the reports of a secret white house operation to ship iran military supplies in exchange for help in freeing three american hostages. >> mr. president, you have stated flatly and you stated flatly again tonight that you did not trade weapons for hostages and yet the record shows that anytime an american hostage was released, there had been a major shipment of arms just before that. are we all to believe that was just a coincidence? >> your arms shipments had no effect on the release of the hostages, then how do you believe the release of the hostages? >> how do you assess the credibility of your own admition in light of the deception of congress and the public? >> the polls show that a lot of american people just simply don't believe you, that the one thing you've had going for you more than anything else in your presidents, your credibility has

been severely damaged? you can repier it? >> well, i imagine i'm the only one around who wants to repair it. >> there is a mood in washington tonight of a president who is very much the leader, very much on the defensive. >> what would be wrong with saying that a mistake was made, a very high risk gamble so that you can get on with next two years? >> because i don't think a mistake was made. >> and may i just go now to chris wallace who is at the white house. i believe that there is a clarification that's come out of this news conference tonight as well. >> well, tom, something that i have never seen before. a statement by the president, there may be some misunderstanding of one of my answers tonight. >> it reaffirms, if you will, chris, the president is not on top of this situation. >> this is quite the worst day that this administration has

had. it's gone from to disaster in such a short time. >> italians were told reagan will have to answer many more questions. for many europeans the scandal confirms their worst fears about the u.s. >> i'm afraid what it shows is a stupefying shambles at the very heart of american policy-making. >> skeptical of ronald reagan, skeptical of actors being in the white house, skeptical of people who must have their lines if they can't read them at the right times. skeptical particularly of presidents who can't record conversations and whether they sell arms or not sell arms, authorized. i think none of this has come as a great surprise. >> are you rewarding terrorism, mr. president? >> mr. president, how does this

damage your presidency? >> both friends and critics agree the ronald reagan good guy image has been tarnished. >> he's as lame a duck as -- >> i don't think he have enough time left in his administration to restore -- >> what president reagan must do -- >> it may be the last chance to save his presidency. >> in the past this president has always been able to bounce back with a television speech, a wave and a smile. but if there's a consensus among admirers and adversaries alike, it is that this time that won't be enough. >> quiet, please. >> voice down. >> here we go. >> yes. hold on. >> set and action.

>> a few months ago i told the american people i did not trade arms for hostages. my heart and my best intentions still tell me th's te, but the facts and the evidence tell me it is not. as the tower board reported, what began as a strategic opening to iran deteriorated in its implementation into trading arms for hostages. >> i asked you 20 years ago how you'd like to be remembered and you said as someone who has tried and done his best. how would you like to be remembered as a president? >> someone who tried and has done his best. >> same answer now. >> yep. >> and if people said, well, he was the head of our nation's studio to put it in for eight years, for the first four years he picked all hits and then like any studio boss, he had a bad

run, but then he staked everything on his soviet coproduction. would that be a reasonable summary? >> if anyone tells you that we're just marking time for the next 22 months, the business that i used to be in said save something for the third act, and we will. all right. thank you. >> mikhail gorbachev's genius is that he has persuaded many people that he not president reagan is in the forefront of arms control. that many in europe regard him better than the president testifies to mr. gorbachev's political skills. >> it's no coincidence the president is challenging the soviet union on human rights. he and his staff are concerned

about the growing tendency in europe to see the u.s. and soviet union as moral equals. mr. reagan came to the berlin wall to try to prove that isn't so. >> thank you. there is one sign the soviets can make that would be unmistakable. general secretary gorbachev, if you seek peace, if you seek prosperity for the soviet union and eastern europe, if you seek liberalization, mr. gorbachev, tear down this wall.

>> berlin is in the middle of celebrations of its 750th anniversary. the president suggested this occasion could bring the two sides of the city together. but it hasn't. mr. gorbachev's already established himself as a shrewd political chess player. when mr. gorbachev is weak, however, is at home with an ailing economy. mr. gorbachev's dilemma is that he cannot move any faster than he can drag along party conservatives and the old guard. an agreement could politically strengthen his hand to deal with his greatest need at home, modernizing a third world economy.

