Hunting American Spooks Germany Prepares Further Spying Clampdown

The latest revelations of US spying on Germany have unleashed unprecedented levels of distrust in Berlin. The government has already expelled the CIA's chief here and may soon be planning additional measures as it seeks answers from Washington.
The United States Embassy in Berlin: The expulsion of the CIA's head in Germany last week marks a significant escalation in the scandal surrounding American spy operations in the country.

The United States Embassy in Berlin: The expulsion of the CIA's head in Germany last week marks a significant escalation in the scandal surrounding American spy operations in the country.

Foto: euroluftbild.de/ dpa

It was an unusual invitation that took four members of a German parliamentary control committee to London early last week. For the ninth time, lawmakers in the so-called "Five Eyes" countries tasked with supervising their respective intelligence services were meeting in the British capital. They had faced serious accusations of spying within the last year. This time, the British, Americans, Canadians, Australians and New Zealanders had invited their somewhat disgruntled German counterparts to join the group.

A casual reception was being held at the British Foreign Office to herald the beginning of the conference. On Monday evening, a limousine appeared at St. James's Hotel near Hyde Park to pick up the German delegation. But due to an error on the driver's part, the German parliamentarians were taken to the wrong destination. Realizing that they would be late by then, the lawmakers decided to skip the reception.

The unexplained absence of the Berlin guests was the source of some anxiety among the Five Eyes delegates. Had they boycotted the reception because of the latest unpleasant surveillance scandal?

Three days and yet another spy affair later, the German government offered an unambiguous response. Last Thursday, it took the unprecedented step of asking the senior CIA representative in Berlin, known as the chief of station, to leave Germany. Some 13 months after the beginning of the NSA scandal, it was the Germans' brusquest response yet to the Americans' blatant spying activities in their country. In taking this step, Chancellor Angela Merkel was sending the message that her views on the matter are now more in line with those of German President Joachim Gauck: She is fed up.

At the same time, the government hoped that its diplomatic bombshell could improve its position in a scandal that doesn't seem to want to end. Derision of Germany's coalition government, which pairs Merkel's conservative Christian Democrats with the center-left Social Democrats -- for being underhanded and overly compliant with US President Barack Obama's wishes has expanded beyond the ranks of the opposition. The ritual outrage coming from the chancellor and cabinet members after each new affront by the NSA, the CIA and others had long been exhausted. At least the expulsion of the CIA official suggests some gumption on Berlin's part.

Will Moves in Berlin Sway US Government?

It remains an open question whether the step will be enough and if it will make a lasting impression on the Americans. Further curiosities from the mysterious world of espionage have already come to light, with new rumors circulating almost daily in Berlin's government district. But just because some of it sounds more like a John le Carré novel than fact, it doesn't mean that it's necessarily made up. Moreover, all the details of the two presumed cases of espionage have yet to emerge, and there is speculation that there could be a shocking connection between the two.

The man who set the spy scandal in motion has two names. At the Federal Prosecutor's Office in Karlsruhe, he is known by his real name, Markus R. But at the BND, Germany's Federal Intelligence, he used his working name, Markus L.

He is short and stocky, has a moustache and wears glasses. His coworkers in the Areas of Operations/Foreign Relations department had to be patient when they spoke with him, because the presumed CIA mole has a speech impediment. The man, who is from a town near Chemnitz in the eastern state of Saxony, never finished high school or attended a university. In addition, he has been handicapped since childhood as a result of vaccination damage.

The extent of this impairment is what his attorney, Klaus Schroth, now wants to have examined in a psychiatric opinion. He says his 31-year-old client strikes him as "not having the qualities and personality structure one normally associates with espionage activities." However, the man who would later become a spy completed the BND's standard "seven-point security review" with flying colors. Apparently it did him little good.

On May 28, Markus R. sent an email to the Russian Consulate in Munich. In it, he offered his services as an informant, and included three internal, BND documents as a sample. The Federal Office for the Protection of the Constitution (BfV) intercepted the email, and then the BND's Internal Security department pursued the case, with the involvement of the Federal Prosecutor's Office and the Federal Criminal Police Office.

