Some Muslims who fought in Afghanistan left to seek new wars; others who admired the Afghan resistance from afar went there to learn the ways of the warrior under new terrorist lord Osama bin Laden. He is believed to have trained militants from more than forty countries, including Egypt, the Sudan, and Algeria, all of which had significant internal unrest from conflicts between fundamentalists and secular governments. The Algerian militants were blamed for a destructive series of bombings in France that began in early 1995, and the bin Laden strikes on the United States have become the stuff of new war.

  Afghan Arabs have been identified fighting in Bosnia and in Azerbaijan and Tadjikistan of the former Soviet Union. There is a relationship between these horrors and the CIA war in Afghanistan, not in terms of responsibility but certainly in the empowerment of the perpetrators. One can debate the degree but not the fact.

  The Afghan project underlines the point that successful covert operations offer only short-term benefits. Pakistan, one of the major U.S. allies in the Afghan effort, is now less stable than before, and U.S. aid did nothing to restrain the Pakistanis from forging their own nuclear weapons, or indeed from proliferating this technology to other lands. Its role as ally and frontline state vitiated Washington’s leverage, leaving Islamabad to pursue its own aims, not just on weapons but in fomenting the same Muslim fundamentalism that has become so deadly. These results are incalculable.

  American relations with China, another ally in the Afghan War, are not materially better as a result. Then there are the potential adverse effects of sophisticated American technology in the hands of terrorists, and U.S. interests threatened by armies of secret warriors rasied by the CIA. Taking the long view, Afghanistan is by no means an unalloyed victory for covert operations. By way of counterpoint, if there had never been a CIA secret war in Afghanistan, the Soviet Union would still have collapsed in the 1990s, perhaps not at the exact moment it did but undoubtedly within that decade.

  Through all of this, or at least until his death late in Ronald Reagan’s presidency, William J. Casey led an expansion of the CIA hailed at the time as its renaissance. Casey pushed for other covert action projects with a similarly anti-Soviet bent. Many of Langley’s tribes would have their hands full during those years. To the secret warriors Bill Casey seemed the herald of a new age.

  * One CIA officer remembers having seen a report, possibly Indian, that associated Amin with the Asia Society. At the time the Indians had close relations with Moscow and may have passed along this data. If so, and if the KGB believed it, this would be an instance of blowback from the CIA public institution activities exposed in 1967. An American diplomat at Kabul at the time of the Soviet intervention reports that Ambassador Dubs specifically asked the CIA station chief if Amin worked as an agent and received assurances he did not. The diplomat himself had five meetings with Amin at various times and found him uniformly hostile to the United States.

  20

  The Reagan Revolution

  AT THE END of 1980 the members of President-elect Ronald Reagan’s transition team unanimously believed there should be more covert action. William J. Casey, Reagan’s 1980 campaign manager and his choice for CIA director, accepted this position though he largely ignored the transition report. The new director, a friend of the president and member of Reagan’s informal “kitchen cabinet,” made no bones about offering policy advice; by all indications, he rather enjoyed the role. Casey and Reagan were a close team. No director of central intelligence—except George J. Tenet in later years—ever spent more time with a president than Casey. Ronald Reagan saw his DCI as a loyal, tough, and competent adviser and an effective agent. Reagan appreciated Casey’s political work and his personal achievements.

  A Wall Street lawyer, Casey had grown wealthy on investments and from dispensing tax advice. An amateur historian, sometime president of the Export-Import Bank, and chairman of the Securities and Exchange Commission, Casey had also been one of the original secret warriors. In World War II he went into the Office of Strategic Services where he worked as an aide to Wild Bill Donovan. The OSS chief, in turn, sent Casey to London. There the acolyte helped organize the Jedburgh Program. In December 1944 Casey replaced David Bruce as OSS chief of secret intelligence for the European theater. He supervised the infiltration of OSS agents into Germany during the last days of the Third Reich. After the war Casey remained active in OSS veterans’ associations and was appointed to the PFIAB by President Gerald Ford. To a newly elected Ronald Reagan looking for a CIA director, Bill Casey must have seemed a natural. Casey himself had wanted to be secretary of state but accepted the Langley appointment and ultimately decided he had the best job in Washington.

