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

by David E. Hoffman

  He gave the Tropel cameras to the case officer, as well as handwritten notes, wrapped in a taped package. The case officer handed over several bundles to Tolkachev: five more miniature Tropel cameras; another 100,000 rubles; a meeting schedule for the next three years; and instructions for new signal and meeting sites, including a location for the next meeting planned for June, code-named trubka, or “pipe.” The CIA’s schedule and instructions were a clear indication that they planned to carry on with the operation for some time to come. The packages also included three books in Russian and an ops note telling Tolkachev how invaluable and important his material had been to the United States.

  Tolkachev presented a long, personal wish list to the CIA. He needed a rear window defroster for his car. He continued to suffer from pain in his teeth and wanted more French medicine. He asked for albums and books on architecture for his son. He wanted soft-tipped French pens similar to those that had appeared the previous summer in Moscow; he gave a used pen to the case officer as a sample.

  Tolkachev also was hungry for news published in the West. He wanted press clippings and Russian-language newspapers printed in the United States. He asked for information on arms control, important speeches by Western leaders, and press conferences of Soviet citizens—refugees and defectors—in the West. Tolkachev said his son regarded his English teachers as “very bad,” and he asked the CIA to put together an extensive English-language training course, with cassette tapes, recording humorous stories and political speeches, all spoken by more than one person. He volunteered money from his escrow account to finance the work.

  In the ops note for Tolkachev, the Moscow station reported that his account balance stood at $1,990,729.85.14

  Time was short. The case officer’s tape recorder was running. He asked Tolkachev about some current rumors: Had he heard anything concerning the health of the Soviet leader, Konstantin Chernenko?

  No, nothing, Tolkachev said.

  What about reports that red mailboxes on Moscow street corners were disappearing, and what did that mean?

  Tolkachev said he didn’t write many letters and hadn’t noticed.

  After twenty minutes, the case officer opened the car door and slipped away.

  It was Tolkachev’s twenty-first meeting with the CIA.

  When the Moscow station opened Tolkachev’s handwritten notes the next day, they found something odd. Pages he had numbered 1 to 10 were normal, then the material skipped to pages 34–35, then skipped again to 52–57. They did not know why.15

  On balance, however, it seemed that Tolkachev was back on track. When the Moscow station sent a cable to headquarters describing the meeting, Gerber, the Soviet division chief, read it and wrote at the top of the page, “Great.”

  On January 31, headquarters sent a message to the Moscow station, saying “we remain optimistic” that Tolkachev’s security crisis of 1983 “has abated.” Headquarters added, “we are especially pleased” that the conditions for photography at the institute “are a lot better than they could have been,” and “it is encouraging that he is not required to pass any document control points” on his way to the small toilet.16

  Just a few days later, headquarters sent worrisome news. Tolkachev’s latest film from the Tropel cameras turned out to be unreadable. The negatives were “extremely underexposed, caused by lack of sufficient light.” The cameras were simply not working in the dim light. The valuable document Tolkachev painstakingly photographed in the toilet stall was lost. Also, there was another unexplained puzzle. The Tropel cameras used a screw-on cap at one end. “The end caps on two of the cameras were obviously switched,” headquarters reported.17 Was it a mistake made in haste or something else?

  At CIA headquarters, an internal review of Tolkachev’s security situation, looking back over all the cables and notes of the last four years, was completed in February and sent to the Moscow station. It examined the system of building passes and library permission sign-out sheets for secret documents that Tolkachev had previously described. Although Tolkachev had been astoundingly successful at smuggling documents out of the institute and photographing them at home for several years, the review cautioned that the authorities “have established a series of interlocking restrictions and checkpoints” that would make it more difficult to smuggle documents out of the institute. The review added that “we are encouraged” by the news “that ckvanquish apparently can move freely within the institute grounds.” It insisted that the CIA be vigilant and look for ways to lessen the danger to Tolkachev. Yet the review focused entirely on the risks to him by his own actions within the institute and said nothing about the dangers to him from elsewhere. The CIA mind-set was that security at its own headquarters was very tight, and it was unthinkable that a leak could come from Langley or the military “customers” who thrived on Tolkachev’s intelligence.18

