47. Report Prepared in the Department of State 1

ESTIMATE OF DAMAGE TO U.S. FOREIGN POLICY INTERESTS

(From Net of Listening Devices in U.S. Embassy Moscow)

Summary

The results of our review of the political effects of the bugging of our Moscow Embassy are paradoxical. On the one hand, in the judgment of the National Security Agency and the Central Intelligence Agency, the Soviets achieved a major intelligence breakthrough, i.e., for a period of years they had the capability to read most, if not all, of our telegraphic messages between Washington and Moscow and between Washington and posts in Eastern Europe. On the other hand an extensive review of major crises and negotiations over the past twelve years does not provide evidence that the Soviets made use of knowledge thus gained to the detriment of our interests.

An explanation for this paradox may be that the Soviets valued the source far more than the use of any particular piece of information they got from it. In order to keep us from discovering their intelligence coup the Soviets appear to have sacrificed many of the specific gains they might have made, and eschewed actions that might have given them away. We have not found instances where a specific Soviet action can be clearly attributed to a particular American message they may have intercepted, and we believe it likely that Moscow avoided taking such actions out of fear that they might compromise their operation. But the fact that damage to American political interests was not so direct and gross as to be readily demonstrable does not mean that there was none. In considering the possible impact which information derived from bugging had upon Soviet policymakers’ thinking, we find large unknown areas. In some instances Soviet awareness of American firmness may have redounded to our advantage. On balance, however, we must conclude that Soviet leaders gained considerable advantage in their dealings with us, and, over time, they may have felt free to pursue more assertive policies because they had a clearer idea of what our reaction might be.

Extensive Compromise

The NSA assessment, the assessments by State Department security experts and information which CIA acquired from a defector make it virtually certain that extensive quantities of classified information were compromised as a result of the Soviet microphone operation. [8–1/2 lines of source text not declassified]

The classified material compromised included Top Secret, Secret and Confidential information. According to the definition of these classifications contained in the Department’s security regulations pursuant to law, the classifying officer is obliged to assign these classifications when in his judgment the unauthorized disclosure of the information could, with regard to U.S. foreign policy and defense interests, be “prejudicial” (Confidential), result in “serious damage” (Secret) or cause “exceptionally grave damage” (Top Secret). Thus, if a message was correctly classified in these categories, its revelation to the Soviet Union by definition could cause damage to the United States although the Soviets were inhibited from exercising to the full their potential to damage our interests. Some messages during this period 1952–62 were no doubt overclassified, but even if considerable allowance is made for the bad habits of many officers in this respect, small comfort can be derived.

Direct, Visible Damage

The damage review described above, which was based upon the worst-case assumption that everything had been compromised, found little evidence of political damage. Indeed, some of the officers working on the political assessment found it difficult to believe that an extensive compromise had in fact occurred. No instance could be found in which Moscow was shown to have made a specific decision detrimental to U.S. interest on the basis of information derived from reading particular messages.

Limits on Soviet Use of Information

The Soviets probably regarded their microphone installation as a major intelligence asset. Certainly if the circumstances had been reversed the United States Government would have thought so. Such a Soviet judgment would have led to a policy of self-denial of use of the information derived. Soviet intelligence officers may well have hoped that this source of information might give them advance warning in the event that the United States ever decided to attack the USSR, and they would have been reluctant to jeopardize the source. In fact the very thing the Department’s reviewers looked for-a Soviet action directly attributable to an intercepted message-would be the very thing which a Soviet intelligence officer would have resisted hardest-the use of information in a manner which might make us suspect the source.

The one instance in which a Departmental reviewer concluded that an intercepted American message probably altered the course of negotiation involved possible initiation of hostilities. The review of the Korean armistice negotiations suggested that Soviet interception of a May 23, 1953 cable from the Department to Moscow revealing our contingency plans to resume hostilities if our forthcoming proposal was not accepted may have been the determining factor in prompting Moscow to accept a settlement.

We know that Soviet intelligence regarded information derived from our telegrams as especially sensitive, and we suspect that many of the lower-ranking officials who conducted negotiations on such issues as the hot line or the consular convention were never privy to the operation. When Khrushchev told Ambassador Kohler that he read his message opposing sale of a large diameter pipe to the Soviet Union (though Khrushchev did not describe the message accurately), he was doubtless guilty of a serious breach of security.

In addition to their reluctance to jeopardize their source of potentially invaluable information, the Soviets were probably also concerned-though to a much lesser extent-over possible embarrassment in being caught.

Operational vs. Background Information

Both our review of the messages themselves and inferences about Soviet handling of the information support the conclusion that Moscow derived very little, if any, operational information upon which they based specific actions.

They always had the hope that by preserving the source, they might one day derive extremely useful operational information, namely, advance warning of an American attack, and that very hope would have made them very reluctant to sacrifice their source in exploiting it for lesser purposes.

But apart from operational information, the Soviets did over the years acquire a good deal of background information. No single piece of this information would necessarily have altered particular decisions, but this kind of information would have given the Soviets some valuable knowledge of United States policymaking processes, some psychological advantages and may over the longer run have strengthened Moscow’s capability for confronting the United States.

If the Soviets read our notes before they were delivered, they may have had a few extra hours to consider their responses which doubtless made their own decision-making easier, though that may well have been to our advantage at times. In reading our reporting messages, the Soviets would have learned no little about how our foreign service operates, about the personalities of various American officers and about [Page 114]the kinds of démarches or talking points which did or did not impress us. Even though they refrained from taking any direct action on the basis of information in our messages the Soviets would have derived either confirmation or disproof of their estimates about our foreign policy based upon other sources of information.

In the aggregate, background information was probably useful to the top Soviet leadership. For example, in the period after the Sputnik and the firing of the first Soviet ICBM our estimates of Soviet strategic missiles were inaccurate. The Soviets would not have learned the details of our estimates from their microphone operations, but they probably would have had confirmation of their impression based upon other sources that United States policy was being made on the basis of estimates of the military balance which erred in their favor. Also of general background utility would have been the knowledge required of differences among the United States and its Allies.

In attempting to assess the impact which background information may have had on Soviet policy, we are faced with imponderables. We have no way of proving how much of a role background information derived from bugging played in the totality of information used by the Soviet decision makers. We suspect that in general Moscow derived a clearer impression of the limits of American tolerance for possible mischief. In many instances it was doubtless to our advantage that the Soviet leadership realized the dangers and stopped short of precipitating potentially grave situations. At the same time, a better estimate of the limits of safety may have tempted the Soviets to play a bit closer to the limits than they might otherwise have done.