WASHINGTON -- An ambitious plan to create a federal post to oversee the government's spy-catching efforts has been shelved by the Clinton administration largely because of strong opposition from Attorney General Janet Reno, officials said.
The job of a national counterintelligence executive was proposed to answer widespread criticism of the government's efforts to combat espionage.The official would have been asked to develop and oversee a strategy to protect the nation's secrets. He would have tried to stay a step ahead of foreign spies by identifying what information -- in government and in industry -- would be the most enticing to other governments.
The proposal, the product of a year-long interagency review, gained high-level support, including from Louis J. Freeh, the director of the FBI; George J. Tenet, the director of central intelligence; and John J. Hamre, who until recently was deputy secretary of defense, officials said.
But Reno blocked the proposal, and some officials said they believed her opposition was the product of her ongoing feud with Freeh, whose agency is charged with overseeing domestic counterintelligence.
In letters and conversations with other officials, Reno indicated that she believed the agency needed to solve its own internal problems with counterintelligence instead of adding a new layer of bureaucracy.
Reno and Freeh have been at odds over a wide range of issues the past few years, most notably Freeh's recommendation, which Reno rejected, that she appoint an independent counsel to investigate campaign fund-raising abuses by Democrats in the 1996 election.
"The idea of a new counterintelligence executive is probably not going to work the way it was proposed," a senior administration official acknowledged.
Still, officials said, many of the panel's ideas for changing the direction of counterintelligence may be incorporated in more a modest reorganization plan in the future. A high-level review of counterintelligence is still underway within the administration, they said.
"It's clear that the CI-21 initiative has succeeded in focusing attention, and what will emerge from that is still evolving," said the Defense Department spokesman, Kenneth H. Bacon.
Despite the debate over the proposed reorganization, there is widespread agreement among senior officials that the government has failed to keep pace with the rapidly changing espionage threats faced by the United States in a post-Cold War, information-age era.
Critics agree that the FBI, the CIA and the Pentagon have found it difficult to shift gears after decades spent keeping tabs on traditional adversaries, like KGB agents working out of the Soviet embassy in Washington.
Today, as the sole remaining economic and military superpower, the United States faces a wider range of espionage threats than ever before, from both allied and unfriendly nations eager to steal information not just from the CIA or the Pentagon but from corporations and research institutes.
France, Israel, China, India, Russia and other countries are believed to have turned their focus on the United States to obtain sensitive and economically significant scientific and technological information, as well as traditional military and national security secrets.
Intelligence officials made some changes after the 1994 arrest of Aldrich Ames, the CIA officer who spied for the Soviet Union. But several officials said they believed that the National Counterintelligence Center, established at the agency after the Ames case, had largely failed to provide coordination for counterintelligence. The center would have been abolished under the proposed restructuring.
Flaws in the government's handling of some high-profile espionage cases, including the investigation of Wen Ho Lee, the former government scientist accused of mishandling government secrets, have underscored the need for counterintelligence reform, officials say.
In the Lee case, an 800-page classified report by the Justice Department has just been completed detailing the mistakes made both at the FBI and at the Justice Department in the way they handled investigation. The report is said to offer an even-handed critique of the government's failures in the controversial Lee case.
The report criticizes the FBI for its failure to aggressively investigate evidence that China may have stolen American nuclear weapons data, as well as its decision to focus on Lee early in that investigation. But it also is critical of the Justice Department for its failure to approve FBI requests to wiretap Lee.
While he was never charged with espionage, Lee was accused of mishandling classified material after investigators found that he had downloaded large amounts of sensitive nuclear weapons design information and then copied it onto portable computer tapes. Some of those tapes are now missing. Lee has said he is innocent of the charges.
The reorganization proposed in the new initiative would not have altered the FBI's authority to handle criminal investigations into spy cases.
But it would have created a board made up of senior officials from the CIA, FBI and Pentagon and advised by other agencies like State and Treasury. It's executive would have set the broad direction of counterintelligence strategy, and would had access to information about ongoing espionage cases.
But the main task of the new executive and the board would have been to change the nature of counterintelligence. Rather than simply waiting for evidence that a spy had already stolen secrets, the new executive would have been asked to bring an analytical approach to the field, both studying America's vulnerabilities while trying to determine which secrets were likely to be sought by other countries.
"It's terribly unfortunate that the attorney general has seen fit to torpedo this, because the concept is very good and absolutely necessary as we face counterintelligence threats that are as great as ever," said Paul Redmond, a former chief of counterintelligence at the CIA.