The fugitive whistleblower says allowing police and security services greater access to data is "beyond belief."
No bombs falling

Germany’s dramatic decision to expel the top U.S. intelligence official in Berlin has put fresh strain on the frequently fraught relationship between American spies and the policymakers who rely on – and sometimes clash with – the nation’s cloak-and-dagger operatives.

The transatlantic feud comes amid a bleak six-month stretch of international crises that appear to have caught the United States flat-footed as well as at a time of skirmishes between the White House and some of the intelligence community’s career operatives.

U.S. intelligence agencies have never been strangers to ugly controversies, from attempts to assassinate Cuba’s Fidel Castro, to the use of interrogation practices that meet international definitions of torture, or the case for the 2003 invasion of Iraq. They have also faced charges of incompetence, like the failure to predict the fall of the Soviet Union.

By those historical standards, 2014 hasn’t been a disaster. But the often testy relationship between spies and politicians is definitely going through a bad patch – and it may only get worse.

The last half-year has featured the shocking rampage of an al-Qaida offshoot, the Islamic State in Syria and the Levant (ISIL), in Syria and Iraq, Russia’s dramatic annexation of Crimea, the White House’s accidental but headline-grabbing outing of the CIA station chief in Afghanistan, and an unprecedented war of words in which one of the agency’s most reliable congressional champions, Senator Dianne Feinstein, accused it of spying on legislative staff.

Not everyone agrees that the relationship is passing through an unusually difficult period. Senator Saxby Chambliss, the top Republican on the Senate Intelligence Committee, praised CIA Director John Brennan.

“I think John is working hard to make sure our intelligence community functions in a way that the White House and policymakers want to see it work,” Chambliss told Yahoo News. “You have bumps in the road in any organization and John’s trying to smooth those out.”

The latest news out of Germany has roots in the stunning disclosures from former National Security Agency contractor Edward Snowden, which began a little more than a year ago. Already, German Chancellor Angela Merkel had openly expressed anger upon learning that U.S. intelligence eavesdropped on her cell phone calls. And the White House’s response – a clumsily worded denial that served to confirm the charges – did nothing to soothe seething tempers in Berlin.

On Thursday, German government spokesman Steffen Seibert tied the expulsion of the CIA station chief to two new formal investigations into suspected American espionage in Germany and the broader dispute over how much Washington spies on its allies.

Seibert said it was "crucial for Germany, in the interest of the security of its citizens and its troops abroad, to work closely on a basis of trust with Western partners, in particular with the USA".

"However, mutual trust and openness are required," he scolded.

At the White House, National Security Council spokeswoman Caitlin Hayden offered “no comment on a purported intelligence matter” but said U.S.-German national security cooperation was critical. “It is essential that cooperation continue in all areas and we will continue to be in touch with the German government in appropriate channels,” she said in a statement.

The dispute has deepened mutual mistrust between the CIA and the White House. The New York Times cited unnamed White House officials as saying that the president did not know when he picked up the telephone to speak to Merkel on July 3 that, just a day earlier, Germany had arrested one of its own intelligence operatives for allegedly passing secrets to Washington. The Times report was notable in part because it cited one anonymous source as openly considering the possibility that Brennan knew but failed to brief the White House.

That angered some career intelligence officials who suggested that the White House was scapegoating Brennan. White House officials would not discuss the matter.

“There's not a White House that's ever existed that isn't willing to point the finger, point the blame, at the intelligence community rather than taking the blame itself," a former senior intelligence official told Yahoo News. “That's exactly what's happening. The White House is trying to deflect blame from them, back to the agency.”

An informed source underlined one irony: Brennan infuriated some of his current colleagues at the CIA when he was the White House’s top counter-terrorism advisor by writing a scathing report criticizing the intelligence community’s handling of the so-called “Underwear Bomber” plot on Christmas Day in 2009.

Obama aides acknowledge some institutional tensions but say Obama’s personal relationship with Brennan is solid, and underline that the president personally asked Director of National Intelligence James Clapper to stay on after the 2012 elections.

They also underline the unusually vast array of problems on the intelligence community’s plate, and argue that the best measure of its performance – and the relationship with policymakers -- is the absence of terrorist attacks on the United States.

CIA spokesman Dean Boyd told Yahoo News that the agency, and the intelligence community more broadly, “successfully work together with the White House and Congress every day to address the vast array of national security threats facing our nation."

