Special Editions 2.2.20
Ep 37 | 2.2.20

Eric Haseltine on his book, "The Spy in Moscow Station."


Dave Bittner: [00:00:04:20] I'm Dave Bittner. In this CyberWire special edition, an extended version of my interview with Eric Haseltine. He's former director of research at NSA, and prior to that, was executive vice president of Disney Imagineering. His new book is "The Spy in Moscow Station: A Counterspy's Hunt for a Deadly Cold War Threat." A shorter version of this interview originally aired on the January 17th 2020 edition of the CyberWire daily podcast.

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Eric Haseltine: [00:01:48:06] The book is about a six year hunt for a devastating leak in our national security that was getting a lot of our assets, that is, Russian citizens who were spying for us, arrested and executed. And what motivated me to write the book is that when I was at NSA, I got the very strong impression that certain countries, especially Russia, were far advanced in certain kinds of spy tradecraft over us, and I needed to raise people's awareness of it. And that was the main reason that I wrote the book and that the main character in the book, Charles Gandy, wanted to have his story told.

Dave Bittner: [00:02:30:19] Well introduce us to Charles Gandy. What was his background, what was the type of work that he was doing?

Eric Haseltine: [00:02:36:12] Well to understand him, you have to go back to his childhood in very rural Louisiana. He grew up in a fairly poor family, who had lots of debt and he had a learning disability. He couldn't read very well at all and his teachers thought he was too stupid to finish high school, let alone ever go to college. They told him he'd never go to college. So it turned out, he's a genius, but he has dyslexia which I diagnosed myself as a neuroscientist a few years ago. No-one had ever told him this, but why that's important, is that that made him never wanna fail at anything. He had something to prove to the world. To prove to the world that he had something to offer.

Eric Haseltine: [00:03:23:04] So, he once told me that in his whole career at NSA, which spanned from 1955 to 1986, so over thirty years, he never failed at a single thing he set out to do, which was quite remarkable, because he was thought of as the kind of genius wizard of NSA. He was like the, in the Mission Impossible, the Tom Cruise character. He was like that. He was like a legend, a god at NSA. And one reason is, he was driven. And that was an important part of this story, is like all good stories, it's about someone who you care about who faces seemingly insurmountable obstacles. But because of their sheer determination and the heart that they have, they ultimately overcome.

Dave Bittner: [00:04:12:04] Well, set the stage for us. The story you tell here in the book about secrets being captured by the Russians.

Eric Haseltine: [00:04:20:24] Yeah, the book starts in 1977 when the head of the CIA in Moscow, we call that the chief of station, a guy named Gus Hathaway, started having his assets, those are the people in Russia who spy for us, for CIA, they were being arrested, interrogated, tortured, and executed in very large numbers. And it was so bad, that the CIA director Stansfield Turner, shut down all human intelligence operations in Russia. So in desperation, Gus Hathaway reached out to the only person he knew of in the intelligence community who had the skill and the motivation to get to the bottom of how the Russians had penetrated us.

Eric Haseltine: [00:05:09:14] And so he put in a call to the director of NSA to ask for Charles Gandy by name. And so shortly thereafter, Gandy got on a plane to Moscow and started investigating what could be happening in our embassy that would tell the Russians who our human assets were.

Dave Bittner: [00:05:29:16] Now, an important part of the story here is, is this sort of inter-agency rivalry, and perhaps even it's fair to go so far as to say adversarial relationship between NSA and the CIA?

Eric Haseltine: [00:05:45:20] That's right. It's an unfortunate truth in Washington, that we say "Where you stand is where you sit." In other words, the approach that you take depends on what your kind of naked self interests are as a bureaucracy. And starting in the '70s, the relationship between NSA and CIA started deteriorating rapidly, because NSA got very powerful, and started doing things the CIA thought were on their turf, and also not telling them what their raw intelligence was, just giving them their opinion of what the intelligence was. So there was a lot of friction there, but there was also friction between all of the intelligence agencies and the State Department, because intelligence services, it is rumored, operate out of embassies, so the people in the State Department who run those embassies, and their job is to build good relationships with their host country, having spies, if you will, in their embassies spying on the very people they're trying to make friends with, is a problem.

