by Bryan Denson
The True Story of the Highest-Ranking CIA
Officer Ever Convicted of Espionage and
the Son He Trained to Spy for Russia
Bryan Denson
Atlantic Monthly Press
New York
Copyright © 2015 by Bryan Denson
Jacket design by Royce M. Becker
Author photograph © Beth Nakamura
The author owes a great debt of thanks to The Oregonian, which published “The Spy’s Kid” story in its original form in May 2011.
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Published simultaneously in Canada
Printed in the United States of America
ISBN 978-0-8021-2358-9
eISBN 978-0-8021-9131-1
Atlantic Monthly Press
an imprint of Grove Atlantic
154 West 14th Street
New York, NY 10011
Distributed by Publishers Group West
groveatlantic.com
In memory of my father,
Kenneth Earl Denson,
and dedicated to Holden Miles Denson,
my son, my wingman, my pride and joy
“I used to advertise my loyalty and I don’t believe there is a single person I loved that I didn’t eventually betray.”
—Albert Camus, The Fall
Contents
Prologue: Suspected Spies in Chains
One: Hola Nancy
Two: First CIA Tour, Manila Station
Three: “Batman” Switches Teams
Four: A New Counterspy Collaboration
Five: We Have Another Aldrich Ames
Six: Spy vs. Spy Under Langley’s Roof
Seven: FBI Takedown at Dulles
Eight: Forsaken All Allegiance to His Homeland
Nine: A New Cellblock Celebrity
Ten: A Fall into Blackness
Eleven: The Russian Consulate, San Francisco
Twelve: A Spy Named “George”
Thirteen: Faith, Prosperity, and The Door
Fourteen: CIA Detects Codes, Espionage, Again
Fifteen: Keep Looking Through Your New Eyes
Sixteen: FBI Offers a Mulligan
Seventeen: Inmate 734520
Eighteen: A Spy Swap and Reparations
Epilogue: The Last Asset
Author’s Note
Acknowledgments
Notes
Index
Prologue
Suspected Spies in Chains
Portland, Oregon, January 29, 2009
I’m sitting in Satan’s Pew, the name I’ve conferred upon the torturously narrow courtroom benches in the Mark O. Hatfield United States Courthouse. As I squirm in my seat, reporter’s notebook dandling on my lap, I notice a curiously high number of deputy U.S. marshals in the gallery, mostly buff guys with steely gazes and Glocks under their sports coats. Behind me, wearing blazers and striped clip-on ties, stands a knot of court security officers. Next to them, FBI agents squeeze together on a bench against the back wall. I haven’t witnessed court security this tight since the feds rolled up Theodore Kaczynski, the Unabomber, and hauled him before a judge in Helena, Montana. A courthouse contact has already tipped me that today I’ll witness something groundbreaking here in the cheap seats of American justice.
Keys jangle behind a paneled wall to my right, where I can hear the clank of a metal door. Deputy marshals are queuing today’s prisoners, who will appear one by one to face their charges before a magistrate judge. The weekday parade of pathos, known to courthouse denizens as Mag Court, normally features a tedious cast of freshly arrested miscreants, some scratching from withdrawal. Now and again the show comes alive with stone killers, cops gone bad, diamond thieves, outlaw bikers, cockfighting impresarios, ecoterrorists, grave robbers, or the corner-cutting captains of industry.
On this foggy Thursday afternoon, I’ve come to write about two suspects—an international spy, and the son who joined him in the family business of espionage.
My editors at The Oregonian, the daily newspaper several blocks away, are holding space on the front page for my father-son spy story. But the duo—whose names I’d never heard until this morning—will be arraigned separately, consigning me to a hellish deadline. I look at my watch and silently curse the docket gods. A hapless bunch of schnooks are scheduled ahead of my spy suspects, and the judge will take her good old time reading them their rights.
First up today is an accused scam artist from California who sold central home vacuum cleaning units across North America; apparently he was brilliant at sales and collecting money, but not at delivering the goods. Now comes another genius, a career bank robber arrested yesterday just twenty-one minutes after knocking off a Bank of America for a lousy $700; he’s already calculating how much time he’ll serve in prison. Up next is a guy who drank himself stupid out on the Umatilla Indian Reservation and threw some playful karate kicks at a buddy, who hurled him to the ground, whereupon Junior Jackie Chan blew a gasket, picked up two knives, and stabbed his pal nearly to death. Then come two men accused of illegally harboring a luckless El Salvadoran woman; she turned up, like so many, on the wrong side of the U.S. border.
Today’s guest of honor is Harold James “Jim” Nicholson, who in 1997 became the highest-ranking Central Intelligence Agency officer ever convicted of espionage. Nicholson, serving time at the federal prison fifty miles from where I sit, sold the identities of hundreds of CIA trainees to Russian spies. Now he’s accused of betraying his country again—this time from behind bars. The Rolex-wearing spy nicknamed Batman, having recruited countless foreign assets to betray their own countries for the CIA, is suspected of sending the Russians his youngest son, twenty-four-year-old Nathaniel James Nicholson, as his emissary. Nathan, a partially disabled Army veteran, took basic lessons in spycraft from the old man, then smuggled his dad’s secret messages out of the prison visiting room to Russian spies on three continents. For the trophy-conscious FBI, securing another conviction against Jim Nicholson would be a major prize.
