A report published by Yahoo News on Monday described a “brazen Russian counterintelligence operation that stretched from the Bay Area to the heart of the nation’s capital” during the presidency of Barack Obama. The operation penetrated FBI communications to a “stunning” degree, according to officials quoted in the story, but was misunderstood and downplayed by the intelligence community and the Obama administration, which was ostentatiously attempting to “reset” relations with Russia when the operation began.

Yahoo News tied their years-long saga of counterintelligence cat-and-mouse to several major news events, including the 2016 mass expulsion of Russian diplomats – ostensibly ordered in retaliation for Russian “meddling” in U.S. elections, but actually because those Russian diplomatic facilities were hives of electronic surveillance activity – and the more recent story about the CIA extracting a Russian asset in 2017. According to the report, a significant number of Russian assets stopped talking to U.S. intelligence agencies because they were afraid their identities would be discovered.

To make a very long story short, the Russians took advantage of the Obama administration’s much-ballyhooed “reset” in relations to set up an aggressive network of electronic monitoring devices in the United States, the effort gaining further momentum after Russian President Vladimir Putin became convinced the U.S. was manipulating protests in Russia to delegitimize elections with allegations of vote fraud. 

The Russians threw themselves into the job of cracking FBI communications and hit the jackpot sometime in 2011. According to Yahoo News:

That effort compromised the encrypted radio systems used by the FBI’s mobile surveillance teams, which track the movements of Russian spies on American soil, according to more than half a dozen former senior intelligence and national security officials. Around the same time, Russian spies also compromised the FBI teams’ backup communications systems — cellphones outfitted with “push-to-talk” walkie-talkie capabilities. “This was something we took extremely seriously,” said a former senior counterintelligence official.

The Russian operation went beyond tracking the communications devices used by FBI surveillance teams, according to four former senior officials. Working out of secret “listening posts” housed in Russian diplomatic and other government-controlled facilities, the Russians were able to intercept, record and eventually crack the codes to FBI radio communications.

Some of the clandestine eavesdropping annexes were staffed by the wives of Russian intelligence officers, said a former senior intelligence official. That operation was part of a larger sustained, deliberate Russian campaign targeting secret U.S. government communications throughout the United States, according to former officials.

The two Russian government compounds in Maryland and New York closed in 2016 played a role in the operation, according to three former officials. They were “basically being used as signals intelligence facilities,” said one former senior national security official.

Some of these decryption efforts were not terribly subtle, as the Russians would literally follow FBI surveillance teams on foot and monitor their communications or drive around in vans packed full of radio gear, listening for FBI calls. The FBI was using radios designed more for light weight and easy mobility than communications security, and their system was regrettably slapdash. Eventually they started using cell phones, which were also compromised by Russian intelligence.

“The infrastructure that was supposed to be built, they never followed up, or gave us the money for it. The intelligence community has never gotten an integrated system,” one former official told Yahoo News. When the extent of the comms system compromise became clear, a great deal of money was reportedly spent in haste to acquire better encrypted radios.

Another official called the Russian operation an “incredible intelligence success” but added the most heavily encrypted transmissions used by American agencies was never cracked. Speculation abounds in the intelligence community over whether the Russians cracked FBI codes on their own, got their hands on some FBI equipment and used it to reverse-engineer the code system, or had help from a mole inside the U.S. government.

The Obama administration’s response to the communications breach was troubling, if not very surprising. As with the Iran nuclear deal, the Obama administration was willing to overlook a great deal of mischief to get the historic headline-grabbing diplomatic breakthrough it wanted. Yahoo News reports:

According to a former CIA official and a former national security official, the CIA’s analysts often disagreed about how committed Russia was to negotiations during the attempted reset and how far Putin would go to achieve his strategic aims, divergences that confused the White House and senior policy makers.

“It caused a really big rift within the [National Security Council] on how seriously they took analysis from the agency,” said the former CIA official. Senior administration leaders “went along with” some of the more optimistic analysis on the future of U.S.-Russia relations “in the hopes that this would work out,” the official continued.

Those disagreements were part of a “reset hangover” that persisted, at least for some inside the administration, until the 2016 election meddling, according to a former senior national security official. Those officials clung to the hope that Washington and Moscow could cooperate on key issues, despite aggressive Russian actions ranging from the invasion of Ukraine to its spying efforts.

Part of the problem was also institutional inertia within the intelligence community, a problem difficult for outsiders to diagnose because so many of the details are classified. The notion that Russia might have compromised not just FBI radios but even “secure” intelligence facilities and drag information across the supposedly inviolate “air gap” between secure systems and the Internet appears to have blown some minds, for example.

It is not clear if the Russians ever managed to fully penetrate these facilities despite some comically obvious attempts. One of Yahoo’s sources thought the Russians might have been pretending they penetrated communications at CIA headquarters just to play head games with their American adversaries.

The good news is that the Yahoo report concluded with an assessment that the Russians have some institutional inertia problems of their own, and appear to have struggled to replace the assets expelled from the United States during the diplomatic facility purge of 2016. The bad news is that U.S. analysts are evidently still conflicted about exactly what the Russians are capable of, from counterintelligence activity on U.S. soil to election meddling, and everyone seems to agree the U.S. intelligence community has become too politicized to get a clear picture of the risks.