Eric Haseltine: [00:06:47:17] And so there has always been, and will always be, very strong tension there. And then you've got the FBI. You know, I remember being at a meeting, I, as an intelligence officer with CIA guys, met with some FBI people on an issue we were working, and it hit me that they're upstanding law enforcement people at FBI who strongly believe in right and wrong and in catching criminals. We, as intelligence officers on the other hand, kind of are criminals, you know, when you think about what we do. So there's a tension there too between the intelligence services and the FBI, and in this book those tensions really got in the way of getting to the bottom of what the leak was actually about.

Dave Bittner: [00:07:35:03] Well, take us through the story, I mean give, give us an overview of, of how this all played out.

Eric Haseltine: [00:07:41:08] Well, Gandy went to Moscow in the spring of 1978. And it just so happened that when he was there, they broke into a false chimney, because someone had heard noises there. And they found an antenna and some electronics connected to that antenna, that were clearly some kind of eavesdropping device the Russians had snuck into the embassy, and it was pointed at the Ambassador's office. Gandy actually got his hands on the antenna and listened through it with his special gear, and he figured out what was happening. And what he figured out was, that the Russians had got some kind of implant that was listening to some kind of text device. It could have been a printer, could have been a typewriter, could have been an enciphering machine, and they were sending it out in bursts. And they were very, very difficult to detect. And the way they did it was genius. He just completely marveled at the way they did it.

Eric Haseltine: [00:08:39:19] I won't go into the technical details of it. It's a little technical, but it was, basically, what they did is that they hid in plain sight. They did it in a way that they kind of self-jammed themselves with the radio broadcasts that were going on in Moscow, and then in this box next to the antenna, they filtered out their jamming, so only they could hear the signals.

Dave Bittner: [00:09:02:21] I see.

Eric Haseltine: [00:09:03:01] So he knew, so he went to the chief of station and said, this is what's happening, and basically, nothing was done, and no one believed him. And people continued to get arrested, and there continued to be problems, and this, this whole thing did not get resolved until six years later, because a lot of what was happening, the CIA said, "Well, no. What he's talking about didn't really happen. What he saw didn't really happen." And it was because of this turf fighting that was going on. The State Department really didn't want it known that their embassy was insecure, because this was then their fault. So they suppressed the information.

Eric Haseltine: [00:09:42:10] But what happened was, in 1983, the French discovered an incredibly sophisticated Russian bug in one of their embassies and told the head of NSA about it, and they sent it to Gandy, and they said, "Hey, you got to do something about this." But what had turned out to happen in about 1981 or so, the director of CIA was so ticked off at Gandy and the trouble that he was making about this problem, that he ordered NSA to get out of the business and to stand down.

Eric Haseltine: [00:10:16:12] And so when the French bug came and the head of information security at NSA, a really colorful guy named Walt Deeley, came to Gandy and said, "Well, you got to get all over this. If they're doing this to the French, who are a third-rate power, what are they doing to us? They must have stuff there we can't even find." And Gandy said, "I can't. The CIA director has told me, can't do it." And Walt Deeley says to him, "What would it take?" And jokingly, Gandy says, "Well, you'd have to get a letter from President Reagan." So three days later, Deeley comes back, and he has a letter from President Reagan. He had gone to the White House and gotten Reagan to sign a letter authorizing Gandy to go over to Moscow and solve the problem.

Dave Bittner: [00:11:00:09] This is a risky move on, on his part to, to, to go over peoples heads, to, to the President himself. There could have been repercussions for this, yes?

