INTELLIGENCE ISSN 1245-2122 N. 82 New Series, 22 June 1998 Every Two to Three Weeks Next Issue on 13 July 1998 Publishing since 1980 Editor Olivier Schmidt (email intelligence-adi@wanadoo.fr; web http://www.blythe.org/Intelligence) TABLE OF CONTENTS, N. 82, 22 June 1998 SPECIAL REPORT EXECUTIVE OUTCOMES & SANDLINE FORGE ON ... FOR PROFIT p.1 TECHNOLOGY AND TECHNIQUES DRESSING "SMART" WITH HIGH TECH CLOTHING p.2 SONIC "SNIFFERS", "X-RAYS" AND "HAMMERS" p.3 TECHNOLOGY AND TECHNIQUES - Briefs and Media Reports. p.4 PEOPLE USA - CHARLES ALLEN p.5 GREAT BRITAIN - PETER RYAN p.6 GREAT BRITAIN - BARBARA MILLS p.7 BELGIUM - JACQUES LEFEBVRE p.8 PEOPLE - Briefs and Media Reports. p.9 AGENDA COMING EVENTS THROUGH 15 AUGUST 1998 p. 10 INTELLIGENCE AROUND THE WORLD USA - FBI AGAINST THE WORLD ON ENCRYPTION p.11 - FBI LOW AND HIGH TECH PROBLEMS p.12 - THE SPIGOT RUNS DRY ON "CYBER TERRORISM" p.13 - Briefs and Media Reports. p.14 GREAT BRITAIN - SELLING OFF FOREIGN OFFICE ASSETS p.15 - ETHICAL ARMS DELAY p.16 - MILITARY "DIPLOMACY" WINS FRIENDS p.17 NORTHERN IRELAND - WORLDWIDE D-NOTICE FOR "THE COMMITTEE" p.18 - "DIRTY WAR" SPY TALES STILL FOR REAL p.19 - RUC REFORM PANEL NAMED p.20 FRANCE - "SECRET" SECRECY AND "LEGAL" SECRECY p.21 BELGIUM - SERGE DASSAULT'S SECRET VISIT & FAIRY TALE p.22 GERMANY - SECRET REASONS FOR FRENCH SPY COOPERATION p.23 WESTERN EUROPE - Briefs and Media Reports. p.24 EASTERN EUROPE - Briefs and Media Reports. p.25 LATIN AMERICA - Briefs and Media Reports. p.26 AFRICA - Briefs and Media Reports. p.27 ISRAEL - SYRIA'S "OFFENSIVE" HIGH-TECH DETERRENT p.28 MIDDLE EAST - Briefs and Media Log. p.29 ASIA - Briefs and Media Reports. p.30 --------------------------------------------- Intelligence, N. 82, 22 June 1998, p. 12 USA FBI LOW AND HIGH TECH PROBLEMS The FBI and the US Department of Justice apparently believe the public and law enforcement specialists have already forgotten the improprieties that rocked FBI forensic laboratories just last year (see "USA - Sloppy Forensic Procedures Blowback on Freeh", INT, n. 56 18). The National Institute of Justice (NIJ) has just issued a research report entitled "Forensic Laboratories - Handbook for Facility Planning, Design, Construction, and Moving". "Designing and constructing a forensic laboratory requires a high level of diligence and attention to detail. NIJ, in collaboration with the National Institute of Science and Technology, created this report to assist administrators and developers as they plan and build new forensic laboratories." It "provides useful guidelines throughout all stages of laboratory production." The NIJ has published, at the same time, "The Unrealized Potential of DNA Testing" which "discusses the impact of innovations in collection procedures, laboratories, and databases that will help criminal justice professionals realize the full potential of DNA evidence." One would hope these recommendations apply to rebuilding FBI forensic credibility and are not based on previous FBI procedures which do not seem to be mentioned in the reports. But this may not be the case, according to a recent critical Department of Justice report by Inspector General Michael Bromwich which states that the FBI laboratory's troubled explosives unit still relies on agent-technicians a year after recommended use of only trained scientists. However, there is reportedly progress in resolving other forensic lab shortcomings, but a continuing failure to regularly and directly review court testimony of forensic experts has been reported. Bromwich revealed that, years after FBI director, Louis Freeh, called for on-site evaluations of the lab, the first accreditation by outside experts finally began about three weeks ago. Stephen Kohn, lawyer for former FBI chemist-agent, Frederic Whitehurst, the whistleblower whose allegations triggered the lab investigation, called the new report "Garbage. The inspector general is responding to the official FBI line from unit chiefs and the lab director and finding some problems. But we've been told that every single FBI employee- whistleblower who previously provided information to them will not talk to them now." According to Iowa Senator, Charles Grassley, chairman of a Senate subcommittee that oversees the FBI, "the old culture within the explosives unit is apparently dying hard." That isn't keeping the FBI out of high tech and big money. The Bureau