  On March 4, the Moscow station put up a visual signal for Tolkachev, asking for a quick meeting. The station wanted to tell him that the last batch of film did not turn out and give him a new light meter and cameras with improved film for low light conditions. “We believe chances are very good that ckvanquish would be able to resume successful photography in the relatively secure conditions of the toilet,” headquarters said.19 But for some reason, Tolkachev did not respond.

  The next week, the station saw a “ready” signal, although the officer wasn’t sure, because it was not the same fortochka as before, but it was opened at the proper time.

  Again, Tolkachev didn’t show.

  An alternative meeting date passed at the end of March, and he didn’t show up again.20

  18

  Selling Out

  In January 1985, Edward Lee Howard flew to Vienna to meet with his Soviet contacts.1 Howard told his wife, Mary, that the KGB wanted to check his bona fides and verify the information he was giving them. He was reimbursed by the KGB for his travel expenses, but he was told they would have to verify his material before he would be paid more. What exactly happened in Vienna is not known, but as Howard later described it to his wife, he was picked up in front of a movie theater and driven around for about half an hour to check for surveillance. He was impressed with the tradecraft. He was taken in through a back door to the Soviet embassy, where he talked with two officers who debriefed him—he identified them as Boris and Viktor—for three or four hours. They made him feel important, treated him with respect, poured drinks, and brought him caviar. One of the two men had flown in from Moscow. Howard said the Soviet officers were “still not totally convinced of his bona fides because they had been unable to verify some of his information.” He said “he was to be paid a considerable amount of money” at a later meeting.2

  From abroad, Howard sent a postcard to a friend that said, “I talked to my case officer.”3

  In April, Howard returned to Vienna, this time accompanied by Mary. She recalled that he paid for everything using traveler’s checks, not his American Express credit card. They stayed at the four-star Hotel Beethoven for two days. Howard had filled out an application for employment with the United Nations agency in Vienna and written to them, saying he would be available for an interview on April 25, 1985. Once in the city, Howard’s wife dropped him off at the UN office.4 But that was just a cover story; Howard had earlier called the United Nations and canceled his interview.5 He apparently met with the Soviet officers again at this time. Howard later wrote that he also went to Zurich, Switzerland, and “indulged a long-time fantasy of mine and spent $600 on a Rolex watch.”6

  Howard had much to offer the KGB. He knew of the presence of a spy for the United States deep in the Soviet military-industrial complex, and he knew of the presence of a wiretap on one of the Soviet Union’s most sensitive underground communications lines. Howard was trained at the CIA for both operations. He knew much of the CIA’s operational tradecraft and technology, such as the use of the tiny radios, disguises, surveillance detection runs, and th
e Jack-in-the-Box.

  In 1984 and 1985, Howard confided to a friend, William Bosch, a former CIA case officer in Latin America who left the agency under a cloud, that he had sold information to the Soviets. Howard met Bosch several times in this period, boasting of his KGB contacts. He told Bosch how his vacation in Milan was a “cover for action,” that he filled a dead drop for the Soviets and had taken secret CIA documents and buried them for later passage to the KGB. Howard tried at least once to recruit Bosch to join him and “go and see Boris my case officer.” Bosch later expressed worry about Howard’s mental stability and wasn’t sure if Howard was joking—or serious. But Bosch, who had his own troubles with the CIA, never reported any of this to the authorities.7