>> yes, i have a very brief statement. i'm pleased to report that i'm in route to denver here. i received a call from geneva and it appears that all of the remaining issues on reaching an imf agreement have been resolved, including a reliable and credible verification. package. this treaty will be finalized when general secretary gorbachev and i meet in washington next month. >> can you tell it to the senate? >> what? >> can you sell it to the senate? >> i'll bet we can, yes.

>> what did you think? >> i just couldn't believe. it's great that he came out to meet us all like that. >> i'm very surprised and pleased. >> what did you think of gorbachev? >> the guy is a pr genius. >> i thought you'd gone home.

>> president reagan meets with congressional leaders to rally support for senate confirmation of the treaty banning intermediate and short range nuclear missiles. >> our efforts to give future generations what we never had, a future free of nuclear terror. >> the lines in this political battle were quickly established with reagan administration finding its greatest support for the treaty coming from democrats. >> this time i am enthusiastically which may hurt your effort, but supportive of your efforts. >> well, i'm glad to be working with the president of the united states for a change. >> the most scathing opposition comes from conservative republicans. >> are you afraid that ronald reagan is going to give away star wars? >> i'm not afraid. i think it's in the works. if i were to vote today, i would vote against that treaty. >> the president insulted the conservative movement. >> unfortunately, ronald reagan is a very weak man with a strong wife and a strong staff. >> he has changed sides, is now aligned with his former adversaries, the liberals, the

democrats and the soviets. >> for the first time in history, the language of arms control was replaced by arms reduction. mr. general secretary, though my pronunciation may give you difficulty, doveryay proveryay, trust but verify. [ speaking foreign language ] >> you repeat that at every meeting. [applause] >> i like it. >> veterans of past summits worry that this president may be too taken with mikhail gorbachev the man and not guarded enough against gorbachev the dedicated communist. howard baker argues that mr. reagan is a good negotiator. as evidence he describes how the president decided to put

gorbachev on the defensive by asking him to autograph a baseball. >> and he looked sort of puzzled and the interpreters took about five minutes trying to explain all this to him. and finally he signed the president's world series baseball and from that moment forward the president had control of the proceedings for the second day of the summit. >> the question, sam, is whether we have a change of heart that's commensurate with the change of face and i haven't seen the evidence of it yet. the president believes we do. i don't think so. >> i urge the senate to give its advice and consent to ratification of this landmark agreement. >> and many of your closest conservative supporters are troubled by your arms control policy. they're afraid that it really could seriously put the security of the united states and the

west at risk. what do you say to them? >> i say to them they don't know what they're talking about. i think that some of the people who are objecting the most just refusing even to exceed to the idea of ever getting any understanding, whether they realize it or not, those people, basically down in their deepest thoughts, have accepted that war is inevitable between the two super powers. well, i think as long as you've got a chance to strive for peace, you strive for peace. ♪ "zorba the greek" by mikis theodorakis ♪

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his name is wilford, and that is a german name, and it means resolute for peace.

yes, sir, wilford. >> good evening. this is ronald reagan, president of the united states. i'm speaking to you, the peoples of the soviet union, on the occasion of the new year. let us consequence crate this year to showing not courage for war, but courage for peace. we owe this to mankind. we owe it to our children and their children and generations to come. happy new year. thank you and god bless you. >> cut. >> take that, mr. gorbachev. >> president reagan would like to leave for the summit with a

ratified treaty in his pocket, but he hasn't got it yet and the summit is only days away. >> so i think the senate should move as quickly as they can this week. >> that will be a tight squeeze to see if the senate does complete action on that before the president reaches moscow. >> and if he goes there without this treaty being ratified, i would predict that we're going to have a terribly crippled president of the united states. >> usa, usa, usa!

>> in the gorbachev era the soviets have become image conscious and leaves nothing to chance, they have hired professional help. meet john, he is a washington, d.c. marketing and public relations man. his client is the soviet government. it's planning that the soviets expect he will help polish their image for the western press just as surely as the workmen giving a face-lift. >> potholes are suddenly getting filled. fresh vegetables are appearing in the stores and new scaffolding is everywhere as painters give parts of moscow a new face-lift. >> would you believe 10,000 official soviet summit t-shirts made in the usa? they're on their way to moscow and tass expects to earn about $200,000 from hard currency from reporters and others looking for a way to remember the summit.

there are some in this administration who think teaching the soviets the latest in pr techniques is just as dangerous as selling them the latest in high technology. and who knows better than ronald reagan the importance of great communication? >> after all the rhetoric which the senate debate produced senators decided overwhelmingly the treaty is a good one. it was approved by the senate this afternoon. ♪ ♪ ♪

♪ ♪ >> this is done for the sake of peace. >> do you still think we're an evil empire, mr. president? >> no. >> why not?

