FOR YOUR DISINFORMATION

By DOUGLAS WALLER/WASHINGTON

IN THE GAME OF SPYING IT'S CALLED THE "feed." When an intelligence service wants to plant a double agent--a spy who defects to a hostile service but is actually still working for his old agency--the agent is often given real secrets to pass along. The "feed" information is designed to lure the enemy into accepting him so he can begin passing along phony material that will cause them to waste money and resources. During the cold war, the CIA became the master of the feed. So generous was the agency with its information that many KGB officers got big promotions because of the secrets that CIA doubles were passing them along with the disinformation.

Now it turns out that in the 1980s Moscow began playing the game just as well, creating yet another scandal for the CIA. The disclosure came last week when the agency delivered to Congress its secret report on the damage CIA mole Aldrich Ames did in spying for the Russians from 1985 to 1994. Not only did Ames send 10 of the CIA's most prized Soviet agents to their death, but his secrets also helped Moscow plant a network of at least a half-dozen double agents, who began slipping both real and bogus information to their CIA handlers. But even after CIA officials discovered the ruse in 1991, they continued to send the White House and Pentagon top-secret reports based on what the doubles were telling them--and never bothered to warn in the reports that the information was suspect. CIA Director John Deutch last week called the lack of truth in labeling "an inexcusable lapse in elementary intelligence practice."

Deutch well knows the impact of bad information. In 1993, in his previous job as Under Secretary of Defense, he himself received bogus Russian military secrets, Pentagon sources told Time. By then the CIA had finally begun to attach caveats to the reports that contained information from the double agents, but the labels were sometimes omitted or ignored by the customer. One such report on Russian antiaircraft capabilities, which made its way to the Pentagon in 1993, clearly warned that the CIA was suspicious about the veracity of its source. But Air Force officials, who considered the report valuable in bolstering support for their $73 billion F-22 Stealth-fighter program, edited out the warning when they sent their summary to Deutch.

Many of the "blue-striped" reports (nicknamed after the blue border around their pages) landed on the desks of Presidents Bush and Clinton. One CIA officer sent out 16 reports to senior Administration officials with no mention in them that their information came from doubles. His justification: the feed from the doubles was still valuable and accurate. But the CIA could never be sure that it had completely separated fact from fiction in what the doubles were divulging.

The scandal has inspired a lot of finger pointing. Deutch reprimanded seven agency officers, six of whom had already retired. Frederick Hitz, the CIA inspector general, recommended that the last three agency directors (William Webster, Robert Gates and R. James Woolsey) "be held accountable." The three ex-directors sent an angry letter to Deutch insisting that they had never been told by subordinates that the sensitive intelligence was tainted.

The Pentagon has launched an internal probe to determine how much was wasted on unnecessary weapons because of the bad reports. Intelligence sources say much of the information supplied by the doubles dealt with Russian aircraft, missile and radar capabilities. But Pentagon officials are privately dubious that they'll be able to pin billions of dollars in waste on the CIA reports. The Defense Department squanders money on unneeded weapons mostly because of pork-barrel politics, interservice rivalries and lobbying by contractors.

The latest scandal has sent morale at the agency to rock bottom. Disgusted with incompetence by higher-ups, many younger spies are resigning. Senior hands complain that Deutch pays too much attention to how operations will play on Capitol Hill. Gregarious and backslapping, Deutch can also be a ruthlessly tough manager and highly status conscious. He recently angered seven Senators planning a fact-finding trip to Bosnia by refusing to let them use a plane he had reserved from the Pentagon for a later trip, even though the Pentagon was able to find him an identical substitute. When one of Washington's hot restaurants, the Palm, was slow to put up Deutch's caricature among more than a thousand portraits of the city's political elite, Deutch had aides and relatives pester the manager with phone calls until the picture was hung.

But Congress is still confident that Deutch can reform the agency. In his first six months as director, he has replaced practically every top manager. And when he met last week with officers in the CIA's soundproof auditorium to explain his reprimands in the latest scandal and to buck up morale, he got a standing ovation. It was a small step in rebuilding confidence inside the agency. The larger task will be restoring the CIA's credibility with those on the outside.

--With reporting by J.F.O. McAllister and Mark Thompson/Washington

With reporting by J.F.O. McAllister and Mark Thompson/Washington