Bill Simpich, a civil rights attorney in the Bay Area and the author of State Secret, proposes an answer to the riddle of “FLASH CANCELLED”

The short version of Simpich’s argument is this: an FBI security flash on Lee Harvey Oswald was cancelled on October 9, 1963 because the CIA and FBI were using Oswald in some kind of intelligence-related operation.
The full version, told by Simpich himself, goes like this:
The Whole Story
The story begins with two cables sent out by top aides to CIA counterintelligence chief James Angleton on October 10, 1963. This was six weeks before JFK’s assassination. Kennedy was alive and well and meeting with two African leaders in the White House. Lee Harvey Oswald was an itinerant ex-Marine with a Russian wife, who–according to the official story–was barely known and of little interest to top CIA officials.
In fact, Oswald was well known to Angelton, a brilliant and powerful man with virtually unlimited authority to prevent the KGB from penetrating the CIA. Angleton’s Special Investigations Group had been reading Oswald’s mail and receiving other reports on him for four years. Oswald, for all practical purposes, was under counterintelligence surveillance from 1959 to 1963.
These two CIA cables of October 10, 1963 responded to an October 8 report from the Mexico City station. The October 8 report noted that an American identifying himself as “Lee Oswald” had contacted a Soviet consular official named Valeriy Kostikov. Scott and other CIA officers knew that Kostikov was a KGB officer; some suspected he was an assassin.
Scott wanted to know more about this Oswald character. Who was he?

Angleton’s staff prepared one reply for the Mexico City Station, a response which drafting officer Jane Roman later admitted was deliberately misleading and betrayed “a keen interest in Oswald”)
Angleton’s people sent a second cable on Oswald to the FBI, State Department and the Office of Naval Intelligence. The FBI’s copy was routed to the Bureau’s Soviet desk.
Curiously, it was also sent to the Bureau’s Nationalities Intelligence division which focused on Cuban affairs. That was curious in that there was nothing in the CIA cable about Cuba, and the Nationalities Intelligence did not work the Soviet beat.
Nonetheless, the CIA report on Oswald wound up in the hands of the office’s supervisor, an agent named Lambert Anderson. [The words “Nat Int”, “Anderson”, and “Wannall” (Anderson’s boss) can be seen on the FBI’s copy of the memo.]
Why did Anderson get the memo?
Watching Oswald

Lambert Anderson was one of the two agents at FBI headquarters who had been specifically charged with handling the Oswald file. In addition, he was involved in running a joint FBI-CIA operation targeting the pro-Castro Fair Play for Cuba Committee for disruption.
The other FBI agent knowledgeable about Oswald was counterintelligence supervisor Marvin Gheesling. He had placed Oswald on the security watch list four years earlier when he went to the Soviet Union.
The day after the October 8 CIA cable on Oswald was sent, Anderson spoke with Gheesling and Gheesling took Oswald off the security watch list. Their decision resulted in this piece of paper.

Both men were familiar with the name and person of Lee Harvey Oswald.
Gheesling and Anderson had signed off on a watch list document placed in Oswald’s file on August 13 after Oswald was arrested in New Orleans for breach of the peace while leafleting for the Fair Play for Cuba Committee. (He got into a fight with a group of anti-Castro Cubans who identified themselves as the Cuban Student Directorate, a group funded by the CIA, under a secret program known as AMSPELL.)
Gheesling later explained that once he learned that Oswald was arrested, he told Anderson that Oswald should be taken off the security watch list because he had inadvertently forgot to remove his name after Oswald’s return from the Soviet Union in June 1962.
Anderson confirmed that story. He said someone had told him that the security flash had been removed because it was no longer necessary once Oswald had returned to the United States.
One problem with Anderson and Gheesling’s story is the purpose of the FBI’s watch list. The list was supposed to call the Bureau’s attention to someone had returned from overseas and then been arrested. The Bureau wanted to know of all such persons and the watch list was the tool for identifying them.
If the purpose of the list was to take notice of someone who had been arrested, why take Oswald off the list after he was arrested in New Orleans in August 1963?
The Problem
An even more intriguing problem, with Gheesling’s story in particular, is that he said that he removed Oswald’s name from the security watch list on October 9, right after he learned about Oswald’s arrest.
Gheesling’s explanation flies in the face of the aforementioned watch list document showing that both he and Anderson knew about Oswald’s arrest around August 13. (Gheesling’s name and initials “wmg” are also on other memos discussing Oswald and his arrest dated August 21 and August 23.) He claimed that he forgot to remove the flash when he closed the Oswald file on September 7. So Gheesling had learned two months before knew that Oswald had been arrested and he didn’t take his name off the list then. Why in mid-October?
The probable solution is that Anderson got wind of a tip that Oswald was of some use to the FBI.
On October 8 Anderson received from CIA-FBI liaison Austin Horn a Sept. 24 report of Oswald’s arrest, which revealed Oswald’s request to speak with an FBI agent. Oswald shared quite a bit of information with the agent while he was detained.
What Happened?
My conclusion is that on October 9th the two men came to some kind of mutual understanding that Oswald was helpful to the FBI, and saw no reason to keep him on the security watch list. His whereabouts were known and he was being watched. (“Anderson” of “Nat. Int.” is written on the watch list file, underneath the date of October 10, and the date of receipt is recorded on top as October 8)
As a result, no alarms went off at the FBI on October 10 when the CIA cable about Oswald being in Mexico City and trying to contact suspected KGB assassin Kostikov arrived. Any alarm that might have sounded about Oswald being a security risk appears to have been deliberately turned off by Gheesling and Anderson.
When Oswald was arrested for killing JFK, Gheesling and Anderson faced some very sensitive questions.
How sensitive? Fifty four years later, an FBI memo on the subject is still riddled with redactions.

