The Spy Who Changed History

by Svetlana Lokhova

  • • •

  A strong sense of camaraderie had developed on the long journey from Moscow and Leningrad and the shared months of intensive language training. Shumovsky was an excellent field agent. Now they were approaching New York the time had come for the party to go their separate ways

  Some universities had chosen to welcome just one student, or a few at most, but MIT embraced the programme wholeheartedly. In their trawl for America’s secrets, the Soviets had spread their net far and wide: six went to Harvard, ten to Cornell in Ithaca, New York; five to the University of Wisconsin in Madison; five to Purdue University, West Lafayette, Indiana; three to the Colorado School of Mines in Golden, Colorado; one to the Carnegie Institute of Technology in Pittsburgh, Pennsylvania; and one to Lehigh University in Bethlehem, Pennsylvania.fn3 6 The remaining twenty-five headed for MIT, in Cambridge, Massachusetts. At some universities the new arrivals went unnoticed. At MIT, there would be a fanfare welcome, and this was replicated at some colleges with articles in newspapers welcoming their foreign visitors,

  MIT were ecstatic to receive the twenty-five Russian students. The Institute was not at the time financially well endowed. The fees were most welcome for the struggling university, arriving mid-Great Depression and during a time of collapsing student enrolments. Catering as it did, unlike Ivy League schools, largely to middle-class families, MIT’s vulnerability to the Depression was due to its dependence for funding on tuition fees rather than endowments or grants. The Russian fees were therefore gratefully received as MIT was drawing down on its savings. So welcoming indeed was the Institute that it would become the Soviet intelligence services’ favourite US university.

  The manifest of SS Europa shows that Alexander (Sasha) Gramp was the first student of that final party to disembark.7 Throughout the long voyage from Bremen, he had been mad keen to get onto American soil, to be reunited with his bride Gertrude Klivans and meet the in-laws. For the next few years, the Klivans’ house in Youngstown would become a magnet for visiting students. Having cleared US customs, compulsory medical quarantine and immigration, the arrivals were met at the dock by a welcoming party of officials from their sponsors, AMTORG. They were then driven by bus a short distance across Manhattan to Fifth Avenue, where AMTORG was based.

  To the Soviet students, their first view of the modern American city of New York was a vivid demonstration of the yawning gap between the capitalist and socialist worlds. It was the city that some of the Russians would be trained in the US to emulate on their return home. Moscow planned in time to build its own skyscrapers, as befitted the capital of the Communist world. Eventually, sweeping boulevards would be created by dynamiting old buildings and whole districts, but the capital of the worker state in 1931 had nothing but dreams to compete with the reality of the Big Apple.

  The students’ accommodation for their one day of acclimatisation to onshore life and an initial briefing was in the recently opened Lincoln Hotel on Eighth Avenue, a few blocks from AMTORG’s office at 261 Fifth Avenue. It would become the favourite hotel of visiting Soviet parties. Tupolev had stayed there on his first trip in December 1929, spending his time trying to figure out the technical marvel of the heating system.8 The hotel was a modern wonder. It boasted an incredible 1,300 luxury rooms spread over 27 floors, occupying an entire city block between 44th and 45th Streets. Just like the luxury ocean liner from which the students had disembarked, the hotel was a showcase of the comforts on offer in a capitalist society, shocking to those used to the overcrowded and squalid conditions of the USSR’s developing cities.

  The arriving students had been briefed to act as ambassadors for their new society. By and large, they behaved as such. They were examples of what socialism had achieved so far and would achieve in the future. They believed passionately in fairness and equality for all workers and peasants and had dedicated their lives to building that dream. Many were military veterans who had experienced brutality and loss on the battlefield in the fight for their beliefs. Perplexed by the rigid class system in evidence on the boat, they had found themselves more at home in third class. They were attracted to the fun and informality as opposed to the regimented stiffness of the first -and second-class decks. America’s relaxed social attitudes suited the students. The Soviet government insisted on premium-class tickets as such passengers were treated differently by customs and immigration. Experience had shown that first-and second-class ticket holders would escape hours of questioning on arrival, or worse, internment at Ellis Island.