>> well -- >> are you happy with our answers? [ speaking foreign language ] >> before things get too far out of hand, we have to find ourselves -- [applause] >> we fd ourselves standing

like this. [ speaking foreign language ] [ applause ] >> the truth came home to us once again. it isn't people but governments that make war.

the judgment of future generations will be harsh upon us if after so much sacrifice and now at the hour of hope we falter or fail. let us resolve to continue one nationone people united in our love of peace and freedom, determined to keep our defenses strong, to stand with those who struggle for freedom across the world, to keep america a shining city, a light unto the nations. frequently when such moments happen in a nation's history, there's a popular saying or song that speaks for that time. and just maybe this verse sounds familiar to you. if tomorrow all the things were gone i'd worked for all my life and i had to start again with just my children and my wife, i'd thank my lucky stars to be

living here today, because the flag still stands for freedom and they can't take that away. [applause] ♪ ♪ ♪ ♪ ♪

♪ ♪ ♪ ♪ ♪ [ applause ] >> no presidency before this one was so often judged as if it were a performing art. i shudder when it's suggested that politicians who come after him are going to have to succeed first on television.

[ cameras snapping pictures ]

. spying is universal. we all want to know what the other person is up to. and the united states is the prime target. bemake the difference around the world. we effect people's lives. 95 percent of the espionage cases as spies go undetected. that's not a classified figure. we catch only 5% of suspected spies. >> that's terrifying. >> you don't know the half of it. as a former fbi agent and

chairman of the house intelligence committee, i had oversight of all 16 of our nation's intelligent agencies. my name is mike rogers. i had access to classified information gathered by our operatives, people who risked everything for the united states and our families. you don't know their faces or their names. you don't know the real stories from the people who lived the fear and the pressure. until now. cubans don't get enough credit for being a first class intelligence service. and they're first class. they have proven their worth tile and time again especially 0 with the united states. >> the cubans are very aggressive and have been very successful for years, though thoe they might not pose a military threat.

when the cubans come here and gather information, a lot of times they could sell it to other countries. >> when we were about to invade iraq, cuba was communicating intelligence information because of their proximity to us of saddam hussein. >> that's what thaikz makes them dangerous in our world because they're very aggressive and they're vy good. >> the record suggests that cubans have been particularly successful of getting american citizens to supply them with information. there are a number of reasons for that, but the one that strikes us the most is ideological reasons. they did not do it for money. americans who grew nupt united states in the mid to late 60s, these were college students and a lot of them seen the vietnam war going on and they were opposed to that and at the the bay of pigs we saw them trying overthrough the revolution.

and a number of them said what i do to help people who are being adversely affected by the united states? >> the cubans have a long history of successfully penetrating different aspects of the united states government. ana montes is probably one of the more well known cases. anna montes did it for ideological reasons. she did not do it for money. >> ms. montes now faces 25 years impres prison meant to be followed by five years supervised release. >> for years the intelligence community had been monitoring transmissions being sent by the cubans up the east coast of the united states. most of their broadcasts to their agents are in voice transmission, numbers that are read out.

>> these transmissions led to the arrest of anna montes in 2001, and the intelligence community was quite proud of her arrest. but unfortunately following her arrest they were horrified to learn that the transmissions had not ceased. this led the intelligence dmunt conclude that the cube manz bans had another high-value asset working inside the united states and therefore a new unsubinvestigati unsubinvestigation commenced. >> unsub means unknown. >> i definitely can't get into specifics about when the investigation was initiated. but by 2007, they reported there

were multiple pen trationz of united states government at least one of which was located inside state department. >> the state daeptz primary role is to conduct foreign relations with foreign governments. the reason why foreign intelligence services, including cuba, are so interested in the state department is that the state department develops and implements foreign policy. and that's why an unsub inside the state department is very dangerous. >> when you have an unsub, you take the information available and establish what we referred to as a matrix which is a profile of what that person or people look like. so we knew that the likely agency within the foouts united states was the state department, it was penetrated by more than one individual working together, that those individuals had lived

