The Billion Dollar Spy: A True Story of Cold War Espionage and Betrayal

by David E. Hoffman

  Gerber, back at headquarters by 1971, never believed in a single formula. Rather, he emphasized pragmatism: find out who has the secrets and build bridges to them. “What works, works,” he often said. But Gerber also knew that the CIA, burdened by the legacy of suspicion, was not particularly welcoming to volunteers in Moscow. Those Russians who dared show up at the embassy would usually be asked a few questions and shown the door. Rarely was there an effort to find out if they were genuine. Angleton’s influence cast a long shadow.

  With a small staff and acting entirely on his own hunch, Gerber began a systematic study, pulling the files of every person who had volunteered information in Moscow going back a decade and a half, and in Eastern Europe a decade. He yanked the dossiers and cable traffic, scrutinizing every scrap. Taken together, the files seemed to shout that Angleton was wrong to have such blanket suspicions. It appeared to Gerber that the CIA had been routinely turning away genuine volunteers, throwing away what might be valuable intelligence. He concluded that it would be far more productive to check out those who offered their services, rather than assume all were part of some KGB deception plot. He felt the CIA ought to be smart enough in Moscow to sift the genuine sources from the fake ones. Also, he noticed a pattern. Those volunteers whom the KGB used as dangles—a trap—were usually already known to the intended recipients, perhaps someone they might have met once or twice before. That’s how the KGB worked; to snare someone, they set out bait that would be recognized, to sugarcoat the trap. In the files, Gerber found there were also patterns for the kinds of people the KGB would not use in a trap. They had never offered up a serving KGB staff officer; they just didn’t trust their own to go off in a relationship with an American case officer. They also didn’t use someone who was a stranger to the recipient. Gerber’s conclusion: don’t be afraid to accept something from a person you’ve never seen before; it is probably not dangerous. It might be useless but probably not dangerous. However, Gerber thought, if a Soviet acquaintance seems eager to thrust an envelope into your hands, be careful; it may well be a deception.39

  These conclusions came to be known at the CIA as the Gerber rules and marked a turning point. They upended the Angleton thinking. Not every volunteer was a dangle. Gerber wrote a report on his conclusions in May 1971. Helms had finally had enough of Angleton’s influence and appointed a new Soviet division chief to clean house. The new chief was David Blee, a veteran of the OSS who had been dropped behind enemy lines in World War II and later joined the CIA at its founding in 1947. Blee, who came across as mild and austere, an old-school intelligence officer who was station chief in South Africa, Pakistan, and India, and later chief of the Near East division, had never had any experience with the Soviet Union, and that is just what Helms needed, someone who was not part of the Angleton fog of suspicion. Blee put out the word: the time had come to get serious about opening the mail inside the Soviet Union. Angleton was forced to retire in December 1974, but even before he left headquarters, a new era was dawning. The more aggressive approach began to pay off.40

  That January, the CIA had recruited a Soviet diplomat then serving in Bogotá, Colombia. Alexander Ogorodnik was the son of a high-ranking Soviet naval officer, thirty-eight years old, tall, and attractive, with an athletic build and dark hair. Ogorodnik was serving as an economics officer in Bogotá. He had plenty of problems. He was under pressure by the KGB to be an informer, a role he did not want but was afraid to refuse. He was married but had a Colombian mistress. He had purchased a car, which was unusual for a Soviet diplomat, and he seemed to enjoy the high life around town. He also needed money.

  A CIA officer made a pitch to Ogorodnik in a Turkish bath in a large downtown hotel in Bogotá. Ogorodnik didn’t hesitate and said yes. He told the officer he loathed the KGB and wanted to change the Soviet system. But his motivation was also personal. He wanted to be paid handsomely. He agreed to let the CIA keep most of his salary in escrow, but he used some of it to purchase emerald jewelry for his mother and modest luxuries for himself, such as contact lenses, which were unobtainable at the time in the Soviet Union.41

  With gusto, Ogorodnik plunged into spy training in Bogotá. Normally, according to a former high-ranking CIA official, such operational training would take months of study and years to perfect, but Ogorodnik mastered it all in a matter of weeks. He learned how to photograph documents, at first with a 35 mm camera and later with a new CIA miniature camera, known as the T-50. The tiny camera was concealed inside a large fountain pen. The film in the T-50 was not very light sensitive. The camera needed strong light on the documents and to be held very steady.

