Foreign Relations of the United States, 1977–1980, Volume XX, Eastern Europe

260. Memorandum From the Deputy to the Director of Central Intelligence for Collection Tasking ([name not declassified]) to Director of Central Intelligence Turner¹

Washington, November 17, 1978

SUBJECT

• Yugoslav Intelligence Exchange

1. Action Requested: For your review and consideration of the recommendation provided in Paragraph 7 below.

2. Background:

a. In a 26 September meeting with Secretary Brown, Yugoslav Defense Minister Ljubicic raised the possibility of a US-Yugoslav intelligence exchange on the Soviet Union. The Secretary agreed in principle, having been alerted in advance that the matter might be surfaced. Secretary Brown subsequently accepted your offer to undertake an assessment of the pros and cons of such an exchange. This memorandum, therefore, provides some background, addresses the relevant issues, discusses the options available to you, and makes a recommendation for further action. Attached are some biographic sketches of the key Yugoslav players.

b. There is some precedent for an intelligence exchange with the Yugoslavs:

—Following Yugoslavia’s expulsion from the Cominform in 1948, a program of exchange of military intelligence was developed between the United States and the Yugoslav Defense Ministry. This arrangement was cancelled by the Yugoslavs in August 1955 as a result of Belgrade’s normalized relations with Moscow.

—[1 paragraph (13 lines) not declassified]

—On 29 August 1968, following upon the Soviet invasion of Czechoslovakia, Secretary Rusk told the Yugoslav Ambassador that the US was closely watching the situation and offered to check out any information that the Yugoslavs developed regarding a Soviet build-up of forces. A few days later, a senior Yugoslav official in Belgrade did request confirmation of reported Soviet moves. When the US Embassy responded with a summary of information on Soviet deployments in Hungary and Bulgaria, an offer was made to provide more detail. The Yugoslavs demurred, saying that they would prefer to continue to exchange information as they had in this instance. The State Department does not equate this arrangement [1 line not declassified]. From 1968 until the 1973–74 period, however, the Yugoslav military attaches were responsive to queries from their US counterparts, which may be attributed to individual rapport at certain posts. US-Yugoslav differences over arms sales and the Toth affair (American convicted by the Yugoslavs for alleged espionage) may have contributed to the cessation of this limited cooperation, but there was no specific word on the subject from the Yugoslavs.

—On 4 October 1978, coincident to the Yugoslav approach regarding an intelligence exchange, the Department of State provided the Yugoslav Foreign Ministry with an assessment of the Soviet leadership.² This stemmed from a proposal by Ambassador Eagleburger to Rajko Knezevic, Director of the Office for Eastern Europe in the Foreign Ministry, that the US and Yugoslavia exchange information on the Soviet leadership and was made in response to Knezevic’s expression of Yugoslav concern with this question.³ Subsequently, a Foreign Ministry official (Budimir Loncar) advised the Ambassador that the information provided had received close attention and that he would discuss the paper “privately” with him some day soon.⁴

3. Considerations:

a. One factor in considering a resumed intelligence exchange is a determination of what the US could provide and what the US is likely to receive in return:

[2 paragraphs (40 lines) not declassified]

b. There are other factors to be considered beyond the potential intelligence value. One is the possible improvement in US-Yugoslav relations in that an exchange would signal a positive US attitude. In the over-all context of US-Yugoslav relations, however, such an exchange may not loom large in Yugoslavia’s estimation compared to matters such as arms sales or the Joint Defense Working Group now being established. On the other hand, it was Ljubicic who raised the issue. Another possible advantage to the US is the useful contacts that would be developed within the Yugoslav military establishment from which we might benefit in more troubled times. Also, US-provided information might sharpen the Yugoslav perception of the Soviet threat. Finally, a Soviet perception of closer ties might act as a deterrent to precipitous Soviet actions against Yugoslavia.

c. Against this possible benefit to the US are the potentially negative factors to be considered: Key among these is the security implications since it would be through a “leak” that other negative factors would be operative. Utmost care would be required to make certain that intelligence passed to the Yugoslavs would not in fact divulge sources and methods. While the Yugoslavs are not likely to provide the USSR with any information, a Soviet penetration of the Yugoslav government cannot be ruled out. [2 lines not declassified]

