To Catch A Spy

Two and a half years ago, the FBI arrested Robert Hanssen, a 22-year veteran of the bureau, for selling secrets to Russia.

Senior FBI officials described him as "the worst spy in US history" and called the mole hunt that nabbed him a major triumph - a tribute to the skill, judgment and dedication of its agents.

But as 60 Minutes reported in February, it turns out that for years, the FBI had targeted the wrong man.

The wrong man is Brian Kelley, an undercover officer at the CIA. He became the focus of an FBI-led investigation that nearly destroyed his life, not to mention his career.

Kelley speaks to Correspondent Lesley Stahl in his first interview which originally aired last January.

What seemed to implicate Kelley the most was the investigation of former State Department official Felix Bloch, who was suspected of spying for Moscow.

That case was broken by none other than Kelley, one of the CIA's top spy catchers. But someone in the US government alerted the Russians that Bloch was under investigation before the FBI could catch him in the act - so the case against Bloch collapsed.

"No one could figure out who would have tipped off the Russians," says Kelley. "We had it so tightly held at CIA that only about seven people knew, and they eliminated everybody but me."

As it turns out, Robert Hanssen was the leak. But at the time, it seemed to the FBI that Kelley knew more than anyone else about a number of cases that had been compromised.

And so an elite team of mole hunters secretly searched Kelley's house, placed him under around-the-clock surveillance, tapped his phones and computers, and subjected him to a series of sting operations designed to smoke him out.

"In order to get brought into this investigation, I needed to take a polygraph given me by the FBI," says Kelley, who agreed to take the test and passed with flying colors.

But John Moustakas, Kelley's lawyer, says that made the spy-catchers even more suspicious.

"Instead of saying, 'Wow, this guy passed a polygraph, maybe he's actually innocent,' they used that as evidence of his guilt," says Moustakas. "They said, 'He's the ice man. He's the perfect spy. He can beat the polygraph.' You know what? That's preposterous."

The next trap they set for Kelley was something called a false flag operation, where an FBI agent came to his house in Vienna, Va., posing as a Russian intelligence officer.

"I got a knock on my door, opened it up, and there was a gentleman outside," says Kelley. "And he said, 'I come from your friends, and we're concerned. Meet us tomorrow night at the Vienna Metro. A person will approach you. We have a passport for you, and we'll get you out of the country.' And then he left."

Kelley says he never suspected for a minute that they were trying to trap him. So the next morning, he reported the encounter to a senior FBI official, who, unbeknownst to Kelley, was heading up the team of mole hunters.

"You can imagine their chagrin, thinking, 'Oh, my God, we tried this brilliant ruse and it failed.' "And immediately, what do they do, spinmeisters that they are? They say, 'Oh, my God, he's perfect. He's a brilliant spy. He knew it was a ruse, and he uncovered the ruse,'" says Moustakas.

"Rather than thinking, 'Well, let's hold on a minute. Let's remember that he also passed the polygraph. Let's put these two things together. They're both exculpatory. They both tend to show that he's innocent.'"

"They were asking about Brian's knowledge of diamonds: 'Did he ever talk about diamonds?' Whether he was engaged in Internet pornography. 'Did he go to strip clubs? Did he ever take me to a strip club?' It was outrageous," says Hunt.

The FBI had compiled a profile that described not Brian Kelley, but Robert Hanssen - who we now know frequented strip joints, visited Internet porn sites using his own name and had asked his Soviet spy masters to pay him in diamonds.

"This was in February of 1999, two years almost to the day to Robert Hanssen's arrest," says Hunt.

In other words, the FBI had some solid clues, but when they connected the dots, they came up with the wrong picture.

"This was a poorly run investigation, where the conclusion was foregone from the beginning," says Moustakas. "What this bureau doesn't do well is it doesn't account for its own blind spot. It has a huge blind spot, insofar as it just can't conceive of the fact that an FBI agent could be crooked."

"We haven't pinpointed Brian Kelley for any other reason except he fits into the facts as we know them, the information as we have it," says Szady.

So why did they focus so single-mindedly on Kelley?

"What you have to understand is when the investigation was moving forward, the type of information that we're receiving clearly focused on the CIA and led us in that direction," says Szady.

That's partly because the FBI now says Hanssen, the real spy, was directing them there. But what about the charge that the FBI was unwilling to look within its own house?

"That's total exaggeration and totally a misrepresentation," says Szady. "And, actually, it's an insult to the FBI … and a personal insult to me."

Even though they got the wrong guy?

"No, because the information, the leads, the cases we were losing pointed toward the CIA, and every time we went and looked at the FBI, we were redirected back to the CIA," says Szady.

But there were clues pointing to the FBI. As early as February 1999, Thomas Kimmel, then a senior FBI agent working on another spy case, came forward to say, "We ought to look within the bureau."

