The Family Jewels (3 page)

Note that all of this took place as the Watergate scandal began to boil over, after six months of more or less successful White House efforts to keep the lid on this potent political threat, which flowed from the Nixon presidential campaign as well as his efforts against activists opposing the Vietnam war. Scandal became a real possibility once a gang of campaign-employed burglars was arrested inside the offices of the opposition political party, the Democratic Party, on June 17, 1972. The party's offices were located in a building along the Potomac known as The Watergate, and “Watergate” became the shorthand for the whole complex of political skullduggery carried out under President Nixon. The trial of the Watergate burglars began on January 10, 1973, ten days before Mr. Nixon's re-inauguration and three weeks ahead of Schlesinger's swearing-in at Langley. Jim Schlesinger had nothing to do with the Watergate burglars or break-in, and he knew nothing about their activities for the CIA during the Helms era. In February the U.S. Senate empaneled a committee to explore the scandal in all its ramifications.

Watergate loomed as an issue that could implicate the CIA, and the agency knew of journalists' inquiries while Helms still headed it. Notes taken at the CIA director's
morning staff meeting show that on January 18, 1973, senior aide John Maury told the group that Seymour Hersh had asked Representative Lucien N. Nedzi (D-MI) about allegations of extensive domestic spying. Nedzi headed a panel of the House Armed Services Committee then in charge of monitoring the CIA. Richard Helms responded by asking senior officials to see Nedzi and brief him on what the agency did and did not do within the United States. Next day Director Helms confirmed his order. Nedzi wanted CIA's presentation made to his full subcommittee. That had yet to happen when James Schlesinger took over on February 2. Six days later Maury, the CIA legislative liaison chief, reminded the group of the impending House briefing. At that point the head of CIA's analytical unit, Edward Proctor, suggested that an internal review identify what in fact the agency was doing at home. That way “marginal” operations could be eliminated and the CIA would look sharper. Thus the idea of a “Family Jewels” document was already in the wind.

Schlesinger's avowed determination to pare back the CIA alarmed its allies in Congress. They scrutinized his actions closely. Director Schlesinger was called to testify before the then-secret subcommittees of Congress concerned with U.S. intelligence—like Nedzi's—almost monthly during this interval. That put Schlesinger on notice that controversial CIA activities could threaten his entire program. Agency people knew this danger as “flap potential.”

Just three months into Schlesinger's tenure at Langley, on April 27, 1973, the Department of Justice revealed in a memorandum to the judge presiding at the trial of the Watergate burglars that in the fall of 1971 the same men, then working directly for the White House, had burglarized the offices of the psychiatrist who treated antiwar activist Daniel Ellsberg. Ellsberg had infuriated the Nixon White House by leaking the Top Secret study of U.S. policy in the Vietnam war known as the Pentagon Papers. Next, on May 2, the federal grand
jury considering Watergate indictments learned from a key figure in the burglaries, former CIA officer E. Howard Hunt, a White House official and then–Nixon campaign intelligence operative, that he had received CIA help on the Ellsberg break-in.

All this stunned Director Schlesinger, who summoned the acting chief of the agency's Directorate of Plans
¹
and asked him what was behind the story. That man, Cord Meyer, Jr., confirmed Hunt's testimony: the agency had furnished him a camera, disguise materials, and false identification. Later investigations established the assistance had followed a telephone conversation between Nixon's domestic counsel, John Ehrlichman, and CIA deputy director General Robert Cushman, followed by a Hunt call to Cushman, both in July 1971. Director Schlesinger learned separately, at almost the same time, that CIA scientists had prepared a “psychological profile” of Ellsberg for the White House. Furious, Schlesinger ordered Meyer to review the agency file on “Mr. Edwards,” the cover identity given to Howard Hunt.

As he examined the Hunt file, Cord Meyer discovered photographs of a building. They were of the sort often used to plan covert operations. The setting clearly seemed to be the American West, perhaps California. The agency's photo labs, it turned out, had developed Hunt's pictures used to prepare the break-in. Astonished, by his own account, Meyer reported this new information to an incredulous James Schlesinger.