  The party had arrived in the belly of the great capitalist beast. They had been taught that their class enemy, the American elite, feared the inevitable triumph of Communism and was scheming to destroy the Soviet Union, but that ordinary exploited American workers were their brothers, although politically asleep, bought off by consumerist dreams and neglectful of their political destiny. Lacking such a purpose, they were told, American life was empty or shallow. In a future Communist society, each member would contribute according to their ability and receive according to their need.

  The students were instructed to describe the Soviet grand project as work in progress, with many problems, challenges and difficult choices. To succeed in their goal entailed making enormous sacrifices for the certainty of a better tomorrow. Having such beliefs separated the Soviets from most Americans, whose lives and aspirations they found materialistic and selfish. It is notable that none of the students decided to defect after their taste of America. Despite Russia’s many privations, Soviet society was on the road to an improvement in living standards for the masses over the squalor and hopelessness of Tsarist autocracy. The students knew that there was still a long way to go, but significantly they had fought hard to come a fair distance already. All of them had benefited from the educational opportunities offered them. Denied formal education under Tsarism, under Communism they were now on their way to study at the most elite universities in the world. Their education would be used not to obtain for themselves a bigger salary but for the greater good of all. Despite the current conditions, the ration cards, public canteens and cramped accommodation, their system was moving forward, offering a brighter future, while capitalism was in retreat and could not even provide jobs for a high proportion of its population. They also expected to meet the cowboys and gangsters they had seen in the movies.

  At their first hotel, the Soviets found evidence of the very class oppression they had been warned to avoid. To real Communists, tipping porters for carrying their bags or paying for a shoe shine were open symbols of class exploitation. Communists could never adjust to paying others to perform simple everyday tasks that they were accustomed to do themselves. They would carry their own bags. They had already seen the evidence on the city streets, and would later read in newspapers lurid accounts of the awful privations of the Great Depression that affected the many, while themselves tasting the surreal world of luxury liners and hotels enjoyed by the few.

  New York was in crisis. There was unprecedented mass unemployment. A plethora of apple sellers could be found on each city street, the unemployed struggling to earn money in order simply to eat. Others wandered the sidewalks wearing placards advertising their skills. All Soviet visitors at the time were consistently surprised at the diversity of immigrants that made up the population, remarking on the large number of countries represented. At this time, close to 7 million lived in the city, with a population density of over 23,000 people per square mile. Moscow was growing fast but still only had a population of 2.8 million.

  Even in the midst of depression, however, New York was the definitive twentieth-century city; its wide streets and boulevards made a deep impression on foreign visitors, not least via the symbol of the modern age, the car and heavy traffic. The New York skyline had only recently taken on its impressive modern form, dominated by the three tallest buildings in the world. The arriving Russians were awed by the three buildings, visible from anywhere in Manhattan.

  The Empire State Building at 102 stor
eys had won the friendly competition with the builders of 40 Wall Street and the Chrysler Building to be the world’s tallest. Construction had begun on 17 March 1930, and the skyscraper was officially opened a few months before the students arrived, on 1 May 1931. The total cost of the building, including the land, was $40,948,900. An MIT alumnus, Pierre S. du Pont, had partly financed the project. Construction required the use of up to 3,400 workers working 7 million working hours over a period of just one year and forty-five days including Sundays and holidays, a feat worthy of a Soviet Five-Year Plan. The art deco building, wrapped in Indiana limestone and granite, aluminium and chrome nickel steel, was the wonder of the modern age – even if in 1931 it was virtually empty, the victim of an unfashionable location and the Depression. The three skyscrapers had been built in a race to the sky as symbols of America’s business confidence that was now shattered.

