1. The CIA Code Thief Who Came in from the Cold

    September 22, 2012

    There is a great article written by intelligence historian and author David Wise in the current edition (October 2012) of Smithsonian Magazine about the spectacular rise and precipitous fall of one of the CIA’s former top “black bag” artists, Douglas Groat, whose specialty was the theft of the codes and cipher materials from foreign government embassies and consulates outside the United States. The term “black bag” refers to the little black bag that professional burglars use to carry around containing the tools of their trade.

    According to the article, from 1982 until 1990 Groat roamed the world stealing cipher materials. His home base was a nondescript single-story building in Springfield, Virginia where his unit, which the author names as the Special Operations Division, was situated. Groat was involved in the planning and/or the execution of about sixty black bag jobs in Europe, Africa, South America, and the Middle East. The article makes clear that some of these operations were huge successes, with the cipher materials that Groat and his colleagues stole going straight to the headquarters of America’s huge electronic eavesdropping organization, the National Security Agency (NSA), to help the agency’s cryptanalysts break the codes of these countries. But other operations that Groat was involved in were unmitigated failures, like a 1989 mission in Nepal to break into the East German embassy and steal the cipher machine used by the embassy staff.

    But Groat’s career went into a tailspin in the early 1990s. After a black bag operation in the Middle East in June 1990 almost failed because of poor planning, the article describes how Groat and his CIA supervisors engaged in an escalating battle of finger-pointing and accusations of mismanagement leading to his dismissal from the agency in October 1996 with no severance and no pension. Desperate for money, Groat sought to pressure the CIA into giving him a financial settlement by informing selected foreign consulates that he used to steal codes and ciphers for the CIA and that he was for hire. On April 2, 1998, he was arrested by the FBI and he was charged with extortion and espionage for trying to transmit classified information to a number of foreign governments. On September 25, 1998, Groat pleaded guilty to the charges and was sentenced to five years in prison. He was released in March 2002 after serving four years behind bars.

    As a matter of course, the U.S. intelligence community has been stealing foreign codes and ciphers for almost one hundred years. The British intelligence services have been doing the same thing for centuries.

    The earliest example of a black bag operation that I have found in declassified American intelligence files occurred in June 1916, when agents belonging to the predecessor of what is now the FBI stole a copy of the latest edition of the Mexican consular code by stealing them from the pocket of a Mexican diplomatic courier as he cavorted with what were described as “fast women” in a Texas border bordello. If you want to know more, there is a great article in the internal NSA publication Crytologic Quarterly about the historical importance of these clandestine “black bag” jobs to NSA’s codebreaking efforts over the years.

    Fast forward to today, and the U.S. intelligence community is still engaged in these so-called “surreptitious entry” because they are now recognized as an essential adjunct to NSA’s codebreaking efforts. A 1996 report by the House Intelligence Committee stated that “Arguably, a clandestine service’s greatest contribution to intelligence is the compromising of codes. The proliferation of sophisticated cryptographic systems ensures the growing importance of this role of the [CIA] Clandestine Service.” So American “black bag” artists are still plying their trade to a greater degree than at any time in the past. The CIA remains responsible for conducting these highly classified operations overseas, while the Federal Bureau of Investigation (FBI) performs the exact same function inside the U.S. and its territories.

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