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

by David E. Hoffman

  His wife was escorted away from the Zhiguli into another car. As she prepared to climb into the other vehicle, she looked up, confused.

  None of the men who stopped them were traffic police. They were all KGB.

  In the van, still restrained by the KGB man’s arm around his neck, Tolkachev was stripped of his clothing to make sure he was not carrying a suicide pill. The KGB remembered well how Ogorodnik tricked them years earlier with the poison concealed in a fountain pen. They put Tolkachev in a tracksuit. Tolkachev was then driven in the blue-and-white van to Lefortovo, the KGB’s notorious prison in Moscow. Once there, he re-dressed in his street clothes, after they were checked again for a suicide pill.5

  When the Tolkachevs did not telephone, and did not show up to see the Rozhanskys on Sunday, their friends began to call the apartment at Ploshchad Vosstaniya. There was no answer. They tried to call Natasha at work on Monday, no answer. On Monday morning, at the institute, Natasha’s supervisor, Vladimir Libin, took note that she was absent. Libin was also a family friend who had visited the Tolkachevs at home and privately shared Natasha’s deep antipathy toward the system. Libin gave her the benefit of the doubt and wrote “compensatory time” on her records, figuring there was a good reason she did not come to work. It could be that someone became ill, a car malfunctioned—anything. In the middle of the day, a woman telephoned Libin, saying she was a neighbor of the Tolkachevs at the dacha, that Adik was ill, he had been taken to the local hospital, and asked that his wife be given some time off. For two more days, Libin marked her down for more time off.

  On Wednesday, frantic, the Rozhanskys drove to the Tolkachevs’ dacha. It was locked. The village was very small, and everyone knew everything about each other; neighbors said they had seen nothing unusual. Tolkachev had left with his wife on Sunday, carrying flowers back to the city.

  Did the car break down? The Rozhanskys went to the local auto shop. No, there were no incidents on Sunday, neither breakdowns nor accidents. They went to the local hospital. Again, nothing. The Rozhanskys returned to Moscow and went to the Tolkachevs’ apartment building. The ocher Zhiguli was not in its usual parking space.

  On Wednesday, June 12, Natasha telephoned Libin at work. She said Adik had been stricken with severe back pain, and she didn’t know when she could return to work. Libin expressed his sympathy. Her voice sounded weak, less than cheerful.

  With no word after days and days of calling friends, the Rozhanskys went back to the Tolkachev apartment. With relatives who had a key to the apartment, they opened the first of two doors to enter it. But they stopped on the inner door. It was marked with paper seals on which were visible three bold letters: KGB.6

  Oleg had also been searching for his parents when they did not return from the dacha. He, too, went to their apartment and saw the KGB seal on their door.7

  Tolkachev’s next scheduled meeting with the CIA was to be June 13, the day after Natasha had called the institute to say Adik was sick.

  In anticipation, the Moscow station drafted an ops note, which began “Dear Friend,” and praised Tolkachev’s material delivered in January, which was “considered to be extremely valuable by our national security experts.” But the Moscow station informed Tolkachev the photographs of that “very important document” had not come out, “due to insufficient light levels … caused by the extremely overcast weather” during the winter. The station said that headquarters was working on a new, more light-sensitive camera, but in the meantime they would give him five more Tropel cameras, like those he had used before. They urged him to “photograph on bright days” only.

  “We remain extremely interested in the very important documents you photographed for our last meeting,” the ops note said. Please take those pictures again, it added, “when you are certain conditions are absolutely secure.”8 The ops note for Tolkachev also raised the possibility of another CIA attempt to replicate Tolkachev’s library permission sheet so he could replace it with the original, “as we did in 1980.”9

  The materials for Tolkachev this time were bulky. The station packaged everything carefully: the ops note; the cameras; four pages of original material he had provided to the CIA in January, being returned; twenty French drawing pens; twenty German drawing pens; two architecture books; eight boxes of dental medicine and instructions; eight bottles of fluoride; eight tubes of toothpaste; a book containing 250 pages of newspaper and magazine articles from the West; and 100,000 rubles toward interest on his escrow account.10 But the CIA told Tolkachev they were reluctant to provide the English-language lessons he wanted for his son because of concern about how he would explain where he got them. The tapes were not in the package.11