Secret Meetings in Austria

Finally, police arrested Markus R. on Wednesday of the week before last. In his nine-hour interrogation, he apparently told the astonished investigators he had already been working for an American intelligence agency for two years. That relationship had also begun with an email, which he had sent to the US Embassy in Berlin, he explained. R. talked about clandestine meetings in Austria, at which he had allegedly been paid a total of €25,000 ($34,000).

In his testimony, R. incriminated two US contacts he claimed to have met. He said that they had introduced themselves by their first names, and that their conversations were informal. The men were presumably using code names. Based on R.'s descriptions of the two men, along with clues and telephone numbers he provided, the federal prosecutor's office is now trying to identify the US agents, but has been unsuccessful so far.

According to information SPIEGEL has obtained, the operation against the BND was not managed from the US Embassy in Berlin. Apparently the CIA was running its German informant from the US Embassy in Austria. In addition to diplomats, CIA employees work at the picturesque building on Boltzmanngasse 16 in Vienna, and they were apparently the ones who secretly met the BND mole in Salzburg and paid him for classified documents.

Managing sensitive sources from a neighboring country is an old trick in intelligence circles, designed to minimize the risk of the agent himself being exposed. But in this case the modus operandi is also potentially harmful for the CIA officials. If German prosecutors investigating the case succeed in identifying the officers who managed the BND mole, they will lose their diplomatic immunity in Germany. If that happened, the Federal Prosecutor's Office could request a warrant for the Americans' arrest.

Markus R. is suspected of having handed over five files of material to the Americans. As the person in charge of filing and cryptography in his department, he had access to highly classified documents. It is believed that Markus R. smuggled hard copies of at least 218 documents out of his office, scanned them at home and edited them to conceal the source.

The documents are believed to have included descriptions of sensitive activities, such as instructions to the BND issued by the Federal Chancellery, as well as the minutes of meetings between BND President Gerhard Schindler and his foreign counterparts. According to insiders, the cache encompasses "a wide range of documents, from incredibly boring to highly sensitive."

Are Spying Cases Connected?

The latter category includes a document that could explain why yet another case of spying rocked Berlin only a few days after the BND mole was exposed. It was an inquiry the Federal Criminal Police Office sent to the BND in the spring of 2014, requesting information about an official in the German Defense Ministry named Leonid K. -- a second German now suspected of spying for the United States. When investigators discovered this letter in the possession of the BND official they had already taken into custody the week before last, they must have realized that someone could have warned Leonid K.

On the morning of July 9, officers raided the office of the presumed second US informant in Berlin's Bendlerblock complex, as well as his apartment in the nearby city of Potsdam. Suddenly the spy scandal had expanded from the intelligence community to an important ministry within the German government.

Even as investigators searched the 37-year-old's office at the Defense Ministry and seized his work computer, senior ministry officials and military officers in Berlin were receiving little yellow notes with the alarming message that a spy had been discovered within their ranks.

German counterintelligence had in fact had Leonid K. under observation for some time. In 2010, while he was working as a political adviser to the German commander of the Kosovo Force (KFOR), an anonymous tipster accused him of being an informant for the Russians. When the Office for the Protection of the Constitution (BFV), which is responsible for counterintelligence in Germany, and the Military Counterintelligence Service (MAD) turned their attention to the senior lieutenant in the reserves, they came across another suspicious contact of the German adviser.

He had apparently had a good relationship with an American in Kosovo who was working for the US government in the Balkans to help build the local intelligence service. Because of his assignment, the investigators assumed he was a member of US intelligence and suspected he could be K.'s key contact.

There were indications to support this theory over the years, but never any hard evidence. Nevertheless, K.'s resumé alone must have made him seem like the perfect source for foreign intelligence agencies. After studying in Berlin, the eastern German city of Frankfurt an der Oder and at the University of Oxford, he worked repeatedly as a political adviser abroad, with access to military officials in various countries. He spent several years in Kosovo, working at various times for both European Union and NATO officials there.

