The Secret Army

By GEORGE J. CHURCH

Almost since the guns of World War II fell silent, the U.S. Army has focused most of its efforts on finding ways to counter the Soviet Union on the potential battlefields of Europe. Increasingly, however, America's real military challenges have been of a less conventional sort. A string of hostage crises in Iran and Lebanon, instability throughout the Persian Gulf, guerrilla wars that threatened El Salvador and other Third World allies, and the emergence of Soviet-aligned regimes in places like Nicaragua and Grenada have hammered home the need for ways to handle some very different military tasks: snatching hostages from the grip of terrorists, perhaps, or helping U.S.-allied governments fight Communist-led guerrillas.

The Iran-contra debacle clearly showed the dangers of relying on semiprivate operators to handle such tricky covert missions. The CIA's legal authority and practical capacity to operate in the gray area between intelligence activity and paramilitary action have come under grave question. The business of conducting covert wars in an open and democratic society has never come easily to the Pentagon either. America's armed forces traditionally resemble a sheriff prepared for a shootout on Main Street at high noon but not for a back-alley brawl.

In fact, though, the U.S. military has very secretly been developing an unconventional capability for eight years. In the wake of the disastrous 1980 hostage rescue attempt in Iran, the Pentagon established the closest thing the nation has ever had to a secret army. These clandestine operations and intelligence units are still around. But their history has largely been a sorry tale of bureaucratic bungling and infighting. Says one special operations officer: "The units still exist, but their morale and our ability to use them are in shambles."

From interviews with military, intelligence, Administration and congressional officials, TIME has pieced together how the secret army was organized, some of the operations it conducted and the troubles it encountered. Its small, specially trained units are designed to operate far more covertly than older elite paramilitary units, such as the Army's Rangers and the Navy's Seals. They have been given exotic code names, such as Yellow Fruit, Task Force 160 and Seaspray. New types of equipment have been developed for them, including small, high-tech helicopters and one-man satellite- & communications radios and dishes. In addition, a far-ranging intelligence organization known as Intelligence Support Activity (ISA) gave the Army for the first time the ability to conduct full-fledged espionage using field agents. And all was done in such deep secrecy that to this day the very existence of some of the special units has never been officially admitted.

But the new units were hampered from the start by bureaucratic feuding between supporters of the secret units and military traditionalists, and between the intelligence and operations sections within this secret army. Operating under loose guidelines, the secret units also proved difficult to control. One got involved in an unauthorized operation planned for Laos. Another became the target of investigations for alleged misuse of funds and other improprieties; three officers eventually went to prison. The Pentagon is now trying to reorganize all special operations units under the newly formed Special Operations Command, and has imposed stricter operational and financial controls on them.

The Army did avoid one of the worst blunders of the Iran-contra affair. Though some of its clandestine activities were initially kept from legislators, to their displeasure, most were properly described to congressional oversight committees. Partly as a consequence, and somewhat paradoxically, the Army escaped the intense spotlight that the many Iran- contra investigations have cast on covert operations in general.

But sources have outlined to TIME a wide range of activities that give a picture of the secret army in action. Among their revelations:

-- After the Desert One debacle in 1980, the Pentagon planned in considerable detail a second operation, code-named Honey Badger, to rescue the Americans held in the Tehran embassy; it was never carried out because of inadequate intelligence.

-- The Army supplied to the CIA cannons and helicopters that the intelligence agency used to attack the Sandinistas in Nicaragua -- before the Boland amendment forbade CIA involvement in "military or paramilitary operations" there.

-- Operatives from ISA and Seaspray gathered intelligence in El Salvador that greatly helped counter a leftist guerrilla insurrection.

-- ISA in late 1981 or early 1982 worked out a deal, which later fell through, to obtain a top-of-the-line T-72 Soviet battle tank from Iraq, a Soviet client, in return for American self-propelled artillery weapons for the Iraqi army.

-- ISA became involved in an unauthorized plan for a 1981 raid into Laos to find Americans thought to be missing in action since the Viet Nam War. Secretary of Defense Caspar Weinberger was so incensed that he ordered the Army's secret intelligence unit disbanded, but it survived to collect information on terrorists in Lebanon, among other activities.