We do know this: Gheesling was punished and transferred from HQ to a field office, for, among other reasons, “removing the stop on Oswald…on 10/9/63“, even though he claimed that there was no reason to maintain the security flash once Oswald returned to the US.
Although Anderson complained that there were only two situations to justify a security flash: “Until such time as they are placed on Security Index (SI) or unless known to be out of country and security flash appears warranted” – his argument was rejected and he was censured for not putting Oswald on the security index.
Soviet Section Chief Bill Branigan completely disagreed with these two men: “We…placed a stop against the prints so that any subsequent arrest in the U.S. would be brought to our attention.”
Branigan made it clear that the purpose of the Security Flash was to notify the FBI of “any subsequent arrest” of Oswald. Granted, Branigan was also punished – for his “overall responsibility” regarding this sorry state of affairs. But the record is unequivocal that Gheesling was the man most severely punished – and his punishment was specifically based, at least in part, for cancelling the flash on Oswald.
There are intriguing parallels between Robert Edward Webster and Lee Harvey Oswald. Both defected in 1959 and redefected in 1962. Webster had served in the Navy and Oswald the Marines.
On his return to the U.S. in 1962, Webster was debriefed by CIA officers to “obtain Soviet Realities data.” Are we to believe Oswald never had been also? https://en.wikipedia.org/wiki/Robert_Edward_Webster
Oswald debriefed by Andy Anderson(CIA).
Gheesling had a reputation of being one of the finest agents. Bungling was not known to have marked his career, from what other agents had to say of him
Fair enough. I can’t help thinking how odd it is that Oswald could so quickly and easily get back into the country after his little sojourn to Russia. There must be other examples on the public record from that period of the Cold War, I wonder what those stories look like. I have no clue where to find out.
It is odd. The FBI produced extensive dossiers on actors and academics who were deemed to be ideologically unfit. There is not a chance in a million that they would be unconcerned with a military defector, if that’s what he really was.
#JFKFiles | Was Lee Harvey Oswald part of a #CIA false defector program to the Soviet Union? This record shows at least one unnamed agent was, while a Mexican asset was used unknowingly. https://twitter.com/filesjfk/status/958505147025403905?s=21
Mark,
Here’s the HSCA report on other defectors:
https://www.maryferrell.org/showDoc.html?docId=84&search=Defectors_AND+study#relPageId=439&tab=page
Some did return. The U.S. doesn’t exile people, so American citizens retain that right. As I remember, even a guy who’d given up his citizenship was allowed to return as a resident alien (he had mental problems). I think the reasoning was that he might’ve caused more problems for the U.S. there than here.
Oswald, remember, was not just any old defector. He had openly proclaimed his intent to tell the Soviets anything he had learned about the Marine Corps during his service. The consul who handled Oswald’s defection request, Richard Snyder, said that Oswald had “intimated that he might know something of special interest.”
Whether or not Oswald actually knew anything, this declaration amounted to a declaration of criminal intent to commit espionage against the United States, and certainly should have earned Oswald more than an “undesirable” discharge.
http://www.aarclibrary.org/publib/jfk/wc/wcvols/wh18/pdf/WH18_CE_908.pdf
J.D.,
Unfortunately the only evidence that Oswald intended to commit espionage was the report that he had threatened to do so, but he later retracted that statement and claimed he didn’t tell the Russians anything. I wouldn’t believe him, but that’s not sufficient evidence to convict him of anything according to the Department of Justice:
https://www.maryferrell.org/showDoc.html?docId=33130&search=%22department_of+justice%22+AND+Oswald#relPageId=57&tab=page
This is very intriguing indeed. From here it looks plausible that we are looking at more evidence of deeper machinations such as Oswald as a double agent or something like that. It also seems just as plausible we are seeing a typical example of bad communication practices, bad timing, or just plain old ordinary bungling. Either of these things would be serious concerns for the agencies involved and keeping the public guessing, thus the redactions. For me, all these things do is sharpen my interest in finding more answers and getting closer to the truth.