ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, November 19, 1996 TAG: 9611190101
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
A onetime CIA station chief was charged Monday with selling top secrets to the Russians for more than $120,000. The FBI suspects that the highest-ranking CIA officer ever charged with espionage sold the identities of all new CIA agent trainees in the past two years.
The 16-year CIA veteran, Harold J. Nicholson, 46, of Burke, Va., ``betrayed his country for money. He was not motivated by ideology but by greed,'' said U.S. Attorney Helen Fahey. ``He had access to a great deal of very damaging information.''
An FBI affidavit said that Nicholson had access to the biographies and assignments of every new CIA agent trained from July 1994 to July 1996, when he taught at the CIA's secret Virginia training site, and that evidence strongly indicated Nicholson sold the material to the Russians.
``As a result of this disclosure, it will be difficult, if not impossible, for the CIA to place some of these newly trained case officers into certain sensitive foreign postings for the rest of their careers,'' said FBI Agent Michael Lonergan's affidavit.
Nicholson was arrested by FBI agents at Dulles International Airport in suburban Virginia Saturday afternoon as he was about to leave for Switzerland, where Fahey said he intended to meet his Russian handlers.
In a rare news conference with FBI Director Louis Freeh, CIA Director John Deutch said, ``Thus far, we have no information that any CIA or FBI assets were killed as a result of Nicholson's spying.'' No U.S. agents or sources abroad appear to have been arrested either, officials said.
Until a damage estimate is completed, there is no way to ``determine how many operations he may have compromised, but it seems unlikely that the damage he caused in any way approaches that done by [Aldrich] Ames,'' Deutch said.
The worst turncoat in CIA history, counterintelligence officer Ames pleaded guilty in 1994 to selling Russia information over eight years for more than $2.5 million. U.S. officials attributed the death of 10 Western agents and the compromise of dozens of operations to Ames.
Fahey said there was no evidence of a connection between Nicholson and Ames and no indication that other U.S. citizens worked with Nicholson.
Freeh and Deutch said Nicholson was arrested much earlier in his alleged double-agent career than Ames because of reforms and new FBI-CIA cooperation undertaken after the Ames case. The Ames case revealed that CIA officials had paid inadequate attention to Ames' unexplained cash, frequent foreign trips and failure of polygraph tests.
``There has been an exchange of high-level personnel between the agencies,'' Freeh said. ``Their analytical efforts led to today's arrest.''
Agents looked at polygraph tests, travel patterns, financial transactions and Nicholson's requests for secret data, Freeh said. They secretly followed him and eavesdropped on him and searched his car, home, portable computer and work station.
Wearing white slacks and a turquoise shirt, the bearded suspect quietly made two brief appearances Monday in federal court in suburban Alexandria, Va. He was held without bond for a hearing Nov.25.
Nicholson could face life in prison without parole. Fahey said prosecutors were not now planning to seek the death penalty.
Nicholson served in Manila from 1982 to 1985 and later in Bangkok and Tokyo. He was chief of station in Bucharest from 1990 to 1992, then went to Kuala Lumpur. His top CIA salary was $73,000.
Last June 27 in Singapore, the FBI observed Nicholson put a camera bag into the trunk and get into a car with diplomatic license plates registered to the Russian Embassy there, according to Lonergan. Within a month of his return, he made $20,000 in deposits, payments and purchases and gave $12,000 to his son to buy a new car, the affidavit said.
The FBI said Nicholson earlier made a series of bank deposits and bill payments following trips to Asia, where he had met Russian agents during his CIA career. This money could not be explained by his ordinary income and was not recorded on financial disclosure forms he was required to file after the Ames case, FBI officials said.
Deutch and Assistant FBI Director Bob Bryant refused to say exactly what first alerted them to Nicholson, but Nicholson's foreign trips, beginning in December 1994, were reported to the CIA as required. Russian spies have traditionally insisted that their U.S. sources meet them abroad, in part to increase their hold on them by implicating them in suspicious travel.
CIA Deputy Director George Tenet said officials were fairly confident Nicholson's spying begin in mid-1994 because ``that's when the first money shows up.''
Bryant said agents didn't find the June 1994 wire transfer of $12,000 from Kuala Lumpur to a saving account in Eugene, Ore., until earlier this year. The transfer came shortly after Nicholson, as deputy chief of station, had authorized meetings with a Russian intelligence officer there before leaving for a U.S. post.
On Oct. 16, 1995, Nicholson first showed deception on a CIA polygraph test when asked about unauthorized contact with foreign spies, Lonergan wrote. Two subsequent tests, Oct. 20 and Dec. 4, also showed deception.
Bryant said ``it's a possibility'' that Nicholson delivered some CIA agent identities to the Russians after failing the polygraph test and while he was under suspicion but before he was arrested.
Searching Nicholson's portable computer in August, the FBI found data on the assignment of a newly trained officer headed to Moscow and on the assignments of other new agents trained between 1994 and 1996. Because the documents on Nicholson's computer were dated before the Singapore trip and had been deleted from the computer's directories, the FBI concluded ``they have already been copied onto a [portable] disk and transmitted to Russian intelligence.''
LENGTH: Long : 104 lines ILLUSTRATION: PHOTO: (headshot) Nicholson. color.by CNB