Eric Haseltine: [00:11:09:14] Absolutely. It was a huge career risk, because he went over his boss's head at NSA, the secretary of defense, the national security adviser. But Deeley was a guy who was a really rough character. He had no college education originally, he joined NSA as a sergeant and clawed his way up to be the number three official at NSA. And he was a street fighter. He really was a tyrant, and you can think of him as kind of a Patton-like character.

Eric Haseltine: [00:11:38:12] And it reminds me of something Admiral King said about warfare in the Atlantic during World War II. He said, "When the shooting starts, go get the sons of bitches." And there's no doubt that that was Deeley. And you know, he didn't care what people thought of him. He cared about the mission, and he was going to do what he thought was right and he didn't care what anyone else thought. And that's a tough person to work with. But in cases like this, that's what you have to have. And although the story is mostly about Gandy, in a way, Walt Deeley is the real hero, because he had the courage to go to the White House and get this thing unstuck.

Dave Bittner: [00:12:15:07] And what was the fallout after that? The, the different agencies having to, to , you know, have their, the revelations of the in fighting and so on and so forth, how did all that play out?

Eric Haseltine: [00:12:28:10] Well the way it played out was, I have a chapter in there called Putting the Smoke back in the Gun. Secretary Schultz at the state department was aware of what Gandy was doing, and said, "I don't want to hear about this unless you bring me a smoking gun." So they did. Gandy and his team found the implant in this certain kind of device, and wrote up a report which actually had crossed pistols with smoke rising from the guns, and it was called Project Gunman. It was an in your face. You asked for a smoking gun, here's your smoking gun. And it was incontrovertible proof, they had found it.

Eric Haseltine: [00:13:04:08] Well, what happened was, State Department said "Okay, well, but nothing very important was ever typed, you know, put in on those devices." And CIA said, "We don't believe it. We think Gandy hired a contractor to do this, so he could find it and get all the credit and budget and make us look bad." CIA never believed it. And so, the short answer is, nothing was done and in frustration, Walt Deeley leaked this to Dan Rather at CBS and in March of 1985, Dan Rather went live with it, saying our Moscow embassy has been compromised. Well that raised a huge stink and there was a Presidential commission to look into it and the bottom line was, about five or six years into this, some small reforms were made at State Department, but not really.

Eric Haseltine: [00:13:58:15] So, at the end of the day they found the leak, they plugged the leak, but no-one changed their behavior at all. And this again, is one of the reasons we wrote the story. I wish it had a better ending, but it is a cautionary tale of when internal turf wars and politics get in the way, our adversaries win and we lose.

Dave Bittner: [00:14:19:02] And what is your sense of where things stand today in terms of the, the communications and collaboration between our own intelligence agencies?

Eric Haseltine: [00:14:27:22] It's very poor, in my opinion. In fact, I wanted to write this book, when I first learned about the story, after I left the government and Gandy said, "No, you're going to destroy the relationship with CIA and NSA." And I said, "That's impossible." He said, "What do you mean?" I said, "Well, in, you know, after 9/11, I was head of science and technology at NSA. I went to my counterpart at CIA, a deputy director there and I said, 'Hey, let's cooperate.' And he said, 'Al-Qaida's our target. You're our enemy. Get out of here.'" And, you know, I found that to be the case today. And so, nothing has really changed. And the reason is, human behavior doesn't change. We reward individuals at agencies for being competitive, for getting more money and more staffs for their mission, and then we're surprised when they're competitive with other agencies whose mission overlaps with theirs.

Eric Haseltine: [00:15:20:01] It's not the people in the agencies that I think are at fault. It's the system that is set up in such a way, that we foster competition, not cooperation, despite what you may have heard after 9/11. I can't tell you how many meetings I was in across the intelligence community after 9/11, where someone would say, "Oh, I guess it's going to take another 9/11 to get us to cooperate." And I would say, "Wasn't one enough?"