  Tolkachev’s fortochka window was open on June 13 at the correct hour, signaling that he was ready for a meeting that evening. But KGB surveillance on the case officer selected for the meeting had been so heavy that the station picked an alternate case officer. There was always a primary and an alternate, and sometimes a third. In this case, the job fell to Paul “Skip” Stombaugh, a case officer who, before joining the CIA, had worked for the FBI. Stombaugh was well liked, a straight-arrow, hardworking type. His Russian-language skills weren’t great, but his colleagues remembered his tenacity in studying. In Moscow, he became a sort of hybrid officer, undercover in the embassy’s political section, but not strictly “deep cover.” He had his own desk in the Moscow station and in 1985, having passed the initial period of KGB scrutiny, was spending about half his time in the station, a colleague recalled.12

  That week in June, the Moscow station chief made a trip out of town, to the southern Caucasus Mountains region. The KGB would have been notified, and the station chief hoped to distract them from operations in Moscow.

  On the evening of June 13 in Moscow, Stombaugh set out on a long surveillance detection run carrying two large Russian shopping bags with handles. He was wearing a white shirt and sport coat. While many case officers tried to disguise themselves to look Russian on the street at times like this, in drab clothes and with thick eyeglasses, Stombaugh did not. He looked very much like an American diplomat. He was driven on the first leg of the run by his wife, then proceeded on foot. Stombaugh reached the meeting site, code-named trubka, or “pipe,” about an hour early. It was located in a residential area of five-story apartment blocks in western Moscow, four and a half miles from Tolkachev’s home, farther out than in the earlier days. The meeting was to be at two pay phones.13

  Stombaugh walked past the meeting site, making an initial check, noticing nothing unusual.14 He then waited on a park bench until 9:40 p.m.

  Leading to the meeting place was a broad sidewalk under a canopy of trees, with apartment buildings on all sides. Puddles still remained on the sidewalk from recent thundershowers. As Stombaugh walked, slowly, toward the site, he noticed a young, red-haired woman talking on one of the pay phones. He thought it was odd that she was talking so loudly on an otherwise quiet street, but he did not change course or move away from her. Under his right arm, Stombaugh cradled one of the bags for Tolkachev and grasped the other, in his left hand, by the handle. He walked just beyond the woman on the phone, then turned on his heel and took a few steps back in the other direction, all the while looking up and around for Tolkachev. He saw what looked like Tolkachev’s ocher Zhiguli car, parked a hundred to two hundred yards away.

  Three plainclothes men ambushed Stombaugh, leaping out from a row of bushes. One pulled Stombaugh’s arms behind him sharply, while the other two wrested free the packages. Five more men, all from the KGB, rushed to the scene. Stombaugh was hustled into a van, which drove off to the Lubyanka, the KGB headquarters building.

  In the van, Stombaugh protested that he was an American diplomat. A KGB man told him to shut up, he didn’t want to hear it.

  Stombaugh was ushered into a holding room in the Lubyanka and searched. The KGB removed from his pockets his tape recorder, a plain plastic Tropel camera, some change, c
ryptic notes he had made before the meeting on possible dead drop sites for the future, his meeting agenda, some medicine for Tolkachev in his right-hand coat pocket, a black felt-tip pen, two pages of a Moscow map, and his watch, wallet, and belt. After an hour in the holding room, Stombaugh was taken to a conference room and told to sit down. Spread out in front of him were the items taken from his pockets and the two packages for Tolkachev, still unopened.

  Rem Krasilnikov, the major general who led KGB counterintelligence, declared, “You have been arrested for committing espionage. Who are you?”

  Stombaugh: “American diplomat. I want to call the embassy. Now.”

  Krasilnikov: “You are not a diplomat, you are a spy.”

