Fighting Each Other: How U.S. Intelligence Rivalries Hampered the Battle Against Islamic Terrorism

“If there is no enemy within, the enemy outside can do us no harm.”¹

Ever since a Hezbollah suicide bomber in 1983 blew up a truck packed with explosives and killed 241 Marines in Beirut, combating Islamic terrorist organizations has been a priority for U.S. intelligence, security, and law enforcement agencies. However, for those of us who have followed the spiraling growth of Islamic terrorism in the 1980s and 1990s, it seemed as if the U.S was sluggishly reactive. They made little headway in extensive counterterrorism programs designed at penetrating and dismantling Islamic terror groups.²

How was it possible for the hijackers and their plot to remain off the radar of intelligence and law enforcement?

The 9/11 attack put a spotlight on the failures of the security agencies tasked to protect the U.S. against acts of terror. How was it possible for 19 hijackers and their ambitious plot to remain off the radar of intelligence and law enforcement? The truth, as I discovered during 18 months of reporting for my book, Why America Slept: The Failure to Prevent 9/11, was not that the plot had gone undetected, but rather that the agencies responsible for monitoring and fighting terrorism had failed to share information, something that would have made it possible to connect the dots before the attack occurred.

The failures were more substantive than mere interagency rivalries between the CIA, FBI, NSA, and local law enforcement. Exclusive interviews I had with top intelligence officers and FBI officials revealed that the origins and depth of the dysfunction inside America’s counterintelligence programs was an internecine bureaucratic war that left little room for working together. Sharing information was given lip service but seldom practiced, particularly when the intelligence at stake was judged as having “high value.”

If the CIA had alerted the State Department, the two Saudis would have been on a watch list that barred them from entering the United States.

The most serious failure was the CIA’s tracking of two terrorists, Khalid al-Mihdhar and Nawaf al-Hazmi, when they moved from Saudi Arabia to California in 2000. If the CIA had alerted the State Department, the two Saudis would have been on a watch list that barred them from entering the United States. Once in California, however, the CIA could not legally monitor them domestically. The Agency not only lost track of the two Saudis but failed to let the FBI, which is specifically authorized to act within the U.S., know they were here. In July of 2001, only two months before 9/11, an FBI memo warned the American intelligence community that some bin Laden followers might be training at U.S. flight schools in preparation for an aerial terror attack. The CIA was unaware that al-Mihdhar and al-Hazmi had taken flight training while living in the U.S.

If the CIA had shared its information about the two Saudis, al-Mihdhar might have been detained in June 2001, when he returned to Saudi Arabia and his visa had expired. Or when an Oklahoma state trooper pulled over al-Hazmi for speeding and a driver’s license check in the national database would have triggered security alerts. Sharing the CIA security concerns about the duo would have meant the Transportation Department had a red flag on them. The pair even used their own names when making reservations on American Airlines Flight 77, which was flown into the Pentagon.

“Responsibility and accountability were diffuse,” the 9/11 Commission Report concluded a year after I had published Why America Slept.³ That was a diplomatic understatement of the paralyzing dysfunction between intelligence and security agencies and policy makers. The unintended consequence of such discord was to give the advantage invariably to the terrorists.

My reporting revealed that the dearth of cooperation between the country’s top security and intelligence services was not new to 9/11. Exposing how and why the breakdowns to communicate between agencies had begun and persisted for decades explains why the world’s best law enforcement and intelligences agencies ended up fighting each other instead of combating Islamic terrorism.

“We knew that the Islamic threat was the next security problem for the U.S., and we had known it since the 1970s,” Duane “Dewey” Clarridge told me in a rare no-questions-off-limit interview in the wake of 9/11.⁴ Clarridge was a CIA legend. He was twenty-three when he joined the Agency in 1955 and over the next thirty years earned a reputation as one of its most accomplished covert operatives. Clarridge served in Nepal, India, and Turkey, before returning to headquarters in the 1970s. He became the chief of covert operations for the Near East Division, later ran Arab covert ops, then moved to the Latin American Division, before becoming the Rome station chief. It was during his three years in Arab operations that Clarridge became familiar with the key Islamic terrorists.