A heavy door swings open, and here he is.
Jim wears a khaki prison uniform and a faded T-shirt the color of broiled salmon. His pale blue eyes sweep the room with an expression that shifts abruptly, as if he’d expected something grander than this feckless rabble of court staffers, lawyers, and a few scribbling journalists. Jim moves for the defense table with the short-step shuffle of a man who knows the sting of a jaunty stride in ankle chains. He eases into a high-back chair. Jim sports a soul patch and mustache, gray hair sweeping over the tops of his ears. I take a mental note. This guy would look right at home playing tenor sax in a jazz quartet.
I’ve gazed at hundreds and hundreds of suspected felons in courtrooms across the country, but Jim Nicholson carries himself differently. He’s not eye-fucking the prosecutors or sneaking glances into the gallery for a friendly face. There’s no swagger, no tapping f
oot, no nervous smile that might offer some kind of tell. The man doesn’t even appear to be breathing. He wears an expression of captive resignation, like a golfer on a tee box watching the foursome in front of him swat cattails in search of a lost ball.
Then I see something. The chin. It tilts upward ever so slightly and guides his gaze, regally, a few inches above the eyes of everyone else on the floor of the courtroom. It’s a look that tells me everything I need to understand: This guy just knows he’s the smartest man in the building.
At this moment, I have no clue that I will spend the next five years contemplating the life and crimes of Jim Nicholson, piecing together his tangled human narrative, the wreckage he left of his family and the CIA, and his unique role in the ongoing hostilities between Washington and Moscow. And I cannot possibly know that I will learn this story with the help of Nathan, his family and friends, prison inmates, former spies and counterintelligence agents, national security lawyers, public policy makers, hundreds of pages of investigative files, wiretaps, court records, prison and military papers, Jim’s correspondence, excerpts from his personal journal, and a colorful band of investigators with the FBI and CIA who twice brought him to justice.
Already my questions are many: How on earth could a man devote decades of distinguished service to his country only to betray her? Why would he reach out to Russia again? Why would Moscow still care about its former mole nearly two decades after the Cold War? What could Russian spies hope to gain by making contact with Jim a dozen years after his treachery was unmasked? And why would he send his youngest son into the breach, risking his freedom? What kind of a dad does that?
When I hustle out of the courtroom to make my early evening deadline, I run into David Ian Miller, the special agent in charge of the FBI’s Portland Field Office. Dave, who has always been a straight shooter, tells me that Jim Nicholson was a skilled and worthy adversary.
“At the end of the day,” he says, “this will prove to be a story of family, trust, and betrayal.”
And, as it happens, so much more.
1
Hola Nancy
“The integrity of the upright shall guide them; But the perverseness of the treacherous shall destroy them.”
—Proverbs 11:3, The Holy Bible (ASV)
Eugene, Oregon, fall 2008
The morning of October 10 dawned cold and gunmetal gray in Eugene, a college town so accustomed to autumnal gloom that the young man with sleepy blue eyes gave it scarce notice. Nathan Nicholson hiked across an elevated walkway from his drafting class toward the Lane Community College library, which sat in the middle of campus in the aptly named Center Building. Behind him, a thicket of towering evergreens carpeted the coastal mountains, which stretched fifty miles west to the Pacific Ocean, clouds draping their rounded shoulders like tattered shawls.
Nathan wore his hair razor-close on the sides, with a little longer patch on top, a style his barbers back in the Army called high and tight, and which, not by accident, disguised his receding hairline. He moved with an infantryman’s gait, chest out, head and shoulders barely rising, stocky legs chewing up ground. But there was a slight hitch in his stride, as if his left leg were stepping over imaginary glass, a parting gift from the parachuting injury that ended his military career. He had turned twenty-four that summer.
The air felt cool on Nathan’s face, his strong brow and broad chin, and he could see his breath. The first rains of winter had begun early in the Willamette Valley, where even longtime residents herald the onset of the soggy season with low-grade despair. Soon would come a monotonous series of drizzles, rolling off the Pacific as if by conveyor belt, delivering the valley so many short, gray days that by February, some folks would begin to joke about eating the barrel of the nearest gun.
Nathan was not a native Oregonian, and he sometimes missed the more exciting climates of his boyhood. His dad’s foreign assignments sent the Nicholson family to punishing places. Manila, with its blistering humidity and electrical storms you could feel under your feet. Bangkok, often called the hottest city on the planet. Kuala Lumpur, where monsoons deliver a hundred inches of hard rain a year. And Bucharest, with its pipe-bursting winter freezes. He also missed the rotations, traveling from embassy to embassy, uprooting every few years to start fresh someplace new.
Outside the library, Nathan slipped a black-and-gray Alpine backpack off his shoulder and knelt on the cool brick walkway as if to tie his shoe. He hunched over the pack for an instant, letting his eyes casually sweep the commons, panning faces and forms. One intense glance from anyone and he would bail, circling back later for another try. But he saw nothing suspicious.