But the tensions also exist at the other end of Pennsylvania Avenue. The Justice Department announced Thursday it would not launch a formal criminal investigation into a furious feud pitting the CIA against the Senate Intelligence Committee.

That came after the extraordinary spectacle of the committee accusing the agency of spying on staffers working on a still-secret report about the CIA use of torture. The CIA accused committee staff of stealing classified documents.

"The department carefully reviewed the matters referred to us and did not find sufficient evidence to warrant a criminal investigation," Justice Department spokesman Peter Carr said in a statement.

The announcement seemed unlikely to quiet the dispute between the agency and one of the committees to which it answers.

“I still believe that the CIA's entry into our computers was unacceptable, perhaps even unconstitutional. And we shouldn't let this drop until we have some fundamental resolution of what happened,” said Senator Mark Udall (D.-Colorado), who sits on the committee and has frequently accused the intelligence community of overreach.

And the underlying battle – whether and how to make public the committee’s report on the CIA’s use of torture in the aftermath of the attacks of September 11, 2001 – still has lawmakers and the CIA at odds.

“At the heart of this is the need still to declassify the committee's report on the rendition and enhanced interrogation techniques that the CIA engaged in in the last decade,” Udall told reporters. “We need to remove that stain.”

Feinstein, the California Democrat who chairs the committee, said she was “pleased” by the Justice Department’s decision not to investigate her staff.

“I believe this is the right decision and will allow the committee to focus on the upcoming release of its report on the CIA detention and interrogation program,” she said in a statement that did not mention the department’s decision not to pursue the CIA.

The fight between the CIA and the committee over whether and how to make that report public has damaged relations between the agency and one of its most reliable defenders.

"That has so poisoned the well that I don't think it's fixable until that issue gets resolved," said a former senior intelligence official. "It is as bad a strain as I've ever seen in years.”

The most surprising national security development of 2014 to date may be the extremist ISIL insurgency’s surge in Iraq, where it has carved out a vast swath of land and claimed to establish an Islamist state.

Intelligence officials underline that they have been warning policymakers for years about the rise of that brutal al-Qaida splinter group and about the frail state of Iraqi government forces. Some policymakers say privately that while the intelligence on ISIL was thorough, they felt the warnings about just how weak Iraq’s military had become were neither loud nor precise enough.

That is by no means a uniformly held view among key players in Congress.

“I think that Iraq was not an intelligence failure,” Chambliss told Yahoo News. “It was a failure on the part of the leadership of the Iraqi forces.”

“You can always point your finger at causes that sometimes are correct and sometimes are not so correct when something like this happens, but I think overall John has done a good job in trying to make sure the agency runs very efficiently and very effectively," the senator added.

Policymakers have also questioned whether the intelligence community missed signs that Russian President Vladimir Putin had decided to annex Ukraine’s strategic Crimean Peninsula.

Intelligence officials who spoke to Yahoo News on condition of anonymity said lawmakers and the president were repeatedly told that Russia had amassed the forces necessary to annex Crimea, but acknowledged that they did not predict Putin’s decision.

“In the months leading up to the Russian incursion into Ukraine, the IC [intelligence community] produced a series of assessments examining the political situation in Ukraine and Russian reactions to the growing crisis, including possible scenarios for a Russian military intervention,” a senior U.S. intelligence official told Yahoo News. In February, analysts “produced analysis that identified Crimea as a likely flashpoint and focused on the tripwires that would lead Russia to intervene.”

One congressional aide countered that the intelligence scenarios for Ukraine included “so many red lines” that might trigger a Russian invasion that the analysis lost its predictive value.

The complaints often run in both directions. Intelligence officials have continued to complain about the White House after it unintentionally outed the CIA station chief in Afghanistan over Memorial Day weekend.

“Amateur hour. Total, absolute amateur hour,” said one recently retired national security official.

The strains are “cumulative,” another former senior intelligence official explained. “It builds on the sense in the intelligence community that the White House let NSA hang out to dry on their issues one year ago, and did not come to their defense right away. And then there's the sense in the intelligence community that the White House is not allowing those parts of the US government that go after terrorists to go after terrorists with the kind of freedom that those parts of the US government would like.”

Obama has defended the NSA in several major speeches, arguing that his administration has struck the right balance between privacy rights and the need to gather information.