“We were running operations in Beirut against an alphabet-soup of Palestinian terror groups,” recalled Clarridge. “At the same time, Carlos the Jackal was running around Europe, pulling off stunts like trying to use a grenade launcher to down an El Al airplane at Orly, or shooting his way into the Vienna OPEC meeting, killing three, and kidnapping the Saudi and Iranian oil ministers. We had our hands full.”⁵

The Rivalry for Control of Operations and Investigations Between the CIA and FBI continues.

Terrorists ambushed and murdered Richard Welch, the CIA’s Athens station chief, two days before Christmas in 1975. Clarridge and his senior CIA colleagues wanted to go after the terrorists with covert assassination plans. The Agency’s timing was poor, however. Senate hearings into past misdeeds produced months of sordid headlines about the Agency’s 1960s assassination plots working with the Mafia to kill Fidel Castro, mind-control experiments, and failed foreign coups. Those hearings “permanently changed the way Clandestine Services operated,” says Clarridge. “It changed the rules of the game for us.”⁶

Congress initiated a process by which the Agency had to submit plans for its covert ops to a committee chaired by the president. Congress would be notified within sixty days after the president signed off. Permanent congressional oversight committees were established. The coup de grâce was President Ford’s Executive Order 11905 on February 18, 1976, that barred U.S. government agencies from undertaking assassinations.

The CIA abruptly halted its plans to eliminate Welch’s killers. For the next seven years, the Agency instead engaged in a mostly unsuccessful campaign to gather intelligence on leading Islamic terror groups in the hope of alerting allies to upcoming attacks.

The suicide truck bomber changed everything.

The suicide truck bomber who struck the U.S. embassy in Beirut in 1983 changed everything. CIA Director William Casey and FBI Director William Webster immediately dispatched teams to find out what happened. There were conflicts between those teams from the start. They got so bad that the agents of the rival agencies sometimes got into screaming and shoving matches. The FBI team returned home early, angry and frustrated by what it complained was dismissive treatment by its CIA counterparts.⁷ The CIA’s new Beirut station chief, William Buckley, ultimately offered an olive branch to the FBI: he invited the Bureau to dispatch another team to Lebanon and investigate free of CIA micromanagement. The FBI solved the case by tracing a fragment of an axle from the bombing truck to an Iranian factory that had links to the Iranian-backed Popular Front for the Liberation of Palestine.

But by the time the FBI reached that conclusion, Iranian-sponsored terrorists had managed to kidnap Buckley in Beirut. That prompted President Reagan to create the government’s first joint task force to battle terrorism. The Restricted Interagency Group for Terrorism was chaired by the CIA’s director of covert operations, and it consisted of single representatives from the CIA, FBI, and the National Security Council. Dewey Clarridge was the Agency rep. The FBI’s man was Oliver “Buck” Revell, the assistant director for criminal investigations (I knew Buck well; he was the FBI Supervisor in Charge of the Dallas office when I researched the JFK assassination for my 1993 book, Case Closed). The National Security Council selected a U.S. Marine lieutenant colonel named Oliver North as its representative.

The new anti-terror group was in a rush to free Buckley before he could be tortured into giving up secrets. North wanted to use DEA informants—heroin traffickers who promised to deliver Buckley for $2 million. Dallas businessman Ross Perot agreed to finance the ransom to avoid U.S. laws that prohibited paying money to drug dealers. But the FBI, under the cautious leadership of William Webster, a former judge whom Jimmy Carter had appointed to run the Bureau, strenuously objected. North then backed a Clarridge operation to kidnap a Lebanese Shiite cleric, the head of Islamic Jihad, the organization holding Buckley. Clarridge wanted to trade the cleric for the CIA station chief. Again, the FBI’s fierce resistance scuttled the plan.

Clarridge fumed at the FBI’s intransigence and lobbied Casey to give the Agency more power in fighting terrorism. In January 1986, with a green light from Ronald Reagan, Casey created the Counterterrorism Center (CTC). Clarridge became its chief and he directed a staff of two hundred CIA officers, mostly analysts, as well as ten people loaned from other government intel and security agencies.⁸

Clarridge initially wanted to rely on the CIA’s foreign stations for surveillance, intel gathering, and informer recruitment, but that was not feasible since they were running at capacity. And, as Clarridge recalled, “the station chiefs were each narrowly focused on their own geographic divisions, while terrorism was a global problem that respected no boundaries.”⁹