  • • •

  On the face of it, the students’ host, AMTORG, was a legitimate trading company with a valuable monopoly on Soviet trade with the United States. American conservatives suspected AMTORG was the hub of major Soviet espionage activities designed to undermine the government of the United States; in fact it was neither capable nor sufficiently resourced to be anything of the sort. Soviet intelligence in the US at the time of Shumovsky’s arrival was in its infancy, small in scale and disorganised. Only in 1933, with the establishment of official diplomatic relations, would the Soviet Consulate take over the leadership role in intelligence from AMTORG and build up resources. The AMTORG office was not the centre of a grand conspiracy to topple capitalism. Soviet espionage sought to strengthen the position of the USSR not to destroy the US system of government. Marxists believed that the collapse of capitalism was inevitable. In 1925 Stalin had adopted a policy of ‘Socialism in One Country’, abandoning the cause of world revolution, and would finally close down Comintern (The Communist International) in 1943.

  Until Shumovsky’s mission, spy work had consisted almost exclusively of the gathering and collation of what would be described today as open-source information, supplemented by an occasional one-off operation. Open-source intelligence is information in the public domain in a particular country that has a value for a foreign power. Intelligence is further subdivided between political and science and technology; activity in the latter field was performed by a small team of technicians at AMTORG who would comb through newspapers and periodicals, mainly technical and scientific journals, for information that might be of use to the industrialising Soviet Union. As the technological gap between the countries was so wide, there was a vast amount of useful information available in US publications.

  Valuable intelligence was often received on an unsolicited basis.US firms would sometimes include commercially sensitive information in the marketing material they sent to AMTORG, which would forward anything useful on to Moscow; some of it would end up on Stalin’s desk. One explosives manufacturer, the Trojan Powder Company of Allentown, Pennsylvania, disclosed the chemical formulae for its solid explosives hoping for a lucrative deal. Stalin personally annotated the document.9 The company even offered to provide the Soviet Union with an unlimited quantity of poison gas munitions. Soviet experts were unimpressed with the Trojan Company’s proposal.

  Accurate political intelligence proved harder to acquire than S&T. Without reliable sources, information was either biased or in some cases downright false. An early large-scale NKVD operation in the 1930s, based in New York and Washington, turned out after many years and a detailed investigation to have relied on a completely fake source. An enterprising New York Post journalist, Ludwig Lore, had created a family industry producing political information for the NKVD and employing his son and wife in the enterprise. The NKVD were entirely taken in.

  Lore claimed that his intelligence reports came directly from a network of well-placed agents in the State Department in Washington, even insisting that the State Department’s Head of Research, David A. Salmon, was his principal agent. In reality, none of Lore’s agents existed. He had plucked names from the internal phone directory of the State Department. Lore was nevertheless able to charge the NKVD exorbitantly for several years for the information he provided, which consisted either of old news stories reheated or pure invention.10 Without checking, the NKVD had already put some of the fake material on Stalin’s desk, describing it as ‘must read’.11 Stalin believed he was reading the very words of America’s ambassador to Tokyo, Joseph Grew, in private meetings with the Emperor’s top officials. It was nothing of the sort; Lore had made up the entire conversation. Shumovsky’s operation at a stroke transformed the quality of Soviet intelligence gathering.

  America was conflicted in its dealings with Stalin; on the one hand, they wanted his business, but on the other, they feared Communism. Despite the countries’ polar opposite ideologies, however, AMTORG officials briefed the student party that the Soviet Union had become the USA’s primary export market, uniquely expanding its economy as the rest of the world contracted.

  AMTORG’s role was to coordinate all commercial visits by Russian experts to the US, and vice versa. It gave each group of students a list of approved contacts in their university city, and letters of introduction.12 AMTORG maintained an extensive library of information on the major US manufacturing companies and their suppliers that the students would visit or be assigned work at during their stay. Besides his course at MIT, Shumovsky would be working for AMTORG’s aviation department, producing reports and articles on the dynamic US aircraft industry. In 1933, he was to write an article published in American Engineering and Technology – an AMTORG magazine filled with US advertising sent to 1,700 key Soviet officials – describing the features of a special plane the Americans had built to fly in the harsh conditions of Antarctica.13

  AMTORG also controlled immigration to the USSR from the USA. With 25 per cent unemployment, the US was suffering a net outflow of migrants. For several years, more people left the country than arrived. In 1931 AMTORG was receiving 12,500 applications per month from Americans to migrate to the land of Lenin.14 No wonder to the Soviets capitalism appeared to be teetering on the brink.