Then there’s the strange case of Bowe Bergdahl, the Army sergeant recently freed in a prisoner exchange with the Taliban. Obama picked Clapper to be the intelligence community’s representative to the discussions about the operation, irking career CIA officials angry about being left out of the loop on one of the most controversial prisoner exchanges in U.S. history.

In a statement to Yahoo News, Obama’s top homeland security and counterterrorism adviser, Lisa Monaco, said the president was “proud of the men and women of our intelligence community and the work that they do.

“They are dedicated patriots who keep our nation, our interests, and our friends and partners safe,” Monaco said. “They are without question the best in the world at what they do, and the president is extraordinarily well-served by their analysis as he makes tough policy decisions and fulfills his duties as commander-in-chief.”

Spy crisis renews strain between White House, CIA

The relationship between U.S. spies and politicians is often testy, and now it may get worse.
Germany's dramatic action highlights issue

BUENOS AIRES, Argentina (AP) — Riot police used tear gas and rubber bullets to disperse a group of rock-throwing vandals who disturbed a rally by Argentines celebrating their team's gutsy performance in a 1-0 loss to Germany in the World Cup finals.

Thousands of Argentines, saddened but proud, had gathered peacefully at the iconic Obelisk in downtown Buenos Aires to applaud their team's best World Cup performance in 24 years.

Police initially remained on the sidelines as fans poured into downtown Buenos Aires. But late Sunday night they began chasing down vandals. The youths, many of them with their faces covered and drinking heavily, responded by hurling rocks, destroying store fronts, tearing down street lights and even breaking into a theater.

Parents with small children could be seen fleeing in fear. Police said 20 officers were injured and at least 60 people were arrested.

The chaotic situation marred what was an otherwise spontaneous show of support for Argentina's national team.

The center of festivities was the Obelisk, where fans traditionally gather to celebrate victory, not defeat. Cars honked staccato rhythms, firecrackers were tossed into the air and fans of all ages jumped in place shouting "Argentina! Argentina! Argentina!"

"We have nothing to regret, we played first rate," said 53-year-old Horacio Laseiras, carrying his six-year-old daughter on his shoulders.

The two-time world champion entered the title match as the clear underdog after Germany's 7-1 thrashing of host Brazil. But despite complaints about lackluster play earlier in the tournament, the team led by captain Lionel Messi showed grit throughout the match, creating several opportunities to score in the first 90 minutes.

Amid the outpouring of gratitude, there was a hint of frustration that Messi, the four-time world player of the year, didn't turn in a stronger performance.

"Messi still isn't Maradona," said 31-year-old Eduardo Rodriguez, referring to Diego Maradona, who lifted the championship trophy for Argentina in 1986 and led the 'albiceleste' to its last World Cup final, also against Germany, in 1990. "But this here is a party. We're all proud of our warriors."

In Argentina's capital, about 20,000 people dressed in the blue and white colors of the country's flag filled the capital's Plaza San Martin to watch the match on a giant screen, climbing atop lamp posts to get a better view.

"I feel an enormous sadness," Soledad Canelas, 19, said after the game. "I had the illusion of seeing Argentina become champion for the first time in my life."

The shot at the title united Argentines otherwise exasperated by one of the world's highest inflation rates, an encroaching debt crisis and a corruption scandal that has penetrated deep into President Cristina Fernandez's inner circle.

Fernandez, whose approval rating has plunged in recent months, kept a low profile during the tournament. She declined an invitation to attend the final, preferring instead to rest ahead of a summit Tuesday, also in Brazil, with leaders from Brazil, Russia, India and China.

She didn't comment on the team's loss but local media reported she had called head coach Alejandro Sabella to offer her support and is planning to welcome the team home on Monday morning.

Despite the pride over their team's performance, many Argentines couldn't hide the pain.

In Rio de Janeiro, more than 70,000 Argentina fans cheered on their team, many having traveled upward of 40 hours by car and seemingly all wearing their team's sky-blue jerseys and chanting day and night.

"This was a trauma. We were going to be able to leave singing songs in victory with the glory of the Cup," said Joao Cuenca, who has an Argentine father and a Brazilian mother. "What happened is nothing short of a disaster."

__

AP Writer Joshua Goodman contributed to this report from Bogota, Colombia.

Henao on Twitter: https://twitter.com/LuisAndresHenao

By Nidal al-Mughrabi and Maayan Lubell

GAZA/JERUSALEM (Reuters) - Israel said it shot down a drone from Gaza a week into its offensive on Monday, the first reported deployment of an unmanned aircraft by Palestinian militants whose rocket attacks have been regularly intercepted.