Much to Clarridge’s disappointment, his only remaining option was to rely on the FBI for most of CTC’s field and operational assistance. It was against his better judgment since he thought the Webster-run FBI was far too risk-averse. Working with the Bureau also meant Clarridge had to run operations plans past FBI lawyers. “No one was very excited at the prospect of sharing national security secrets with lawyers at Justice,” recalled Clarridge.¹⁰

Clarridge quickly proposed an ambitious and risky operation to kidnap the Islamic Jihad hijackers of TWA Flight 847 and to fly them to America for trial. Webster contended the operation was likely to fail and that it likely violated both international and U.S. laws. The standoff between Clarridge and Webster killed the plan.

The next proposed CTC op was to kidnap Mohammed Hussein Rashid, a top bomb maker who had gotten explosives past airport security machines hidden in a Sony Walkman. A CTC operation to grab Rashid in the Sudan failed. Clarridge blamed the FBI, whose field agents were responsible for what the bureaucracy dubbed an “extraordinary rendition.” The Bureau complained that the Agency’s intelligence was flawed.

The unintended consequence of such discord was to give the advantage invariably to the terrorists.

The deteriorating CIA and FBI tensions worsened during a series of bungled operations. Not only did it botch the Rashid kidnapping, but a squad dispatched to free Beirut station chief Buckley also failed. It was also unsuccessful in tracking down the Libyan terrorists who bombed a Berlin disco frequented by American soldiers. The 1985 hijackings of TWA Flight 847 and the cruise liner Achille Lauro were headline news and made the U.S. look vulnerable and weak.

The FBI began a whisper campaign in Washington that the CIA’s jealous stewardship of CTC was its ruination. Those back door complaints resulted in a task force headed by Vice President George H.W. Bush. It proposed the FBI run its own “intelligence fusion center” to complement the CTC, but its recommendations were never implemented.¹¹

Senior CIA officials complained bitterly to Reagan’s national security team that the FBI was overly cautious.

Senior CIA officials complained bitterly to Reagan’s national security team that the FBI was overly cautious and that America was vulnerable to Islamic terrorists who had entered on legal visas and had set up sleeper cells. Reagan responded in September 1986 by creating the Alien Border Control Committee (ABCC), an interagency task force designed to block the entry of suspected terrorists while also finding and deporting militants who had entered the country illegally or had overstayed their visas. The CIA and FBI joined the ABCC effort with great fanfare.

The ABCC had its first success only six months after its formation. The CIA tipped off the FBI about a group of suspected Palestinian terrorists in Los Angeles and the Bureau arrested eight men. But instead of being lauded, civil liberties groups contended that the ABCC should not be allowed to use information from the government’s routine processing of visa requests. Massachusetts Democratic Congressman Barney Frank, a strong civil liberties advocate, led a successful effort to amend the Immigration and Nationality Act so that membership in a terrorist group would no longer be sufficient reason to deny anyone a visa. The Frank amendment meant a visa could only be denied if the government could prove that the applicant had committed an act of terrorism.¹² The amendment thereby rendered the ABCC toothless.

Meanwhile, the worsening relationship between the CIA and FBI hit a nadir within a couple of years when the weapons-for-hostages (Iran–Contra) scandal broke. The three key figures were the CIA’s Casey and Clarridge and the National Security Council’s North, all senior Counterterrorism Center officials. The FBI’s Buck Revell worried that the CIA and NSC might have violated U.S. laws prohibiting aid being given to the Contras and negotiating with terrorists. After Casey testified to Congress in November that he did not know who was behind the sale of two thousand TOW missiles to Iran (though the Agency was actively involved), Revell told FBI Director Webster that he thought Casey and other top Agency officials were obstructing justice. Webster authorized the Bureau to open a criminal investigation.

The failure of the country’s two premier national security agencies to work together seamlessly … only works to the benefit of America’s many enemies.