Nathan unzipped the pack’s front compartment and lifted out a small notebook with a blue, marbled cover. He flipped through its pages until he reached a twenty-eight-word notation that began, “Hola Nancy.” He studied it for a few moments and climbed to his feet, satisfied he could e-mail the message just as the Russian had dictated the previous winter in Peru.
His gut was tormenting him again. For many months, stabbing pains deep beneath his breastplate had intermittently doubled him over. He was convinced that the stress of the last year had given him stomach ulcers. His meals bunched in his belly like piles of tacks. He’d seen a doctor at the college’s health clinic, who told him to drink green tea, carry Pepto-Bismol, and avoid tomato juice. Nathan thought she’d seemed unconcerned, even dismissive of his pains, as if she considered college students exempt from the titanic stresses that produce big-boy ulcers. She had not appeared to comprehend the depth of his anxieties, nor could she. There was no way for her to know that for two years he had traveled the Americas as his father’s agent to Russia’s foreign spy service, and now feared he might be under surveillance by the Federal Bureau of Investigation.
Inside the library Nathan followed tan-gray industrial carpet past bookshelves topped with busts of famous literary and historic figures. From across the room, the figures of Will Rogers, Benjamin Franklin, and Frederick Douglass were locked in a perpetual stare-off with Ernest Hemingway, Albert Einstein, and Kate Greenaway. Nathan pushed through a doorway into an adjoining classroom that doubled as a computer lab, eyes scanning the room for anyone out of place. He settled in front of one of two dozen Dell monitors spread across rows of white desktops. It had taken him weeks to find this spot, the only computer lab on campus where students weren’t required to log in.
Nathan pulled up the Yahoo home page, with its familiar red logo, and tapped in the user name “Jopemurr2” and the password “Florida12.” He typed the e-mail from memory, wincing at each word. The sentences looked more ridiculous on the screen than when he jotted them down inside a soundproof room at the Russian Embassy in Lima. His fingers froze for an instant over the keyboard as he listened to the words in his head. They sounded as if someone with clumsy English were speaking a pass-phrase in an old spy movie. Such obvious code. He resisted the urge to revise the words into something approximating authentic human correspondence. The Russian had been specific that he stick to the prescribed text, and Nathan stuck to the script. Yet he couldn’t stop himself from waking up the prose with a forest of exclamation marks:
Hola Nancy! It is great to receive your message! I love you too. I hope to see you soon!
The best regards from my brother Eugene!
—Love,
Dick
The Russian had assigned them code names. He called himself “Nancy” and gave Nathan the name “Dick.” He conferred the sobriquet “Eugene” on Nathan’s father, whose years spying for the Russians had brought them all together.
At precisely 9:58 a.m., Nathan saved his e-mail into the draft folder of the Yahoo account. He cleared the web page off his screen and sneaked a casual glance to his side. Earlier he had spied a woman standing behind him. She was still there, eyeing his workstation like someone stalking a stool in a crowded bar. When he stood and reached for his bag, she practical
ly dove for his seat.
Nathan’s e-mail, safely parked in the draft file, would remain suspended in cyberspace until the Russian—God only knew where—logged into their shared account and opened the folder to read his message. The note would never travel from one computer to another, leaving a messy trail across the Internet that could link them. The draft folder served as a modern-day dead drop, a spy tool as old as espionage.
Spying, sometimes called the world’s second-oldest profession, is complicated business. But the essence of covert communications hasn’t changed since a Mesopotamian potter stuck a secret formula for glaze into the hidden compartment of a clay tablet thousands of years ago. Spies use signals—a chalk mark on a bridge, a beer can on a country road, an X on the post of a streetlamp—to let their handlers know they will meet at a prearranged spot. Now they use high-tech gadgets such as Internet remailers and codes embedded in digital photos. But new isn’t always better. Old and new tricks work, right up until they don’t.
Nathan didn’t fully comprehend the risk posed by his face-to-face meetings with the Russian. He was unaware the old man who called himself “George” had been tossed out of the United States, persona non grata, at the apex of the Cold War, or that the meetings George arranged exposed only Nathan to arrest.
There was genius in their Yahoo cyber exchange. It was such a simple hideaway that nearly anyone could pull it off, even a grandfatherly Russian spy born nearly forty years before the advent of e-mail.
Nathan’s note confirmed that in precisely two months, he would stand, as instructed, outside a restaurant on the island of Cyprus clenching his backpack in his right hand. There he would meet the Russian, share the latest messages from his dad, and walk away with another bundle of Moscow’s money.
Hola Nancy, indeed.
On the first Saturday in December 2008, a metal door clanked behind Jim Nicholson as he peered across a vast rectangle of scuffed linoleum looking for his youngest son. Visiting hours at the Federal Correctional Institution in Sheridan, Oregon, were just under way. Prisoners and their guests took seats on rows of blue plastic chairs, which were bolted together airport-style so that they sat thigh to thigh and faced the same direction. Uniformed guards stationed behind a crescent of painted cinder blocks kept watch over the room. Surveillance cameras spied from above, as families shared snacks and stories, the din of their conversations punctuated by the occasional squeal of a toddler leaving the adjoining playroom.