  There was only one large problem, at first. That was poor speaking ability, which might not impress senators at a confirmation hearing. Casey could be well prepared for testimony, but that turned out to be the least of his difficulties. One irregularity after another emerged during the confirmation process, until Casey’s chances appeared threatened.

  Among these surprises was a political item from the Reagan-Carter election campaign that brewed into a significant scandal which pundits began calling “Debategate.” Reagan and President Carter had appeared in several televised debates, formatted as joint press conferences, hosted by the League of Women Voters. Before the foreign policy debate a copy of Carter’s briefing book was surreptitiously made and given to the Republicans. Reagan’s staff used the book to prep him for what Carter might say. As Reagan’s campaign manager, Bill Casey had kept the briefing book in his office safe. Several more things called into question Casey’s judgment or integrity. His financial disclosure forms, necessary under post-Watergate laws, were incomplete and had to be amended. It also developed that Casey had not registered as a foreign agent as required by law during periods when he represented the government of Indonesia, and many others as well. Then it became known that he intended to continue managing his stock portfolio, which might create conflicts of interest for a CIA director.

  After confirmation, judgment again became an issue in the summer of 1981 in the Hugel affair. This concerned Max Hugel, whom Casey personally brought into the agency as an assistant, then promoted to deputy director for operations. Hugel’s attraction for Casey lay precisely in his lack of association with intelligence. As the CIA director explained to a friend, Gerald P. Carmen, Casey needed to break up the CIA Old Boys network, and only someone from the Outside could do that.

  But Hugel did not last long. He resigned after allegations of insider stock transactions. This happened just two months into Hugel’s tenure. Even after the initial disclosures, Bill Casey solidly backed his protégé, saying he had known Hugel as an honest man for twenty years. But once tape recordings surfaced of Hugel giving out business tips, Casey admitted to fewer than two years of more casual acquaintance. Hugel’s legal problems later appeared as overblown allegations by associates, but as far as the CIA was concerned, the damage had been done. The appointment had shaken the clandestine service, which breathed a sigh of relief when the interloper departed.

  Had he not had President Reagan’s high regard, Bill Casey would probably have been swept away. As it was, Casey mended the fences he could, listing seventy former clients in financial disclosure statements, asserting he remembered nothing about Debategate, and eventually also agreeing to a blind trust for his stocks. At Langley Casey assembled the top CIA leadership in The Bubble to reassure them. Reagan defended Casey, commenting that the criticisms were merely personal. In August 1981 the Senate intelligence committee passed a recommendation judging “there is no basis for concluding Mr. Casey is unfit to serve” as CIA director.

  Casey mollified the professionals with his next DDO. John Henry Stein, the man originally recommended by the transition team, was a forty-eight-year-old officer with two decades at the CIA. Director Casey’s intentions were reflected in his instructions to the new DDO: concentrate on covert paramilitary and political action. Espionage and management could be left to an associate. Casey wanted to stress the critical role the spooks must play in the Reagan universe as well as motivate the best minds to see intelligence as necessary to national security. He anticipated difficulties with congressional overseers but believed these could be circumvented.

  Langley did its best to follow the director’s lead. Greater emphasis on recruitment led to a one-third increase in personnel, putting CIA back near its Vietnam-era peak. John Stein saved expertise in covert operations by bringing back eight hundred of the officers let go in the 1970s, most of them on contracts. Although spending for covert operations dropped to just 2 percent of CIA expenses, the base grew since the agency’s budget more than doubled. From 1981 to 1984 the intelligence community’s total allotment increased as much as a quarter. The military contributed to several programs while, by the 1980s, the radios were separately funded. CIA funds did not have to stretch as far.