Casey was incapacitated by a stroke and hospitalized in early December. He resigned as CIA Director after surgery for a brain tumor a month later. Reagan tapped Robert Gates, the Agency’s Deputy Director, to take charge. But Gates soon withdrew his name when it became clear that questions about his role in Iran– Contra had scuttled any chance for Senate confirmation.¹³ After Gates’s withdrawal, Reagan offered the CIA job to Republican Senator John Tower, the head of the president’s Iran–Contra board. Tower declined. Reagan then got a no from James Baker, his chief of staff.¹⁴ Reagan and his team were in a panic. There were a dozen names on their list of possible CIA directors, but the president was set to make his first comments about the Iran–Contra scandal in a highly anticipated address to the nation on the evening of Wednesday, March 4. Reagan wanted to pick a new CIA director before that speech. Everyone agreed it had to be someone who would easily obtain Senate confirmation. That narrowed the field. On the morning of his national speech, Reagan met with FBI Director William Webster—who was in the final year of a 10-year contract to run the FBI—and surprised everyone by offering him the CIA post.

The news that the cautious FBI director had been asked to run the CIA sent shock waves through Langley and the ranks of senior spies. Webster was a Christian Scientist who relished a reputation as an inflexible straight arrow. He boasted his only vices were chocolate and tennis. Historian Thomas Powers concluded that the “CIA would rather be run by a Cub Scout den mother than the former head of the FBI.”¹⁵ Webster was disparaged by top officers like Clarridge, who had come to know his risk-averse management style.

“Since we at CTC had been working so closely with the FBI on terrorism,” Clarridge told me, “we had already heard a lot about Webster, and none of it was good. From the street level to the top echelons, they detested Webster because they saw him as an egotistical lightweight, a social climber, and a phony.”¹⁶

Webster had no background in foreign policy or world affairs. While Casey was judged inside the CIA as a kindred risk-taking spirit, especially by the covert teams, Webster’s cautious nature was exacerbated by an overwhelming fear of failure coupled with his strict insistence on not bending the letter of the law.

One of Webster’s first moves was to replace the CIA’s popular George Lauder, who had spent twenty years in the Operations Directorate, with William Baker, an FBI colleague. It was such an unpopular choice that no one clapped when Baker was introduced in the CIA’s main auditorium. When Baker told the agents they should study a new house manual called “Briefing Congress” and embrace the four “C’s”—candor, completeness, consistency, and correctness—many in the audience audibly snickered. “It was vintage FBI,” one agent in attendance told me. “It was what we expected.”¹⁷

Baker was not the only FBI colleague Webster brought along. Peggy Devine, his longtime executive secretary, had earned the nickname “Dragon Lady” at the Bureau. Also, his FBI chief of staff, John Hotis, and a group of “special assistants” made up what CIA employees derisively dubbed either the “FBI Mafia” or the “munchkins.” Some in the FBI contingent had Ivy League law degrees, but none had any intelligence background. And they effectively sealed Webster off from the rest of the Agency.

There was a widespread sentiment inside the CIA that the FBI had gone from being a partner to an avowed enemy.

Meanwhile, the FBI investigation that had begun under Webster into the Iranian arms sales had kicked into high gear. FBI agents raided Oliver North’s office and retrieved key documents his secretary did not have time to shred. Another FBI team served an unprecedented warrant at CIA headquarters in Langley, VA. The agents ordered Clair George, the CIA deputy director for operations, to open his office safe. It contained a document, with two of George’s fingerprints, that showed he had misled Congress. That produced a ten-count indictment against George and the removal of three CIA station chiefs. As for Clarridge, a few days before the statute of limitations expired, he was indicted on seven counts of perjury and making false statements to Congress. Inside the CTC, many employees wore T-shirts with slogans supporting him.

There was a widespread sentiment inside the CIA that the FBI had gone from being a recalcitrant partner to an avowed enemy whose purpose was to destroy the Agency’s hierarchy and its way of conducting its operations. As Clarridge noted:

We could probably have overcome Webster’s ego, his lack of experience with foreign affairs, his small-town-America world perspective, and even his yuppier-than-thou arrogance. What we couldn’t overcome was that he was a lawyer. All his training as a lawyer and a judge was that you didn’t do illegal things. He never could accept that this is exactly what the CIA does when it operates abroad. We break the laws of other countries. It’s how we collect information. It’s why we’re in business. Webster had an insurmountable problem with the raison d’être of the organization he was brought in to run.¹⁸

Clarridge was not the only one who thought Webster’s legal background was a handicap for running a spy agency. Pakistan’s President Muhammad Zia-ul-Haq once asked Webster how it was possible for a lawyer to head the CIA. Webster did not answer.

