Sunday, August 29, 2004

Oregon Live: 03-16-01 Oregon FBI agent gets job as nation's top spy fighter

Oregon Live: 03-16-01 Oregon FBI agent gets job as nation's top spy fighter: "David W. Szady is the lead on the Larry Franklin Israeli Spy - Mole Case. JBOC

Oregon FBI agent gets job as nation's top spy fighter
Counterintelligence expert David W. Szady takes a new post protecting national secrets from domestic and foreign intrusion

By Mark Larabee of The Oregonian staff
FBI chief Louis J. Freeh on Thursday named David W. Szady, Oregon's top FBI agent and a counterintelligence expert, to the newly created post of coordinating the government's spy-fighting efforts.

As the nation's first governmentwide counterintelligence executive, Szady will be charged with identifying the nation's crown-jewel secrets and developing ways to protect them.

"The key thing about the job is to identify the key assets of the country," said Szady, a 28-year FBI veteran. "What do we need to protect that could cause the most damage to the U.S. if it's stolen and used against us?"

Dubbed "CI-21," which stands for counterintelligence in the 21st century, Szady will lead a staff of government spy catchers whose aim will be to thwart expanding threats from foreign spies, terrorists and computer hackers. He will answer to a board of directors headed by Freeh, and deputy directors of the CIA and Justice and Defense departments.

The group is not charged with protecting just traditional Cold War-like secrets, such as missile guidance systems and weapons technology. It's also looking to cloak private-sector secrets, such as developments in computer chips and software, banking technology and the Internet.

"We have to protect against intrusion into the nation's computer systems," Szady said. "Developing an outreach program to the private sector, like Oregon's Silicon Forest, is a key aspect of CI-21."

The announcement comes a month after the FBI charged one of its own agents, Robert Philip Hanssen, with spying for Moscow for 15 years. Hanssen is alleged to have furnished Russian agents with scores of highly classified national security and counterintelligence information in exchange for more than $600,000.

Sen. Ron Wyden, D-Ore., a member of the Senate Select Committee on Intelligence, which reviewed Szady's appointment, said the threat to U.S. security interests is real.

"This is about as important as it gets," Wyden said. "There's been a major breech. The information that got out is not trifling stuff. It's going to take somebody of Dave Szady's character to turn this around."

President Clinton created the new post in January, partly in response to allegations that Taiwan-born nuclear scientist, Wen Ho Lee, was a spy. Federal agents began investigating Lee in 1996 on suspicion that he provided China with design plans for Trident missile warheads. He pleaded guilty in September to one count of mishandling classified information.

Szady said the Lee case is a perfect example of the type of problem CI-21 is designed to avoid. The case resurrected old questions about the nation's somewhat fractured anti-spying efforts. After years of bureaucratic resistance, Szady hopes his work will broaden the efforts of the nation's national security agencies to work together.

"People who are friends could still be our friends, but they're trying to steal our secrets," Szady said. "There are key things within our nuclear program that different countries are looking for."

Szady, 57, who joined the FBI in September 1972 as a field agent in Mobile, Ala., is considered a counterintelligence expert.

From 1975 to 1985, he rose to supervisor of the FBI's headquarters intelligence division, where he oversaw the investigation of convicted U.S. Navy spy John Walker Jr. Before his arrest in May 1985, Walker lead a spy ring that sold secrets to the Soviet Union, including a manual on Navy contingency plans in the event of war in the Middle East.

From 1985 to 1995, Szady ran the FBI's major foreign counterintelligence program in San Francisco, then spent two years there as the assistant special agent in charge, running counterintelligence operations in Silicon Valley.

Beginning in March 1997, Szady was the FBI's chief of counterintelligence and counterespionage, which included being the FBI liaison to the CIA. In May 1999 he was assigned to run the FBI's Portland field office, supervising 92 agents.

Szady said it's painful for him and his family to leave Oregon. He said he's proud that he elevated the FBI's drug, organized crime and white-collar crime investigative teams, expanded the agency's presence in Eastern Oregon and developed crucial working relations with local police.

You can reach Mark Larabee at 503-294-7664 or by e-mail at"


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