http://www.insidebayarea.com/ci_2921495?rss Rogue Guards tap spy center Secret unit, created without orders or budget, infiltrated state's anti-terror operation Ian Hoffman and Sean Holstege, STAFF WRITERS
Soon after the Sept. 11 terrorist attacks, the California National Guard sent a captain with a top-secret clearance inside the state's civilian anti-terror intelligence center, the first of several California guardsmen to venture into the world of domestic intelligence analysis. But last summer top Guard commander Maj. Gen. Thomas Eres had a grander vision: He would create his own military "Information Synchronization Center" to pull together intelligence from the military's classified network and law-enforcement intelligence networks. Guard documents described it as an intelligence outfit "on steroids," feeding up-to-the-minute threat information to senior Guard officers. In a February memo, Eres said the information would be used in "preparation of operations against threats directed against the United States, the State of California, and their citizens and resources." State Senate Budget Committee chairman Joe Dunn, the Ocean Grove Democrat who is investigating the intelligence plans,said the Guard was stopped just in time. "I think what happened here is, if this unit and the involvement of the California Military Department went unchecked for another 12 months they would have been deep within surveillance activity on California citizens," Dunn said. Eres had no orders from the Defense Department or approval from the state Legislature, and he used money cloaked as pay for regular troops, Guard insiders allege. As a state Senate investigation unfolds, the official line is that Eres acted in relative isolation. But new Guard documents show the military worked closely with the California Anti-Terror Information Center from the beginning. With the tacit oversight of Gov. Gray Davis' office and Attorney General Bill Lockyer, a growing number of uniformed Guard officers worked side-by-side with state and local law enforcement intelligence analysts. "We do not and have not maintained a domestic surveillance unit with the department, nor have done any surveillance of Californians as recently alleged," said California National Guard spokesman Col. David Baldwin. "We do not maintain illegal files on Californians or any other U.S. persons." To his knowledge, repeated routine audits by the Army have found no violations of any rules regulating how the Guard shares intelligence. The soldiers' missions evolved from developing statewide target lists to "predictive" intelligence, under direction from the governor's terrorism advisers. In large measure, the soldiers try to predict a terrorist attack by keeping a database of suspicious and extraordinary events around likely California terrorist targets. It is full of reports of people photographing bridges or driving around refineries at odd hours, but with all names, license plate numbers and other identifiers stripped out. Officials at the Guard and CATIC, now revamped and renamed the State Terror Threat Assessment Center, say the soldiers do not spy on Californians and abide by state attorney general's guidelines that forbid collecting information on any U.S. citizen without a reasonable suspicion of criminal activity. Lockyer spokesman Tom Dresslar said the Guard soldiers, known as the Predictive Indicators Analysis Unit, "have nothing to do with" Eres' new intelligence center, though they are in the same command. "If any member of the Guard in the PIAU were engaged in human intelligence gathering, that would be outside the boundaries, way outside the boundaries, of their duties at STTAC. It would be cause for seriously grave concern for the attorney general," Dresslar said. The revelation that Gov. Arnold Schwarzenegger's press office and National Guard intelligence commanders shared an e-mail notification of a Mother's Day protest by peace groups, first reported by the San Jose Mercury News, prompted Dunn to launch an investigation. The e-mails were reminiscent of an April 2003 bulletin by CATIC analysts, warning of possible violence at an upcoming anti-war protest at the Port of Oakland. It turned violent when police fired wooden dowels into the crowd. Two years later, a top Guard commander received a heads-up e-mail about the Mother's Day protest from the governor's office and passed it to several Guard officers. He wrote that he would forward the information "to our intel folks who continue to monitor." But Guard officials said he apparently was referring to regular operations personnel who watched TV news reports on the protest. Eres stepped down, and his newly hired chief of intelligence fusion, Col. Robert O'Neil retired. Dunn predicts investigators will find misappropriation of state or federal money. Eres' attempts to create a state military intelligence system took flight when he hired O'Neil and took advantage of the National Guard's often confusing hybrid role as a state and federal agency. "They play the seams," Dunn said, to stave off state and federal scrutiny. When the Pentagon calls up Guard troops for deployment to places like Iraq, Guard insiders say it frees up their state-paid salaries. Normally, the Guard would back-fill those positions. But Eres used the money instead to hire O'Neil, Guard officers said. Last summer Guard officers prepared a budget request for the new intelligence system, as Eres saw it. It sought $8.7 million to hire 41 officers and enlisted troops, including 11 to form the Information Synchronization Group. Eres never forwarded the request. Guard documents show that O'Neil was salaried at $147,000, although that figure is not accounted for in the state budget. 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