The last two weeks have witnessed the unfolding of the strangest spy saga in the history of American intelligence. Edward Snowden, a young contractor with the National Security Agency, burst the bubble of secrecy surrounding that most secretive of American spy services with shocking accusations of civil-liberties violations by the NSA. But soon thereafter Snowden changed the narrative, going beyond alleged domestic abuses by exposing highly sensitive NSA foreign-intelligence programs from Chinese territory. And then he fled to Moscow.

There has never been anything quite like this in the annals of American espionage. While there have been plenty of traitors, more than a few defectors, plus some whistleblowers (some of whom turned out later to have been under the control of foreign intelligence services), Snowden seems increasingly to be a postmodern combination of all three, perfectly tuned to the age of the Internet, 24/7 news coverage and Twitter. Certainly the global media storm he has unleashed surpasses any previous cases.

From the moment Snowden appeared in Hong Kong, identifying himself as the source of leaks about top-secret NSA programs like PRISM, intelligence veterans were concerned about the possible role of foreign intelligence services behind events, a suspicion that increased when it was revealed that the residence where Snowden spent his last week in Hong Kong was a safehouse belonging to local security, which is known to be close to Beijing.

The worries of counterintelligence hands jumped exponentially when Snowden fled to Moscow with the assistance of Russian authorities. As his stay in Moscow—which Russian authorities have repeatedly, if quixotically, explained is not actually in Russia—has grown longer, worries in Washington have mounted about what the Russians may be learning from Snowden, who is acquainted with a large number of top-secret NSA and CIA programs.

No one familiar with Russia’s formidable “special services,” as they call them locally, has any doubts that the FSB, the domestic successor to the KGB, will take full advantage of such a goldmine of information appearing on their doorstep. Russian interest in the NSA is anything but new. During the Cold War, the KGB literally had no higher priority on earth than penetrating the NSA, the excessively secretive agency that Moscow secretly termed OMEGA. This interest, which has not withered with the collapse of the USSR, is not difficult to understand. The NSA is not only responsible for signals intelligence (SIGINT), by far the biggest source of intelligence in the U.S. government. The Agency also is charged with securing secret American communications. A breach in the NSA’s security wall could endanger not only American SIGINT, but the safety of sensitive U.S. communications, too.

What exactly Snowden knows remains avidly pursued by U.S. counterintelligence, but reports that he has “thousands” of pages of NSA documents with him indicate that the damage he could inflict, if such technical information were to fall into the hands of hostile intelligence services, would be catastrophic. It could take many millions, perhaps billions, of dollars to repair the harm done, and some losses may be irreparable at any cost. Thus, counterintelligence officers are assuming the worst.

The NSA has been down similar roads before. In 1960, two analysts, William Martin and Bernon Mitchell, disappeared from Agency headquarters, only to appear weeks later at a Moscow press conference, denouncing NSA spying on foreign diplomatic communications. The aftermath of that debacle reverberated at the Agency for years, but even worse was a sensational case that the American public did not learn of until after the Cold War.

One of the great triumphs of American SIGINT as the Cold War was just beginning was a top-secret effort termed BOURBON, a joint U.S.-UK project to break into Soviet communications. By late 1947, after hard code-breaking work, BOURBON was able to read extensive amounts of encrypted Soviet military and political information. Then, over a period of a few months, BOURBON “went dark,” in spy jargon: the Soviets changed all their codes and ciphers. This loss was probably the greatest American intelligence setback of the entire Cold War.

Three years later U.S. counterintelligence would learn that the betrayal came from William Weisband, a linguist working inside the SIGINT system. A Soviet agent since the 1930s, Weisband informed the Soviets not just about BOURBON, but also about the super-secret VENONA project to read Soviet intelligence communications. (In a perverse irony, Moscow knew about VENONA several years before President Truman was told of the program.) For the newly founded NSA, Weisband was a foundational catastrophe. Is Snowden a second Weisband? It’s too early to know for sure, but there can no doubt that the potential damage he can wreak on American SIGINT and overall security may be unsurpassed.

What is clear is that Snowden represents a disastrous failure of American counterintelligence. Although many have called for the Intelligence Community to get serious about CI, as it’s known in the trade, nothing significant has been done. Snowden’s background investigations seem to have been slipshod, perhaps due to excessive outsourcing of such important tasks. Moreover, it appears evident that the NSA's computer security was laid waste by a hacker inside the building, working in its compartmented servers and databases. Snowden’s admission that he took his last contract job in Hawaii with the express purpose of divulging secrets means much could have been done to prevent this, but was not.

The Russian angle to this story this is not difficult to decipher. The Kremlin, President Putin included, clearly savored the pain the Snowden situation has caused the Obama administration. But there also is the potential for payback in what insiders call SpyWar, the secret struggle between security services, largely hidden from the public, which has heated up considerably between Moscow and Washington in recent years. The humiliating manner in which the FSB arrested Ryan Fogle, a suspected CIA officer assigned to U.S. Embassy Moscow, not long before Snowden appeared there, indicated former KGB colonel Putin's desire to play hardball.

For the Russians, the Snowden situation is likely payback for the rollup by U.S. counterintelligence of a Russian spy network in 2010, which led to the arrest and expulsion of ten illegals—that is, spies operating without official cover—who were operating in the United States. Although the media focused mainly on the redhead Anna Chapman, the most photogenic of the illegals, this was a serious setback and embarrassment for Moscow. Defeats require pushback, says the logic of SpyWar, and this seems to have led to Moscow’s unusual treatment of Edward Snowden.

Whatever happens next, whether Snowden winds up in South America or U.S. custody or somewhere else, it’s important that U.S. intelligence at last begin to treat counterintelligence as a core issue—rather than the peripheral, even unwanted, aspect of espionage that too many American intelligence mavens think it is. For example, a detailed April 2013 26-page assessment of intelligence issues prepared by the Congressional Research Service analyzed a wide array of topics, but the word “counterintelligence” never appeared. Such institutional blindness must cease.

At a minimum, standards for access to top-secret information need radical overhaul, while the use of contractors for so many sensitive, crucial intelligence community functions must be reconsidered. Additionally, it is time to assess the prominent role of WikiLeaks in this case. Although it bills itself an “anti-secrecy” organization, its willingness to cooperate with the Russian intelligence services (and perhaps others) to help Snowden raises important questions about the group’s ties and allegiances. Americans may hold any political beliefs they wish, but those espousing jihadist or neo-Nazi views are not usually considered eligible for top-secret clearances. The time has come to question if admirers of Julian Assange ought to be disqualified as well.

Counterintelligence is back inside the Beltway, after a too-long hiatus. It is imperative that U.S. security policymakers begin to seriously ponder how to do CI better—and fast. The Russians place counterintelligence at the center of their espionage worldview. While that tendency is unhealthy in a democracy, finding a healthy balance of between intelligence and counterintelligence is the only way to ensure another Snowden disclosure will not happen.

John R. Schindler is professor of national security affairs at the Naval War College and a former intelligence analyst and counterintelligence officer with the National Security Agency. The opinions here are his own.

Image: Flickr/Mike Herbst. CC BY-SA 2.0.