  • • •

  In trading with the US, the Soviets were very careful with their money, committing only to buying the very best products on the most advantageous terms. Experts such as Shumovsky would prove to be invaluable in ensuring that those conditions included the transfer to the USSR of all technical knowledge. And, as a planned economy, they had clear goals with their purchases.

  The Soviet Union’s ultimate goal was to build its military capability. The German and Soviet high commands shared a vision of how to fight a future war. The Russians called the strategy ‘deep penetration’ but it is better known by the German term Blitzkrieg. Through its secret work with the German military, the Red Army had identified three priorities: to build the world’s largest mechanised forces, a powerful air force, and a chemical warfare capability. With political tensions rising in Europe and Asia, the Red Army leadership had been speeding up its modernisation since November 1929. Before Stalin insisted on a purely domestic solution, the Soviets came to shop in America.

  Following a Politburo resolution in early 1930, a high-level Soviet delegation led by the Red Army’s head of mechanisation, Innokenty Khalepsky, visited armaments factories in France, the UK and America. They arrived in the US keen to buy an instant solution to their desperate need for a modern tank. They had decided, without seeing it, to purchase the experimental T1, manufactured by Cunningham, a prototype designed for the US Army. Looking for a bargain, Khalepsky dangled in front of the manufacturer the prospect of a large order dwarfing anything the tiny US Army might buy. The commercial terms presented by the Americans in return were unacceptable to the Russians. The product was crazily expensive, and on closer examination, the tank was found to be inferior both in speed and armour to the British Vickers. Worse, the manufacturer insisted on a minimum order of fifty tanks and a down payment in cash of 50 per cent for t
he unproven product. Cunningham moreover refused to provide any technical assistance or drawings to the Russians, no doubt as the US Army had been involved in the tank’s design.15

  However, in the process of visiting America, the committee met the maverick inventor John Walter Christie. While attempting to create a tank for the US military, Christie had produced more than his fair share of failed designs. His vehicles were too cramped for the crew, shook violently when in motion, were badly built and mechanically unreliable. This time, however, he had come up with a unique chassis design using large springs as shock absorbers. To reduce the space needed to house the springs and retain a streamlined profile, Christie had invented a lever system that turned the damping effect of the springs from vertical to horizontal. He was, moreover, a great salesman. He promised everything the Russians wanted. They could have a small test batch of his tank, full technical specifications including drawings, and he would come personally to Russia to oversee production. He clinched the deal by dropping into conversation with the credulous Russians the terrifying news that their hostile neighbours the Poles were buying hundreds of his fast-moving tanks. On 28 April 1930, Christie’s company, the struggling US Wheel Track Layer Corporation, agreed to sell AMTORG two M-1931 Christie-designed tanks at the cost of $60,000, together with spare parts for a further $4,000, the tanks to be delivered not later than four months from the date of signing. A further $100,000 went on acquiring the manufacturing rights and patents allowing the production, sale and use of the tanks inside the borders of the USSR for ten years.

  A spy scandal attached itself to the purchase when it was suggested that, as the Soviet Union had no diplomatic relations with the US at the time, it could not officially obtain military equipment. Although little of it was true, the NKVD and AMTORG were alleged to have secured the plans and specifications for the Christie M-1931 tank chassis using a series of deceptions. The two Christie tanks were apparently falsely documented as agricultural farm tractors and sold illegally without seeking the prior approval of the US Army or the Department of State, and then shipped without turrets to the Soviet Union.