Dave Bittner: [00:15:47:21] What is your sense of how things operate on the other side? Do the Russians deal with this same sort of in-fighting, or is that, is it not a problem for them?

Eric Haseltine: [00:15:57:09] Everybody deals with this sort of in-fighting. You know, we are tribal in our DNA. And in any organization, you're going to find this kind of tribalism. You have mafias, cadres, cliques, rat packs, whatever you want to call them, that's the real world. And the same is true, even inside NSA. Someone said, you know, "It's at Fort Meade, Maryland" and someone said "It's not a fort at all, it's just a collection of tents," meaning these little pockets, these spheres of influence. At NSA, for example, there's a math mafia of mathematicians, and there's a language mafia of linguists. At CIA, you have the operators, the high prestige case operators who actually operate spies, and then you have the S&T, science and technology geeks, and you have the kind of academic analysts.

Eric Haseltine: [00:16:48:02] So, really, at every level organizationally you have tension, and the Russians definitely have this. GRU, which is their military intelligence, is very competitive with both the FSB and the SVR who are the more civilian-oriented intelligence services. And then, within each of those services. So it's universal. Thank god we're not the only ones who suffer from it.

Dave Bittner: [00:17:15:09] One of the last chapters in the book, the, the last proper chapter, is titled "Lessons about the Russians for Today." And you set the scene of, of you sitting with, with Charles and his wife Freda at their home, sort of being retrospective, the group of you and you're wondering you know, "What can we learn from, from these lessons from decades ago for this situation that we find ourselves in with the Russians and things like election interference?" Can you share some of those conclusions that, that you all reached?

Eric Haseltine: [00:17:49:11] Yes, thank you for asking that, because that to me, is kind of the most important takeaway of this book. It's very relevant today. First of all, when you look at what happened, the Russians got extremely aggressive in penetrating us. And when we caught them, what happened was, we pointed fingers and blamed each other and made ourselves even weaker. So what we taught the Russians forty years ago, is get very aggressive and the worst that will happen is your adversary, America, will tear itself apart. So this event that happened forty years ago almost certainly motivated the Russians immediately after, up to today, to do this kind of thing.

Eric Haseltine: [00:18:29:19] So, when you look at the election, it's just one in a series of things where they say, "Gee, if we don't get caught, we get really good information and we keep getting it. We're stealing stuff from the Americans. If we do get caught, they'll tear themselves apart. What's not to like?" So now you understand, I think, a little bit more of the context of the election. But the other thing I talked about is what I call the cyber blind spot. In America, when we look at networks and security and communications, we think of it as ones and zeros, digital. And they do too, the Russians, but they also look at it as electromagnetic energy, so they look at a computer as something that can send and receive electromagnetic energy, in addition to the bits that go over the wires with the fiber.

Eric Haseltine: [00:19:18:14] So they're able to exploit computers and networks. For example, I talked about in the book, something called radar flooding, where you can take an information system at some significant distance, point a radar at it, even if it's air gapped, meaning it's not connected to any other network, and you can listen to what's going on in that computer bus or on a cable coming in and out of the computer. And most people aren't even aware that this is physically possible.

Eric Haseltine: [00:19:47:11] The Russians teach it in freshman information security at almost every university. In this country, nobody even knows about it. So I call that a cyber blind spot. That they have a lot more ways of attacking us than we are, almost everybody in this country, is aware of. And so I think those are kind of the takeaways that the way that they did this attack and other attacks on the embassy, are very relevant today and in forty years, you know they have gotten a whole lot better at it.

Dave Bittner: [00:20:18:08] What is your outlook? I mean, as, are we doomed by the nature of us being humans with these, these tribal tendencies? Are we always going to have this in-fighting? Is, is there any hope for, for working beyond this and everybody working together?