Hamas, the Islamist group which runs Gaza, said its armed wing had sent several drones to carry out "special missions" deep inside Israel - a development which, if confirmed, would mark a step up in the sophistication of its arsenal.

More than 166 Palestinians, most of them civilians, have been killed, Gaza health officials said, in seven days of fighting that has shown no sign of ending.

Israeli aircraft and naval gunboats attacked 204 targets in the Gaza Strip overnight, said the army, in the worst flare-up in Israeli-Palestinian violence in almost two years. Health officials said at least 20 people were wounded.

Palestinian militants fired more than 20 rockets into Israel, causing no casualties, the military added.

The Israeli military said the drone was intercepted near the port of Ashdod by a U.S.-built Patriot missile, used largely ineffectively by Israel against Iraqi Scud missiles in the 1991 Gulf War.

The force was trying to locate debris in the area about 25 km (15 miles) north of Gaza, and determine whether it had carried explosives.

There was no sign of any sharp escalation of Israeli attacks in the northern Gaza Strip, where Israel threatened on Sunday to step up strikes against rocket-launching sites in parts of the town Beit Lahiya and urged thousands of its residents to leave.

A U.N. aid agency said around a quarter of Beit Lahiya's 70,000 residents have fled deeper into the Gaza Strip. Al-Mezan, a Gaza-based Palestinian human rights group, said 869 Palestinian homes have been destroyed or damaged in Israeli attacks over the past week.

DIPLOMATIC EFFORTS

U.S. Secretary of State John Kerry, whose bid to broker a wider Israeli-Palestinian peace deal collapsed in April, offered on Sunday to help secure a Gaza truce.

The call was echoed by France and by Germany, which will send its foreign minister to the region on Monday. But with the United States and European Union, like Israel, shunning Hamas as a "terrorist" group, Middle Eastern intermediaries were mooted.

An Egyptian-mediated truce doused the last big Gaza flare-up, an eight-day war in 2012. Cairo is now again seeking calm, but its military-backed government is at odds with Islamist Hamas, complicating any mediation efforts.

Qatar and Turkey have also been suggested as possible truce brokers.

Gaza health officials said 138 civilians, including at least 30 children, were among the dead.

There have been no fatalities in Israel since border hostilities intensified last Tuesday. Israel's Iron Dome anti-missile system has intercepted many of the rocket salvoes.

But the persistent rocket fire has disrupted life in major cities, paralyzed vulnerable southern towns and triggered Israeli mobilisation of troops for a possible Gaza invasion if the Palestinian rockets persisted.

While allowing that a diplomatic solution could eventually be found, an Israeli official said Israel would, for now, pursue its military offensive "to restore quiet over a protracted period by inflicting significant damage to Hamas and the other terrorist groups in the Gaza Strip".

Hamas and Islamic Jihad, the second-most potent Gaza faction, made clear they would not accept a mere "calm for calm" where both Palestinian fighters and Israeli forces stand down.

"Netanyahu began this crazy war and he must end his war first," Hamas leader Izzat Al-Reshiq told Al-Arabiya television.

"There can be no ceasefire unless the conditions of the Resistance are met," he added, saying Israel had to stop blockading Gaza and free hundreds of Palestinians it rounded up in the occupied West Bank last month while searching for three Jewish seminary students who it said were kidnapped by Hamas.

Hamas neither confirmed nor denied responsibility. Rocket fire from Gaza increased during the West Bank dragnet. Tensions were further inflamed when the three teens' bodies were discovered, after which suspected Israeli avengers killed a Palestinian youth from East Jerusalem.

(Writing by Jeffrey Heller and Dan Williams)

Residents of the Donetsk region in eastern Ukraine prepare to board buses for Rostov-on-Don in Russia from a collection point in Donetsk July 14, 2014. REUTERS/Maxim Zmeyev

By Richard Balmforth and Anton Zverev

KIEV/DONETSK Ukraine (Reuters) - Ukraine said on Monday its forces had ended a rebel blockade of a strategic airport in the east as it traded charges and threats with Russia over violations of their joint border during a weekend of fierce military combat.

Ukraine's military said its warplanes had inflicted heavy losses on the pro-Russian separatists during air strikes on their positions, including an armoured convoy which Kiev said had crossed the border from Russia.