"When I brought that to the attention of authorities in the FBI, I was told that the authority was 99.9 percent sure there was no spy in the FBI," says Kimmel.

His suspicions were based on what he had learned from Earl Edwin Pitts, an FBI agent who had been arrested in 1996 for selling secrets to the Russians. Kimmel says Pitts could have done a lot more damage.

"Earl Pitts had extraordinary access to information about the United States government's operations, specifically, about the FBI's operations, and the Soviets didn't appear to be particularly interested," says Kimmel.

To Kimmel, that could mean only one thing: The Russians had another mole in the FBI, someone with even better access than Pitts.

Pitts also thought that himself. In fact, he told his FBI debriefers they might want to look at Robert Hanssen.

But when Kimmel went to dig deeper, he says he was denied access to the FBI files he needed: "I knew they were stonewalling me. I think they were almost in a lose-lose situation. If there was a spy in the FBI, that was an admission that we were flawed."

"We can't go and do a total financial analysis on every employee of the FBI because we think there may be a mole … within the FBI," says Szady.

But Szady also knew and dismissed another fact well known around the FBI: that Robert Hanssen had been caught hacking into his boss's computer.

"You have to put this in perspective. Let's say we knew nothing about a mole, and all we have is the fact that Robert Hanssen hacked into a computer or Robert Hanssen paid $75,000 for a home improvement," says Szady. "Do we have a spy on our hands?"

The investigators thought not, and in August 1999, they turned up the heat on Kelley by bringing him into CIA headquarters for a confrontational interview. It was the first time he realized he was a suspect - let alone the suspect.

"They said, 'We know who you are. We know what you've been doing. We even know the KGB code name they use for you,' which was Karat, K-A-R-A-T," says Kelley.

Then, Kelley says he was confronted with a hand-sketched map of Nottoway Park in Vienna, Va., where the FBI had spotted Russian agents operating. The investigators had obtained the map during the search of Kelley's home and thought it was a diagram of where he made document exchanges with the Russians.

One reason they thought that was because he lived only a 10th of a mile away. But Robert Hanssen lived even closer. In fact, when his interrogators whipped out the map, Kelley says it was a scene right out of "Perry Mason."

"The senior bureau agent jumped up, opened his briefcase up, and slammed a piece of paper in front of me, and he said, 'Explain this.' And I looked at it and it took me a moment to realize what it was. It was my jogging map stamped 'secret,'" says Kelley.

The FBI thought the running routes marked on Kelley's jogging map were his drop-off locations.

"It's sort of funny now, but at the time it was petrifying. They threatened him with capital offenses." says Moustakas.

"His sisters, his daughters, his friends, his colleagues were all told, to the exclusion of all others, 'Brian Kelley is an agent of the Russian government.'"

They stuck to that hard line even though 60 Minutes has learned that eight of the roughly 25 investigators believed Kelley was telling the truth - one-third of the team.

Despite the doubts, Kelley was suspended from the CIA, with pay, and spent the next year and a half at home waiting and worrying.

"You're totally dominated every day with 'When is the next shoe going to drop?' When are you going to be intercepted and thrown up against the hood of the car and charged with espionage? You cannot escape it," says Kelley.

He also told 60 Minutes he was at the end of his rope. Meanwhile, the mole hunters decided to expand the investigation to Moscow where they put the word out that the US would pay top dollar for information they hoped would nail Kelley once and for all.

The offer paid off. The FBI got their hands on a Russian intelligence file. The team gathered to go through the file, which contained a tape recording of the spy talking to his Soviet handler.

Someone in the room described the scene to us this way: '"We listened to it, and it's clearly not Brian Kelley's voice.'"

The hard-liners on the team say: "Of course it's not Kelley's voice. He's too smart to place the call himself. He got a cut-out, an intermediary, to do it."

Then someone from the FBI recognized the voice. "It's Bob Hanssen's," he said.

Kelley learned about it two days later from his son, who had heard it on a morning newscast: "I woke up very quickly and ran downstairs to the computer, got on, and as soon as I saw the lead story and I saw the name Hanssen, who I knew and had worked with, I knew that my nightmare was over."

"The very fact that we eventually caught Robert Hanssen indicates that our investigation never slowed down, never stopped, and never quit with Brian Kelley," says Szady, who admits he wouldn't do anything different.

"I think that Brian Kelley may have been wronged in this, but eventually we were able to get the mole."

But the Justice Department couldn't disagree more. Last week, it issued a scathing review of the case, blaming Szady and his fellow mole hunters for missing obvious clues like the fact that Robert Hanssen deposited KGB cash in his own name at a bank only a block from FBI headquarters.

As for Brian Kelley, he's been fully exonerated and is back at work at the CIA – teaching fellow spy catchers about the mistakes that were made in the Hanssen case.