Suspect Denies all Allegations

The outgoing native of Germany's southwestern Swabia region, whose aristocratic demeanor prompted some to liken him to former Defense Minister Karl-Theodor zu Guttenberg, was known to boast to Defense Ministry officials about his international contacts, his experiences far away from Germany and his command of five foreign languages. He preferred traveling with political delegations to places like Uzbekistan over his mundane tasks at home, where he worked as an adviser compiling country profiles for senior ministry officials.

Over the years, he stayed in touch with his old contact in Kosovo. In fact, K. flew to Istanbul several times to meet with the American. These spontaneous trips attracted the attention of German counterintelligence, where it was known that the young political scientist was plagued with money problems. The investigators decided to tap K.'s phone.

Not everything was going well for him professionally. After his stints in Kosovo, K. began looking for a new job. He applied for a position as a consultant to the German parliament, the Bundestag, and had an unsuccessful interview with the German Society for International Cooperation, before landing a job at the Defense Ministry in June 2013. When his American friend suddenly transferred €2,000 to his account in the same year, it raised yet another red flag with German counterintelligence. Nevertheless, German agents still lack solid evidence that K. revealed classified secrets to foreign agents.

When he was questioned last week, he expressed complete surprise and vehemently denied all allegations. He claimed that the American colleague had been a close friend over the years, and that he had merely borrowed the €2,000 from his friend for a wedding, a debt he insisted he had already repaid.

Oddly enough, all contact between K. and his American friend abruptly ended in February 2014. Whether American intelligence services, alarmed by the activities of the BND mole, warned K. and he was therefore able to destroy evidence is one of the questions the Federal Prosecutor's Office must now address. It is quite possible that the somewhat cold trail leading to Leonid K. was only revived recently by the BND case. At any rate, K. still remains at large, as federal prosecutors have no strong suspicions that he has committed a crime.

A Palpable Sense of Insecurity

After the second suspected case of espionage in one week, many in Berlin have tried to downplay the damage. Interior Minister Thomas de Maizière, a member of the center-right Christian Democratic Union (CDU), characterized as "laughable" the information the Americans obtained through the informant. "At the moment, we can only see this as a minor disaster," say intelligence officials, noting that it is anything but certain that there is more to the Defense Ministry case than an unusual friendship between two men.

Finance Minister Wolfgang Schäuble said, drastically, that the Americans' actions were "so idiotic" than he could almost break out in tears over the news. Nevertheless, he sounded like a grandfather who had caught his grandson stealing erasers -- an unfortunate matter, but not particularly dramatic.

But the scope of the damage the Americans have inflicted so far is still only vaguely recognizable. Their initial response to the revelations by whistleblower Edward Snowden in the summer of 2013 was that the Germans should get over themselves -- after all, they insisted, everything the NSA does takes place in the interest of freedom and strictly in accordance with law and order. But then came the revelations of the tapping of Merkel's mobile phone. It was an embarrassing incident for US President Barack Obama, who quickly gave Merkel his personal assurance that US intelligence would refrain from tapping her phone in the future. The inference was that it would be less likely to do so in other cases.

The case of the CIA informant at the BND shows that Washington apparently still doesn't consider the massive technical efforts it undertakes to spy on the entire globe to be sufficient. It helps to explain why the numerous US intelligence agencies still manage human sources, just as they did in the bad old days, even in the nerve centers of Washington's close allies.

The Federal Prosecutor's Office in Karlsruhe, Germany's top investigative agency, is now pursuing three cases of suspected espionage relating to the United States, supposedly Germany's closest ally. Even the biggest appeasers in Berlin must realize by now that the Americans are dead serious when it comes to their desire to know "everything," to quote an NSA document.

There is a palpable sense of insecurity in Berlin's government district these days. Even lawmakers with many years of experience have become suspicious of the US Embassy, as well as the embassies of France, Great Britain and Russia. They are all merely a stone's throw from the offices and conference rooms where German politicians sometimes meet. Some now view the highly secured foreign embassies as little more than surveillance antennas surrounded by buildings.

