Spy Case: Harold (Jim) Nicholson, CIA, spied for Russian SVR

Counterintelligence - Espionage - Spy Case

Name	NICHOLSON, Harold James aka Jim
Employer	CIA
Dates of Employment	20 October 1980 to 16 November 1996
Employee Type	Staff
Job Title/Duties	GS-15 Operations Officer specializing in intelligence operations against foreign intelligence services, including the intelligence services of the USSR and later, the Russian Federation 1982-85: Manila, where he had sustained, direct contacts with targeted Soviet officials. 1985-87: Bangkok 1987-89: Tokyo 1990-92: CIA Chief of Station in Bucharest, Romania 1992-1994: Deputy Chief of Station/operations officer in Kuala Lumpur, Malaysia, where, among other duties, he met with and targeted for recruitment Russian intelligence officers. 1994 -July 1996: Instructor at the classified CIA Special Training Center ("STC") in the Eastern District of Virginia, teaching CIA trainees intelligence tradecraft. July 1996: Branch Chief in the Counterterrorism Center, Directorate of Operations, at CIA Headquarters in Langley, Virginia
Military Rank	Former US Army captain who served with the ''Screaming Eagles'' of the 101st Airborne Division
Clearance Level	TS/SCI

Spying For	Russian SVR
Codename
Spying Dates	June 1994-1996
Co-conspirators
Methodology	According to CIA records, NICHOLSON was assigned to Kuala Lumpur, Malaysia during 1992-94 as Deputy Chief of Station/operations Officer. CIA records show that NICHOLSON met with an officer of the Russian intelligence service SVRR in Kuala Lumpur on four occasions during NICHOLSON's final months there; three of these meetings took place in the Russian Embassy in Kuala Lumpur. These meetings were authorized by the CIA and reported by NICHOLSON. On June 30, 1994, one day after NICHOLSON's last reported meeting with the SVRR officer, financial records show that $12,000 was wired into NICHOLSON's savings account #000026-1759/01 at Selco Credit Union, Eugene, Oregon. NICHOLSON left Kuala Lumpur on July 5, 1994, and returned to the United States. The FBI has been unable to trace the source of this money to any legitimate source of income. Surveillance of NICHOLSON in Singapore on June 27, 1996, revealed that NICHOLSON left his hotel with his camera bag at approximately 10:11 a.m. for about four hours. During this four hour period, NICHOLSON made a "surveillance detection run," that is, a trip designed to detect surveillance. For example, NICHOLSON was observed taking numerous counter-surveillance measures, such as backtracking his steps, watching glass panels of shops to look behind him, then entering and immediately exiting a subway station. During this excursion, NICHOLSON made no purchases and took no photographs. On or about August 1, 1996, surveillance detected NICHOLSON approach a mailbox at 8283 Greensboro Drive, Tyson's Corner, in the Eastern District of Virginia. A sealed Hallmark greeting card envelope containing a postcard was subsequently retrieved from the mailbox. A return address of 2206 Pimmit Run, Falls Church, 22041 was hand printed on the envelope. Both the envelope and the postcard carried oversized commemorative stamps with a face value of $1, an amount in excess of the necessary postage. The postcard was addressed to a post office box in a foreign country. The foreign post office box to which the postcard was mailed is an "accommodation address." An accommodation address is a prearranged address where an intelligence officer can receive mail clandestinely from an agent. The accommodation address itself may be serviced by an intermediary. This post office box appears to be the method that NICHOLSON uses to communicate with his SVRR handlers. On or about September 23, 1996, electronic surveillance at NICHOLSON's workplace in Langley, Virginia revealed NICHOLSON removing a camera from his desk and holding it above papers on his lap, as if he were trying to photograph documents. NICHOLSON had requisitioned this camera and lenses from the CIA. Later, NICHOLSON asked for a camera that folds down into a briefcase; this style camera is useful in photographing documents. According to CIA officials, NICHOLSON has no need for any camera in connection with his current official duties. On or about October 9, 1996, FBI surveillance observed NICHOLSON deposit an item in a mailbox at Gallows Road and Electric Avenue, Dunn Loring, Virginia. The FBI retrieved the item, a sealed airmail envelope which contained a postcard mailed to the same address and same foreign post office box as the August 1, 1996, postcard. Both the envelope and the postcard carried the same oversized commemorative style stamps with a face value of $1 as used on the August 1, 1996 postcard.
