FBI has failed to plug spying gaps - inspector

WASHINGTON, Oct 1 (Reuters) The FBI has failed to plug significant gaps that allowed jailed agent Robert Hanssen to spy for the KGB for more than two decades, the Justice Department reported today.

The department's inspector general's office said the FBI had not yet adopted significant recommendations in its 2003 report on the case, which it called the most damaging in the agency's history.

The findings come as spying on the United States by Russia and China has rebounded almost to Cold War levels, according to U.S. intelligence agencies.

The report said the arrest in 2005 and jailing of former FBI intelligence analyst Leandro Aragoncillo for giving secret documents to Philippine officials demonstrated the agency had lingering problems in rooting out spies.

''The circumstances surrounding Aragoncillo's activities and the FBI's response to them are stark reminders of the vulnerabilities that persist within the FBI's security program and the further need to address these vulnerabilities,'' it said.

The FBI said in a statement that it would continue to work on implementing the inspector general's recommendations and noted the report's finding that the agency had made ''significant progress.'' The inspector general's latest report was a follow-up to its probe into Hanssen's spying.

Hanssen was a former FBI supervising agent arrested in 2001 and charged with more than two decades of spying on behalf of the Soviet KGB and its successors in Russia. He was sentenced in 2002 to a life term.

The initial report blamed the breach on a ''deeply flawed'' FBI internal security program and long-standing counterintelligence problems.

Several of the 21 recommendations it made have been implemented, such as a database for tracking security violations and an annual financial disclosure program, the new report says.

But it said other recommended changes are not in place.

It said the FBI moved only recently, ''after disagreeing ...

for several years,'' to create a new unit devoted exclusively to finding potential internal spies.

The agency also has not resolved information-tracking problems that let Hanssen ''walk out of FBI headquarters with classified documents,'' nor has it set up a central storehouse for derogatory information that could trigger an investigation of an agent.

It blamed a three-month delay in investigating Aragoncillo on flaws in the existing counterespionage system.

In the Aragoncillo case, the report said the FBI failed to probe his questionable credit history and it gave him a high-level security clearance despite his being ineligible because there were non-U.S. citizens in immediate family.

Furthermore, it said Aragoncillo drew attention for ''excessive and highly unusual'' use of his cell phone, for asking others at the agency about their cases and for using his computer to read information about Philippine corruption, which was unrelated to his job.

Aragoncillo used agency computers to download more than 100 sensitive documents unrelated to his duties. Aragoncillo later acknowledged his espionage efforts were aimed at destabilising and ousting the Philippine government.

He was arrested in 2005, pleaded guilty the following year to four spying-related charges and in July 2007 was sentenced to 10 years in prison.

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