4 April 1998
Source: Hardcopy The New York Times, April 4, 1998, pp. A1, A9

# C.I.A. Charges Dismissed Spy Yielded Secrets

By TIM WEINER

WASHINGTON, April 3--A veteran officer of the Central Intelligence Agency, enraged by his dismissal, tried to extort $500,000 from the C.I.A. in exchange for his loyalty and, when the agency would not buy his silence, told two foreign nations how the United States spied on them, officials said today.

The case of Douglas F. Groat, 50, who was arrested on Thursday, is the third in four years involving major espionage at the C.I.A. Mr. Groat, a $70,000-a-year technician who had worked undercover abroad for most of his 16 years at the agency before he was dismissed in October 1996, faces the death penalty if convicted of spying.

The Director of Central Intelligence, George J. Tenet, called the case "extremely serious" but said he did not yet know how deep the damage ran.

The C.I.A. is still recovering from the treason of one turncoat, Aldrich H. Ames, who caused the deaths of a dozen foreign agents, and another, Harold J. Nicholson, who gave Russia the names of three years' worth of graduates from the agency's school for spies.

"During Groat's employment with the C.I.A.," said Wilma A. Lewis, the United States Attorney for the District of Columbia, "he participated in classified covert operations aimed at the penetration of cryptographic systems of foreign governments." In other words, Mr. Groat's job was to be a thief, stealing and cracking secret codes.

Mr. Groat, an Army officer, a police officer, a county sheriff's process server, a prison guard and a United States marshal in the eight years before he joined the C.I.A. in 1980, stands accused of extraordinary crimes of espionage.

Code-stealing and code-breaking are among the most secret operations of United States intelligence. They allow the United States to read the mail and eavesdrop on the conversations of foreign governments.

Disclosing the ways in which United States intelligence does this work could shut down operations aimed at the governments under surveillance. The statutes forbidding those disclosures allow the death penalty for doing so.

Shortly after noon today, in a Federal courtroom shielded by thick, bulletproof glass, Mr. Groat, wearing blue prison garb, a short beard and a dark mien, entered a plea of not guilty through a public defender.

Eric Dubelier, an assistant United States Attorney, had no problem persuading Judge Norma Holloway Johnson of Federal District Court here to order Mr. Groat held without bond: Mr. Dubelier called the defendant "a danger to the community."

"He is trained in traveling in false identity, and deception," the prosecutor said. "He has no ties to the community and he possesses sensitive classified information."

The Justice Department and the Federal Bureau of Investigation, whose agents arrested Mr. Groat, were unusually secretive about the case. They said that to disclose which nations were tipped off by Mr. Groat, or where he had served overseas, would gravely endanger American national security.

Ms. Lewis called the case "an extremely sensitive matter." Mr. Dubelier said the Government would invoke the Classified Information Procedures Act, which is designed to shield Government secrets from disclosure at a public trial.

The Government unsealed an indictment today containing a few bare facts. Only four pages long, it said that in March and April 1997, Mr. Groat had told two foreign governments about how the United States went about "the targeting and compromise of the cryptographic systems" those nations used. That the charges were brought in the District of Columbia strongly suggested that Mr. Groat had approached two foreign embassies within the capital offering secrets.

The indictment ended with a startling paragraph charging that for nearly two years, from before his dismissal until a few weeks ago, Mr. Groat threatened to tell foreign intelligence services what he knew unless the C.I.A. paid him "for his silence in excess of five hundred thousand dollars." The accusation of blatant extortion by an intelligence officer is unique in the publicly recorded history of the C.I.A. It is unclear how Mr. Groat is believed to have made his threats, although it appears likely that he made them without revealing his identity to the C.I.A.

Mr. Tenet spoke to the agency's employees for about five minutes on a closed-circuit broadcast at the C.I.A.'s headquarters in Langley, Va., at about 12: 30 P.M. today, as Mr. Groat's court session ended.

"While the allegations in the case are very serious," Mr. Tenet said, "I want you to know that I know that this is not a reflection on you--the most dedicated, loyal and honorable group of men and women I have ever known."

But the case, if proven, may reflect poorly on the handling of a distressed, disgruntled and dismissed intelligence officer. It will inevitably be compared to the strange career of Mr. Ames, a C.I.A. officer arrested in February 1994 and serving a life sentence. Mr. Ames spied undetected for Moscow, for nearly nine years, rising to extremely sensitive positions despite his drunkenness, sloth and seething resentment at the agency. It may also be measured against the betrayal of Mr. Nicholson, a former station chief who sold a wealth of knowledge to Russian intelligence, starting weeks after Mr. Ames pleaded guilty. Mr. Nicholson is serving a term of more than 23 years.

The case also revealed an aspect of the agency's work that it never discusses publicly: eavesdropping on allies and enemies alike with electronic technicians.

Unlike Mr. Ames and Mr. Nicholson, who worked in the C.I.A.'s directorate of operations, Mr. Groat worked at the little-known directorate of science and technology. The directorate is concerned largely with inventing new gadgets and using existing ones to spy on people, places and things of interest to United States intelligence. Its personnel stationed overseas often use a thin cover, posing as Government "communications officers."

Mr. Groat's resume suggests he never found his station in life until he joined the C.I.A. He was born in 1948 in Niskayuna, N.Y., and graduated from Scotia High School, outside Schenectady, in 1965. He enlisted in the Army in 1967, was commissioned as a second lieutenant and left active duty as a captain in 1972. He attended at least three colleges before obtaining a liberal arts degree from the State University of New York in 1978.

Between 1972, when he left the Army, and 1980, when he joined the C.I.A., he held four law-enforcement jobs, none for long: as a police officer in Glenville, N.Y., between 1973 and 1976; after graduating from college, as a process server and a correctional officer for the Schenectady County sheriff, and as a United States marshal based in Phoenix.

Entering the C.I.A. in May 1980, he spent most of the next 13 years as a technical operations officer.

Something went wrong for Mr. Groat in 1993--citing privacy laws, the agency would not say today what --and he spent the next three years on administrative leave, losing his fight against dismissal in October 1996. A few weeks before that, he was divorced. By then, the indictment charges, he was already extorting the C.I.A. and threatening treason.