by Shane Harris
On November 21, just eleven days after the tense meeting with the national security principals in the Situation Room, Ed Meese, Reagan’s attorney general, told the president it was time to close the book. He had to figure out which way was up in this Iran mayhem. Reagan’s staff weren’t protecting him, Meese felt. Would the president let him interview all the players and gather the facts?
It was Friday. Reagan gave Meese the weekend and asked for his report on Monday.
The same day, Reagan’s White House counsel discovered that one of the missile shipments was large enough that it must be reported to Congress or be declared a violation of the weapons shipment law. Neither had occurred. The White House was officially over the line. And it was only Friday.
Meese didn’t have to look long for more incriminating evidence. On Saturday he spoke to Shultz, who blasted Poindexter and the NSC staff for selling the president a bill of goods. Meese said the president didn’t remember the missile shipment that tripped the reporting requirement, but neither man thought it much mattered. The Democrats would zero in on the slightest infraction and bring down the White House. Something else bothered Shultz. He’d suspected that the Iran initiative might be connected somehow to funding the Contras. Meese should be on the lookout.
Meese took a break from poring over paperwork. He and two aides stole away for a quiet lunch at the Old Ebbit Grille, a local favorite not far from the White House. One of the aides said he’d been going over files from Oliver North’s office, and he’d found a real whopper—the NSC staff was giving $12 million from the Iran missile sales to the Contras.
“Oh, shit,” Meese said.
Poindexter liked to arrive at the White House early, at least by 7:00. Though as deputy he had to drive himself to work, the post of national security adviser came with a chauffeur. Poindexter passed the half-hour commute working or thinking in the backseat of a town car, paying no mind to the rush-hour traffic that he abhorred. He took his breakfast in his office, where he reviewed overnight message traffic. He ate heartily—usually two poached eggs on an English muffin, a bowl of cereal with fruit, and bacon. He met with the NSC staff in the Situation Room at 7:30, attended a meeting of the White House staff, and at 9:30 delivered the president’s daily security briefing. At times he let his mind wander, only for a moment, to soak up the rarified air of the Oval Office.
On Friday, November 21, Poindexter added an extraordinary task to his regular routine. Ed Meese had called to say he wanted all relevant NSC staff documents related to the Iran initiative. Poindexter hung up the phone, opened his safe, and pulled out the sole copy of the first finding that Reagan had signed, which described the Iran operation as just an arms-for-hostages deal. He tore the finding into pieces and deposited them in a burn bag, which was collected each day and tossed into an incinerator. Then he turned to his computer and called up more than five thousand messages he had exchanged with North and others about the staff’s covert activities. With the click of a button, he deleted them.
On Monday, Meese made his report to Reagan. He told him that the NSC staff had diverted money from the missile sales to the Contras. Then Meese questioned Poindexter about it directly, and Poindexter did not lie.
Later that day the president sat down with the file of memos and news clippings that his national security adviser prepared for him every day. Tucked into the stack was an op-ed Poindexter had penned for the Wall Street Journal , defending the administration’s Iran policy. It had run in that morning’s paper.
Under the headline “The Prudent Option in Iran,” Poindexter defied the administration’s detractors to come up with a preferable, more sophisticated policy. Some other way to fight terrorism, balance regional strategy, and get all the hostages back. “Those who question us now owe the country an explanation of how they would have acted differently given the stakes, the opportunities, and the dangers.” If you’ve got a better idea, let’s hear it.
Reagan took his pen and across the top of the article scrawled a note of praise: “Great—RR”
The next morning Poindexter met with Reagan in the Oval Office and told him the whole story. He had instructed North to give the Iran profits to the Contras. It was his decision, and he’d never told the president.
“I’m prepared to resign,” he said. It always had been his plan if the operation became public.
Reagan took Poindexter up on his offer. He would return to another assignment in the Navy. North, however, was fired from the NSC staff. He retained his military commission.
Later that morning Meese laid out the entire affair to a meeting of the full cabinet and congressional officials. At noon he joined the president at a hastily arranged press conference and introduced Iran-Contra to the world. Reagan did no better explaining the latest twist in the debacle than he had a few days earlier, at another press conference just about the arms sales. In that performance the president forgot most of the lines Poindexter had taught him.
Now, Reagan said that he had no idea his staff had diverted money to Nicaragua, a “seriously flawed” move that was nevertheless part of a well-founded and important policy in Iran. He didn’t even attempt to entertain questions. Amid howls from the press corps, Reagan turned the meeting over to Meese. They traded places at the podium like confused dance partners, not sure who was leading.
On April 7, 1990, Poindexter stood before a twelve-person jury culled from the citizenry of the District of Columbia. He’d been accused of five felony counts: one of conspiracy to obstruct official inquiries and proceedings, and two each of obstructing Congress and false statements to Congress. His earlier deference to McFarlane’s false statements to the intelligence committee, as well as his destruction of e-mail messages, composed parts of the indictment. Poindexter considered the latter issue particularly preposterous. There were no rules on the retention of e-mail records. He should know, he said. He brought e-mail to the White House.