The story of the secret army begins in late 1979, when the Pentagon set up a task force under the command of Army General James Vaught to plan a rescue of the hostages in Tehran. The CIA had no agents there, so the Army organized a Field Operations Group that slipped four intelligence officers into Tehran, where they gathered vital information on the situation at the embassy. Later, FOG members rented trucks in Tehran for the rescue team that was to be flown into Iran by helicopters supplied by the Navy. All for naught: the mission was scrubbed in April 1980 because of a helicopter malfunction at the landing site, and one chopper crashed into a cargo plane.

At White House direction, Vaught began planning Honey Badger, a second rescue attempt uniting aviation and intelligence in a predominantly Army operation. The Army developed special equipment: one-man satellite- communications radios, Black Hawk helicopters modified to fly longer distances, and what one source describes as "very small, very capable, very exotic" 500MD helicopters equipped with advanced navigation and communications capabilities. But by then, the U.S. could never pin down the location of any group of hostages long enough to mount a rescue.

Nonetheless, the Army's top command -- particularly Chief of Staff General Edward Meyer and Vice Chief General John Vessey -- had become committed to secret operations. When the Reagan Administration took office, the generals made the new ad hoc groups permanent. In early 1981 Colonel James Longhofer, who had worked on Honey Badger, was assigned to head an expanded office of special operations to oversee various types of unconventional missions. One of its field units was Seaspray, jointly commanded by the Army and the CIA, which took over the special helicopters developed for the Iran rescue mission. The Pentagon dutifully briefed key members of Congress, who agreed to put up $90 million to fund the new office.

But Congress was not told that $20 million of that sum went to set up a supersecret intelligence unit, the ISA, under the command of Colonel Jerry , King. (The role of regular Army intelligence is to collect tactical military information, not to lay the ground for covert operations.) ISA initially was to act as a pathfinder for secret missions, but its functions quickly expanded. When General William Odom became assistant chief of staff for intelligence in late 1981, he argued persuasively that ISA was needed to fill gaps in the CIA's activities. Its personnel grew from about 50 at the start to 283 in 1985. At its peak it had agents in Morocco, Nigeria, Somalia, Sudan and some ten Latin American countries. In Panama, for example, it operated a refrigeration company that served as a front for its agents. One ISA mission was to map out the routes U.S. rescue teams would take to reach American embassies likely to be seized by terrorists.

From the beginning, friction arose between King's ISA and Longhofer's operations units. In 1981 they cooperated with the CIA on a mission to slip Christian Leader Bashir Gemayel back into Lebanon after a secret visit to the U.S., foiling a suspected Syrian plot to kill him. Gemayel made it (though he was assassinated one year later). But while the Seaspray-ISA team was in Egypt coordinating the mission with the Israelis, a special operations officer spotted an ISA man taping their discussions, on King's orders. "Young man," the officer reportedly thundered, "this is a CIA mission. Either you put that ((tape recorder)) away or I'm going to smash it."

The following year, ISA and Seaspray worked together on a mission, code- named Queens Hunter, to locate leftist guerrilla forces in El Salvador by monitoring their radio transmissions. Seaspray pilots flew planes from Honduras to track the transmitters electronically; ISA agents rode along to operate the airborne radio equipment. Although the operation was planned to last only a month, it picked up so much useful information on where the guerrillas were hiding that it was extended for three years.

The Seaspray operatives and ISA agents, however, proved uneasy partners. They worked together out of a house in a small Honduran town, bickering over who was to be in charge. The feuding led to a formal ISA complaint about loose Seaspray security. Seaspray agents had set up a small military satellite dish outside the Honduran house, hiding it with only a plastic garbage bag. An operations security team, Yellow Fruit, flew a large commercial satellite dish to Honduras so that the Queens Hunter team could more convincingly play the part of rich Yanqui tourists. &

Longhofer's operations units racked up some other successes. In 1983, one branch set up a helicopter surveillance project in Korea to monitor North Korean agents crossing the demilitarized zone at night. The same year, they supplied Bushmaster rapid-firing cannons to the CIA, which mounted them on speedboats and used them to blow up a Nicaraguan oil refinery. Also Seaspray transferred some of its special helicopters to the CIA; several Seaspray pilots left the Army and were hired by the CIA as civilian employees. They then flew the choppers in direct attacks on the Sandinistas.

