Subject: INTERCEPTS NETWORK NEWS/CIA WASHINGTON- The CIA, which spent the Cold War locked in mortal combat with Moscow, is discovering that some of its worst wounds were self-inflicted and one of its worst enemies was itself. The arrest of Aldrich Ames, a Moscow mole inside the CIA from 1985 to 1994, highlighed institutional failings that let one of its own sell secrets under the CIA's nose in the worst security breach in its history. Ames' sellout crippled U.S. ability to spy in much of the world during the final years of the Cold War and helped Moscow figure out how to dupe Washington more skilfully. Recently, the CIA dealt itself further body blows in Guatemala, where it failed to inform Congress that agents in its pay were suspected of murder and torture. More embarrassing disclosures involving operations in Honduras will be acknowledged publicly soon, agency employees said. In the latest and possibly most damaging blow of its own making, CIA Director John Deutch admitted on Tuesday that the agency fed U.S. leaders flawed reports from double agents whose ultimate loyalty was known or suspected to be Moscow. The tainted intelligence about the Soviet Union, the chief U.S. adversary at the time, was sent to decision makers in ``blue-border reports,'' the type hand-carried to presidents, lawmakers said. Describing misrepresentation of sources in some such reports as ``an inexcusable lapse in elementary intelligence practice,'' Deutch acknowledged that it would take ``years and years'' for the CIA to fully recover. Senate Intelligence Committee Vice Chairman Bob Kerrey, a Democrat, said on Wednesday that the CIA would never recover unless three past CIA directors were held personally accountable for circulating the skewed intelligence, something Deutch has declined to do. ``If that's the way the CIA operates and does its business, I don't know how they ever recover credibility with customers who are making billion-dollar and life-and-death decisions based upon that (intelligence),'' Kerrey said in a telephone interview. Senate Intelligence Committee Chairman Arlen Specter, a Republican, said the tainted intelligence may have influenced Pentagon decisions to spend ``vast sums'' on possibly unneccessary military hardware. Deutch, who became CIA chief in May when his predecessor quit under congressional fire for lenient punishments in the Ames case, did not make public possible motives for sending improperly sourced information to presidents Ronald Reagan, George Bush and Bill Clinton. He said he was taking new steps to ``reconstruct'' the CIA's covert service and rebuild confidence in the agency. Whatever the motive for sending unreliable information and masking its source, the effect was to call into question the integrity of all of the thousands of analyses and reports ground out by the CIA for U.S. decision makers. ``If you're talking about the credibility of intelligence, I can't imagine anyting more damaging,'' said Marvin Ott, a professor of national security policy at the National War College and former Senate Intelligence Committee staff member. He said the CIA's use of material it knew was unreliable would probably fuel calls for abolishing the CIA. Subject: INTERCEPTS NETWORK NEWS/CIA BAD INTELL WASHINGTON - The investigation into the fallout from the Aldrich Ames spy case has found that intelligence known to be from Soviet-controlled sources was passed on to U.S. policymakers on 35 occasions, the chairman of the Senate Intelligence Committee said Thursday. Pennsylvania Republican Sen. Arlen Specter told reporters that in an additional 60 instances there had been ``some concern for the source'' of the material provided. He said that in 11 of the 95 total cases studied materials were sent to the president with no indication of their source. All the lapses occurred between 1986 and 1994. CIA Director John Deutch disclosed last week that the agency fed U.S. leaders flawed reports from double agents whose ultimate loyalty was known or suspected to be Moscow by the agency. Deutch called misrepresentation of sources in some reports ''an inexcusable lapse in elementary intelligence practice.'' Specter gave new details of the scandal surrounding the activities of Ames, a CIA turncoat now serving a life prison sentence, following a closed-door briefing by two CIA officials. He said that President Clinton had received at least one of the 11 suspect briefings in early January 1993, when he was president-elect. Congressional intelligence committee members have raised the possibility that the false intelligence might have resulted in the Pentagon spending billions of dollars on unneeded weapons. Specter said he had no information on this. His counterpart in the House, Rep. Larry Combest, a Texas Republican, said in a statement after hearing testimony from former Central Intelligence Director James Woolsey Wednesday: ''There is no evidence to date to suggest that the United States 'wasted' billions of dollars because of this intelligence.'' The Defense Department said last week it had set up a special panel to review potential damage caused by information received via the CIA from suspect Soviet agents. ``These reports could have impacted in some way not only on acquisitions but on policy and operations,'' Navy Capt. Mike Doubleday said. Specter said his committee would hold an open hearing on the Ames case next week. The panel was briefed Thursday by CIA Inspector General Fred Hitz and Rich Haver, chairman of a task force assessing the damage from the Ames case.