plans to spend $430 million over the next five years to modernize its information and computer systems. The program entirely overshadows the crime labs and is one of the FBI's largest procurements in recent years, and, contrary to what is happening in the labs, the Bureau plans to move fast. In March, the FBI released a draft request for proposals for its Information Sharing Initiative (ISI) through which its plans to develop an integrated information system for criminal investigations and counterintelligence operations. "This is an important contract because it is critical to accomplishing FBI operations, providing access to the information as needed and increasing efficiency," said Mark A. Tanner, special assistant to the FBI deputy director. Apparently the credibility of FBI forensic labs is not "critical to accomplishing FBI operations". During ISI Phase 1, in 1999-2000, the Bureau will build ISI infrastructure with 15,000 PCs, 5,000 scanners, 3,000 printers, hundreds of servers, and multimedia and document management systems for the electronic capture of all investigative and counterintelligence data, including text, image, video and audio files. In ISI Phase 2, ending October 2001, the FBI will deploy analytical and intelligence tools, along with database applications and appropriate training for personnel. In the final ISI Phase 3, the FBI will install security network applications and gateways, along with encryption equipment, email and Internet servers to link all its field offices and other sites, including an estimated 350 reestablished and credible crime laboratories. The three mainframe client-server computers will be at FBI headquarters in Washington and in Clarksburg, West Virginia. Of course, if the FBI wants to avoid another technical "Waterloo", any hacker or computer expert would warn it to begin ISI with Phase 3: developing network security to avoid "outside visits" to the Bureau's fancy new and expensive technology. For those already on the Internet, 16,000 pages of FBI files, full of rumor, conjecture, innuendo -- "raw intelligence reports" from the FBI Reading Room -- have been declassified and put on the web. To save money on photocopying, the FBI decided to post on the web some of its most requested cases: instead of FBI FAQ -- "Frequently Asked Questions" -- it's FBI FAF -- "Frequently Asked Files". A new batch was posted this month with, of course, the names of correspondents and informants blacked out. --------------------------------------------- Intelligence, N. 82, 22 June 1998, p. 22 BELGIUM SERGE DASSAULT'S SECRET VISIT & FAIRY TALE Since March 1995 and the suicide of Lieutenant General Jacques Lefebvre (see "People" in this issue), aviation and military equipment magnate, Serge Dassault, has been hiding from an international arrest warrant issued by Belgium justice investigating massive kickbacks and political corruption (INT, n. 10 42). Lefebvre, who had been involved in worldwide Dassault business, left his home after his name was mentioned on television and rented a room in a Brussels hotel where he committed suicide. He is not the only important person in this scandal to have "disappeared from the scene". Maom Kassab Bachi, who was indicted two years ago, drove his car out of Geneva on 22 May and had a fatal accident. There has been no official investigation to determine what happened but the official version of the accident says he was driving to Fribourg when a car, coming in the opposite direction, crossed over the road and landed on top of Bachi's car, killing him. Pierre De Boccard, who was the Dassault family banker, number 3 man at Credit Suisse and who had been interrogated by Belgian justice, died in a hospital during the Dassault inquiry and no investigation has been made of his death. Alfons-Hendrik Puelinckx, a Dassault lawyer for many years, is still alive, cooperating with Belgian justice and causing tremendous problems for Dassault. A statement he made to Belgian justice on 5 March was recently published in Belgian media. Puelinckx was jailed in 1995 for several months in the Dassault scandal for suspicion of channeling money from Swiss bank accounts to Belgium Socialist ministers. After release from jail in 1995, he received a late May 1995 visit from a famous and rich Belgian lawyer, Emile Verbruggen, in the Amigo Hotel in central Brussels. Verbruggen had asked to meet