CIA BRANCH CHIEF ACCUSED OF BETRAYAL.

Byline: David Johnston The New York Times

Federal authorities said Monday that a CIA career officer charged with spying for Moscow offered himself to Russian intelligence officials two years ago at the height of the furor over the CIA's last major espionage case.

The officials said their investigation showed that Harold J. Nicholson, the highest-ranking CIA employee ever to be charged with espionage, deposited the first installment of the nearly $120,000 that they suspect he was paid by Moscow shortly after meetings with the Russians in Kuala Lumpur, Malaysia, where Nicholson was stationed. The meetings occurred at a time when the intelligence agency was reeling from the arrest of another career officer, Aldrich H. Ames.

``He betrayed his country for money,'' said Helen Fahey, the U.S. attorney for the Eastern District of Virginia, after Nicholson appeared briefly Monday before a U.S. magistrate in Alexandria, Va. ``He was not motivated by ideology, but by greed.''

Court documents unsealed Monday traced a wealth of evidence amassed during the nearly yearlong investigation. Agents wove their case from strands that included an examination of deceptive answers on polygraph tests, a pattern of extensive overseas travel by Nicholson unrelated to his work assignments and bank deposits that could not be explained by Nicholson's annual salary of $73,000.

In an affidavit made public Monday, authorities described how Nicholson, a branch chief in the Counterterrorism Center, searched CIA databases for classified documents relating to Russia. The affidavit said Nicholson's job as a training officer had provided him with access to the biographies and work assignments of CIA trainees. The evidence suggests that Nicholson sold the material to the Russians, officials said.

In recent weeks, investigators have searched Nicholson's house and office, his 1994 Chevrolet Lumina and mailboxes that they believe he used to send postcards with cryptic messages to his Russian contacts. One postcard recovered by the FBI depicted the Washington Monument under a full moon; another had a photograph of the Capitol.

One of the cards, dated Aug. 1, 1996, was addressed ``Hello Old Friend'' and suggested a ``ski holiday'' on Nov. 23 and Nov. 24. A postscript added that ``the snow should be fine by then.''

Authorities say they suspect that the message was intended to signal the Russians that Nicholson wanted a meeting on the two dates. The card was signed ``Nevil R. Strachey''; the authorities say Nicholson adopted that name to disguise his identity.

Nicholson apparently never sensed the net closing around him. On Nov. 12 at the intelligence agency, as agents monitored his movements with video cameras, Nicholson used a briefcase camera he had requisitioned from CIA stocks to photograph highly classified documents. The documents were seized by the authorities when he was arrested Saturday at Dulles International Airport as he prepared to board a flight for Zurich.

Monday, in an unusual joint news conference, FBI Director Louis J. Freeh and CIA Director John M. Deutch sought to describe the investigation that led to the arrest as a triumph of cooperation between two agencies that have engaged in the past in a bitter feuds that undercut their efforts to root out spies.

Freeh and Deutch said in an interview after their news conference that the two agencies had applied new coordination procedures adopted after the Ames case to find Nicholson.

Deutch said Nicholson's activities had come to light at first because his name appeared on several lists that are now regularly maintained by the agency on employees who show unusual patterns of spending or travel or who, like Nicholson, showed deception in polygraph exams.

``Certainly by 1995, we have him very much in our minds as a suspect,'' said Deutch, adding that the improved counterintelligence measures had enabled investigators to focus on Nicholson much more quickly than they had on Ames.

Despite the effort to call the case a success, the disclosure of another potentially serious spy inquiry was a blow to an intelligence agency still assessing the damage from the Ames case, the worst betrayal in its nearly 50-year history.

And Nicholson's case was a reminder that the Russians were continuing - despite improving relations - an aggressive search for American intelligence sources and that CIA officers appeared to be willing to sell secrets for cash to their former Cold War adversary.

Career officers said that more painful still was the realization that a productive member of the CIA was susceptible to being turned against his own agency. Unlike Ames, a plodding intelligence officer, Nicholson was regarded as a top-flight intelligence officer and had exhibited few signs that he planned to sell CIA secrets to the Russians.

Nicholson had served in a variety of intelligence jobs, in Manila, Bangkok, Tokyo, Romania and Malaysia. From 1994 to 1996, he worked as an instructor at the CIA's secret training base, teaching trainees the techniques used by spies to recruit foreign agents and evade detection by other intelligence services.

Freeh and Deutch took pains to emphasize that Nicholson's espionage activities, while serious, are emerging as far less damaging than those of Ames, whose information led to the execution of more than a dozen agents working secretly for the CIA.

While a full assessment has yet to be done, Deutch said no one working secretly for the CIA had died as a result of Nicholson's spying.

If convicted of spying, Nicholson faces life in prison without parole. Fahey said Monday that prosecutors were not planning to seek the death penalty, a judgment that appeared to be based on the conclusion that Nicholson was not responsible for the deaths of agents working for the CIA.

Ames pleaded guilty in 1994 to charges of spying for the Russians, who paid him more than $2.5 million in nearly eight years, and he was sentenced to life in prison. The death penalty for such crimes did not become law until after his case.

The authorities said there was no connection between the cases of Ames and Nicholson, although at one point they said Nicholson had provided the Russians with a copy of a report on the information that Ames had provided to the CIA after his conviction.

The Ames case led to a series of changes in how the government investigates spy cases, including the assignment of FBI agents to work at the CIA's Counterterrorism Center. Officials said Monday that the procedures had been successfully applied in the Nicholson case.

But this episode suggests that the Russians used the uproar created within the CIA over the Ames case to recruit an agent who, in his years at the agency, had access to some of the nation's most closely guarded secrets, including the identities of newly trained agents being sent abroad to spy on the Russians.

Nicholson fell under heavy counterintelligence investigation early in the year. In July, he was transferred to the CIA's Counterterrorism Center, a move designed to restrict his access to information without alerting him to the inquiry.

A search of his computer memory July 19 showed that Nicholson was using his computer for database searches unrelated to his job. He was looking specifically for documents containing the words ``Russia'' or ``Chechnya.'' CIA computer security personnel listed Nicholson as a ``surfer,'' which further attracted the authorities' attention.

CAPTION(S):

2 Photos

PHOTO (1) CIA Director John Deutch, right, discusses the joint investigation with the FBI that led to the espionage arrest. The news conference in Washington also included FBI Director John Freeh.

(2) Harold J. Nicholson

Allegedly spied for Russia