  The CIA under Casey moved into a phase of what enthusiasts saw as combat on Communist territory, fighting revolutionary movements anywhere the Reaganites perceived them as Communist-controlled—which meant almost everywhere. As he would put it in a 1986 speech, the United States had a window of opportunity to advance democracy. To do this, he declared an intent to match Soviet meddling: “Just as there is a classic formula for communist subversion and take-over, there is also a proven method of overthrowing repressive government that can be applied successfully in the Third World.”

  With its in-house capabilities plus its privatized or proprietary network, the CIA went to work. Director Casey advocated vigorous covert action. The president declared his support for “freedom fighters” everywhere and defended U.S. covert action. Casey backed operations that were talked down at Langley. John Stein resisted escalation in Nicaragua; John McMahon, Casey’s DDCI after 1982, opposed the wrong kind of effort in Afghanistan, certain Libya plans, and renewed support for UNITA in Angola. For the most part Bill Casey got his way. By 1986, fueled especially by Afghanistan, the CIA’s budget for covert operations surpassed its spending for espionage and clandestine collection for the first time in history.

  Within the executive branch President Reagan worked to improve the climate for covert action. Reagan reestablished the President’s Foreign Intelligence Advisory Board, which Carter had abolished, appointing conservatives who encouraged activism. Leo Cherne, a longtime Casey associate, who had chaired the PFIAB under Ford and in fact had been instrumental in bringing Casey onto the board at that time, returned as vice chairman. Anne Armstrong became chairwoman. Like Armstrong and Cherne, staff director Randall Fort, though sophisticated, wore his conservative credentials on his sleeve. The president populated his board with mostly like-minded characters, including Clare Booth Luce, Martin Anderson, W. Glenn Campbell, John S. Foster, Jr., Adm. Thomas Moorer, and William French Smith. On this board Henry Kissinger and Alan Greenspan passed for liberals. Only William O. Baker remained from the old cadre of PFIAB experts. He was joined by CIA space maven Albert Wheelon and airline magnate Robert Six.

  In this administration the board was highly restricted. When the White House debated where to put PFIAB and how to fund it, the decision was to locate the board in its old offices on the fourth floor of the Old Executive Office Building, but the budget would come from money set aside for unanticipated needs. The Intelligence Oversight Board, with its minuscule $5 million budget, would be more than an order of magnitude ahead of PFIAB. There is no evidence of efforts to play watchdog; the advisers reviewed the great spy cases of the day, the Moscow embassy bugging mess, and disputes over satellite programs, but on covert action there is little trace of PFIAB. To the contrary, specific indications are that Director Casey encouraged President Reagan to purge the PFIAB in late 1985 in order to rid it of figures who questioned agency activities in Nicaragua. About half the board’s twenty-one members were let go in a “streamlining” move, replaced with a fresh crop of conservatives.

  Reagan also reorganized the National Security Council to create a National Security Planning Group (NSPG), a more restricted subcommittee of the NSC that included Vice President George Bush, the secretary of state, the secretary of defense, the DCI, the NSC adviser, and top political aides. Reagan’s deputy secretaries committee, the old 40 Committee or Special Coordinating Committee at the heart of the secret war, was retitled the Crisis Pre-Planning Group (CPPG), then the Policy Coordination Group (PCG), also known as the 208 Committee for the room in the Old Executive Office Building in which it met weekly. The attorney general and OMB director, regular members of Carter’s NSC Special Group, were relegated to occasional invitees.

  Langley’s proposals came in options papers passed around at the outset of a meeting and collected at the end. Final decision rested with the NSPG. Here the Reagan administration parted with its predecessors: Eisenhower had participated directly on the Bay of Pigs and the Congo, and Johnson on Cuba, but these had been ad hoc episodes. Under Ronald Reagan the president himself sat on the ultimate covert action decision body for the first time, eliminating the Special Group as a screen. In Reagan’s day many decisions were made right in the Situation Room, at the NSPG table.