  With the information obtained from Howard, the KGB began to look for a spy inside a vast network of military research institutes, design bureaus, and factories spread across eleven time zones. Although the KGB had served as the cruel hammer of Soviet repression, they had become more legalistic and procedural over the decades. They would not make a move based on Howard’s tip alone. They were seeking evidence, and they wanted to catch a spy in the act. Howard apparently described to the KGB some details about Tolkachev but did not, or could not, provide his name. Howard later claimed he didn’t know the name.8 The KGB was left with a vague description of the spy they were hunting for. Several participants later recalled that they began with a broad investigation that examined both aviation and electronics branches of the defense industry but then narrowed it down to one institute: Phazotron.9

  Just as the KGB was learning more from Howard, another American intelligence officer stepped forward with new information. On April 16, 1985, Aldrich Ames went to the bar of the Mayflower Hotel in downtown Washington. A tall man, with a mustache and heavy eyeglasses, he was head of a counterintelligence branch inside the Soviet division at CIA headquarters. Ames was regarded by colleagues as a rather bland and mediocre intelligence officer. At the hotel bar, he waited for a Soviet diplomat to show up. When the man didn’t come, Ames walked two blocks to the Soviet embassy on Sixteenth Street NW. He handed an envelope to the receptionist and motioned to the duty officer that he wanted it given to the KGB rezident upstairs. Inside the envelope, Ames offered to become an agent for the Soviet Union, describing two or three cases involving Soviets who had approached the CIA to offer their services, but not Tolkachev. Ames also included a page from the CIA internal phone directory that identified him. He asked for $50,000. Ames returned to the embassy on May 15 and, meeting the KGB in a soundproof room, was told he would get the money. Two days later, the KGB gave it to him in $100 bills at a restaurant. Up to this point, Ames had given the Soviets some hints of his potential but not a large quantity of secret materials. He had not disclosed such operations as ckvanquish and ckelbow. But he certainly offered the promise of more.10

  In the spring and summer of 1985, CIA headquarters was confronted with a string of anomalies, all related to espionage against the Soviet Union. There was no single, credible explanation, and some of the events might not have been connected to Howard and Ames. At this point, the CIA did not know that either of them was committing treason. But the events of 1985 came quickly and sent a shudder through headquarters. What worried them most were the anomalies that they couldn’t explain.

  In May, Sergei Bokhan, a longtime CIA agent in Athens who was serving in the GRU, Soviet military intelligence, was unexpectedly summoned to Moscow. Bokhan was told his son was in trouble at a military academy, but he knew that was false. Had he been betrayed? Would he be arrested in Moscow? Bokhan consulted with the CIA, and in a decision approved by Gerber, the division chief, in just a matter of days Bokhan was exfiltrated by the CIA to the United States.11

  Also in April, a case officer in the Moscow station, Michael Sellers, met a KGB source who called himself “Stas,” whose real identity was not known to the CIA. He was a rough-cut officer with a guttural, street-jargon Russian that wasn’t easy to understand, but Sellers managed to grasp it, and they walked around Moscow and talked for an hour and a half, undetected, as “Stas” provided a stream of valuable intelligence, including the disclosure that the Moscow station had made a major error in another operation.12 Just as they were getting ready to part, “Stas” took out what looked like a small can and a plastic bag and sprayed something into it. He informed Sellers it was a sample of a mysterious powder the KGB used to track officers of the Moscow station. The invisible chemicals were sprinkled by the KGB on car door handles and other locations. A special light exposed the spy dust on a doorknob, a telephone, or a bus window. Sellers had seen the stuff before in his car, even on a child’s car seat—it looked like yellow bee pollen—but now the United States had proof. Why had “Stas” volunteered? Who was he? It wasn’t clear.13

  In the spring, a case officer from the Moscow station made a run to the underground cable tap. With an electronic device, the case officer “interrogated” the recorder about tampering, and it responded with an alarm. The sensor wasn’t perfect, and it could be a false alarm, but the case officer decided to abort the run. After a debate, the Moscow station decided to try again, figuring that an espionage machine that had cost tens of millions of dollars was worth the risk. The case officer returned to the site and safely retrieved the recorder, and it was sent back to the United States, but the valuable intelligence that had been picked up for years on the underground cable had completely dried up. No one knew why.14