Poindexter fixed his eyes on the twenty-five-year-old jury foreman, a para-legal student at a local community college. To each of the five counts the judge read, the young man replied, “Guilty.”
Poindexter rocked gently, but his blank expression never changed. He gave nothing away. The judge ordered him to return in two months for sentencing, when he could receive a maximum of twenty-five years’ imprisonment. Poindexter turned to his wife, Linda, and kissed her. They walked out of the courthouse into the spring air.
Amid a throng of reporters, they kept silent as they exited the building. Three and a half years had passed since the day he came home from the White House for the last time. He had been so tired, and glad that at least one part of the saga had ended.
The trial had consumed much of his time since then. He had decided not to testify in his own defense lest he give the prosecution ammunition for its case, which portrayed Poindexter and North as bandits in a conspiracy run amok. He opted, instead, to rely on videotaped testimony by Reagan, hoping to demonstrate that Poindexter had operated under the broad umbrella of White House policy that was endorsed by the president. But many of the essential details of Iran-Contra, and Poindexter’s precise role in it, seemed to escape the former president’s memory. He failed to persuade the jury.
Did Poindexter wish he had testified? one of the reporters in the crowd shouted. He didn’t answer. But Linda turned, looked the questioner in the eye, and replied, “No second thoughts.”
They got into their car and drove home.
The jury foreman later said that “an overwhelming set of facts in support of the prosecution’s allegations” left the jury no choice. But Poindexter was unapologetic and defiant. “That was not a jury of my peers,” he would say years later, his tightened voice betraying the bitterness that simmered beneath his placid exterior. “Not one of those people understood the information presented to them.”
It wasn’t just innate brilliance that Poindexter thought gave him an edge. It was information. Information was power. It could work for you. It often turned against you.
But there was always so much of it, more than most minds could handle.
The Iran-Contra affair had been a jumble of bad information, and it was John Poindexter’s undoing. But it was also the catalyst for his rebirth. Rather than retreating into quiet solitude, he would redouble his efforts to change and master the complex interplay of intelligence, power, and technology that he generally summed up as “the system.” He had no idea then just how radically it was about to change.
ACT TWO
Clandestine, foreign government, and media reports indicate Bin Ladin since 1997 has wanted to conduct terrorist attacks in the US. . . . Al-Qa’ida members—including some who are US citizens—have resided in or traveled to the US for years, and the group apparently maintains a support structure that could aid attacks.
—Item from the President’s Daily Brief, August 6, 2001
“Data mining” would potentially access both foreign intelligence information and domestic information regarding U.S. citizens. . . . We need to think carefully how we want to deal with a capability which can gather such information into one cross-referenced super-data base.
—Legal counsel to the chairman of the Joint Chiefs of Staff, in an
April 14, 2000, memo on the Able Danger program
CHAPTER 5
A CONSTANT TENSION
There was a time when everyone was linked to a lug nut, and the agents of the FBI liked it that way.
It was 1985, and federal agents in New York were running cases against drug dealers, mobsters, and money launderers. They’d managed to take down gangs and expose criminal networks thanks to the bounty of evidence provided by one simple, reliable tool: the wiretap.
Agents had insinuated themselves into the inner workings of their targets by surreptitiously snatching their own words off copper phone lines. Crime fighting had a certain, comforting order owing to the simple engineering of the phone system: Everyone who used it was tied to the ground by a wire. On any given day an agent could stand on a street corner in Manhattan, gaze up at an apartment building, with its neat rows and columns of units stacked atop one another, and know that inside each one there was a telephone tethered by thin copper wire to a single point, sometimes several miles away. In his mind’s eye he could have imagined shrinking himself to the size of an electron and traveling over the phone line, down to the bottom of the building, then shooting beneath the streets, until he ended up in the basement of the telephone company’s switching station. There the wire emerged, pegged to a rack by a single copper lug nut. Acres of racks lined the walls, each holding rows and columns of lug nuts and their wires, neatly stacked atop one another—the city of New York in analog miniature.
With a warrant in hand an agent could tell the technicians at the phone office, with whom he had become friendly over the years, “Go up on RR326.” The tech would walk to the rack, find the wire, and clamp on a listening device. Instantly, the agent became an invisible interloper.
But there were rules to this eavesdropping. Under federal law the FBI needed to be absolutely certain that the line they were on belonged to the suspected dealer, or launderer, or capo named in the court-approved warrant. Not the guy in the apartment next door. Not someone down the block. This guy. This phone. RR326. Unless an agent wanted to risk a judge tossing his evidence, or perhaps tossing him in a jail cell, then he had to be sure. The phone number must belong to the very same line that snaked back through the subterranean maze of Manhattan, through all those blocks of concrete caverns, back to that apartment building, up through the walls and out of the jack and into the phone that was in the hand and next to the mouth of the FBI’s target. It was, by design and necessity, a neat, specific system. And then it all went sideways.
The FBI’s friends in the phone company put the bureau on notice: Over the next few years those racks and stacks of wires and lug nuts would be swept into the technological dustbin. The telephone network was going digital. Technicians would no longer stand at a rack; they would sit at a keyboard. In some parts of the country that had already made the change, phone calls were traveling as a stream of 1s and 0s. Thousands of lines commingled in a single computer. When New York went digital the phone techs would no longer be able to tap directly into RR326. In fact, they couldn’t even tell for sure where RR326 resided in this new matrix.