  Reagan continued regulating intelligence activities by executive order. His version, Executive Order 12333, issued on December 4, 1981, contained a somewhat expanded definition of covert action, which it termed “special activities.” The order reiterated existing prohibitions on assassinations and specifically provided that, except in time of war or by presidential direction, the CIA had full responsibility for “special activities.” While domestic intelligence provisions attracted the bulk of public attention at the time, the order clearly referred to the NSC as “the highest Executive Branch entity that provides review of, guidance for and direction to” special activities.

  Under these procedures Reagan had to sign Memoranda of Notification to justify each covert action and in order to authorize it at the policy level. Reagan issued general instructions affecting the CIA’s role that were expressed in National Security Decision Directives (NSDDs), the authorization documents of his administration. These were supplemented by findings or secret annexes, such as in the 1985 Afghan escalation. Reagan approved covert action against Nicaragua in a November 1981 decision directive. About a year later he sanctioned Bill Casey’s activist stance in an NSDD that ordered global covert operations to prevent nations from accepting the “Cuban model” as well as an NSDD that authorized a “public diplomacy” campaign that nevertheless had secret aspects. An important feature of the struggles over intelligence oversight that pitted Reagan against Congress during these years were controversies over the nature of presidential findings.

  An uneasy relationship prevailed between the executive and Congress through much of the period. The Hugel affair and Casey’s legal entanglements got the sides off badly. Nevertheless Arizona Senator Barry Goldwater, who chaired the Senate Select Committee on Intelligence, beginning in 1981 tried to protect Casey and minimize the intrusiveness of oversight. The committee supported the CIA in passage of the Intelligence Identities Protection Act in 1982 and in obtaining extra exemptions from the Freedom of Information Act two years later. But Langley took a jaundiced view, according to historian Frank J. Smist, Jr., who concludes that the CIA position (which he attributes to both Casey and Carter-era national security adviser Zbigniew Brzezinski) viewed the SSCI as compromising sensitive information and according oversight power to people with no expertise. Treatment of the House Permanent Select Committee on Intelligence was similar. The secret war in Nicaragua proved to be a particularly thorny area of dispute. But Bill Casey, confident in the capabilities of his secret warriors, had no qualms.

  Proprietaries had long constituted a backbone of CIA covert capability. Under Casey’s leadership they assumed greater importance. As before, aviation companies performed some of the most useful services, but the 1980s brought a great need for entities capable of moving money, currency trading, personnel services, and the quiet acquisition of various kinds of gear. The CIA had them all.

  When Langley liquidated Southern Air Transport (SAT), its buyer, Stanley G. Williams, once SAT manager for the agency, initially went in directions CIA abhorred. Williams sold off most of SAT’s assets, leading to contentious litigation. But mutual dependency proved too great—the CIA needed Southern Air, and SAT wanted Langley’s business. Iranian air force contracts had comprised as much as 42 percent of SAT’s work in 1978. The fall of the shah hurt SAT badly. Even with the Iranian deals, SAT posted a loss of $272,928 for that year. The Iranian account disappeared. Williams bailed out, selling Southern Air to lawyer James H. Bastian in 1979. He became its sole proprietor. Bastian had been SAT’s legal counsel during its CIA years.

  Southern Air Transport maintained headquarters and operating facilities in Miami and made a slow recovery. Operating revenue in 1982 totaled $9.8 million and profit $628,700. The next year Bastian brought in William G. Langton as president. Langton had previously worked for two other cargo carriers, Flying Tiger and Evergreen International. In 1984 SAT won $9.1 million in contracts from the Pentagon’s Military Airlift Command, a figure that ballooned to $23.4 million a year later, out of total revenues of $38.9 million—60 percent of its business.

  Southern Air’s largest private account was as subcontractor to the Anglo-Irish firm IAS-Guernsey, to provide flight services to Marxist Angola. About three hundred flights were made in Angola between June and December of 1984 alone. Business increased further in 1985 after a competing company left Angola following destruction of one of its C-130-type aircraft on the ground in a guerrilla attack. That year SAT flew almost six hundred flights in Angola plus a hundred more from the United States to the Angolan port city of Benguela. At one point the State Department warned Southern Air against carrying Cuban soldiers on its flights, and SAT ceased doing so.