Possible Motivations, Problems	Money, anger from bitter divorce in Spring 1994 that would cost him tens of thousands of dollars to settle ''I reasoned that I was doing this for my children,'' to make up ''for the long hours at work and for failing to keep my marriage together.''--Nicholson at sentencing--an ultimate child abuse statement for his children to think it was their fault he betrayed the US
Finances	GS-15 making $73,000/year By reviewing CIA records and NICHOLSON's frequent flyer records and financial records from 1994 through early 1996, the FBI uncovered a pattern of twice yearly foreign travel, followed by unexplained deposits and payments to NICHOLSON's accounts. On June 30, 1994, one day after NICHOLSON's last reported meeting with the SVRR officer, financial records show that $12,000 was wired into NICHOLSON's savings account #000026-1759/01 at Selco Credit Union, Eugene, Oregon. NICHOLSON left Kuala Lumpur on July 5, 1994, and returned to the United States. The FBI has been unable to trace the source of this money to any legitimate source of income. According to NICHOLSON's travel records, NICHOLSON left the United States on personal travel on or about December 9, 1994. According to an itinerary he provided to the CIA, NICHOLSON planned to travel to London, New Delhi, Bangkok and Kuala Lumpur. NICHOLSON left Kuala Lumpur on December 28, 1994, returning to the United States on December 30, 1994. After arriving in Kuala Lumpur, NICHOLSON made a $9,000 wire deposit from Malaysia to his Selco checking account #000026-1759/10, and a $6,000 cash payment to his American Express account #3728-128689-71001. Almost immediately after returning to the U.S., on December 31, 1994, NICHOLSON entered the Selco Credit Union in Eugene, Oregon, and, using 130 $100 bills, paid off a $3,000 loan at Selco (Loan #86, Volkswagen), and paid $10,019.35 toward his Selco Visa account. The FBI has been unable to trace the source of the money in these transactions to any legitimate source of income. CIA leave records show that NICHOLSON took annual leave from June 15, 1995 through July 14, 1995. According to an itinerary NICHOLSON provided to the CIA, NICHOLSON left the United States on June 16, 1995 for Singapore, then traveled to Kuala Lumpur, where he stayed from June 17 through July 1, 1995. NICHOLSON returned to the United States through Hong Kong on July 1, 1995. Analysis of financial records created during and shortly after the trip show the following financial transactions totaling $23,815.21 involving accounts in the name of HAROLD J. NICHOLSON and joint accounts he holds with his children. The FBI has been unable to trace these financial deposits and payments, which are set out below, to any legitimate source of income. Accounts marked with a '' indicate accounts that NICHOLSON holds jointly with one of his children. Date Amount Institution Account* 6/21/95 $6,300 American Express 3728-128689-71001 6/30/95 $1,000 Selco Credit Union 000026-1759/20 Money market 6/30/95 $4,715.21 Selco Credit Union Visa 4202-51000-261-7591 6/30/95 $1,000 Selco Credit Union 000029-1248* 6/30/95 $1,000 Selco Credit Union 000034-2527* 6/30/95 $1,000 Selco Credit Union 000029-1249* 7/10/95 $1,000 Selco Credit Union 000026-1759/10 Checking 7/10/95 $1,000 Selco Credit Union 000026-1759/20 Money Market 7/17/95 $1,000 Central Fidelity 7922119540 7/17/95 $3,000 Central Fidelity 7922119540 7/20/95 $1,400 USAA Mutual Fund 52900-468973 7/20/95 $1,400 USAA Mutual Fund 54900-278125 According to CIA leave records and NICHOLSON's travel records, NICHOLSON left the United States for personal travel on December 18, 1995, and arrived in Bangkok, Thailand on December 20, 1995. NICHOLSON stayed in Bangkok until December 24, 1995, when he left for Phuket, Thailand. NICHOLSON returned to the United States on December 30, 1995. Analysis of NICHOLSON's financial records during and shortly after this