Agency, who was released from a Pakistani prison in 2011 despite being implicated in a double murder there, says he was freed with the help of senior Pakistani officials. Raymond Allen Davis was a CIA contractor posted in the US consulate in Pakistan’s Punjabi capital, Lahore, which is also the country’s second-largest city. It has been suggested that, for a while, Davis was the CIA’s acting station chief in Lahore, thus technically the most senior American intelligence officer in Punjab.

On January 27, 2011, while driving in downtown Lahore, Davis opened fire against two men riding on a motorcycle, killing them instantly. Soon after the incident, Davis appears to have contacted the US consulate in Lahore, which rapidly dispatched a consular vehicle to remove him from the scene of the shooting. However, the vehicle was unable to reach Davis, who was surrounded by an angry crowd. Unable to pick up Davis, the car then returned to the consulate after running down and killing a motorcyclist who was unconnected with the earlier incident. Eventually Davis was arrested and charged with double murder and illegal possession of a firearm. The Pakistani government dismissed Washington’s assertion that Davis was an accredited diplomat, and was thus not subject to Pakistan’s legal system because of his diplomatic immunity. With public opinion in Pakistan heavily against Davis, the case sparked a diplomatic crisis between Washington and Islamabad. Unexpectedly, however, Davis was released in March of the same year, after the families of the two men he killed appeared in court and said they forgave him and wanted him to be pardoned. It later emerged that the families of the murdered men had been given a total of $2.4 million as compensation for their deaths.

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American spies use US Federal Reserve to monitor foreign banks

Federal Reserve Bank of New YorkAmerican intelligence services have made use of a little-known confidentiality exception to spy on the financial activities of foreign banks who have accounts with the United States Federal Reserve, according to Reuters. Established in 1913, the Federal Reserve System is the central banking structure of the US. It oversees and regulates the nation’s financial institutions, and is tasked with —among other things— maintaining the stability of the American financial system. Additionally, however, the Federal Reserve offers a host of financial services to official (government-owned or sanctioned) foreign institutions. Thus, over 250 foreign banks (typically central banks) from dozens of countries have deposited nearly $3.3 trillion in assets at the Federal Reserve Bank of New York, one of 12 Federal Reserve Banks in the US. Depositing assets at a US Federal Reserve Bank, allows these foreign ‘depository institutions’ to use the US Federal Reserve as a ‘custodial institution’. Through it, they get direct and immediate access to American debt markets, where they can trade directly in dollars — the reserve currency of the global economy.

As one would expect, the ‘custodial services’ provided to foreign state banks by the US Federal Reserve are subject to strict confidentiality rules. However, according to a report published yesterday by Reuters, US intelligence agencies have found ways to circumvent these rules and monitor the activities of foreign banks who use the US Federal Reserve’s services. The news agency said it interviewed “more than a dozen current and former senior [Federal Reserve] and [US] Treasury [Department] officials”, including executives and division heads. It concludes that the US Intelligence Community has “leveraged the [US Federal Reserve’s] position at the center of global finance” to gain insights into the financial activities of foreign governments.

Specifically, the report alleges that American spies have made regular use of a little-known “need to know” exception clause to the US Federal Reserve’s confidentiality rules, and have been able to monitor the financial activities of selected foreign governments. These include Libya, Yemen, Iraq, China, Russia and Turkey, among others, says Reuters. In its report, the news agency says that the exception clause has been used at least seven times in the past 15 years. In some of these instances, the intelligence gathered led to “specific US responses” in relation to the financing of terrorism, or large-scale money-laundering. In other cases, the intelligence gathered helped Washington closely monitor market activity in areas of interest around the world, says Reuters.

The news agency contacted the New York Federal Reserve Bank, and was told by a spokesperson that the exception to the Federal Reserve’s confidentiality rules “has been used on rare occasions and on a limited basis”. These instances related to “issues as compliance with sanctions requirements and anti-money laundering principles”, said the spokesperson. The US government did not respond to calls for comments.