  Stombaugh: “I am a diplomat.”

  Krasilnikov: “You are a spy!”

  Stombaugh, with his sport coat folded over his arm, flexed his shoulders, obviously sore. His arms had been pinned behind his back for the first hour of his detention. The KGB turned on a video camera. Krasilnikov then proceeded to open the two packages, carefully examining each item inside. When he opened the second package, those present in the room stared in awe at the bulging stack of rubles. Holding the brick of currency, sealed in plastic, Krasilnikov said, “A huge bundle of 50 ruble notes!” He asked Stombaugh about the plastic Tropel camera, and Stombaugh refused to answer. Krasilnikov then took out the ops note and read the first two lines aloud, thanking the agent for valuable information at the last meeting. Krasilnikov read the rest of the letter in silence until he reached a line about the CIA’s reluctance to give the agent English-language training materials and read it aloud. Krasilnikov also found the notes handwritten by Tolkachev containing intelligence information, the pages given to the CIA in January that had been oddly numbered. The CIA was returning them to Tolkachev at his request. Krasilnikov commented that they were “most interesting.”15

  The Soviet Foreign Ministry notified the U.S. embassy that an American had been detained by the KGB. When an embassy duty officer came to the Lubyanka to get Stombaugh, a heated confrontation erupted. Krasilnikov kept insisting Stombaugh was a spy, and the embassy duty officer demanded they be allowed to leave. The embassy officer was told by Krasilnikov that Stombaugh had been detained “in the act of meeting with a Soviet citizen for alleged espionage purposes” and “the Soviet citizen in question had been arrested.”

  Just before the ambush, the KGB had put an impersonator on the street to resemble Tolkachev, carrying the recognition signal, a book with a white cover in his left hand. The KGB also opened the fortochka in Tolkachev’s window and parked Tolkachev’s car nearby as additional enticement. Stombaugh saw the car but didn’t see the fake Tolkachev. He thought he had been free from surveillance, but the KGB was waiting.

  A flash cable was sent to CIA headquarters reporting an arrest. A longer cable was sent to headquarters after Stombaugh was released, describing the ambush. Stombaugh was released after midnight, Moscow time, declared persona non grata, and expelled.16

  The incident carried an ominous meaning for those who knew of the Moscow station’s most valued asset. The KGB had the exact time and place where Stombaugh was to meet the agent. It meant the Tolkachev operation was over.

  He was already in the grip of the KGB.

  That same afternoon, Aldrich Ames arrived at a small restaurant, Chadwicks, on the Georgetown waterfront in Washington. Ames had wrapped up a bundle of classified messages in his CIA office and carried them out of headquarters without being stopped. He brought the cables and documents in a plastic bag to the restaurant, where he was met by Sergei Chuvakhin from the Soviet embassy. Ames gave him the materials, a colossal breach that was just the beginning of his treachery. The KGB had already detained Tolkachev, but if they had any doubts, Ames gave them further confirmation.17

  That evening, Gerber was at home on Connecticut Avenue in Washington. His wife, Rosalie, was cooking, expecting a guest for dinner, James Olson, who had worked with them in the Moscow station. Olson was the first case officer to climb into the manhole for ckelbow and had also met Sheymov in Moscow and worked with Rolph on the ckutopia exfiltration. After dinner, Gerber and Olson were scheduled to participate in an exercise on the streets of Washington, providing training in detecting, evading, and escaping surveillance to the next generation of CIA case officers. Gerber was to play the role of a spy, and the young trainees would attempt to find him while dodging or escaping the surveillance, provided by the FBI. On a warm summer evening, the exercise would require a few hours out on the streets, teaching the rookies the exacting, choreographed methods that Gerber had polished over a long career. Olson arrived with a grim face at Gerber’s apartment. The first thing he said was, “Terrible news.” The CIA had just received the message from the Moscow station that Stombaugh had been arrested.