  One day, Ogorodnik had a surprising announcement for his CIA handlers. The Soviet embassy had received a top secret policy paper on China that could only be read in a closed room inside the KGB offices. Twice, Ogorodnik tried to take the fountain pen into the room, but he could not escape the watchful gaze of the guard. Finally, he appeared at the hotel room door and declared to his CIA tutor, “I think I’ve got it.” The CIA man rushed the camera to a waiting courier, who carried it by hand on a plane to headquarters at Langley, Virginia. The camera had captured all but two of the fifty pages.42

  Ogorodnik was transferred back to Moscow in 1974, putting him in an even better position to become an agent for the United States. He told the CIA he had just one request: a suicide pill, in case he was caught. The CIA was reluctant, and Ogorodnik flew home to Moscow without the pill. But he did carry a book; concealed inside was a schedule and instructions for communications with the CIA.

  The CIA was finding its way out of the wilderness of mirrors. Ogorodnik was the first agent of this new period, but he would not be the last.

  2

  Moscow Station

  Marti Peterson led a stressful double life in Moscow. At the U.S. embassy, she worked in a busy staff job, five days a week, eight hours a day. The embassy employed dozens of Soviet workers, and Peterson was side by side with eight of them, all women, potential KGB informants. Peterson did her work well, showed up on time, and after hours went out with other single men and women from the embassy staff. Everything in her apartment—clothes, purses, shoes, shopping bags, letters from home, music, and books—was that of a young American embassy worker. But at midday, she would often slip away, saying she was going to lunch, and spend an hour in the CIA’s Moscow station typing up a report or preparing an operation. At night and on weekends, she checked and photographed rendezvous sites, delivered and retrieved agent packages, handled electronic gear to communicate with spies, and kept a constant watch for any sign that the KGB might know what she was doing. Her life was an exhausting split screen: she maintained the routines of a normal embassy staffer by day while carrying a full load for the CIA the rest of the time. The two roles had to be separate, the first convincing, the second invisible.

  Peterson was the first woman to serve as a case officer in the Moscow station. She had been handpicked by the station chief, Robert Fulton, who calculated that the KGB would overlook a woman, because they only used men in such roles. Fulton, then forty-nine years old, had devoted his career to the shadow war against communism. He served in the Korean War as a military intelligence officer and joined the CIA in 1955. His assignments later included espionage operations in Finland, Denmark, Vietnam, Thailand, and the Soviet Union. Spying was his life. He was a pillar of support for Peterson, waiting patiently in the station during the lunch hour for her to show up from her cover job, always attentive, and coaching her on her tradecraft. He had a sparkle in his eye and never took himself too seriously.

  When she got to Moscow in 1975, Peterson was thirty years old and was just emerging from her own private hell of grief and uncertainty. In her twenties, she had accompanied her husband, John Peterson, to Laos, where he was running CIA paramilitary operations during the Vietnam War. On October 19, 1972, John was killed when his helicopter was shot down. The loss crushed her, and for a while she felt adrift, pained by the antiwar pr
otests in the United States. Eventually, she decided to follow in John’s footsteps and joined the CIA in 1973. She was the daughter of a Connecticut businessman with a liberal arts education, a product of the Cold War years, with strong memories of air raid drills in school. She was motivated more by a can-do spirit than by any ideology. When a friend suggested she go into clandestine operations, she seized the chance. Peterson was attractive and single, and Fulton had guessed correctly: on her arrival in Moscow, the KGB failed to detect she was an intelligence officer.1

  The Moscow station was a cramped box of a room on the seventh floor of the embassy, the only place Peterson could be herself. Outside, she had to live her cover, and the rules were strict; she could not even share a cup of coffee in the cafeteria with the other CIA people, nor socialize with them, because there were Soviet employees all around who might inform the KGB. Once safely inside the station, she could relax, unwind, and talk openly. She took the CIA’s training courses before leaving the United States, practicing such things as how to put down a message for an agent, using a beanbag tossed from a moving car at the Hecht’s department store parking garage in northern Virginia. Her beanbags hit the target, but real operations were far more difficult and stressful. Her first weeks in Moscow were spent learning the streets, driving her boxy Zhiguli car all over the city, often accompanied by a female friend.

