THE BUGGING OF THE APEC IN SEATTLE


Cited under fair use for non-profit educational use.

From INSIGHT MAGAZINE.

                   Snooping on Allies Embarrasses U.S.
   ___________________________________________________________________
                                    
                           By Timothy W. Maier
   ___________________________________________________________________
                                    
    The Clinton camp ducks alleged bugging of Seattle summit, Insight
     discovers State Department 'pimp' account and foreign embassies
              express shock about FBI-led espionage caper.
   B lackmail, lies and deceit may be the only fitting description of
   the 1993 Seattle Asia-Pacific Economic Cooperation, or APEC, summit
      where dignitaries from 17 countries are reported to have been
   placed under electronic surveillance by American agents. As Insight
    first reported last month, the Clinton administration is said by
       intelligence and security specialists -- who admitted being
        involved -- to have bugged the conclave and then provided
     classified secrets to the Democratic National Committee, or DNC
     (See "Sex, Spies and Videotape at Clinton's APEC Summit," Sept.
       29). This in turn allegedly was used as bait to barter with
   potential big-buck donors for large contributions to the Democratic
                coffers, sources in and out of government
                                 claim.
    . . . . This week the story continued to develop with new twists
    and turns. Former officials of the National Security Council, or
     NSC, and high-level economic advisers tell Insight they remain
    deeply concerned that classified information may have been leaked
     for political purposes. "That would make it blackmail," says a
    former senior-level Bush appointee who asked not to be identified
      because of an ongoing business relationship with the Clinton
   administration. "I find the story totally credible. I wouldn't put
                      it past this administration."
      . . . . Insight also detailed in earlier reports a series of
     alleged criminal activities, including the procuring of boys to
    engage in sexual activities with diplomats; FBI agents accepting
    thousands of dollars of kickbacks; and, the most serious offense,
   the White House providing top-secret trade information to two West
           Coast law firms working off the books for the DNC.
       . . . . The covert mission was so large that the government
     purchased about $250,000 in electronic surveillance equipment,
    including Konica cameras, from at least three private suppliers,
   according to classified records reviewed by Insight. American spies
   then collected raw economic data on Asian businesses through agents
   of the FBI, the Customs Service, Naval Intelligence, the Air Force
       Office of Special Investigations, the NSC, and the National
                  Security Agency, or NSA, sources say.
   . . . . The FBI is believed to have bugged more than 300 locations,
      with electronic audio and video surveillance devices used to
   monitor 10,000 to 15,000 conversations -- much of it real-time data
       that was bounced from satellites to the NSA. The monitoring
     stations usually were placed near a Secret Service perimeter or
    Naval Intelligence facilities. And many of the targets concerned
               large contracts with Vietnam, sources say.
     . . . . Larry Klayman, executive director of Judicial Watch, a
     private legal watchdog group suing the Commerce Department for
    trade records, suggests the bugging may be related to a possible
    surveillance operation on the late commerce secretary Ron Brown,
    suspected of taking bribes involving Vietnam contracts. But that
       alone doesn't explain how the DNC could have ended up with
                         top-secret information.
   . . . . Ironically, Clinton boasted that this summit was based on a
      new spirit of trust in U.S. relations with Canada, Australia,
   Brunei, China, Hong Kong, Indonesia, Japan, Malaysia, New Zealand,
    the Philippines, Singapore, South Korea, Taiwan, Thailand, Mexico
     and Papua New Guinea. Little wonder that exposure by Insight of
     this covert mission has been met with outrage around the world.
    . . . . "Is that what happened to our lumber deals?" asked George
     Rioux, a frustrated Canadian diplomat requesting copies of the
     story. Indonesian diplomat Hubudio Subardi says, "Everybody who
     learns about it would be surprised to hear about it." Japanese
   Embassy spokesman Tsuyoshi Yamamoto tells Insight, "Our government
   has not issued any complaint," but notes Japan bitterly complained
   to the State Department about another publicized incident. In 1995
   NBC Nightly News reported the NSA had bugged the heads of state in
   Miami at the Summit of the Americas to promote free trade. NBC news
     also revealed that U.S. spies had intercepted a call made by a
    Japanese emissary from a Washington hotel shortly before Clinton
          was to meet Japan's prime minister in February 1994.
      . . . . The New York Times reported in 1995 that the CIA had
    eavesdropped on conversations in Geneva among Japanese officials
   and car-company executives and then fed those reports to U.S. Trade
      Representative Mickey Kantor, who had been pushing for better
     access to Japan's markets for U.S. cars and parts. Kantor thus
            learned Japan's bottom-line bargaining position.
       . . . . Outrageous as it may be to Americans who believe in
   openness and fair play, this sort of thing has been done regularly
      by the Clinton team. What is new is that APEC appears to have
   involved leaking of national-intelligence information for political
                              fund-raising.
     . . . . Many embassies of the targeted nations asked if Insight
   knew who was compromised by the child-sex ring. No senior political
   leader was involved --it was "secondary" people, such as assistants
   to those responsible for cutting trade deals, intelligence sources
   say. It still is unclear who provided the boys to the dignitaries,
   but Insight has learned that the alleged sexual activities occurred
           in rooms at the West Coast Vance Hotel in Seattle.
   . . . . When Pete Shimondale, the general manager of the hotel, was