trip show the following financial transactions involving accounts in the name of HAROLD J. NICHOLSON totaling $26,900 which the FBI has been unable to trace to any legitimate source of income. Date Amount Institution Account 1/3/96 $4,000 Central Fidelity 7922119540 1/3/96 $4,400 Central Fidelity 7922119540 1/4/96 $3,000 Central Fidelity 7922119540 1/5/96 $1,900 Central Fidelity 7922119540 1/8/96 $1,000 USAA Mutual Fund 52900-468973 1/8/96 $1,000 USAA Mutual Fund 54900-278125 1/11/96 $900 Central Fidelity 7922119540 1/16/96 $2,000 Central Fidelity 7922119540 1/17/96 $1,400 Central Fidelity 7922119540 1/22/96 $900 Central Fidelity 7922119540 2/6/96 $1000 Central Fidelity 7922119540 After meeting with Russian SVR officers in Singapore, on or about June 28, 1996, surveillance detected NICHOLSON leave his hotel and go to an American Express Travel Services Center in Singapore, where he made an $8,300 cash payment to his American Express account. Several days later, NICHOLSON left Singapore for Bangkok, paying his $1,679.59 bill in cash. Records of NICHOLSON's financial transactions during and immediately after this Singapore trip reveal approximately $20,000 in purchases, deposits and payments. In addition, electronic surveillance has detected a telephone conversation between NICHOLSON and an acquaintance indicating that NICHOLSON gave his son approximately $12,000 to purchase a new car. I have seen a cash receipt found in HAROLD J. NICHOLSON's van dated July 12, 1996, issued to his son for $12,377.50 cash. Date Amount Institution Account 6/28/96 $8,300 American Express 3728-128689-71001 7/l/96 $820. 58 Overseas Union Bank purchase gold coins 7/l/96 $1,679.59 Shangri La Hotel 7/5/96 $762.93 Hanalei Bay Resort 7/8/96 $1,000 Selco Credit Union 000029-1248* 7/8/96 $1,000 Selco Credit Union 000034-2527* 7/14/96 $120 Dulles Airport Parking 7/29/96 $5,000 Selco Credit Union 000026-1759/10
Identified/ Investigation	On or about October 16, 1995, and October 20, 1995, NICHOLSON underwent polygraph examinations administered by CIA polygraphers as part of his routine security update. A computerized review the examination results indicated a .97 (out of 1.0) probability of deception on two questions: (1) Are you hiding involvement with a Foreign Intelligence Service? and (2) Have you had unauthorized contact with a Foreign Intelligence Service? During one of the examinations, a CIA polygrapher deemed NICHOLSON's response "inconclusive" to the following question: "Are you concealing contact with any Foreign Nationals?" On or about December 4, 1995, NICHOLSON underwent a third polygraph examination administered by a CIA polygrapher. A computerized review of the examination revealed an .88 probability of deception on the following questions: (1) Since 1990, have you had contact with a Foreign Intelligence Service that you are trying to hide from the CIA? and (2) Are you trying to hide any contact with a Foreign Intelligence Service since 1990? The CIA examiner noted that NICHOLSON appeared to be trying to manipulate the test by taking deep breaths on the control questions, which stopped after a verbal warning. On or about July 19, 1996, an audit of CIA computer information revealed that NICHOLSON was using his computer to conduct searches in CIA databases for information using the following key words: "Russia[n]" and "Chechnya." As a result of NICHOLSON's use of these key words to conduct searches, CIA cables, reports, and documents containing either of those key words would be routed to his computer where he could read them and print them. According to CIA officials, NICHOLSON has no need for such materials in his present position. The audit also revealed that NICHOLSON attempted to access CIA databases that he had no authorization to access, including two attempts to access Central Eurasian Division databases which would contain information on Russia. This unauthorized activity led the CIA computer security personnel to list NICHOLSON as a "surfer."
Arrest Date/Location	16 November 1996 at Dulles International Airport in Chantilly, VA
Charges	Violation of Title 18, United States Code Section 794(c) (conspiracy to commit espionage)
Court	Eastern District of Virginia
Lawyers	Defense: Jonathan Shapiro
Status	In jail. Sentenced to 23 years 7 months in prison.