  Gerber realized instantly what that meant: Tolkachev had been lost. Gerber cared passionately about his country and about agents who risked their lives for it. A Roman Catholic, he often lit a candle at Mass for agents who had been killed in the line of duty. But after a career in espionage, he was also determined not to let setbacks slow him down. He often compared the work to that of a surgeon or a cancer doctor. He did everything he could to save the patient, but if and when a patient died, he moved on to save the next. Gerber always felt it necessary to soldier on, even with the burden of loss. He did not torment himself over whether he should have done something differently. He knew there would be all kinds of questions about Tolkachev in the morning; for now, he and Olson headed out to the street to prepare future CIA case officers in how to run a spy.18

  In the weeks that followed, the Moscow station and headquarters attempted to puzzle out what might have compromised Tolkachev. The cables and messages were defensive and inconclusive. The reports and requirements branch in the division, responsible for sharing intelligence with the “customers,” emphasized that “all of ckvanquish’s material has been disseminated on an extremely limited basis” and that “all of the customers made a conscientious effort to keep down the number of people cleared.”19

  On July 8, headquarters wrote to the Moscow station, “We cannot state definitively what might have caused his compromise.” One possibility, headquarters said, was that Tolkachev was “compromised at work through discovery of his intelligence gathering activities,” and another was that he was discovered “as a result of a security investigation” at Phazotron. Perhaps the investigation in early 1983 that had so frightened Tolkachev was still going on in early 1985 and exposed him.

  There was one more embarrassing possibility. Three pages of the master copy of a top secret Tolkachev document were lost in July 1984 when they were sent to the CIA’s printing and photography division. The contents of the pages were “specific enough to compromise ckvanquish,” headquarters noted. No one knew what happened to those three pages.

  Did Tolkachev make a mistake with all his money from the CIA? Headquarters didn’t think so. “Lavish spending does not seem to accord with what we know of ckvanquish’s character and conservative lifestyle, or with his statements from time to time that he viewed the money we gave him as a nest egg, or insurance against adversity,” headquarters told the station.

  Was Tolkachev already under control by the KGB at the January 1985 meeting, when he turned over the cameras, with the end caps switched and the film blurred? Headquarters thought this was not likely, given the high value of the potential intelligence to the United States. The KGB didn’t like to dangle agents who could relinquish really important secrets.

  All of the headquarters messages at this point were speculative and largely wrong. None of them focused on the possibility that Tolkachev was betrayed from within the CIA. But one observation was very accurate. Because the KGB knew the time, date, and place of the June 13 meeting with Tolkachev, they must have discovered the materials the CIA gave Tolkachev in January, including the meeting sites, ops note, and schedule. All of it was terribly
incriminating.

  “The arrest, therefore, came without warning.”20

  20

  On the Run

  On August 1, 1985, Vitaly Yurchenko went for a stroll from the Soviet embassy in Rome and never returned. He had recently been named deputy director for the KGB department that ran Soviet spies in the United States and Canada. From the street, he called the U.S. embassy and said he wanted to defect to the United States. A quiet and dignified officer, Yurchenko was debriefed by the CIA before being flown from Naples, Italy, to Andrews Air Force Base outside Washington.

  Alerted to the defection, Gerber remained late in his office at CIA headquarters, waiting for details. The cable secretariat called at 8:00 or 9:00 p.m. and said new messages had come in. Gerber walked down the stairs to get them, and as he climbed the stairs back to his office, he opened the envelope, found the most recent cable, and began to read.

  He felt his throat tighten. The cable reported that Yurchenko told the debriefers that the KGB had a very good source, code-named robert. Yurchenko did not know the true name of the source but identified him as a disgruntled former CIA trainee who was in the pipeline for the Moscow station and was subsequently fired.

  Gerber suddenly felt overcome with emotion. He immediately put the pieces together: the KGB source was Edward Lee Howard, and he had betrayed Tolkachev. After all they had done to protect Tolkachev—after all the concealments, identity transfers, surveillance detection runs, electronic communications gear, Tropel cameras, and messages urging Tolkachev to be careful—the billion dollar spy had been destroyed by one of their own, by a failed trainee.1