Even before Clarridge’s indictment, Webster had officially reprimanded him for his role in Iran–Contra and after promising to reassign him as the CTC director, had forced him to resign in June 1988. I spoke to nearly a dozen former operatives from the Directorate of Operations who confirmed, on background only, that the anger Clarridge expressed on the record about Webster was widespread throughout the CIA. The Agency had long prided itself on an unwritten code—Loyalty Up and Loyalty Down—and many CIA veterans felt that Webster had trashed that by going after agents like Clarridge.

It got worse for Webster when he tasked his chief of staff, John Hotis, and Nancy McGregor, a 28-year-old law clerk who had been one of his FBI administrative assistants, to rewrite the CIA’s regulations for covert operations. Webster had infuriated many intelligence agents when he compared covert ops to the FBI’s use of undercover agents in criminal probes. Under the new Webster rules, lawyers had to sign off on all covert plans. There was a long checklist required to get operations approved. The informal and fast-moving process of the past was history. Webster argued his rules instilled long overdue accountability in the Agency’s covert work. It was, countered CIA officials, the same framework that existed at the FBI and that had hindered the Bureau’s investigations for decades.

With the new rules in place over covert operations and having purged the CIA of half a dozen senior officers connected to Iran–Contra, some of the criticism of Webster started going public. Tom Polgar, a retired agent, wrote in an opinion editorial in The Washington Post that “the new watchword at the agency seems to be ‘Do No Harm’—which is fine for doctors but may not encourage imagination and initiative in secret operations.”¹⁹

Meanwhile, William Sessions, a former federal judge from San Antonio and a close friend of Webster’s had become the new FBI director. With encouragement from Webster, Sessions expanded the number of FBI agents serving in counterintelligence abroad. Instead of welcoming the help, it further irritated the CIA leadership who considered the FBI as inept competitors who were only likely to compromise intelligence operations.

Webster thought he could reform the Agency to share information with the FBI. In April 1988, Webster announced a totally redesigned Counterintelligence unit. Headquartered in Langley, VA, its mission was to teach CIA and FBI agents how to compile, organize, and share data that would be useful to both agencies. The first test of that cooperation happened in December 1988 when 270 people were killed when a bomb blew up Pan Am Flight 103 above Lockerbie, Scotland. The U.S. government did not disclose that three Middle East-based CIA officers flying home for the Christmas holidays were among the victims.

Israel’s Mossad intelligence had warned the CIA two weeks earlier. The CIA had never passed the warning to the FBI.

Israel’s Mossad intelligence had warned the CIA two weeks earlier that they had intercepted information that a Pan Am flight from Frankfurt to the U.S. would be bombed in December. Pan Am Flight 103 was a Frankfurt to U.S.-bound plane. The CIA had never passed the warning to the FBI.

Webster’s redesigned CTC was put in charge of the U.S. investigation. In Scotland, more than a thousand police, soldiers, and bomb technicians scoured hundreds of square miles around the crash site. They bagged thousands of pieces of evidence, and in that haul was a fragment of a circuit board the size of a small fingernail. It matched an identical board found in a bomb-timing mechanism used in a 1986 terror attack in the West African country of Togo. CTC tracked the circuit board to a consignment of timers manufactured by a Swiss company that had sold twenty of them to Libya.

Although progress had been made on finding out how the bombing was done, according to one U.S. official, it was not very long before the investigation was a “chaotic mess” of noncooperation.²⁰ Within a few months, there were competing theories about who was responsible. The CIA blamed Iran for hiring a Damascus-based radical Palestinian faction to carry out the operation. Taking out the American plane was, according to Vincent Cannistraro, a CIA’s senior CTC officer, payback for the mistaken 1988 downing of an Iranian Airbus by a U.S. naval cruiser, which resulted in 290 civilian deaths. Cannistraro had become, after Clarridge’s departure, the major power inside CTC and its driving force.

Meanwhile, the FBI thought Libya was the sole culprit, seeking revenge for the U.S. bombings in 1986.

