Cassidy's Run

by David Wise

  Finally, the espionage convictions in May of Ronald L. Humphrey, an employee of the United States Information Agency, and David Truong, an anti–Vietnam War activist, also influenced the department’s response. Attorney General Griffin Bell had authorized the use of a video camera in Humphrey’s office and a bug in Truong’s apartment in Washington, both without warrants, but the attorney general had not approved the camera in Austin.10

  Some weeks after the PALMETTOS had fled to Mexico, the Justice Department sent formal notice to the FBI of its decision not to prosecute the Lopezes, citing the wiretaps and entries as the chief reasons. The case had been reviewed by the deputy attorney general, Benjamin R. Civiletti. By that time, however, the horse was long since out of the barn.

  There remained several unexplained aspects to the way the Justice Department handled the case at the end, allowing the two spies to escape. Phil Parker never found any of the department’s explanations either satisfactory or clear. Nor was he told why the criminal complaint was never filed in Tampa. The bottom line was that the government permitted two Soviet spies to escape. For Parker, it was particularly galling.

  Even two decades later, the Justice Department’s decision to let the Lopezes go still rankled inside the FBI’s National Security Division, which has responsibility for counterintelligence. John F. Lewis, Jr., who retired in 1998 as assistant director of the FBI in charge of the division, was blunt in his assessment. “Despite the years of intense investigation, a confession from the male PALMETTO, photographs of both subjects receiving classified information, and the loss of two special agents’ lives, the PALMETTOS were allowed to board a plane in Minneapolis bound for Mexico on June 5, 1978.”

  After watching the PALMETTOS’ plane disappear into the Minnesota sky, a gloomy Phil Parker drove back to town. There was one more chance to gather additional evidence against Lopez. “We wanted a search warrant for his apartment,” Parker recalled. “The owner of the apartment said the commode was stopped up. We immediately thought Lopez had been getting rid of stuff.”

  But Parker and the other FBI agents were spared the indignity of delving into the Soviet agent’s toilet. It was catch-22: “DOJ wouldn’t authorize a search warrant,” Parker said, “because there was no plan for prosecution.”

  C H A P T E R: 18

  ENDGAME

  In the wilderness of mirrors that is counterintelligence, both sides now studied the shadows and reflections and engaged in intricate probability analyses of each other’s stratagems. When an espionage operation goes bad, the intelligence agency responsible for the case conducts a damage assessment that normally explores multiple possibilities: The operation may have been betrayed by a mole or by a double agent; a spy may have practiced sloppy “tradecraft,” such as neglecting to evade surveillance; or the opposition may have penetrated the agency’s codes and communications.¹

  Back in FBI headquarters in Washington, Phil Parker decided to try to turn the flight of the Lopezes to the bureau’s advantage. Perhaps their departure could still be used to sow confusion inside the GRU. “In their damage assessment, they would have to figure out where it went wrong,” Parker said.

  It had been more than five years since Lopez had appeared at Cassidy’s last drop in Florida; the GRU, Parker reasoned, might trace the trouble back to Cassidy, but it might also logically assume that Lopez had been detected in more recent espionage activity. The FBI had followed Lopez north toward the Canadian border a year earlier because it thought he might be picking up material from real Soviet spies, not just from Joe Cassidy. “We had a strong suspicion Lopez was servicing others,” Parker said.

  The intelligence division believed, therefore, that the FBI’s questioning of the Lopezes would not automatically lead the GRU to conclude that Cassidy was a double agent. For that reason, the FBI decided to try to keep Cassidy in play. Jack O’Flaherty recalled, “We had Joe try to continue to contact the Soviets and follow his instructions. And he did get some more messages.”

  Parker agreed that Cassidy should continue to try to maintain contact with the Russians. “There were so many potential scenarios as to how we got onto Lopez. We certainly didn’t know what Lopez told them. Did he tell them he’d been approached by the FBI? . . . They [the GRU] could have thought it was tradecraft lapses,” he said. “They might figure the FBI saw Cassidy meeting with someone from their embassy. The FBI could have followed Cassidy to Tampa and then picked up Lopez’s trail.”