Eric Haseltine: [00:20:35:11] We're never going to stop people from being tribal. The question is, whether we let it hurt us more than it helps us. A certain amount of competitiveness is really good. I mean, if you think about us, put aside government and all that, we are a social species that strikes an equilibrium between cooperation and competition. We cooperate when we hunt, which makes us good hunters. We cooperate for safety in numbers. But we also compete to make sure that the best genes get into the next generation. So this is the way nature is with all social species. So competition by itself is actually a healthy thing, when kept in check.

Eric Haseltine: [00:21:14:15] The problem is that most of the leaders in Washington are outwardly focused. In Washington, we're consumed by what we call the optics. How will this look in Congress? How will this look to the American people? How will this look to the Washington Post? We don't think about looking down and saying, "How do we get our people to cooperate more than they compete?" In the intelligence world, competition is actually essential. You don't want group think. You don't want everybody reaching the same conclusion, because they're all on the same page. You want a diversity of opinions. You want there to be tension, because no one gets it right all the time. And in fact that's why CIA was created. The Washington establishment realized that if the Pentagon was the only one who got to say what the Russians were doing, they would naturally say, "Oh the Russians are going to wipe us out tomorrow", in order to get bigger budgets. So they created CIA to be a counterweight to that.

Eric Haseltine: [00:22:12:05] So, it's not a matter of whether tribalism is bad. Tribalism is a fact of life. It's going to be there forever. But great leaders learn how to harness that and turn it in a positive direction. And there are ways of doing that, for example, having a kind of a competition to see who can get something first, but to also reward cooperation in that competition. So I think that's the important point. If you try to fight human nature, you're going to lose every time. You can't fight it, it's a wave. So instead of being swamped by that wave, you have to learn how to surf that wave.

Dave Bittner: [00:22:49:04] Oh, that's a great analogy. All right, well, Eric I think I have everything I need for the story. Is there anything I've missed, anything that I haven't asked you that you think it's important to share?

Eric Haseltine: [00:22:59:19] Well, yeah, there's sex in the book.

Dave Bittner: [00:23:06:16] (LAUGHS) Yes, there is.

Eric Haseltine: [00:23:07:12] There is, it's just to titillate you a little bit. Yes, while he was, while he was in Moscow, Charlie got approached by what we call a honey trap. And not just any honey trap, it was this woman who was drop-dead gorgeous, who enticed him in ways that I think the reader will find interesting.

Dave Bittner: [00:23:26:13] Well, but I think that also, besides the, the natural interest in the titillation of it, I think it points to the very real human factor of all of this that regardless of, of all of your training and so on and so forth, we are at our core, you know humans with the impulses and strengths and weaknesses and all those sorts of things we all deal with every day.

Eric Haseltine: [00:23:47:06] Right, and I think that's kind of the main theme of the book, that it's really all about human behavior. The technology is secondary. I mean, the Russians, for example, are the best in the world at the technology of this stuff. But they don't honor it nearly as much as the human. You know, in our business, every time we gave an intelligence brief, we had some kind of satellite photo or something that went with it, even if the picture was more or less irrelevant, because in our country, we don't believe it if we can't see it. In Russia it's the opposite, they don't care about that so much. They need to hear it from a human. So the Russian approach to intelligence gathering is far more human centric as a rule than ours is, and they tend to be much more street smart about the human element to it. And that makes them especially dangerous, because that will always be the Achilles heel of any security system.

Dave Bittner: [00:24:40:09] Well, the book is The Spy in Moscow Station, a counterspy's hunt for a deadly cold war threat. Eric, thanks for joining us.

Eric Haseltine: [00:24:49:12] Thank you, it's been a lot of fun.

Dave Bittner: [00:24:52:04] Our thanks to Eric Haseltine for joining us. The book is "The Spy in Moscow Station: A Counterspy's Hunt for a Deadly Cold War Threat." Thanks to our sponsor KnowBe4. Go to knowbe4.com/ransom and check out their exclusive webinar on ransomware. For everyone here at the CyberWire, I'm Dave Bittner, thanks for listening.