Puelinckx and represented Dassault and Belgian Socialist ministers, such as Guy Spitaels, the former prime minister of French-speaking Belgians (INT, n. 39 13, n. 44 45 & n. 45 45). According Puelinckx, Verbruggen hinted that it would be better for Puelinckx to change his testimony and remove the name of Serge Dassault from what he had said. Verbruggen also told Puelinckx that while in jail he had had access to the letters left behind by Lefebvre and he, Verbruggen, was interested in knowing if they said anything "negative" about Serge Dassault. Puelinckx replied it could have been worse for Dassault. Verbruggen also said Spitaels had an apartment on Brussels' luxurious Avenue Louise that only he, Verbruggen, and Spitaels knew about. Nonetheless, the police had raided that apartment, and Verbrugeen believed it was on the basis of telephone tap information. Verbruggen said Dassault was particularly worried about discovery of payments to the Catholic PSC party, despite the fact that the official investigation concerned only the Socialists and not the PSC (Catholic), nor other government coalition parties. The explosive part of Puelinckx testimony to Belgian justice is Dassault's concern about PSC and other coalition party payments when Belgian justice knew only about payments to the Socialists. Moreover, supposed Dassault payments to the PSC reportedly passed through Lefebvre. Another -- and more important -- Puelinckx-Verbruggen meeting took place on 12 May 1996 in Brussels. The Dassault lawyer clearly stated that it was in Puelinckx's interest to cooperate with Dassault and repeated his previous statement about changing Puelinckx's testimony, and in a rude tone told Puelinckx to take all responsibility for PSC payments himself (Puelinckx was not a PSC member). Verbruggen reportedly stated that since Puelincks was already involved in funnelling money to Socialists, he could take responsibility for the PSC too and take Dassault out of the picture. If Puelincks did do so, rest of his life will be a cushy affair after a slightly longer prison sentence. Puelinckx thought about it, finally refused, and on 5 March 1998, talked to public prosecutors. On 17 June, Walter De Bock published excerpts from Puelinckx's testimony in the Flemish daily, "De Morgen", as did the Flemish weekly, "Knack". During interrogation, Puelinckx gave the Union de Banques Suisses (UBS) account number that belonged to Lefevre in Lausanne since 1984 (8.38695 UBS Lausanne). Lefebvre gave Puelinckx and Bachi the number in 1984 for kickback payments. Puelinckx said he couldn't be sure the 1988 PSC kickbacks didn't transit through this account. Following Puelinckx's testimony, Belgian justice officially opened a new investigation concerning Dassault payments to the PSC and sent an international search warrant to Dassault in Paris and the UBS in Lausanne. Unknown prior to the publication of the two Belgian reports on 17 June, is that Serge Dassault secretly visited Brussels to testify before the investigation for two days: 6-7 May 1998. On 26 May, Dassault signed an affidavit stating Puelinckx was responsible for all payments to the Socialists. Neither the French, nor the international press published any information concerning this discreet visit. During interrogation, Dassault charged Puelinckx 100 percent for everything associated with payments to the Belgian Socialists and told the incredulous Belgian judges a "fairy tale" they had a hard time taking seriously. According to Dassault, he knew that Puelinckx had "stolen millions of francs from my mother". Ms. Dassault, aged 87, died after the 1995 scandal broke, as did the traditional Dassault family banker, Pierre De Boccard. The latter probably knew about and managed two secret Swiss accounts of Marcel Dassault, the father of Serge, which play a central role in Serge's extortion story: accounts code named "Sophie" and "Mirabelle". Serge Dassault "didn't know how De Boccard, Puelinckx managed to do so" but they supposedly extorted money from Madame Dassault. According to the accused, part in the money went into De Boccard and Puelinckx's pockets, and, to cover up their dirty dealing, they also gave some money to Belgian politicians. Out of the testimony of 600 witnesses and 350,000 pages of documentation, the flabbergasted Belgian judges showed Dassault statements by his own top managers -- Jean Climaud and Bertrand