Both agencies leaked their internal disagreements. Anonymous CIA officials were quoted in the press mocking the FBI’s analytical reports on the bombing as being “like essays from grade school,” whereas an unidentified FBI agent said that “CIA believe they have a lot, but it’s a Styrofoam brick.”²¹

Even when the Libyans became prime suspects, the two agencies fought over what should be done. The FBI wanted to wait for indictments and then arrest those charged. The CIA’s Webster, not surprisingly, supported the letter-of-the-law approach. But inside the CIA, especially in CTC, agents bristled that the Libyans were beyond the reach of U.S. law. Cannistraro argued for “removing” the suspects at any cost, even if that meant assassinating them or allowing Israel to do it on behalf of the U.S. But Webster would broker no such discussion. Frustrated with Webster’s limitations on covert ops, Cannistraro abruptly resigned in September 1990, just before Iraq invaded Kuwait. “The CTC is starting to look too much like the FBI,” he disparagingly told a former colleague after giving Webster his notice.²²

A 1990 Senate panel concluded that Webster’s efforts had failed to overcome the extensive fragmentation and competition in the government’s counterintelligence efforts. The panel concluded that it was virtually impossible to cure the dysfunction by merely insisting that the CIA and FBI drop their long-standing mutual distrust and dislike. Only by completely recreating America’s intelligence and crime-fighting apparatus, the panel suggested, might it be possible to make substantive progress.

The CIA and FBI have overhauled their training … but skepticism that there is any benefit to partnering remains a significant obstacle.

The 9/11 Commission made a series of recommendations for changes that could finally force the CIA and FBI and other elements of the national security apparatus to work together more effectively. There are thousands of internal intelligence documents released since 2001, as well as Inspector General Reports from the CIA and FBI, that have given great lip service to the “imperative of reform.”

The result over two decades later?

The CIA and FBI have overhauled their training of intelligence analysts, streamlined the management of the information collected and analyzed, and improved the coordination between the analytical units and operational teams. There are now redundancies designed to prevent intel from falling between the cracks. And there is greater accountability for failures.

Do the CIA and FBI work together better today than before 9/11?

What about the cooperation between the premier American law enforcement/intelligence agencies? Conversations with half a dozen currently serving and former officials from both the CIA and FBI give a mixed picture at best. The deep animosity from the Clarridge/Webster days is now mostly history. No one thinks of the other agency as a threat to its own survival. But skepticism that there is any benefit to be had by partnering with one another remains a significant obstacle to cooperation. CIA officers continue largely to view the FBI as highly paid police officers who are hobbled by Department of Justice lawyers. The FBI officials to whom I spoke pointed repeatedly to the CIA’s approval of torture for 9/11 detainees as a key reason the main terrorists at Guantanamo Bay have not gone to trial. “Maybe they would be better off,” one former FBI Counterintelligence officer told me, “if they had lawyers who told them when they were crossing the line instead of just rubber stamping every wild idea coming out of Langley.”

Do the CIA and FBI work together better today than before 9/11? Yes, in many respects. They have often had little choice with the rapid growth of more than 200 Joint Terrorism Task Forces (JTTF) since 1980. In the JTTFs, the FBI and CIA are only two of more than 30 law enforcement and intelligence agencies supplying analysts, investigators, linguists, and hostage rescue specialists, to combat international terrorism directed at the homeland. Since they do not run the operations, their sniping at each other is not as evident. But that does not mean the JTTFs are free of finger pointing between all the partners. For instance, a 2009 arrest of three Afghans in a terror plot in New York City was widely heralded as a law enforcement triumph, but I discovered that FBI agents were privately furious at New York Police Department detectives for blowing a chance to snare a larger terror sleeper cell.²³

Infighting among those tasked with enforcement makes it exponentially more difficult.

The rivalry for control of operations and investigations between the two 900-pound security gorillas in the U.S.—the CIA and FBI—continues. So does the desire to take credit for successful missions and put the blame on the other for failures. There are billions in annual budgets at stake and the reputation each seems jealously to guard. “They don’t make us better,” one retired CIA analyst contended in a conversation I had this summer. “They just compromise what we do best.”

That attitude cannot be eliminated through any series of bureaucratic reforms suggested by presidential commissions and Congressional hearings. It is a shame, however, because the failure of the country’s two premier national security agencies to work together seamlessly to fight terrorism and today’s enormous criminal cartels only works to the benefit of America’s many enemies. Crime and punishment is a difficult enough subject when the targets are international terrorists. However, infighting among those tasked with enforcement makes it exponentially more difficult.