  A small CIA-built radio receiver allowed case officers to monitor KGB surveillance broadcasts while on the street. Peterson heard nothing. The men in the station envied her ability to move around unfettered. Peterson realized that some suspected she just didn’t see the surveillance. She was determined to prove herself but at the same time suffered her own insecurities. Could it be that she didn’t see the KGB was watching her from the window of an apartment building, or maybe it was the policeman up in the “bird’s nest” on the boulevard intersection? It would have been much easier to just give in and say yes, that she was under surveillance, than to keep trying to prove there was none. But she saw none, and that’s what she told them. Peterson often used John’s Nikon SLR camera with a wide-angle lens to photograph sites for possible dead drops or clandestine meetings. No one on the street ever asked her what she was doing.2

  When Peterson arrived at the Moscow station, the Ogorodnik operation was already in full swing. The spy had been given a code name, cktrigon. The CK was a digraph that indicated the Soviet division. When Ogorodnik left Bogotá and returned to Moscow, he drew an assignment in the Soviet Foreign Ministry. It wasn’t at a high level, but it gave him direct access to secret cables arriving from and going out to Soviet embassies around the world. For the CIA, that was just perfect. After a delay, Ogorodnik provided a steady stream of secret documents from the Foreign Ministry. He mastered the T-50, and his photographs were always in focus and proper alignment. He followed procedures agreed on in Bogotá and made signals to the CIA by parking his car between 7:00 and 7:15 p.m. in front of his mother’s apartment building.

  Once, when Ogorodnik signaled he was ready to deliver a package, Fulton went to collect it himself. Calmly, he put his dog, Goliath, in the car and set off for a forest on a wooded hill overlooking the city near Moscow State University. As Fulton drove there, he saw the KGB surveillance team lazily tailing him. He often walked his dog in the woods, so they did not suspect anything unusual. When Fulton opened his car door, the dog suddenly bounded into the forest of birches and pines, Fulton chasing him. The dog urinated on a tree, precisely where the package had been left. Fulton quickly snatched it up and stuffed it into his coat pocket before the KGB could see what was happening. He took it home but did not open it, suspecting the KGB might have a video camera in his apartment. The next morning, it was opened in the station. It contained ten rolls of film and a note.3

  In 1976, fresh signs of difficulty cropped up. Ogorodnik inexplicably missed signals in February and March. Then, in April, Peterson was assigned to fill a dead drop, her first operational act in Moscow. The package was to be placed at the foot of a light pole on a cold and snowy evening. Carefully constructed by the CIA technical operations officers, the package looked like a crushed cigarette pack, but inside were a miniature camera, rolls of film, and a message. Peterson deftly laid down the package as she simultaneously pretended to pause to blow her nose and adjust her boot. Cold and anxious, she walked on for an hour, following the plan agreed to earlier in the Moscow station, then returned to the site to see if the package had been retrieved.

  It was still there. Ogorodnik had not come. She picked it up and headed home, uncertain and worried.