Things got worse for the government. People started using cellphones. These wireless devices were inherently harder to tap because they used phone lines differently than their analog counterparts. In 1985, a mere 203,000 Americans were using cellphones. Within a year, the number doubled. Two years later, it climbed to 1.6 million. By the end of the decade, a staggering four million Americans counted themselves as cellphone subscribers. Organized criminals, the FBI’s favorite targets, were among them.
Members of the Colombian Cali drug cartel operating in New York figured out how to throw agents off their trail by briefly using a cellphone and then tossing it and switching to a new one. To tap a mobile device the phone company technicians had to install listening equipment on an “electronic port,” the modern version of the copper lug nut. But in most switching stations there were only half a dozen ports available at any one time. The crooks were chucking phones faster than the cops could tap them. Prosecutors and FBI agents found themselves standing in line at the phone company, fighting with one another over whose case should take priority, and threatening to haul phone company employees into court so they could explain to the judge why they hadn’t executed a wiretap order promptly.
Electronic surveillance had been such a dependable craft. Now rapidly evolving technology was threatening investigations. The phone companies had no interest in making the government’s life easier. By the end of the eighties their annual revenues from cellphone subscriptions were more than $2 billion. The new decade held the promise of more digitization, more mobility. The agents in the New York field office put their bosses in Washington on notice: “If we don’t do something, we’ll be out of the wiretapping business.”
The digital revolution had crept up on the FBI and the intelligence community. Though law enforcement agents and spies were governed by different surveillance rules, they were all tapping the same network. And both sides shared the same basic philosophy about surveillance: The best evidence in a court of law or in an intelligence operation is a person’s own words. No surveillance meant no intelligence. No intelligence meant the nation could be taken by surprise.
The National Security Agency, the intelligence community’s primary eavesdropper, had perfected the art of clandestine wiretapping, but it had also built a global network of electronic surveillance equipment to snatch signals out of the air. As phone calls and transmissions shot out of radio transponders and bounced off satellites, the NSA could grab them in transit. Much of the NSA’s foreign intelligence haul came through aerial capture. But when the world went digital, all those signals went underground. The new telecommunications system was a fiber-optic network of glass tubes, moving information through beams of light. It was out of the NSA’s grasp.
The agency had another problem. Encryption technology—the computer algorithms that the NSA’s code makers used to protect the nation’s secrets— was now available on the open market. Drug kingpins and mob bosses could purchase secure phones, which had long been a luxury reserved for defense secretaries and national security advisers. The technology was getting cheaper and easier to use, and it was becoming ubiquitous. Mike McConnell, who took over as director of the NSA in 1992, could imagine a day when criminals and spies around the world encrypted all of their communications using technology that his agency had helped invent. In this new global telecom enterprise, the NSA risked going deaf.
The cops and the spies had a choice to make. They could control this new revolution, or they could become its victims. They launched a two-front campaign to ensure that whatever the future of communications looked like, it would bend to their needs.
In the summer of 1994 the FBI and the Justice Department put
forth a legislative proposal that would require phone companies to build their networks so that they could be tapped immediately with a judge’s order. No more waiting in line for scarce digital ports. No computer-induced uncertainty about which phone number was targeted. The government demanded assurances that it could listen in at any time. The companies must not build an untappable system.
Louis Freeh, the FBI director, personally pushed for the new law. A former special agent and federal prosecutor, Freeh had used wiretaps to secure convictions in some of the most complicated organized-crime investigations in history. He showed up unannounced in the offices of reluctant lawmakers, who’d been hearing horror stories from the phone companies about stifled innovation and excessive regulation. Congress also had been pressed by an emerging movement of technolibertarians, whose ranks included some of the very same lawyers who had helped write the Foreign Intelligence Surveillance Act in 1978, passed in the wake of illegal spying on war protesters and political activists. They warned Congress: We have been here before. The government always will try to take more than it needs. (Only a few years earlier, Justice officials had gotten as far as placing language in an anticrime bill that would have allowed the attorney general to set standards for telecommunications equipment, effectively making him the new network’s architect in chief. The bill did not pass.)
Freeh was undeterred. He started sitting in on congressional committee markup sessions—an unprecedented move for an FBI director—just so he could stare down recalcitrant members. At the same time, McConnell made his play at the National Security Agency. Acting under a presidential directive from Bill Clinton issued in 1993, the NSA began development of a cutting-edge microcircuit called the “Clipper” chip, which would be used to scramble telephone conversations. The agency wanted to install the chip in U.S. telephones, so that every phone call in America would be converted into a jumble of digital data that only the government could decipher. The “key” necessary to unlock the encryption codes would be in safekeeping with government authorities. McConnell and his colleagues reasoned that if the world was moving toward encrypted communication, then the NSA better try to set the standard, and protect its turf. With the Clipper chip the NSA would be the ultimate code maker and code breaker of the telecom system.