Many lawmakers involved with the intelligence services and their supervision have stopped discussing sensitive information on the phone or sending unencrypted emails, and they have taken to meeting in person, in public places, for confidential conversations. If they even take their mobile phones along, they sometimes use them to play loud lounge music, hoping to confuse unwelcome listeners.

A number of parliamentarians also now plan to obtain so-called crypto phones, which, though expensive and impractical, are practically bug-proof. Patrick Sensburg (CDU), the chairman of the NSA investigative committee, has already had crypto phones purchased for his fellow committee members.

The week before last, before the BND spy case became widely known, Sensburg invited the committee representatives to attend an extraordinary meeting. In it, he allegedly highlighted the risk that all members of the committee, formed to investigate the NSA scandal, are in fact being spied on themselves.

'Domino Effect'

In fact, Sensburg believes that the current cases of espionage will not be the last. "I fear that there will be a domino effect," says Sensburg, a lawyer by profession. "I am convinced that even more will be revealed in the coming weeks and months, and that America will not be the only country involved."

The chairman has announced that he intends to make his committee's technical infrastructure as spy-proof as possible. "It would also be advisable for all of us to have the Federal Office for Information Security check our mobile phones."

Is this paranoia? It depends on one's point of view. Last week Roderich Kiesewetter, a retired colonel who represents the CDU and its Bavarian sister party, the Christian Social Union, in the NSA committee, said that he had had his mobile phone tested some time ago. And, lo and behold, technicians had determined that third parties had indeed tapped his phone.

As it appears, Kiesewetter isn't the only German lawmaker whose communications are of great interest to unknown parties. Steffen Bockhahn, a member of the intelligence committee for the Left Party in the last legislative period, was also apparently targeted in surveillance activities.

On July 30, 2013, Bockhahn's closest associate was on the phone in her house in the northern city of Rostock when the conversation was suddenly interrupted. She was alarmed when she glanced at her display. The phone, a Windows Phone 8X, seemingly operated by an invisible hand, had searched through her texting communications with Bockhahn. Then the device's email program was opened without the phone's owner being able to stop it. According to her account, emails specifically related to the parliament control panel appeared on her display. She insisted that a hacker was browsing through the documents. It may be a coincidence, but at the time the committee had been briefed about the NSA scandal almost weekly in closed-door meetings -- and Bockhahn was one of the most vocal German critics of the global espionage operation.

When the lawmaker heard about the mysterious cyber attack, he called the then state secretary in the Interior Ministry, Klaus-Dieter Fritsche, who notified the authorities. The Federal Criminal Police Office and police in the northeastern state of Mecklenburg-Western Pomerania, with the help of cybercrime specialists, launched an investigation on Aug. 7, 2013 into suspected computer sabotage and efforts to secure state secrets. But they have been unable to solve the mystery to date.

According to Bockhahn, however, senior government officials told him that he should "assume that this was an intelligence operation," especially as his own mobile phone was also doing strange things during the time in question. For instance, says Bockhahn, he received several empty text messages from anonymous senders. "At some point you come to the realization that you have no way of defending yourself," says the Left Party politician. "It's not what I would call a free society."

Feverish Search for Appropriate Response

It still isn't clear whether intelligence services are actually behind such incidents. And if they are, which ones are they? In any event, it has slowly dawned on the German government in recent weeks that it must give a stronger reaction to American spying activities than just making polite inquiries in Washington.

Merkel's team spent last week feverishly searching for an appropriate reaction to the latest revelations. The fact that the Americans responded to the storm brewing over Berlin with their characteristic silence or platitudes did little to mollify members of Merkel's coalition with the center-left Social Democratic Party (SPD).

Once again, the Americans had underestimated the scope of the political damage. Washington was still reticent about the scandal days after the BND mole had been exposed, most likely because the CIA operation apparently had not been coordinated with the White House, at least not in detail.