• —Another security aspect is that in passing intelligence requirements to the Yugoslavs, the US would tend to reveal its intelligence gaps.
• —Should any intelligence exchange arrangement be surfaced to the USSR, moreover, it could result in a Soviet estimate of greater US-Yugoslav collusion and result in a negative Soviet attitude with unpredictable effects but possibly including Soviet efforts toward destabilization in Yugoslavia in the post-Tito period beyond those which the USSR may now contemplate. Such a concern would weigh heavily in Yugoslav consideration of undertaking the exchange agreement and may, in fact, limit the degree of that exchange.
• —It also must be noted that the Yugoslav intelligence service is believed to engage in acts of assassination against Croatian elements around the world. At a time when the US is fostering the ideal of human rights, a new arrangement, if it became known, would appear to be in contradiction to that ideal.
• —Also not to be overlooked is the unknown motivation behind this Yugoslav initiative and the possibility that the Yugoslavs subsequently could cite this arrangement to their own advantage.

d. On balance, it probably would be to the advantage of the US to participate in an intelligence exchange with Yugoslavia. Such an exchange would provide an opportunity to obtain intelligence difficult to gain from any other source. Moreover, an intelligence exchange might benefit US foreign policy interests. This is a determination, however, which others should address. From an intelligence point of view, we see no overriding obstacles providing that the exchange arrangement is closely monitored.

4. Modality of Exchange: We would agree with Ambassador Eagleburger’s assessment that the arrangement for any intelligence exchange is of particular importance.

a. [4 lines not declassified]

b. Belgrade would be the preferred locale for the exchange and the DAO the logical instrument to effect it. Such an arrangement would have the advantage of postponing immediate decisions on what to provide by referring the question to Washington. Specific actions would be required before release of information:

• —The originating agency should approve the release of any of its reports used as a basis for information to be passed.
• —NFAC and DIA should make an assessment of the net gain to be derived in providing the general type of information that would be passed.
• —The US Ambassador in Belgrade should have final approving authority on the passing of specific information.
• —Approval should be obtained from national-level authorities of both countries to insure that information exchanged has highest level official sanction.
• —Intelligence exchanges should be conducted on a reciprocal basis.

c. Long term commitments should not be made and the exchange arrangements should be continued only as long as they prove to be in the best interests of the US.

d. [5 lines not declassified]

5. Options: In light of the above considerations, several options are available:

a. Advise the State and Defense Departments that from an intelligence point of view there is no objection to an intelligence exchange providing that arrangements for such an exchange assure the protection of sources and methods, as above.

b. Advise those Departments that the intelligence value to be gained from such an exchange could be offset by the potential disadvantages, including security implications, which would weigh against entering into such an agreement.

c. Advise the concerned Departments that preliminary findings suggest that there could be a substantial intelligence advantage to be derived from an exchange, that we have no objections if sources and methods are protected, and that larger foreign policy considerations should be the subject of NSC consideration.

6. Staff Position: This memorandum has been coordinated with NFAC, the Operations Directorate and the State and Defense Departments, as well as with the NSC Staff.

7. Recommendation: Accept Option “c” to ensure full consideration of the problem and policy-level support of any intelligence exchange that develops.⁵

1. Source: Central Intelligence Agency, Office of the Director of Central Intelligence, Subject Files (1978), Job 80M01542R, Executive Registry Box 14, Folder 14, Y–2: Yugoslavia. Secret. Sent via the Deputy Director of Central Intelligence.
2. In telegram 6654 from Belgrade, September 12, Eagleburger reported his conversation with Knezevic at a reception in Belgrade. After hearing from Knezevic of the “GOY’s ‘serious’ concern about what is going on in Moscow,” Eagleburger reported his offer to the Yugoslav official for an “exchange of views about what is going on in Moscow among the leadership.” (National Archives, RG 59, Central Foreign Policy File, D780371–0143)
3. In telegram 250569 to Belgrade, October 2, the Department provided Eagleburger with the Department’s analysis on the situation in Moscow. (National Archives, RG 59, Central Foreign Policy File, D780403–0615)
4. Eagleburger briefed Loncar on October 4 on the substance of the information provided by the Department on October 2. On October 18, following a discussion on other issues, Eagleburger noted that “Loncar took me aside out of earshot of his North American desk assistant to say that the info we provided [on October 4] is extremely interesting and has received close attention. As a next step in the process, Loncar said he would see me ‘privately’ some day soon to discuss the paper.” While unsure if the Yugoslavs “will give us more than the map coordinates for Moscow,” Eagleburger undertook to tell Loncar that “we hope the exercise can be repeated from time to time.” (Telegram 7686 from Belgrade, October 18; National Archives, RG 59, Central Foreign Policy File, D780436–0800)
5. Turner approved this recommendation on November 20 and wrote on the bottom of the last page: “Another advantage, and one that dominates my thinking, is that we will establish mil-to-mil contacts that may prove invaluable in post-Tito period. Stan.”