The Crusader

running an agency.³² Under Casey, the CIA played a central role in economic warfare, with the analysis division launching a systematic campaign to identify Soviet economic weaknesses.³³ “What we realized is that the CIA [prior to the Reagan administration] was monitoring Soviet strengths,” said Herb Meyer, special assistant to Casey. “It was not looking at Soviet weaknesses.” Now, under direct orders from the president, Casey began conducting Soviet vulnerability assessments.³⁴

Because of his vehement anti-Communism and strategic insight, Reagan found a soul mate in Casey, a man who like Reagan saw the Soviet Union as vulnerable to pressure. With Casey at Langley, Reagan’s intent to undercut the Soviet Union now found a formal method, one that would use intelligence collection as an offensive tool. In this capacity, Reagan unleashed Casey, picking his brain for ideas, placing tremendous confidence in him, and then signing off on dangerous initiatives that exploited Soviet vulnerabilities. He did this quite discreetly, often in closed-door meetings that involved only him, Casey, and the national security adviser (Clark in the most crucial years): As Bill Clark acknowledged: “Few of these initiatives were discussed at cabinet meetings. The president made his decisions with two or three advisers in the room.”³⁵

Moscow immediately recognized Casey’s prominence inside the Oval Office, and was quite concerned, as evident by the way he was profiled in the Soviet press. He was referred to as the “Queens Gangster,” as “Casey the Untouchable,” or as simply “the Crook.”³⁶ The Soviets were enraged when Casey, in a speech in San Antonio, colorfully exclaimed that Marxism-Leninism had unleashed the Four Horsemen of the Apocalypse.³⁷ In response, Vitaliy Korionov mocked the CIA director in Pravda: “Casey stated, voice atremble: ‘The Marxist-Leninists have unleashed the four horses [sic] of the apocalypse—famine, plague, war, and death.’ Are you not scared, reader?”³⁸ And as for Casey’s and Reagan’s confidence that they could reverse Communist gains from Afghanistan to Nicaragua, Korionov warned: “But just you try, gentlemen!” Well, Casey and Reagan were ready to try.

Casey shared Reagan’s optimism that Communism was not the future; aside from Reagan, he was the rare administration member who publicly articulated that vision. In a speech at Ashland University, Casey estimated: “Now for the good news. The pendulum of history slowly but surely is swinging away from Soviet Marxism as a model of Third World countries, and toward the concepts of democracy and free market economies.”³⁹ And from the start, Bill Casey was ready to do his part to help Reagan rock the pendulum.

TWO-TIERED APPROACH

Though they were clearly putting together the tools to wage an economic war, Reagan understandably shied from publicly using those very provocative words and regularly reminded zealous staff to refrain as well.⁴⁰ “Certainly it was economic warfare,” said Reagan defense official Richard Perle, “although we had to deny it at the time.”⁴¹ Similarly, Secretary of Defense Caspar Weinberger explained that it would have to be “a silent campaign.”⁴² Clearly, there was no doubt within the staff over what they were doing, and together they sensed that while they would not be able to publicly celebrate the individual victories of each battle, the ultimate victory of the war would be the sweetest of them all—if and when it came.

This war would come to manifest itself in what Clark and others called the president’s “roll back strategy,” which, as Clark put it, aimed at “changing the Soviet system from within by further destabilizing their economy through strict export controls [on] high technology transfers, by accelerated arms competition, and by exposing the Soviet system for what it was.”⁴³ This broad declaration could be divided into two categories: First, there was an effort to restrict Soviet cash flow and revenues by depriving the USSR of vital trade and technology. Second, there was an attempt to spend the USSR into a corner—if not into oblivion—by challenging it to a costly arms race and technological competition that Reagan felt it could not match and would die trying.

RESTRICTING CASH FLOW

Depriving Moscow of money quickly became a team effort, and one of the unsung heroes was Roger W. Robinson, who joined the Reagan team that March 1982 at age thirty-one. When he was thirty-two, Robinson became senior director of U.S. international economic affairs at the NSC, where he ran the bulk of international economic policy—that which involved foreign policy and security dimensions. Like Bill Casey, he was a rare find in that he had both Wall Street and foreign-policy backgrounds. Robinson had previously worked at Chase Manhattan, where for five years he was a vice president in charge of Chase’s loan portfolio for the Soviet Union and Eastern and Central Europe.

It was Robinson and his colleague Norm Bailey who, under the leadership of Clark and Reagan, focused the administration’s attention on going after the Soviet hard-currency flow—and Reagan personally “worked closely” in configuring this security-minded economic strategy.⁴⁴ The consistent approval of Clark and Reagan, emphasizes Robinson, was alone a “major breakthrough” in his work—in that another president and national security adviser might have vetoed his suggestions. It was through Robinson’s work that the administration came to see that Soviet hard-currency income in 1982 was only about $32 billion, much of which came from gas and oil exports.⁴⁵ This was a stunning degree of dependence on merely two resources.

THE PIPELINE

In 1982, natural gas was one of the Soviets’ top exports and as such it was the lifeblood of the Soviet economy. The Soviets had already begun a huge $35 billion project that would transfer natural gas from Siberia to Western Europe. The project called for two 3,600-mile pipelines, each of which would be fifty-six inches in diameter, extending from the Yamal Peninsula into Western European cities via the Soviet gas grid. While the construction of these pipelines would give Western Europeans a gas supply that would last them into the twenty- first century, it would also provide the Soviets with billions of dollars in revenue.

Before Ronald Reagan took office, Western Europe had committed to cooperating with the Soviet Union in the construction of the pipeline. Neither the previous U.S. administration nor Western governments had resisted the enormous project; quite the contrary, Western Europe, grappling with very high unemployment, favored construction because it would bring jobs. In 1981, the French president, Francois Mitterand, entered office with a number of large contracts already signed and approved by his predecessor. Each of these French companies needed the money and Mitterand said he felt legally bound to them.⁴⁶ Even Margaret Thatcher supported the pipeline, as several large British firms were assured big contracts.

Despite the Western nations’ support for the project, Reagan was convinced that it needed to be stopped. If America was going to be successful in this economic war, the administration needed to stifle each and every opportunity for the Soviets to generate cash flow and this meant stifling the pipeline. Secretary of Defense Weinberger explained Reagan’s take on this issue: “He knew that what the Soviet Union needed very much was hard currency. And he knew that the construction of the pipeline would give them that. He felt very strongly that you didn’t want to assist them in any way in getting hard currency.”⁴⁷

It was a position that he knew would be unpopular with America’s allies, but he also knew that it would be unpopular with his enemies as well. As construction neared, Reagan began considering his options to prevent assembly of the pipeline. It was merely the beginning of a fight that would last for the next year and a half.

THE FAREWELL DOSSIER