  And Lopez himself, Parker reasoned, would have fallen under suspicion in Moscow, since the Russians would not have known about the battle over the case between the FBI and the Justice Department. “The Soviets would have to wonder, Why did we let him go? We wanted to make them leery of why Lopez was allowed to leave the United States. We were hoping they would think Lopez had been turned.”

  Keeping Cassidy in play with the Russians presented other hurdles, aside from the possibility that the operation had been compromised once the FBI had confronted the PALMETTOS. In April 1977, six months after his last meeting with the GRU, Cassidy received an envelope through the mail with a fictitious New York City return address. The one-page letter in secret writing canceled the 1977 drops and meets with no explanation. It instructed him to wait for a postcard that would give the dates of future meets and told him to check for radio messages as well. In November, however, he received another letter terminating radio transmissions until further notice. In February 1978, the FBI passed word to its counterintelligence agents that it had learned that the GRU was freezing its agent operations in the United States pending a reevaluation. Cassidy might have been caught up in an across-the-board suspension of activities.

  By late summer, however, Cassidy’s link to the Russians seemed even more tenuous. On August 2, two months after the Lopezes had flown the coop, Cassidy received a plaintext greeting card from the Russians: “Departing for Europe, I’ll get in touch next summer. Mike.” The Soviets appeared, for the moment, to be keeping their options open. But the message could also be read as a good-bye note, which is how Cassidy took it.

  “I was kind of down in the dumps,” he recalled. “I figured this might be the end of it. Somehow my cover was blown. And I really didn’t want it to end. It was exciting to me.” Despite Cassidy’s momentary gloom, the FBI instructed him to not give up and to try to keep in contact with the Soviets. The rock he had received at his last meeting in New York had contained instructions and specific dates for reestablishing contact should it ever be lost. The FBI approved a plan for Cassidy to attempt re-contact in New York the following year.

  But a month before he left for New York, Cassidy found himself literally thrust into the public spotlight. It was an unnerving experience. Spies like to remain in the shadows, and they normally avoid attracting attention to themselves. Yet in September 1979, Cassidy unexpectedly ended up onstage with Kathie Lee Gifford at Disney World.² The son-in-law of Cassidy’s old army buddy Woodrow James was appearing on the same bill in Orlando and had arranged a front-row booth at the show for the unsuspecting Cassidy.

  At the time, Gifford had gained a measure of fame as the featured singer on the television game show Name That Tune. The Cassidys, enjoying the nightclub act from their ringside seats, were in for a surprise. “I didn’t know it was a setup,” Cassidy said. “She was singing and came and got me and said, ‘This is my number-one fan, the president of my fan club.’ She was on the TV show where you were supposed to guess the songs. She told me she would sing a little and when we get to the title you hum it.” They would do this a couple of times, Gifford indicated, and then she would sing all the words, revealing the title to the audience. Flustered by suddenly finding himself in the glare of the spotlight, Cassidy blew it. The acting skills that had been good enough to fool the Russians for two decades failed him. He recognized the songs. “I sang the title,” he said. “I did it each time.”

  In October, Cassidy drove to New York. On the last Saturday of the month, one of the alternate dates he had be
en given to reestablish contact with the Soviets, he once again waited in front of the antiques store in Brooklyn, yellow package in hand and pipe in mouth. He brought along a hollow rock containing the film of the emergency planning document and his report, in secret writing, of his trip to the nuclear-weapons depot in Charleston.³ But no one showed, either that day or the next.

  Cassidy made one last attempt. He telephoned the Soviet mission to the United Nations and asked for Mike.

  “We don’t have any Mike,” he was told. “Nobody’s here.”

  “Mike owes me a lot of money,” Cassidy protested. “I want my money.”

  “Nobody’s here,” the operator said. “They’ve all gone to the beach.”

  Cassidy was skeptical of the explanation. “It was October!” he recalled. “So I went back to Florida. That was the end of it.” It had been almost twenty-one years since Joe Cassidy had begun his risky career as a spy on a spring evening in Washington.