  Amid these jarring events and unanswered questions, the CIA decided not to bother Tolkachev until the next scheduled rendezvous, set for June. The summer months would bring more daylight, and the CIA might be able to give him new film or a better camera. The Moscow station and headquarters seemed optimistic that they could solve the photography problem, even if it meant urging Tolkachev to take pictures in the toilet only on sunny days.15

  19

  Without Warning

  On the evening of March 10, 1985, the ailing Soviet leader, Konstantin Chernenko, passed away. The next day, the youngest member of the Politburo, Mikhail Gorbachev, became the fourth leader of the Soviet Union in three years. Tolkachev usually paid little attention to politics. At home, he was content to bury himself in his technical books, ignoring broadcasts and pronouncements of the party-state. He loathed them all and rarely even glanced at a television. He was not an optimist that the Soviet system would change. But when it did, he took notice. After the arrival of Gorbachev, he could not get enough of the television news. One day at home, he marveled, “Did you notice this concert on television, there were no propaganda songs?” Frequently, he read the newspapers—which he hadn’t done for years. He was curious and excited about Gorbachev and the hints of new thinking. Could it be that their dashed hopes from the days of the thaw would be realized at last?1

  On Wednesday, June 5, the next date for a planned meeting with Tolkachev, the Moscow station checked the fortochka. This time, the correct window was open, a signal that he was ready, but that evening the case officer had to abort, saying there was too much surveillance.2

  Over the weekend of June 8 and 9, Tolkachev and his wife drove to their dacha north of Moscow. Their son, Oleg, no longer joined them for trips to the country. While Tolkachev and his wife were away, KGB officers secretly entered and searched their apartment. They discovered the fountain pen with the L-pill from the CIA. They might also have found the other CIA materials in the entresol, including the schedule and maps for upcoming meetings.3

  A family friend recalled that at the dacha Adik often worked with wood, repairing window frames, while Natasha liked to cultivate the garden. They had plans on Sunday evening, June 9, to see old friends in Moscow, the Rozhanskys.4 When they left the dacha, Adik put on a light sport coat, and his wife a black-and-white-check dress with trim at the sleeves, anticipating they would meet their friends soon after their return to the city. Natasha had only recently obtained a driver’s license and was behind the wheel of the Zhiguli. The cou
ntry had been cool for the weekend, and as they drove, it was drizzling. The Zhiguli’s wipers were on.

  On a narrow two-way road toward the city, which cut through a stand of pine and birch, they were stopped by a traffic policeman wearing a uniform and a rain cape who waved them over with a baton. A traffic police checkpoint was not unusual, although it was not often found so far out in the country. The ocher Zhiguli approached the checkpoint, pulled over as instructed, and braked jerkily behind a parked blue-and-white police van. The traffic policeman saluted and asked the owner of the car to get out.

  Adik and Natasha sat inside quietly for a moment, and then Adik climbed out on the passenger side. He was wearing his sport coat and appeared to slide something, perhaps his documents, into his left inside coat pocket after he got out of the car.

  The policeman directed him to step forward of the blue-and-white van, toward other vehicles parked along the shoulder. Tolkachev took about ten strides in that direction, with the traffic policeman in front of him. Tolkachev raised his left hand and scratched the right side of his chin.

  At that moment, a young man with black hair and a mustache briskly strode up behind him, holding a white rag in his left hand. The man threw his right arm around Tolkachev’s neck, into a choke hold, and with his left hand stuffed the white rag into Tolkachev’s mouth. Three others grabbed Tolkachev’s arms and yanked them behind him, lifted his feet off the ground, and carried him back toward the van. The rag still in his mouth, Tolkachev was silent. The side doors to the blue-and-white van swung open, and Tolkachev was shoved inside.