Daugny, president director general of Dassault Electronique -- which did not support his "fairy tale", and Dassault simply stated they were wrong. "Daugny is in his bubble", stated Dassault. Pressed for "proof", Dassault offered the following "explanation": Puelinckx and De Boccard have Cote d'Azur villas close to each other and that is where they set up there conspiracy. Belgian justice checked it out and, Yes, they have Rivera villas ... but several kilometers from one another and with hundreds of other important persons living in between. All the rest of Dassault's "proof" was expressed in "I assume that ..." The weakness of Dassault's counterattack -- and the fact that he is willing to put his own top managers in doubt -- means he is "being hung out to dry". "Intelligence" is aware that there is an "unofficial" silencing owner on the French press -- and perhaps the international press -- but powerful factions in France feel it is time to "clean out the stables" and are willing to "let the cards fall where they may". It looks like one of France's military industry kings has come up against a trump card and, of course, not in France but next door -- in Belgium. --------------------------------------------- Intelligence, N. 82, 22 June 1998, p. 23 GERMANY SECRET REASONS FOR FRENCH SPY COOPERATION Intelligence specialists are speculating on the reasons French journalist, Jean Guisnel, and the French weekly, "Le Point", decided, on 6 June, to publish a story on secret French-German space-based intelligence cooperation. After all, the information was incorrect, outdated and well-known to intelligence specialists. France and Germany did not sign a recent eavesdropping agreement to target satellites over the US such as Intelsat and Immarsat and operate out of Kourou, French Guiana. The German BND has had a liaison team from its Department II Sigint unit operating with its French partners in Kourou for almost ten years! Therefore, such a "deal" could not have been involved in getting Germany to participate in the French Helios spy satellite project as Guisnel suggests. There are other reasons. For almost as long as Signit cooperation has been in place in Kourou, France and Germany have been alternatively sharing a single embassy in Ulan Bator, Mongolia, with each country successively taking responsibility for running the embassy and representing the other partner. "Intelligence" once asked French authorities if security and intelligence matters were also handled "alternatively", as diplomatic matters were. We did not receive a clear reply. The same happened when "Intelligence" asked how security and intelligence are handled for the joint French-Germany "Euro Corp" armed forces unit. In the case of Mongolia, there has definitely been some form of long-term intelligence cooperation since a BND chief of station was sent to Ulan Bator for the first time only in late 1996. One can therefore assume that French DGSE foreign intelligence was "taking care of things" until the BND station chief arrived. Strangely enough, the US has just recently decided to set up a eavesdropping station in Mongolia, too. COMMENT -- The fact that Guisnel, a defense specialist with very good contacts among senior French military officers, would publish the article he did, is a "coded message" probably intended for intelligence officials in the US, since German intelligence officials already "know the story". It is true that French and German intelligence have been "stepping on each other's toes" while setting up their respective spheres of influence in Post-Cold-War Eastern Europe, but this has usually been worked out without the use of media operations (as an exception, see "Germany - Dialogue with Hungary Censored by ... France", INT, n. 63 30). This time, it looks like the French are "telling the story" to Washington and the major media: European intelligence is being constructed and it's Franco- German. This message will also be heard and understood by British intelligence which has some trouble, particularly in space-based intelligence, in finding any liberty of movement in the secret "straight-jacket" UKUSA intelligence cooperation agreement. After all, Great Britain can't listen to Intelsat and Immarsat satellites over the US because it's working for the US NSA which pays GCHQ bills at the end of the month. ---------------------------------------------