  Not long afterward, the FBI learned that Mikhail Danilin had been posted to Canada. The bureau proposed a joint operation with Canadian intelligence. Under the plan, Cassidy would be sent to Ottawa and accidentally bump into Danilin. The GRU officer would immediately realize the encounter was no accident, that Cassidy was under American control. That in turn would jeopardize Danilin’s own position: His prime source had turned out to be a double. “The hope was that Danilin, seeing Joe, might be impelled to defect,” Jack O’Flaherty said.

  The bureau contacted Cassidy, who was ready and willing to take part. “But the Canadians said no, the political climate was not right,” O’Flaherty said. “The bureau then proposed that Joe just go on his own, but Ottawa said no to that, too.”

  Phil Parker pushed for the Canadian operation, though he did not really expect to turn Danilin. “I don’t know that we thought he would actually defect. He seemed a pretty solid Soviet. There was no real hope in my mind that Danilin was going to roll over and start working for the FBI.

  “But if Danilin ran into Joe, he would have to report it, and that would cause some disruption. The whole idea was to play with their minds. . . . It would make them wonder—at what point was the case under control of the FBI? From the beginning? After two years?” In other words, the GRU would wonder whether Cassidy had been a double agent from the start or whether he was a genuine spy for Moscow who had been detected and turned by the FBI.

  Soon after the FBI proposed the operation to the Canadian service, however, Danilin left Ottawa. O’Flaherty wondered whether the Canadians had approached Danilin on their own and tried to “pitch” him to defect. Danilin would have been obliged to report the approach, and he would automatically have been sent back to Moscow.4

  On September 16, 1980, Joe and Marie Cassidy journeyed to Washington for another secret award ceremony, this time at FBI headquarters. Cassidy’s work was done. Once again, his case officers gathered to honor the man who had, in total anonymity, given so much to his country. Jimmy Morrissey was there, along with Donald Gruentzel, Jack O’Flaherty (resplendent in a three-piece suit), and Charlie Bevels.

  Cassidy was presented with a simple certificate with a blue border. Its langauge was cryptic: “The Federal Bureau of Investigation expresses its appreciation to Sergeant Major Joseph Edward Cassidy for service in the public interest.” The certificate was signed “William H. Webster, Director.”

  Webster also wrote a letter to Cassidy thanking him “for your accomplishments in the sensitive area of national security. You have over an extended period of time assisted FBI personnel in achieving our goal whenever called upon and your efforts were absolutely vital to our country’s defense.”

  Marie Cassidy, too, received an award from the FBI, a gold plaque that read simply: “Marie Cassidy, in appreciation 6/68–9/80.”

  Near the conclusion of the ceremony, someone handed Cassidy his Distinguished Service Medal that General Abrams had taken back more than six years earlier at the Pentagon. With a self-conscious smile, Cassidy, now in mufti, posed for pictures holding a case that displayed the DSM, a gold eagle set against a blue background below a broad red-and-white-striped ribbon.

  Now, at last, it was his to keep.

  C H A P T E R: 19

  THE TURNING OF IXORA

  By late June 1978, the FBI had been watching Edmund Freundlich, code name IXORA, the GRU sleeper agent in New York, for almost seven years.

  Now that the PALMETTOS had flown back to Mexico, it was possible that the GRU damage assessment would affect IXORA. Although Moscow could not be sure how its operations had been penetrated, it might well choose to play it safe and cut its losses. IXORA could be pulled out of New York.

  If the bureau was to make a move, the timf to act might rapidly be running out. The decision was made to approach IXORA and try to turn him into a double agent for the United States. That delicate mission was assigned to Special Agent James Kehoe and two other counterintelligence agents in New York City, Jack Lowe and Dan LeSaffre.