“What else have you people been hiding from me?” Director Schlesinger retorted.
²

Meyer's boss at the time, Deputy Director for Plans William E. Colby, was in Thailand on a Far East inspection trip. In a Bangkok newspaper, he read of Hunt's testimony and the CIA assistance on the Ellsberg break-in. As the agency's executive director in 1972, under orders from Director Helms, Colby had been point man for all Watergate-related CIA matters. Colby had briefed Schlesinger on what he thought
was the whole story, but he, too, had known nothing of the Hunt problem. Colby immediately dropped his inspection and returned to Washington. He saw Schlesinger. The new director demanded the inside scoop—as Colby recounts, “We would tear the place apart and ‘fire everyone if necessary,' but we had to find out whether there were any other such questionable or illegal activities hidden in the secret recesses of the clandestine past.”
³
They might explode at any time.

Colby drafted an order to make Director Schlesinger's wish a reality. Schlesinger and Colby finalized the directive, which the DCI issued on May 9, 1973. The same day Schlesinger made another of his appearances before the Senate Appropriations Committee and used the opportunity to declare he was imposing fresh controls on the agency. Referring to both this Capitol Hill testimony and the press reporting on the CIA and Howard Hunt, the Schlesinger directive not only prohibited all domestic operations, it ordered all “senior operating officials of this Agency to report to me immediately on any activities now going on, or that have gone on in the past, which might be construed to be outside the legislative charter of this Agency.”
⁴

Every CIA officer was enjoined to contact Schlesinger's office if he or she had knowledge of such activities, and exemployees were invited to do so as well. Anyone given an order going beyond the charter should call immediately. Mr. Schlesinger supplied his telephone number for that purpose. “With that directive,” Colby recounts, “the CIA ‘family jewels' were born, and led inexorably to a year of Congressional investigations and a whole new status for American intelligence.”
⁵

Bill Colby took the lead in assembling The Family Jewels. He was assisted by CIA Inspector General (IG) William V. Broe and his staff. A second Schlesinger order demanded information on any contact between any CIA employee and any of the individuals implicated in Watergate. The IG staff
ranged back over the minutes of the CIA director's daily meetings and extracted items that seemed to fill the bill. Each CIA directorate or division chief wrote a paper recounting activities that fell within the scope of the directive, and provided attachments that illuminated their summaries. Here fear played its role—fear of falling to Schlesinger's ax—as well as CIA officers' disdain for the director, inclining agency barons to report only the bare bones of many escapades. “Down in the directorates,” Bill Colby recalled, “they were upset that this could drag out a lot of things.”
⁶

Thus the actual, original Family Jewels amounted to a flawed product, merely scratching the surface on key points. Bill Colby surveyed the reports and asked for amplification where he felt it necessary. Here again The Family Jewels suffered because a number of activities it detailed had peaked during the 1960s, when Colby had been preoccupied with Far Eastern matters; or in the period from 1968 to 1971, when he had actually been in South Vietnam, assigned to run pacification programs. In important instances Colby did not know what to ask for. The various submissions were bound together to create the final document, a massive compendium of 693 pages. The Family Jewels went to the CIA's executive management committee on May 17. Despite its length, Colby was unimpressed: “I remember my impression after looking at the whole set of items was that they were pretty small potatoes. They really were.”
⁷
But not having pursued knowledge of the underlying programs, and with little sense of American public attitudes, Colby actually missed the full implications of what he held in his hands.

It turned out that CIA activities with “flap potential” were many, not few. They included activities to thwart journalists and to sway opinion; an intrusive operation that built files on Americans based on physical surveillance, or on opening their mail; hostile CIA interrogations; drug experiments on Americans, witting or not; infiltration of political groups
opposed to the Vietnam war, plus assistance to other federal agencies performing similar roles; CIA subsidies to Nixon White House political operations; and more. Agency intelligence circulated to other government bureaus such as the FBI had fueled further domestic intrusions. Some activities, such as assassination programs, were entirely excluded. The CIA employed tactics including telephone wiretaps, illegal under the 1968 Omnibus Crime Act; spying on Americans inside the United States; break-ins; coordination with local police units; and the specific techniques required for the political surveillance programs. All of these activities were explosive in themselves, the compendium more so. The Family Jewels is probably the most sensitive secret document ever produced by the Central Intelligence Agency.