in the washington, d.c. area for an extended period of time, they received their transmissions in english. one of those individuals was proficient in morse cod and hav a tumor on their shoulder in a certain time period late 1996. >> how did you get the information in the matrix point? >> i'm sorry, that's classified. >> you want to protect your own sources and methods. >> i wish it was concrete information such as blue eyes, brown hair, walks way limp. no. they were more subtle things. these were things like the person spoke english things, right. really narrows down our list. >> i assumed responsibility as the lead fbi case agent for the unknown subject investigation, and we engaged diplomatic security in an effort to try to get their assistance to identify this individual.

>> the bureau of diplomatic security is the law enforcement arm of the state department. one of our main functions is we run security at embassies, foreign minister of a country comes in we'd be responsible for that. i work more hand in hand with the fbi. that's my sole purpose is to help them with state department indicates or thaftion thinforma they may need from the state department. >> robert booth was a diplomat and he had the historical information that we may need. >> i was approached in my office by the fbi liaison officer who explained to me that had an unsub espionage case and they thought i would be able to help them resolve that question. >> so robert and i went over to fbi headquarters and they presente to us information from the intelligence community believing that the state department had been penetrated

with a possible zblspy. >> and this information specifically was coded messages being sent by short wave frequency from cuba to the united states. when i asked the fbi how long the transmissions had been going, they said at least nine years. and the state department, if you're a foreign service officer, you have to travel every couple of years. that means he is a civil service employee. do you know how many subjects we have just eliminated? and they all looked at me in amazement. now we knew what we had was a civil service employee who worked between 1990 and 1999 all of a sudden the is unsub started to appear.

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the cubans had another high-value asset working inside the united states, and therefore a new unsub investigation commenced. >> i think it might even be in this instance more complicated than identifying a needle in a haystack. >> so i told the fbi at the end of that may meeting that if this matrix is correct, we will find and identify the unsub. that was a bold statement. >> robert had one of our other agents in our office do a computer program that basically

took the points that we had from the fbi, boil that down and we came up with about 27 subjects. >> i now knew i had my work can cut out for me. >> you feel nervous? >> absolutely. i go down and see my colleague in the personal security review section, pass the list of 27 names. i said, barbara, you can get met security files on all 27 of these people. you get the files in your name, and then i go to another office with no window, i didn't want anybody to see what i was doing. >> how many pages is one person's file? >> hundreds. hundreds of pieces of paper. it's mind numbing. then you had to read page after page after page. and this is the reality of counterintelligence work.

i've never driven a plane, i've never driven an as tro martin. that's not kaurnt intelligence. thaimz that's james bond. real kaurnt intelligence agents sit in front of a screen, read files and interview people and your eyes start to strain, you get discouraged. and then i opened up file 13. my heart was racing. there's no other way to describe it. every piece of the matrix fit like a glove. it was kendall myers. >> kendall best fit everything that we were looking at. for robert and i it was like a oh, we think we found the person based on the information, now we have to prove it. and that's the hard part. >> after reviewing the file on my own, i think the thing that put me over the edge was not only were there matches for matrix points that we expected, but his file revealed that he

ok trip to cuba in 1978. >> kendall and two other state department employees traveled down there and that's when we believe the cubans first spotted him for recruitment. >> we move from the unsub phase of the investigation to a directed targeted investigation on kendall myers. >> at that point, we try learn as much about his life as possible, everything from the time he joined the state department to the very present day. >> kendall came from a very affluent background, was well educated, intelligent guy. >> kendall myers came from a little bit of royalty. his family was quite accomplished. they had a lot of old money. >> kendall myers is the great, great grandson of alexander graham bell. i is an american blue blood. >> kendall myers was a state department employee for over 30 years. i was respected within the state department, he was a very smart man. >> as far as everybody was

concerned, he was a model employee. he did his job magnificently. he was a well-respected analyst in the office of intelligence and research. >> so kendall was an analyst for the state department, but this wasn't a case of the state department being penetrated, that was a case of the intelligence community being penetrated. kendall myers worked in the intelligence community portion of the state department, so he had access to intelligence reporting for all intelligence agencies. >> unfortunately, the office of intelligence research known as i&r gets all the information from the entire intelligence community. cia, dia, nsar imagery, everything. that's why he could have been the most damaging cuban spy castro had. >> so after we established that kendall was likely one of the