    asked by Insight about the sexual allegations, he responded, "Oh
   God. I didn't start here until 1994." He said authorities have not
     been out to question him or review records of hotel guests but
                      declined to comment further.
    . . . . The boys are believed to have been 15 to 17 years old. As
      shocking as this may be, some say it's routine. A former Bush
   economic adviser observes, "The sex? That's done all the time. If a
    foreign diplomat wants a companion, the State Department provides
    it. It doesn't matter if it's a man or woman. They have a special
    fund set up for that." Another former NSC official who requested
     anonymity says other countries also do it. "I was offered every
   sexual favor you can imagine. I turned it down all the time. After
          a while they left me alone and stopped offering me."
    . . . . Government agencies alleged to be involved in this spying
      responded to Insight with carefully crafted half-denials and
    artfully dodged a series of questions with noncommittal answers.
       Confronted with questions about whether Naval Intelligence
   purchased or used electronic equipment from private consultants and
    suppliers for the operation, the first response by Navy spokesman
   Lt. Joe Walker was, "I don't know." But later Walker insisted, "The
         Navy was in no way involved in the bugging of hotels or
              restaurants. We did not purchase equipment."
    . . . . The FBI, which first declined to comment, insisted after
   the story broke that "we used no physical surveillance at hotels or
   restaurants" and "we used no microphones" but repeatedly refused to
    say whether wire tapping or wireless surveillance took place. And
   the FBI says information regarding its agents taking kickbacks has
       been forwarded to the Bureau's national security office for
    investigation. Pressed to answer whether the FBI is denying that
   the operation happened, an informed agent replied, "Listen, I don't
                          want to go to jail."
   . . . . Told about the half-denials and vague responses, Insight's
    intelligence sources say that was to be expected. "But the bottom
   line," says a high official in the alleged operation, is this: "The
    FBI is lying. The FBI was there. Period. They used microphones."
    . . . . If true, the Clinton team crossed well over the line when
     it decided to bug hotel rooms, rental cars, popular waterfront
     restaurants including Salty's, and even the chartered boat that
                   took the conferees to Blake Island.
     . . . . Sources confirm to Insight that the operation produced
      real-time data that after being moved to the NSA were sifted
   through by 20 to 30 NSA specialists and handled by a senior manager
   at NSA. The information then was passed to a senior NSC member and
    two NSC staffers. >From there it landed in the hands of at least
   one San Francisco attorney and another West Coast law firm working
     off the books for the DNC. Attorneys were used because they can
   claim client confidentiality if ordered to reveal the nature of the
      information, its origin or destination, according to sources.
     . . . . The operation was approved by the "Secret Court," which
   clears such national-security operations, according to intelligence
   specialists. This court legally may authorize wiretapping, and all
              its writs and rulings are permanently sealed.
     . . . . In fact, monitoring of G-7 economic summits under prior
      administrations was approved through the Secret Court, says a
   former National Security Council official under Reagan, but never a
        fishing expedition on this scale. "We did it through the
   embassies," says the ex-NSC official. "We never bugged hotel rooms,
              and no physical surveillance was ever used."
   . . . . Former CIA Director R. James Woolsey claims no knowledge of
   the bugging of the APEC conference and insists if it was bugged the
    CIA would not have participated because it deals with a domestic
     situation. "We wouldn't have anything to do with that," Woolsey
   tells Insight. "The U.S. should not engage in industrial espionage.
    The CIA should not be doing intelligence on behalf of an American
   company that requests it. For one thing, it's a mess to figure out
                what is an American company these days."
   . . . . Woolsey acknowledges that the CIA collects intelligence on
   dual-use technology -- businesses violating sanctions with Iraq and
     foreign entities giving bribes for contracts -- operations that
    save American business billions of dollars a year. The companies,
       Woolsey says, are never aware of the CIA's involvement. "We
   preserve a level playing field and the American company has no idea
           why all of a sudden a contract is rebid," he says.
   . . . . But Woolsey insists that U.S. intelligence agencies "should
    not work for political parties," a situation that appears to have
   existed during the Clinton administration. For example, the DNC and
     CIA have been revealed in sworn testimony to have pushed White
     House access for $300,000 donor Roger Tamaraz. Likewise the DNC
     requested the White House to conduct security checks on alleged
    Latvian organized-crime leader Grigori Loutchansky, who had been
      formally invited to attend a $25,000 a plate DNC fund-raising
      dinner in 1995. He was uninvited under pressure after the DNC
    received classified information about Loutchansky's alleged Mafia
         ties, according to the Washington Post's Bob Woodward.
    . . . . Congressional investigators say that, if the Woodward and
     Insight stories continue to develop, these security leaks could
   turn a campaign-finance scandal into an impeachment hearing. Taylor
   Lawrence, majority staff director of the Senate Select Committee on
    Intelligence, says, "If the [APEC] allegations are true, we would
      be very concerned and we would look at this, but we need hard
    evidence." The APEC surveillance tapes might provide the smoking
   gun. But at the moment investigators tell Insight they have no plan
   to secure those tapes until someone comes forward to testify about
    the covert Seattle mission and connects the dots. Stay tuned. It
                              might happen.
                                    
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