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December 4, 2008
Notes from the Pentagon

Obama warned on CIA
A former CIA deep-cover spy says President-elect Barack Obama needs to radically reshape what he terms the "dysfunctional" CIA -- or face more strategic intelligence failures.

Ishmael Jones, the pseudonym for a former Marine and recently retired CIA case officer, said in an interview that despite intelligence reform efforts in the post-Sept. 11 era, "the CIA bureaucracy has mutated into a living creature that serves its own aims."

The retired CIA officer, an Arabic speaker and 20-year veteran, stated in his recently published book, "The Human Factor," that the CIA's clandestine service should be streamlined and given clear marching orders and more focus on its mission: recruiting and handling human spies while avoiding trivial sources.

The officer wrote of his frustration as an overseas agent recruiter who couldn't make a phone call without five bureaus at CIA headquarters first approving it.

He also wrote that "most" CIA employees work in the United States but that there is an urgent need to "get the CIA spying on and in foreign countries."

The officer said in the interview that fixing the CIA will not be easy. "While the CIA is unable to run effective human source operations, it has a raptorlike efficiency when it comes to defending itself and its growth," he said. "The CIA's myriad offices and wealthy contracting companies are constituents of congressional districts, and they wield lobbying power to protect CIA funding."

Also, he thinks CIA managers will give the new president impressive "dog and pony show" briefings "to make the CIA look busy."

Money is not the problem. The former CIA nonofficial cover officer said one post-2001 CIA program got $3 billion to deploy more operations officers outside U.S. embassies overseas but "has been unable to field a single additional effective officer."

The former spy recommends putting the military in charge of foreign spying and transferring foreign intelligence liaison carried out at U.S. embassies to the State Department. The FBI should take charge of the CIA's domestic activities, he said.

For the president-elect, the former CIA officer's message is this: "You must ruthlessly reform the CIA bureaucracy, or its failures will attack and destroy your presidency. Fix the CIA, and you will protect the lives and freedom of Americans and our allies."

Asked for comment, CIA spokesman Paul Gimigliano said: "When it comes to books about espionage with the title 'The Human Factor,' the one that's truly worth reading is the one by Graham Greene."

Iranian tech threat
A senior Republican senator asked Treasury Secretary Henry M. Paulson recently to conduct a national security review of the proposed joint venture between California-based computer chip maker Advanced Micro Devices (AMD) and a company in the Persian Gulf state of United Arab Emirates (UAE).

"I believe that there are a number of serious issues that require thorough vetting to guarantee this transaction does not pose a risk to U.S. national security," Senate Republican Whip Jon Kyl of Arizona stated in the Nov. 18 letter.

Mr. Kyl asked the Treasury-led Committee on Foreign Investment in the United States, or CFIUS, to review the deal.

A CFIUS review recently prompted the U.S. network equipment maker 3Com to cancel a deal with the Chinese computer equipment company Huawei over concerns about technology leakage.

Mr. Kyl said in his letter that under AMD's proposed merger, a new company called Foundry Co. would set up a partnership with Advanced Technology Investment Co. in Abu Dhabi, the UAE capital, and that the deal would include $8 billion in funds provided by the emirate government.

Mr. Kyl wants CFIUS to examine reports that Mubadala Development Co., a sovereign wealth fund of the emirate of Abu Dhabi, will be a major investor in the deal. "As you are aware, investments by sovereign wealth funds raise a number of concerns including the involvement of foreign governments in the ownership of U.S. businesses ...," Mr. Kyl said.

AMD makes cutting-edge semiconductors and technology, including chips with "a wide array of military applications," the senator said. "The potential transfer of this technology to dangerous regimes and other entities must therefore be tightly controlled," he said.

Mr. Kyl stated that U.S. security agencies have concerns about lax UAE export controls, noting that some $8 billion in goods is re-exported from the emirate to Iran annually.

"Some of these re-exported goods involve sensitive technology, the sale of which is barred by U.S. law," Mr. Kyl said, noting that he is worried that sensitive U.S. chip technology will reach Tehran.

A CFIUS review is needed for the AMD deal, and if the committee, made up of intelligence, security and financial agencies, uncovers potential risks to national security "I urge you, consistent with the law, to reject it," Mr. Kyl said.

Treasury spokeswoman Brookly McLaughlin declined to comment because all matters under CFIUS review are secret.