Author: Joseph Fitsanakis | Date: 27 June 2017 | Permalink

German intelligence agency spied on thousands of targets in the United States

BND GermanyThe foreign intelligence service of Germany spied on at least 4,000 targets in the United States from 1998 until 2006, according to a leaked document published yesterday by leading German newsmagazine Der Spiegel. The German investigative weekly said that the surveillance was carried out by the German Federal Intelligence Service, known as BND. The Hamburg-based magazine claimed to have in its possession a list of approximately 4,000 “selector keywords”, unique distinguishing terms, addresses or numbers that identify individual targets for surveillance. The list allegedly includes names, telephone or fax numbers, and email addresses of people that the BND had identified as worthy of individual attention between 1998 and 2006.

According to Der Spiegel, the list of targets in the United States includes officials in the White House, the Department of the Treasury and the Department of State. Their work and private phone numbers, and often emails, are listed in the BND document. The latter also focuses on the American military sector, paying particular attention to the US Air Force and the Marine Coprs. Other targets include the National Aeronautics and Space Administration and the Defense Intelligence Agency, the US Pentagon’s intelligence organization. In addition to US government targets, the BND exercised surveillance on American companies with ties to the state, such as Lockheed Martin, as well as state-owned universities. The leaked list also includes targets in international organizations that have an institutional presence in the US, such as the International Monetary Fund and the Arab League, which has an office in Washington. Hundreds of foreign embassies and consulates in the US were also targeted, said Der Spiegel.

German-American relations suffered a major setback in 2013, when it was revealed that Washington had spied on the personal cell phone of German Chancellor Angela Merkel. In response to the revelations, Germany expelled the Central Intelligence Agency’s station chief in Berlin —the most senior American intelligence officer in the country. It remains to be seen whether Thursday’s revelations will affect the current relations between the two transatlantic allies. Neither the BND nor the US embassy in Berlin responded to questions about Der Spiegel‘s report.

Author: Joseph Fitsanakis | Date: 23 June 2017 | Permalink

Islamic State’s cyber army still ‘largely intact’ despite America’s efforts

US Cyber CommandThe global reach of the Islamic State through the use of the internet remains “largely intact” despite relentless efforts by some of America’s most advanced cyber warfare experts to neutralize the group’s online presence. It is now over a year since the United States Department of Defense announced that it had launched a cyber war against the Islamic State —the militant Sunni Muslim group that today controls large parts of Syria and Iraq.

At that time, the Pentagon’s Cyber Command (USCYBERCOM), put in motion plans that included the deployment of computer viruses, denial-of-service attacks and other cyber weapons against computers, internet servers and cell phone networks belonging to the Islamic State. As intelNews wrote at the time, the idea behind the plan was that an all-out online war against the Sunni militant group would hurt its public image and prevent it from launching armed attacks against targets abroad. Additionally, the Pentagon aimed to disrupt the Islamic State’s ability to recruit new members online, to spread its propaganda and to coordinate operations through the use of encrypted communications.

However, according to The New York Times, American military commanders are disappointed with the Cyber Command’s efforts. The Pentagon is quickly discovering, says the paper, that its cyber warfare methods, which were designed for fixed targets in countries like North Korea and Iran, are ineffective against the mobile and polymorphic cyber army of the Islamic State. In many instances, US Pentagon hackers wipe out online information found on Islamic State servers, only to see it reappear elsewhere online within hours. In other cases, US Cyber Command experts uncover Islamic State information stored on the cloud, but are unable to access it because it is strongly encrypted.

According to The Times, the lack of progress in the cyber war against the Islamic State was one of the reasons why the administration of President Barack Obama sought to replace Admiral Mike Rogers, the head of the National Security Agency, who also led the US Cyber Command —and continues to do so under the Donald Trump administration.

Author: Ian Allen | Date: 20 June 2017 | Permalink