In the meantime Watergate upheavals brought William E. Colby to the head of the CIA. The resignation of Attorney General Richard Kleindienst at the end of April led Nixon to shift his secretary of defense over to head the Justice Department. The president then named James R. Schlesinger to lead the Pentagon. Colby was promoted to Director of Central Intelligence. Thus it was Bill Colby who would deal with the fallout from The Family Jewels and answer the questions that arose from the projects the documents revealed.

Before the change of command, Jim Schlesinger and Bill Colby agreed that the results of their inquiry should be shared with congressional overseers. Colby, who faced confirmation hearings and whose last Vietnam tour had been contentious (due to assassination charges connected to the notorious Phoenix program), was especially concerned to smooth his way on Capitol Hill. Consequently he took up The Family Jewels with key senators and congressmen. Most were content to listen to the CIA officer's basic briefing,
⁸
but Lucien Nedzi wanted more. On May 23 Colby and Inspector
General Broe met with Nedzi for two hours and described the data on CIA illegalities in detail, including the most sensitive sections. By Broe's account, Colby described the compendium as “descriptions of activities (especially involved in the domestic scene) that had flap potential.” Colby and Nedzi discussed the material item-by-item, “and in most cases [Nedzi] actually read the text.”
⁹
The congressman had many reactions—some no doubt unprintable—but also not detailed in Broe's record. He demanded a copy of the original order to compile The Family Jewels plus more information on ten issues raised in the documents. Nedzi also suggested making the information public. Obviously, from 1973 until 2007 the CIA resisted doing that.

With one exception Congressman Nedzi agreed to follow the CIA's lead in keeping quiet about the Family Jewels. The exception was Watergate. Nedzi was holding hearings to investigate the agency's role in the political scandal. He was especially interested in the CIA's handling of a series of letters it received from White House Plumber (and former CIA officer) James McCord during the months after his arrest in the Watergate burglary. Nedzi demanded testimony on that. A hearing was held. Colby had Howard Osborn, CIA security chief, swear out a deposition on the letters and the agency. Osborn, Broe, agency General Counsel Lawrence Houston, and other officials duly appeared. Nedzi went ballistic over the failure to report McCord's letters to FBI Watergate investigators.
¹⁰

Apart from taking testimony on the letters, however, Nedzi and his secret CIA subcommittee took no action other than to report on the agency's Watergate issues.
¹¹
In particular they did nothing in public. Relieved it had “informed” legislative overseers while successfully keeping the lid on the Family Jewels, the CIA did nothing further. Director Colby did promulgate orders confirming prohibitions already issued on the underlying CIA abuses. Until that fateful day
in December 1974 when Sy Hersh published the first of his articles in the
New York Times
, nothing was known of the Family Jewels, including at the White House. Schlesinger apparently rejected informing the president, and Colby never thought of it. The question, he recalled, “Just never arose; never answered the question, never even posed the question.”
¹²
The several investigations of the Central Intelligence Agency that proceeded through the year 1975 would result from the combination of a blindsided president, CIA reporting that merely dipped into the programs, and the public outrage that followed revelation of some of the abuses.

2

THE FAMILY JEWELS

The White House Reacts

Director Colby knew of the December 1974
New York Times
story that revealed The Family Jewels. Seymour Hersh had approached him to ask questions, and later for comment on the allegations. The spy chieftain attempted to dissuade the journalist from submitting the story as he had it, arguing that Hersh was mixing very different elements into the same stew: the CIA investigating whether foreign nations controlled the antiwar movement, its efforts to plug leaks, and its work to counter espionage. Hersh was not impressed, nor were his editors. The
Times
went with the story they had, and added to it over succeeding days. Once the series was published, not only did the reporter's take seem justified, but more abuses surfaced: the CIA mail-opening and its drug experiments on unwitting Americans. The charges were explosive. Coming on top of Watergate, controversy over CIA complicity in the 1973 Chilean coup, long disquiet over the CIA's role in Vietnam, and, starting from the Bay of Pigs fiasco, years of gradual exposure of covert adventures, the Hersh articles created a public uproar.