Date/Place of Birth	17 November 1950 in Woodburn, Oregon
Citizenship	US
Residences	5764 Burke Towne Court, Burke, Virginia Springfield, OR
Education	1973: bachelor's degree in geography from Oregon State University Master's degree in education and counseling from the University of Maryland
Family	Divorced in August 1994, three children (in 1996: 18, 15 and 12 years old) Thai girlfriend Ex-wife Laura, became enamored of New Age philosophies, changed her name to Al Aura Jusme. Separated in 1992
Other Employment	c.1973-1979: US Army
Additional Bio	Son of a US Air Force officer

Documents	Affidavit: US v Harold J. Nicholson (15 November 1996) FBI Press Release on the Arrest of Jim Nicholson (18 November 1996)
Quotes	"The arrest makes clear that we must continue to place priority on counterintelligence in the CIA and the rest of the intelligence community. We must remain vigilant to the penetration of U.S. national security organizations by Russia and other hostile intelligence services."--John Deutch, Director of the CIA "The story here to me, today, is not that there was another spy--that we have to anticipate given the frailty of human nature--but, rather, that the CIA and the FBI have together built a very formidable counterintelligence capability that captured this person, identified it, uncovered him much more rapidly than existed in the case of Ames, and have brought him to justice. So the story here is that we have a successful post-Ames counterintelligence effort which is in a position to defend the country from any foreign intelligence service that targets our national security apparatus."--John Deutch, Director of the CIA ''I won't ask for the forgiveness of my colleagues and countrymen, for I know they cannot give it. I will ask for the forgiveness of my family and children, because I know they will.''--Nicholson ''No weaknesses.'' ''Mr. Nicholson can do it all.'' ''His future is bright.''--statements on Nicholson's performance appraisals at work ''I have lost everything that was ever dear and important to me--everything that was ever of value. 'I am in so many ways so very sorry.''--Nicholson
Case Links

News:

C.I.A. Traitor, Saying He Wanted Cash for Family, Gets 23 Years

The highest-ranking C.I.A. officer ever convicted of espionage told the judge at his sentencing today that he had become a spy for Russia for the benefit of his three children. In his only public statement since his arrest last November, the 46-year-old defendant, Harold J. Nicholson, a former C.I.A. station chief who sold secrets to Moscow for $300,000, bowed his head and said, ''I reasoned that I was doing this for my children,'' to make up ''for the long hours at work and for failing to keep my marriage together.''......(New York Times, 6 June 1997)

CIA turncoat sentenced to 23 years in prison

After apologizing for being a Russian spy, confessed CIA double agent Harold Nicholson was sentenced on Thursday to 23 years and seven months in prison. He is the highest-ranking CIA officer ever caught spying. Nicholson, who has cooperated with investigators, could have received a life sentence. He pleaded guilty March 3 to selling national security secrets to Moscow for 2 1/2 years. Authorities said he was paid $300,000 by his Russian spymasters......(CNN, 5 Jun 1997)