Ukrainian President Petro Poroshenko's office said Kiev would present documentary proof of incursions from Russia to the international community via diplomats on Monday.

But Russia kept up pressure on Kiev over the death of a Russian man who, it said, was killed by a Ukrainian shell that hit a residential area of a Russian border town.

The Ukrainians have denied the shell was theirs. But a Russian newspaper, citing a source close to the Kremlin, said on Monday that Moscow was considering the possibility of pinpoint strikes on Ukraine in retaliation.

The intensified military activity and Moscow's threat of "irreversible consequences" after the cross-border shelling marks a sharp escalation in the three-month conflict between Ukrainian forces representing Kiev's pro-Western leadership and separatists who have set up 'people's republics' in the east and said they want to join Russia.

Ukrainian forces, taking the lead from Poroshenko who swore to "find and destroy" the separatists who killed 23 servicemen in rocket strikes on Friday, went on the offensive across a broad range of targets south and south-east of the border town of Luhansk and near the town itself.

Poroshenko's office on Monday said Ukrainian forces, backed by warplanes, had broken through rebel lines surrounding Luhansk airport, ending a separatist blockade.

A spokesman for the so-called Luhansk People's Republic said on Monday that 30 volunteer fighters had been killed in Ukrainian fire on Oleksandrivka, a village to the east of the town, Russia's Interfax news agency said.

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A pro-Russian separatist waits as he escorts his family to a bus for Rostov-on-Don in Russia at a co …

PUSHING FOR SANCTIONS

Poroshenko on Sunday complained of alleged Russian incursions into Ukraine in a telephone call with the European Union's Herman Van Rompuy with an eye to pushing the 28-member bloc to take further sanctions against Moscow.

The EU - Ukraine's strategic partner with which it signed a landmark political and trade agreement last month - targeted a group of separatist leaders with travel bans and asset freezes on Saturday but avoided fresh sanctions on Russian business.

But a Ukrainian presidential aide said Kiev-based diplomats would be called in on Monday and informed of facts documenting the passage across the border from Russia of military equipment "used in attacks on our serving forces".

"We have the facts and the testimony which we will show to the international community," the aide, Valery Chaly, said, according to Poroshenko's website.

In Moscow, the newspaper Kommersant quoted a source close to the Kremlin as saying pinpoint strikes might be carried out in retaliation for the killing of the Russian man in a border town which bears the same name as Ukraine's main eastern city of Donetsk.

The source said Russia "knew exactly where fire was coming from." He said it would not be a massive action but pinpoint strikes on the positions where the shelling came from.

Russia sent Ukraine a diplomatic note of protest describing the incident as "an aggressive act" against Russia and its citizens and warning of "irreversible consequences".

Andriy Lysenko, spokesman for Ukraine's National Security and Defence Council, denied that Ukrainian forces had fired onto Russian territory and on residential areas. The Ukrainian foreign ministry called on Russian authorities to carry out "an objective and impartial" evaluation of what it described as "a tragic incident".

Moscow's response to the cross-border shelling raises again the prospect of Russian intervention, after weeks in which President Vladimir Putin had appeared intent on disengaging, pulling back tens of thousands of troops he had massed at the frontier.

The conflict in eastern Ukraine erupted in April when armed pro-Russian fighters seized towns and government buildings, weeks after Russia annexed Ukraine's Crimea peninsula in response to the overthrow of a pro-Moscow president in Kiev.

Well over 200 Ukrainian servicemen had been killed in the fighting and several hundred civilians and rebels.

The fighting has escalated sharply in recent days after Ukrainian forces pushed the rebels out of their most heavily fortified bastion, the town of Slaviansk.

Hundreds of rebels, led by a self-proclaimed defence minister from Moscow, have retreated to the Ukrainian city of Donetsk, built reinforcements and pledged to make a stand. The once-bustling city has been emptying in fear of a battle.

Rebel fighters on Monday were evacuating about 200 Donetsk residents by bus across the Russian border into the Rostov area.

Vladimir, a 55-year-old coal miner, was sending his wife with two children to relatives across the border. "The Ukrainians have already cut off water. Electricity is only just working. How can you live without water and light? I have no work but if on top of that I have nowhere to live either there is no reason to be here," he said.

(Additional reporting by Natalya Zinets in Kiev; Writing by Richard Balmforth; Editing by Giles Elgood)