Nevertheless, Republican US Congressman Jim Sensenbrenner says that if the Obama administration had wanted to deal with it, there would been ways to do so, such as the president putting in a call to the chancellor. He is critical of the president for not having called Merkel. Sensenbrenner is the first influential US politician to call for an end to spying on allies. Historically, the United States only maintained a no-spy agreement within the context of the "Five Eyes" club. Sensenbrenner argues that the club should be expanded and that Germany would be at the top of his list for new members. The latest incidents have done immeasurable damage, he adds, and now something has to be done to repair it.

Sending a Message that Hurts

So far, the Obama administration seems to disagree. Although CIA Director John Brennan requested a face-to-face meeting with German intelligence services coordinator Klaus-Dieter Fritsche, in it he said nothing about clearing up the allegations. Much to the indignation of officials in Berlin, Brennan didn't even admit to something that seems abundantly clear, based on the facts of the case to date: that his agents were managing the BND mole.

After US Ambassador to Germany John Emerson had sidestepped the issue in a conversation with Foreign Minister Frank-Walter Steinmeier, the German government knew that it had to send a political message that would trigger more than amused smiles in Washington. It had to be a message that "hurt." This time the response was the expulsion of the CIA's top intelligence official in Germany.

The CIA agent, who was asked to leave the country, is not an unknown entity to German authorities. Since G. assumed his position in the summer of 2013, he painstakingly worked his way back up the Agency's list of Berlin contacts, which had cooled as a result of the NSA scandal. He attended meetings once a month, sometimes even more frequently, at the Interior Ministry, the Chancellery, the BND and the BFV, where he was respected for his networking abilities and affable manner.

It is not without irony that G. is the one being expelled. The German government knows that he had little or nothing to do with managing the informant. Instead, he had to go "because Germany needed a sacrifice as a political symbol," as a senior official puts it. This was probably why BFV head Hans-Georg Maassen delivered the order to leave Germany to the CIA agent in person on Thursday.

Berlin Wants Answers

Government representatives later called it a "sign of self-confidence," noting: "Now it's their turn." They want the Americans to finally provide some answers, at least to the most pressing questions surrounding the spying scandal, which were posed a year ago and have since been ignored in Washington.

If Obama refuses to back down, the German government could take further steps. However, Merkel already imposed narrow limits on herself from the very beginning. She doesn't want to jeopardize intelligence cooperation, because she believes that the risk of attacks in Germany is too great to simply dispense with US intelligence information.

But in light of the most recent events, even the most pro-American faction in the government is now increasingly willing to "realign" the intelligence services. What this means, most of all, is that the BFV will probably broaden its focus to include the United States in its counterespionage efforts in the future. In addition, the government is having experts in all government ministries search for weaknesses in communication technology, along with signs of American spying activity.

The hunt for additional moles has also begun at the BND. An investigative team will search data systems in all departments for unauthorized access, over a period of several years.

If the Americans remain obstinate, Berlin officials are even thinking about suspending or even paring back treaties with the United States.

In this context, the so-called Safe Harbor Program could prove to be an effective tool to apply pressure to Washington. The 2000 agreement allows US companies to store and process billions of pieces of data on European citizens, but only if they pledge to abide by European data privacy rules -- with US authorities monitoring compliance. More than 3,000 companies, including giants like Google, Facebook and Microsoft, have already agreed to the rules of the program.

"If we suspend this cooperative program, it will be both an economic and political blow to the Americans," says Jan Philipp Albrecht, a Green Party member of the European Parliament. His fellow party member Renate Künast, chair of the Committee on Legal Affairs and Consumer Protection in the Bundestag, says: "Under the Safe Harbor Agreement, our data are not secure when transmitted to the United States, but instead are exposed to uncertainty."

The German government is still hesitating before putting the screws on Washington. But at this point no one would bet that further cases will not turn up. "The Americans are furnishing their opponents with free arguments," says a government official.

By Nikolaus Blome, Florian Gathmann, Matthias Gebauer, Hubert Gude, Horand Knaup, Gordon Repinski, Jörg Schindler, Fidelius Schmid, Gregor Peter Schmitz and Holger Stark

Translated from the German by Christopher Sultan
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