The Thankless Task of Catching a Spy

On the evening of Nov. 12, after most of his co-workers had gone home, Harold Nicholson took a wad of classified papers out of a black folder, placed them on the floor under his desk at Central Intelligence Agency headquarters and snapped them with one of the agency's cameras.

Although he had taken the precaution of first scanning the ceiling as he had been trained to do, Mr. Nicholson failed to detect the other camera in his office.

The scene recorded by the hidden lens is among the evidence the Federal Bureau of Investigation says supports charges filed last week that Nicholson had spied for Moscow since 1994. An FBI affidavit contends that the veteran agent planned to give the film of the papers he photographed to his handlers in Russia's Foreign Intelligence Service, the successor of the Soviet KGB.

Nicholson's lawyers said he would plead innocent today at a federal court hearing in Alexandria, Va., to a one-count indictment accusing him of selling to Russia for $180,000 secrets that compromised the nation's security. Among the disclosures for which he is charged, Nicholson is said to have exposed the identities of CIA agents and sources.

In outlining the evidence, the affidavit by FBI Special Agent Michael Lonergan provides a window into one of the most difficult and least glamorous jobs in the world of espionage: counterintelligence.

The work is painstaking and thankless. While agents plug leaks of vital secrets, prosecutions of double agents also spread serious demoralization within the intelligence community and fuel public outrage against agencies unable to publicize their successes.

A former CIA official who worked with Nicholson in Asia says his colleagues are "completely surprised" by his arrest. "He was the most stand-out red-white-and-blue kind of guy."

Talking about staff at the CIA's training center in Virginia, where Nicholson worked as an instructor, the former official says, "Everybody down there is in a state of shock."

In the Nicholson case, investigators over a 13-month period dissected his personal life and finances, scanned his old reports on meetings with foreign agents, and retraced his posts and travel around the globe during a 16-year career as a CIA field officer, station chief, and instructor. They opened mail he sent, searched his office, bedroom, and van, monitored him with listening devices and cameras, and followed him to Singapore.

Counterintelligence is dogged by a checkered history. On one extreme is the "institutional paranoia" of James Angleton, whose over-zealousness in hunting traitors led to his ouster as CIA counterintelligence chief in 1974; on the other is the sluggish investigation of Aldrich Ames, the agency's most damaging traitor, who went on funneling secrets to Moscow from the time he fell under suspicion in 1989 to his arrest in '94.

Senior officials credit reforms forced on the CIA by the Ames case for what they say was the speed and efficiency with which the case against Nicholson was built.

THE FBI says Nicholson came under suspicion in October 1995 after giving "deceptive" answers in polygraph tests when asked if he was hiding involvement with a foreign intelligence service.

FBI and CIA investigators then began examining Nicholson's reports on official contacts with foreign agents and his financial records. They found that during his 1992-94 stint as CIA station chief in Kuala Lumpur, he met a Russian agent four times. The day after the last meeting, he wired $12,000 into a savings account at a bank in his native Oregon.

"The FBI has been unable to trace the source of this money," says the affidavit, which put Nicholson's salary at $73,000.

An examination of Nicholson's travel, frequent flyer miles, and financial records turned up additional evidence. It showed that during personal trips to Asia in December 1994 and December 1995, he paid hotel and credit card bills totaling more than $78,000.

Suspicions of Nicholson mounted last April, when he was working as an instructor at "The Farm," the CIA's training center in Virginia. During a visit to CIA headquarters, he asked colleagues for data on the war in the Russian republic of Chechnya, saying he needed it for a training exercise.

Co-workers were troubled by the request and reported it, unaware that Nicholson was under investigation.

In June, investigators tailed Nicholson during a personal visit to Singapore. On the morning of June 27, he was seen leaving the Shangri-La Hotel with a camera bag. During the next four hours, he took steps to determine if he was being watched, says the affidavit. He then returned to his hotel.

Several hours later, he returned to the subway station carrying the camera bag. He met another man and together they walked to a car with Russian Embassy license plates. The pair got in after Nicholson threw the camera bag into the trunk. Within days, he made financial transactions totaling $20,000.

Over the proceeding months, CIA and FBI agents conducted computer audits that allegedly showed he had been retrieving material from CIA databases that were unrelated to his new job in the agency's Counterterrorism Center.

Using a court order, agents also broke into his van, where they found a laptop computer and diskette containing copies of classified CIA documents.

The camera was hidden, meanwhile, in Nicholson's office. On Sept. 23, he was seen photographing documents and then again on Nov. 12 and Nov. 13. Four days later, Nicholson was arrested at Washington's Dulles International Airport as he prepared to board a flight for Switzerland. The FBI says he had set up a rendezvous in Switzerland with his Russian handlers by means of a postcard that agents had intercepted in August.

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