agents that we were looking for through doing background investigation on his wife gwen, we found out she was likely involved as well. >> we found that gwen wads an act sflift south dakota before they came to d.c. she this that activist gon boen in her body. >> we found out that she worked in the 1970s and sitter aber zack at that time was known to have very strong pro-cuban feels. he'd been trying to work this embargo against cuba was wrong and everything else and maybe in that senator's office she started to get the same kind of inc. cla nations and feelings about the castro government. >> having a husband and wife team is unusual, but it made sense that she was likely involved as well. >> how could gwen be a spy for cuba if she herself did not have access to classified information? >> you don't need access to

classified information, you just need access to someone that has access to classified information. the first thing we need dodd w focus the investigation on kendall because he hadccess to the state department. so i knew that we needed to move the investigation to physical surveillance, electronic surveillance to try to collect evidence that we could prosecute him with. >> everybody working this case wanted one charge and that was 7904, espionage as we call it. >> when you have an individual with that kind of information, he can do severe damage to the united states government and potentially cost someone their lives. saving 50% on these samsung

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the first thing we needed to do was focus the investigation on kendall because he had access to the state department. >> we had to be able to show that kendall was in fact passing classified information. >> so we had to move things to physical surveillance, electronic surveillance. some of things we do in these

types of cases are monitored telephone calls, monitored e-mail traffic, install cables in phones and residences. >> my role was collaborate wg the fbi and just gathering information, as much as possible about kendall myers. it required me to go over and conduct surveillance inside the state department, i would do that. >> you have to follow him. you have to monitor him. you have to see where he goes. you have to see who he talks to on the phone. you have to see who he pulls on his computer. you have to look at anything and everything that is suggestive of espan yauj activity. >> we were hoping to catch him in the act, where he was removing information from the state department and providing to the cubans. >> and that's what we had to try to do. he did not do it.

so he was not removing classified documents from his office and walking out of the building. we were all convinced it's him. but no counterintelligence, no espionage indicators. >> so kendall's had no activity, no contact. >> it appeared that they were no longer operational. they weren't continuing to provide the cubans with intelligence. that presented us with a problem of not being able to catch them in the act if they're not still active. it doesn't matter, what matters is that at one time or another they chose to betray their country and we're going to identify them and prosecute them if we can, regardless of how long they've been dormant. so at that point we were only going to be able to show historical espionage activity,

not ongoing espionage. >> i had just transferred from our computer forensics branch. fbi asked us for help and we had some areas of expertise that were useful. >> nsa's role, specifically andreas who was the lead counterintelligence agent assigned to the investigation was in part to conduct a forensic review of kendall myers' computer activity at the state department. >> forensics were just pieces of computer information that helped tell a story. whether or not you look at a web page, click on an e-mail or print something, those are all pieces of forensic image. and so you put those all together and get a pretty compelling picture of what somebody's doing day to day. the great thing about audit and forensics is the audit and

forensic data goes back far more so that we could get a better picture of kendall and what his actions were before he became the subject of the investigation. looking at the work computer and kendall's past history, we found he was going what we call off topic with alarming regularity. 40% of his searches were dedicated to searching for information the cubans would have found interesting. that's when i really, really thought that we had the right guy. >> but we needed more to be certain and prove that case in a

court of law. we wanted to show positively that he was accessing national defense information via his access there at the state department and providing it to the cubans. it was essential to charging espionage. >> and the information we had suggested that kendall was working for cuba but we still did not have him providing national defense information to a foreign power. >> we were starting to get a little frustrated because while we were happy that we had the unsubof kendall myers, again we're not seeing any espionage indicators. what made everything worse was the fact that kendall myers submitted an early retirement. >> when kendall retired, it was a blow to the investigation because you lose home field advantage. you lose the ability to control at least an aspect of their

life. >> even though he had left the state department, even though he was no longer in direct access to u.s. government information, he still had a lot in his head and if he were going to choose to work with the cubans again in the future, that could be very damaging. >> so we had to basically regroup and come up with a new strategy. what powers the digital world. communication. that's why a cutting edge university counts on centurylink to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.

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