C.I.A. Traitor Severely Hurt U.S. Security, Judge Is Told

Harold J. Nicholson, the former Central Intelligence Agency station chief who turned traitor in 1994, did incalculable damage to the agency's secret operations, the Acting Director of Central Intelligence told the Federal judge who will sentence Mr. Nicholson on Thursday. Mr. Nicholson, the highest-ranking C.I.A. official ever convicted of espionage, unmasked ''a large number of C.I.A. officers'' to his Russian handlers and destroyed important clandestine operations overseas, the Acting Director, George J. Tenet, told Judge James C. Cacheris of Federal District Court in nearby Alexandria, Va., in a letter dated June 2 and filed with the court today. The lives of several intelligence officers working ''under our deepest cover'' were endangered by Mr. Nicholson's betrayals, Mr. Tenet said. Those C.I.A. officers were working abroad under guises more sophisticated than their conventional ''cover'' assignments as State Department officials. The C.I.A. is still trying to assess how badly it was hurt, but it says it will never really know. ''We will never be able to calculate fully the damage to the national security of this country'' caused by Mr. Nicholson's betrayal, Mr. Tenet told the judge.......(New York Times, 4 June 1997)

C.I.A. Officer Admits Spying for Russians

Harold J. Nicholson, the highest-ranking Central Intelligence Agency officer ever charged with espionage, today pleaded guilty to selling secrets to Moscow. Striking a plea agreement under which he might someday be a free man again, Mr. Nicholson, who is 46, admitted that he had been a Russian spy since June 1994, when he was the C.I.A.'s deputy station chief in Malaysia. His confession came in a terse hearing at the Federal District Court in Alexandria, Va. He said little more than ''I plead guilty, Your Honor.'' ......(New York Times, 4 March 1997)

C.I.A. Officer Pleads Not Guilty to Charges He Spied for Moscow

Harold J. Nicholson, the highest-ranking C.I.A. officer ever indicted for espionage, today pleaded not guilty to charges of conspiracy to spy for Moscow. A judge set March 10 as the trial date......(New York Times, 28 Nov 1996)

Investigators Say Spy Suspect Used a Swiss Bank Account

Federal prosecutors disclosed today that Harold J. Nicholson, the C.I.A. officer accused of spying for Moscow, kept $61,000 in a Swiss bank account. The existence of the account was made public at a hearing in which Thomas R. Jones Jr., a United States magistrate judge, ordered Mr. Nicholson held without bail pending a trial on the espionage charge. With the discovery of the account, the prosecutors now say Mr. Nicholson received a total of $180,000 from the Russians.....(New York Times, 26 Nov 1996)

Bored CIA spies go moonlighting
ALARM is growing in the Central Intelligence Agency that renegade agents are exploiting their unique access to sell commercial secrets to private clients. As the CIA comes under intense criticism for incubating yet another spy in the upper levels of the agency - the latest alleged traitor, Harold Nicholson, is the most senior agency official charged with espionage - experts warn that a culture of moral decline and profiteering has taken root at its headquarters in Langley, Virginia.....(Daily Telegraph, 14 Nov 1996)

The Spies Didn't Come In From The Cold War

The cold war is over. But as the arrest last week of a former C.I.A. station chief, Harold J. Nicholson, demonstrates, Russia and the United States are still engaged in the high-stakes game of ''Spy vs. Spy.'' For the new Russia's intelligence services, the adversary is the same: the C.I.A. The fears are the old ones: encirclement by hostile powers and supposed plots to keep Russia weak. And the goals are similar: the acquisition of Western military and, increasingly, commercial technology. In the United States, there has been a great gnashing of teeth about the role of the Central Intelligence Agency in the wake of the cold war. Not so here.....(New York Times, 24 Nov 1996)

C.I.A. Officer Indicted by Jury On Sole Charge

A Federal grand jury returned a one-count indictment today against Harold J. Nicholson, the career C.I.A. officer who was arrested on Saturday, charging him with conspiracy to commit espionage for Russia. Law-enforcement officials said the the indictment, which came as a mild surprise, was not an effort to bring substantive new charges against Mr. Nicholson. Rather, they said, it was a tactical step intended to streamline the prosecution of the accused spy......(New York Times, 22 Nov 1996)