AMD spokesman Drew Prairie said all parties involved in the venture agreed to submit the planned deal to CFIUS. "The review is ongoing," he said.

The deal could be finalized in early 2009 if CFIUS approves it, he said.

"We respect and share Sen. Kyl's broad concerns about unauthorized disclosures of controlled U.S. technology to Iran and other sanctioned countries," Mr. Prairie said, noting that AMD works with U.S. government agencies to maintain a "robust" export compliance program.

The proposed joint venture will include an export-compliance program with a security committee of "trusted U.S. citizens" to oversee operations and ensure compliance with laws and regulations, he said. "We and our partners thus believe and intend that the joint venture will operate fully in compliance with U.S. laws designed to prevent unlawful leakage of technology to Iran."

Pentagon suppliers
The chairman of a congressional China commission said the panel is concerned that the Pentagon's reliance on Chinese suppliers has threatened U.S. computers, weapons systems and equipment with sabotage or other remote electronic tampering.

"On defense supply chain, the commissioners remain concerned about the integrity of the defense supply chain, and we are not sure that the defense logistics system managers know what they are getting from China," said Larry Wortzel, co-chairman of the U.S. China-Economic Security Review Commission. "It is not secure," he said of the current Pentagon supply chain.

Mr. Wortzel, in an interview, was commenting on one little-noticed finding of the commission in its report made public Nov. 20. The report to Congress warned that widespread Chinese government computer hacking poses risks because of Chinese-supplied parts in U.S. computer networks.

"Components in these computers and networks are manufactured overseas -- many of them in China," the report said. "At least in theory, this equipment is vulnerable to tampering by Chinese security services, such as implanting malicious code that could be remotely activated on command and place U.S. systems or the data they contain at risk of destruction or manipulation."

In one case, the Pentagon was found to be using hundreds of counterfeit computer routers made in China. "This suggests that at least in part, Defense Department computer systems and networks may be vulnerable to malicious action that could destroy or manipulate information they contain," the report said.

Mr. Wortzel said the Pentagon logistics agencies in charge of buying the Chinese-made parts gave the commission the "runaround" when panel members asked about the problem.

"Our recommendation is that Congress haul them in and have a classified hearing on this," Mr. Wortzel said.

Chinese Embassy spokesman Wang Baodong could not be reached for comment. However, Chinese Foreign Ministry official Qin Gang said in a statement Nov. 24 that the commission views China "through tinted lens" and is undermining U.S.-China cooperation by "tarnishing and attacking China deliberately and misleading the general public."

Islam leaving
The special assistant to Deputy Defense Secretary Gordon England and a key player in the Pentagon's Muslim community outreach program is leaving with his boss, a spokesman for Mr. England said Wednesday.

Special Assistant Hesham Islam "will be leaving," said England spokesman Kevin Wensing. Mr. England announced this week that he will step down.

Mr. Islam, a retired Navy commander, was investigated by the Pentagon at the request of Congress after a dispute with Joint Staff analyst Stephen Coughlin in the fall of 2007 over the nature of Islamist extremism. Mr. Islam disagreed with Mr. Coughlin, a specialist on Islamic law and its ties to extremism, and later referred to him as a "Christian zealot with a pen."

A Pentagon spokesman said at the time that Mr. Islam was a valuable adviser to Mr. England and assisted the deputy defense secretary in contacts with foreign officials.

The probe of Mr. Islam was requested by three members of Congress who had raised security concerns about Mr. Islam after discrepancies were reported by journalist Claudia Rosett in an official biography of Mr. Islam posted on the Pentagon's Web site, including an assertion that Mr. Islam as a youth was in Cairo and bombed by Israeli forces in 1967. However, there are no records of bombing the Egyptian capital, only the airport near Cairo.

Mr. Islam also claimed to have been onboard a freighter sunk by an Iranian torpedo in the Persian Gulf, but that could not be verified.

Pentagon spokesman Geoff Morrell said at the time that the investigation by Mr. England's office "concluded there is no reason to question Cmdr. Hesham Islam's credibility or his allegiance to his country." The firing of Mr. Coughlin, a contractor who continues to consult for the Pentagon, was first reported in this space as one of the first casualties in the internal government political battle over the war of ideas against Islamic extremism.

  • Bill Gertz covers national security affairs. He can be reached at 202/636-3274, or at

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