  When Peterson went on another foray on June 21, she was carrying the most important package the CIA had ever prepared for Ogorodnik: the suicide pill he requested. Concealed inside a large hollowed-out log created by the CIA was a handsome black fountain pen, with a cyanide fluid capsule inside, and another pen, identical on the outside, with the T-50 miniature camera inside. The cyanide cartridge in the pen was fragile and could easily be crushed by biting down on it. Peterson had cradled the hollowed-out log under her arm, set it down near a lamppost in a wooded area, and left the spot. Then Ogorodnik arrived, picked it up, and left behind what looked like a crumpled milk carton smeared with mustard plaster—to resemble vomit and deter anyone from picking it up. An hour and a half later, Peterson returned to the lamppost, scooped up the milk carton, slipped it quickly into a plastic bag in her purse, and walked to a nearby bus shelter. She was elated. The next step was to put a thin red line with lipstick on the bus shelter, to signal Ogorodnik that she had recovered his package. But in her excitement, she pressed too hard, the lipstick smashed in her fist, and left a red blob. She felt a rush of adrenaline from the successful exchange, but a hollow sensation, too. While walking, Peterson had a lot of time to think about Ogorodnik. She had never met him in person. He had to feel terribly alone. She wondered if he feared arrest. Would he find the courage to use the suicide pill? Would he mistakenly think the end was near and commit suicide prematurely?4

  Later in 1976, in a moment of panic, when he thought he was under suspicion, Ogorodnik threw out his pen with the cyanide capsule. He asked for another. Peterson prepared to deliver it again at the same site, in a hollowed-out log. But this time, an hour before he was supposed to pick it up in the forest, Peterson saw Ogorodnik drive by in his car, just as she approached the park. She knew it was his car by the license plate, but what really unnerved her was the sight of a woman with a ponytail on the passenger side. Who was she? Peterson found a remote spot and hid in the woods, tense and motionless. At the proper hour, Ogorodnik came by, alone, carrying a briefcase, and picked up the log. “Ponytail” was nowhere to be seen.

  When work got stressful in the long, dark winter months, Peterson sought release in cross-country skiing in the forests outside the city. The Moscow station had selected a dead drop site for Ogorodnik in the forest. He had signaled that he was ready to drop a package on Saturday, January 29, 1977, at 9:00 a.m. The site was near a boulder. Peterson had seen a sketch of the location.

  On the morning of the drop, a blizzard covered Moscow. Peterson drove out to the country, seeing almost no one, parked her car, and slipped through the forest on her skis. The boulder, as big as a Volkswagen, was buried in snow. She had hoped to see Ogorodnik’s footprints, but the snow was as pristine as white sugar icing. No trace of anyone. Peterson hunted for the package but couldn’t find it. She was certain it must be there; perhaps Ogorodnik left it on the wrong side of the rock. She started digging—and found nothing. Growing frantic, she uncovered and sifted through every bit of snow around the boulder.

  There was no package. Peterson went home, worried and exhausted.

  Earlier in January, Fulton, the station chief, was filling up his car at a gas station used by diplomats and other foreigners in Moscow. It was a small pavilion, with pumps out front and a Russian sign, “No Smoking.” Fulton was just getting back into his car at 6:00 p.m., and at least five vehicles were wai
ting behind him. People were standing around, talking.

  As Fulton opened the car door, a man walked up to him. The man spoke in English. “Are you American? I would like to talk to you.”

  Fulton had not noticed the man until he actually spoke. Fulton said it would be difficult to talk right there and asked him what he wanted.

  “Oh, it would be difficult?” the man said, his words stilted, as if he had expected that was what Fulton would say.

  Switching to Russian, the man said, “Excuse me,” leaned slightly into the car, and put a folded piece of paper on the seat. Fulton realized that the man had been holding the note in his palm and seemed to have given some thought to what he was doing.

  The exchange lasted no more than fifteen seconds. The man walked away from the gas station and turned down a side street. Fulton headed back to the Moscow station and saw no one following him.5

  Once safely in the station, Fulton examined the note. It was written in Russian on both sides of a single sheet of white paper, folded up within a second sheet that was blank. Fulton sent a cable to CIA headquarters, describing the man as in his late fifties or early sixties, about five feet six inches, 175 pounds, dressed “as an average Soviet, wearing dark overcoat and fur hat.” Fulton reported that his car was the only one with license plates indicating he was an American in the gas station at that time. In the abbreviated style of such cables, Fulton added that the man was “obviously waiting for American to show up.” The man “appeared in no way to be nervous and obviously had approach well thought out.”