Alleged Spying by a Top CIA Officer Demoralizes Agency

CIA Director John M. Deutch described alleged spy Harold James Nicholson on Wednesday as one of the agency's "leading officers" and said "there is no question" that the revelation of his alleged betrayal has had a devastating effect on CIA morale......(Washington Post, 22 Nov 1996)

On the Trail of a C.I.A. Man: Trips and Big Cash Transfers

At 10:11 A.M. on June 27, Harold J. Nicholson, a veteran C.I.A. officer, slung a camera bag over his shoulder and locked his $300 room in the Garden Wing of the Shangri-La Hotel, then slipped out of the lobby, past the luxury cars in the driveway and into the elegant streets of Singapore.......(New York Times, 21 Nov 1996)

Careers Are Among the Casualties Of C.I.A.'s Latest Security Breach

The careers of the bright new graduates of the Central Intelligence Agency's school for spies are blighted: the F.B.I. fears that the class lists and curriculum are sitting in a Russian safe. The identities of American businessmen in Moscow who volunteer intelligence secrets to the C.I.A. have probably been exposed. The agency's operations in Moscow, Tokyo, Manila and Malaysia have been compromised. And the reputation of the nation's clandestine service has taken another crushing blow......Officials suspect that Mr. Nicholson sold his Russian contacts the names of every student who prepared for undercover assignments overseas at the C.I.A.'s training school in 1994, 1995 and the first half of 1996......(New York Times, 20 Nov 1996)

More on the case of CIA agent Harold Nicholson, the most senior agent ever accused of spying for Russia

In Washington today, the State Department filed a protest with the Russian government for its attempted espionage against the United States. But in Moscow, officials dismissed the arrest of CIA agent Harold Nicholson as an internal American matter. Nicholson, a former station chief, is the highest-ranking CIA official ever to be charged with espionage. He allegedly sold information to Russian intelligence for $120,000. Now we get two views on the case from Walter Pincus, who covers intelligence for the "Washington Post, and David Whipple, a retired CIA official who is now executive director of the Association of Former Intelligence Officers......(PBS Online NewsHour, 19 Nov 1996)

An excerpt from the CIA-FBI news conference

Spy Suspect Seemed Like the Best and the Brightest

Very few people at the Central Intelligence Agency rise from trainee to station chief in a decade, but Harold J. Nicholson did. The rise of Mr. Nicholson, who was highly regarded by his peers in the C.I.A.'s operations directorate and was rewarded with prestigious posts throughout the second half of his 16-year career at the agency, makes his fall all the more startling.The espionage charges against him have ''no precedent,'' a senior C.I.A. official said today. Never before has a onetime station chief -- the agency's equivalent of an ambassador overseas -- been charged with spying against this country......(New York Times, 19 Nov 1996)

OFFICIALS OUTLINE 2-YEAR BETRAYAL WITHIN THE C.I.A.

Federal authorities said today that a Central Intelligence Agency career officer charged with spying for Moscow offered himself to Russian intelligence officials two years ago at the height of the furor over the C.I.A.'s last major espionage case. The officials said their investigation showed that Harold J. Nicholson, the highest-ranking C.I.A. employee ever to be charged with espionage, deposited the first installment of the nearly $120,000 that they suspect he was paid by Moscow shortly after meetings with the Russians in Kuala Lumpur, Malaysia, where Mr. Nicholson was stationed. The meetings occurred at a time when the intelligence agency was reeling from the arrest of another career officer, Aldrich H. Ames......(New York Times, 19 Nov 1996)

Veteran CIA official charged with spying

Career CIA employee Harold J. Nicholson was charged Monday with espionage for passing classified secrets to the Russians for several years......(CNN, 18 Nov 1996)

Additional reportage