  In attempting to turn IXORA, however, the bureau was taking a risk. If Freundlich chose to tell his Soviet handlers of the approach, his information would point to Joe Cassidy, who had been told to call Freundlich in case of war. It was possible, of course, that real Russian spies inside the U.S. government had also been instructed to call Freundlich if they detected military preparations for an attack, and in that case the GRU would not be sure that Cassidy was the problem. But, combined with the bureau’s approach to the PALMETTOS, any tip by IXORA to the GRU would certainly have removed any lingering doubt about Cassidy’s real allegiance.

  James Kehoe, the case agent for the IXORA operation, was a tall, bespectacled New Yorker, gray haired and balding, and considerably older than the other two agents assigned to make the approach. A Fordham graduate, Kehoe was a veteran counterintelligence agent who had participated in the capture of Rudolf Abel, a KGB colonel who had slipped into the United States as an illegal. Abel, who had posed as a struggling artist in Brooklyn, had been convicted and sent to prison but had been traded in 1962 for the CIA’s U-2 pilot Francis Gary Powers.

  Kehoe’s partner, Jack Lowe, had known Powers. Lowe, a big man, blond and heavyset, had grown up in Norton, Virginia, where the U-2 pilot’s father was a cobbler. Lowe had joined the bureau in 1972 and had been assigned to foreign counterintelligence in New York. As it turned out, one of the first drops Lowe covered was Joe Cassidy putting down a hollow rock.

  Dan LeSaffre, the third agent, was six foot three and 210 pounds, an athlete and college baseball player from Methuen, Massachusetts. He graduated from Bridgewater State College, south of Boston, joined the bureau in 1972, and had been working in foreign counterintelligence in New York for two years. With LeSaffre at the wheel, the three agents drove to Broadway near West 230th Street, where Freundlich’s car pool usually dropped him off, a few blocks from his apartment.

  The three agents, all fairly big men, got out and surrounded IXORA at 5:30 P.M.They flashed their credentials.

  “We want to talk to you,” Kehoe said. “We need you to come to our office so we can talk privately.”

  Freundlich looked scared to death. “He volunteered to come with us,” Lowe said, “but we were helping him volunteer. We had hold of his arm and were moving him toward the car. In the car, he was visibly shaken. Taking deep breaths, swallowing, hands shaking. He had that ‘Oh shit’ look. A lot of this was fear of the unknown—what’s going to happen to me? When you are doing something over the years, you know it’s wrong and that one day the knock may come on the door.” For IXORA, it had come.

  “He thought it was like what he had experienced in Europe. It took us a while to explain to him that we weren’t going to kill him. We weren’t going to harm him. We just wanted his cooperation.”

  The FBI men drove Freundlich to the bureau’s office in Manhattan at 201 East Sixty-ninth Street. For maximum psychological effect, they took him upstairs to the offices of the special agent in charge. “We took him to the executive conference room outside
the SAC’s office, a very official-looking place. We began to talk to him. There was no video, no tape running.”

  The counterintelligence men knew this game very well. IXORA was trapped and fearful. “He is wondering was he caught because of something he did?” The agents painted a grim picture for Freundlich: The Soviets would never trust him now; they might even assassinate him.

  Then the agents offered IXORA a lifeline. “Part of the conversation was to put him at ease, to show him there was a way out,” Lowe said. “We’ll protect you. There is a way out. We need to know the details.”

  As the evening wore on, gradually IXORA began to cooperate. “He said he had done some things for the Soviets, but not bad things. The turning took several months. It was a slow process over time—he did not tell us everything all at once.”

  Freundlich revealed astonishing details. If he received a warning that a nuclear attack was imminent, he was to flash the word to the Russians from a vantage point in the very heart of New York City.

  “He was given a radio that worked and played music,” Lowe said. But it was no ordinary radio. “When he got a call warning of military preparations, then he was to go to Sixty-eighth Street and Fifth Avenue. Just inside the wall of Central Park, there was this huge rock. He was to climb up on the rock, take out the radio, and open the back.”¹

  Under the rear panel of the special radio were buttons that activated a tiny transmitter concealed inside. It broadcast to the Soviet mission to the United Nations a few blocks away on East Sixty-seventh Street between Third and Lexington avenues. “He had a choice of one of five buttons. He would push the button that matched the number in the parol.”