Nonetheless, the conventional military never felt comfortable with either King's or Longhofer's units. Seaspray and ISA were deliberately excluded from the 1983 invasion of Grenada by a Navy commander who claimed that he was not familiar with what they were or what they could do. Defenders of the secret groups retort that he refused a proffered briefing on those subjects.

Both ISA and the special operations group quickly got into trouble over questions of accountability. ISA, indeed, had to fight for its bureaucratic life almost from the moment of its creation. In mid-1981, James ("Bo") Gritz, a retired Green Beret colonel, planned to lead a small group of Americans on a foray into Laos to search for MIAs. Despite warnings, Jerry King insisted on helping him; ISA supplied Gritz with two cameras, plane tickets, parts for a lie detector and, Gritz claimed, $40,000 in cash. The preparations for Gritz's raid are said to have crossed wires with an ultrasecret plan by the U.S. Joint Chiefs of Staff to send American military forces into Laos to hunt for MIAs.

Congressional investigators looking into the Gritz fiasco were furious that they had not been told about ISA's existence. The Pentagon conducted its own investigation, which apparently convinced Secretary Weinberger that ISA was already spinning out of control. In early 1982, only a year after ISA's formation, Weinberger ordered the unit disbanded.

ISA continued to operate, however, while Army commanders and Weinberger's office engaged in protracted negotiations about its future. In mid-1983 the National Security Council approved a so-called charter that kept ISA around, but under strict control. The agents are currently said to be forbidden to travel outside the Washington area without specific permission from the Secretary of the Army.

The special operations division, meanwhile, was getting into even deeper trouble. The source was Yellow Fruit, which had been assigned to keep watch over the other special operations units to make sure they preserved secrecy. In 1983 two of the unit's officers complained that their commander, Lieut. Colonel Dale Duncan, was trying to cover nearly $90,000 in missing funds with phony receipts. Colonel Robert Kvederas, the new commander of special operations, asked Longhofer, who had become military liaison with the CIA, to investigate. Longhofer initially concluded that Duncan's accusers could not prove their charges. But Jerry King of ISA sent the accusers to higher-ups. He later boasted to associates that he had "blown the whistle" on his old rivals.

A spate of investigations and prosecutions ensued; some are still not finished. Last year an Army court convicted Duncan of financial improprieties and security violations; he is now serving a seven-year sentence in the military prison in Fort Leavenworth, Kans. Longhofer was court-martialed on charges of disobeying an order not to involve himself with his old special operations group and of not conducting a thorough investigation of Duncan. A dozen other officers were investigated for alleged irregularities. Several resigned; although the Army found no basis for prosecuting them, they feared that their careers were effectively ended.

The secret Army still exists, but it seems quiescent for the moment. Most of Seaspray's aircraft have been parceled out to other units. The ISA is also still around; last year it had an agent under deep cover in Beirut, according to an Oliver North computer message inadvertently printed in the February Tower commission report.

Yet the troubles these units have experienced raise questions about whether the Pentagon ever can -- or should -- develop a covert operations and intelligence capacity to handle paramilitary missions that are beyond the scope of the civilians in the CIA. In some form there may be a legitimate need for secret, specially trained units to operate in behalf of approved U.S. foreign policy goals. Looking back on the secret operations he helped to begin, General Meyer, who retired as Army Chief of Staff in 1983, muses, "I think the lesson is that whatever kind of operation we conduct needs to have oversight. And somehow there has to be an accommodation between the oversight side and the operations side. Because these are the wars of today and tomorrow." No military mistake, of course, is as classically disastrous as planning to refight the last war.

With reporting by Jay Peterzell/Washington