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

by David E. Hoffman

  Yurchenko’s mention of the mystery agent robert led to an internal meeting at the CIA. The CIA’s quasi-independent security office wasn’t yet convinced of the link and said there were several possible candidates. But Gerber was adamant. “This is undoubtedly Howard,” he insisted. The clue was unambiguous; Yurchenko was talking about a trainee who had been fired and was in the pipeline for assignment to Moscow. That description fit Howard perfectly.2

  More than two years had passed since Howard had been forced out of the CIA, and for a long time the agency’s attitude was to keep its problems to itself. Now the CIA informed the FBI they had a problem. The person known as robert was Edward Lee Howard. But the hour was late.3

  Howard’s next planned meeting with the Soviets was to be in Mexico City, but he sent them a signal, changing it to Vienna. He flew there on August 6, 1985. Howard took with him his own handwritten notes about CIA matters on water-soluble paper, a trick he had learned in training. According to his wife, Mary, he received $100,000 on this trip. On August 12, he opened a Swiss bank account in Zurich and made a large deposit. The Soviets had a word of caution for Howard: One of their own officers had defected to the United States. Howard was told if he ever felt he was in trouble, he should go to any Soviet consulate.4 On his return to New Mexico, Howard bought a metal “ammo box” and put inside $3,100 in $100 bills, $900 in $50 bills, a dozen one-ounce Canadian maple leaf gold coins, a hundred-troy-ounce bar of fine silver, and two gold Krugerrands. Howard then drove to a wooded area about three miles away from his house and buried the box.5

  The FBI began an investigation, opening a file titled “Unknown Subject, Known as Robert.” The file was created on August 5 or 6, according to an FBI official directly involved. The title of the file was changed to “Howard” within days. But the FBI did not contact Howard right away. Rather, it asked the Justice Department whether there was probable cause to arrest Howard. The response came back: no. Meanwhile, the department sought a court order to wiretap Howard’s phones, which took some time. The bureau decided not to interview Howard immediately because that might alert him and make further investigation more difficult.6

  In early August, FBI headquarters directed special agents in Albuquerque to “conduct discreet inquiries” about Howard’s whereabouts and activities. Surveillance was begun on August 29 and was “carried out in a discreet, intelligence gathering mode, attempting to determine his routines.”7 The surveillance consisted of special FBI teams of watchers who are trained to blend in and look like civilians, as well as regular FBI special agents. With court approval, Howard’s phone was tapped, and fixed-wing airplanes were used to keep an eye on his movements. The “discreet” surveillance of Howard was carried out from 7:00 a.m. until he went to bed in the evening.

  On September 3, Howard bought a $10,000 U.S. Treasury certificate. His annual salary at the Legislative Finance Committee in New Mexico was $30,000.8

  On September 10, Howard drove out into the desert about three miles, stopped, and retraced his route, all the while being watched by the FBI. At one point, he pulled over to the side of the road and turned off his car lights, attempting to spot the surveillance. The FBI decided it was time to confront him. The FBI had obtained Howard’s psychiatric evaluations and other evidence “which indicated that Howard would probably break in an interview and confess his espionage.” The word came from Washington: go ahead. Howard was put under more intensive, twenty-four-hour FBI surveillance on September 18.

  The next day, he was called at his office at 2:00 p.m. and asked to come to the lobby of the Hilton hotel in Santa Fe, where the FBI wanted to talk to him. On the phone, Howard sounded concerned, but fifteen minutes later he showed up at the hotel. The FBI agents took him to room 327. He was told that he was being questioned about working with the KGB and that he had been implicated by a defector “in London.” Howard adamantly denied making contact with the Soviets and angrily accused the CIA of being out to get him. Asked about trips to Vienna, Howard quickly suggested that the FBI check the “paper trail,” his American Express card receipts, and see that he had not been to Vienna, although he mentioned he had been elsewhere in Austria in 1984 on business. What Howard didn’t say is that he had carefully avoided using the American Express card on the trip. About twenty minutes into the interview, Howard said the FBI was denying him his rights and he wanted to consult with an attorney. The FBI agents agreed; he was free to leave. Howard got up out of his seat and began to walk out of the room, but as he did, the FBI told him that if he did not cooperate, they would begin a full-scale investigation, interrogating his wife, relatives, employer, and associates. Howard reconsidered and sat down.

  Then the FBI agents said Howard should take a polygraph examination at some later point, suggesting that if he were innocent, the lie detector would clear him and the FBI could look for the “true” suspect. Howard adamantly refused, saying he had been “screwed” by the polygraph in the past, reiterated that he was innocent, and again demanded time to consult a lawyer. The FBI then switched gears and said Howard would have to take a polygraph before seeing his lawyer. At that, Howard grew irate and said the FBI could do whatever it had to, including search his house. The FBI agents asked if he would sign a consent to be searched. Howard refused. The FBI agents said if he reconsidered, they would be around the next morning, and they gave him a phone number to call.9

  The next day, a Friday, late in the day, Howard called the FBI agents in the hotel room, saying he had talked with a lawyer and suggested that, despite his fear of the polygraph test, he might agree to go through with it, to get the FBI “off his back” and to prove his innocence. His tone seemed cooperative, a sharp change from the day before. He told the FBI that on Sunday he was going to Austin, Texas, on business and would get back in touch when he returned on Monday afternoon.10 After Howard’s phone call, the FBI decided to revert to “discreet” surveillance, “in order to avoid antagonizing” him.11

  The FBI had trouble keeping an eye on Howard’s house at 108 Verano Loop, located in a desert area with wide open terrain. They couldn’t find a neighboring house to use for a lookout, so they parked an empty van with a video camera across the street from Howard’s low-slung single-story home. The video signal was transmitted by microwave to a trailer a short distance away and monitored by a single FBI special agent. FBI surveillance teams were also parked just outside the subdivision, to follow Howard in case he left, but they could not see the house or the exits of the subdivision. The entire watch depended on the video feed from the empty van to the trailer and on the lone agent to alert the others. The agent was assigned an eighteen-hour duty shift, from 3:00 p.m. on Saturday until 9:00 a.m. on Sunday. Inside the trailer, he thought the video image from the van was poor.

  On Saturday, in the early evening, Howard and his wife hired a babysitter and went out to a local restaurant, Alfonso’s. They took their red Oldsmobile but left a second car, a Jeep, in the driveway. The lone agent in the trailer didn’t see the Oldsmobile leave, so the surveillance teams were not dispatched to follow Howard. The babysitter made calls from Howard’s home phone that were picked up by the FBI tap, but still the surveillance teams did not move. Mary even called the house from the restaurant and had a conversation with the babysitter, but this did not trigger the surveillance teams. About 7:30 p.m., the surveillance teams decided to conduct a drive-by of the house because so little had been seen or heard. Nothing unusual came from the drive-by, either.12

  The FBI completely missed Edward Lee Howard and Mary Howard. On the way home from the restaurant, Mary was at the wheel and took the car on a winding route, a surveillance detection run like those they had practiced a few years before. At one point, the car stopped near downtown, her husband jumped out, and she flipped up a makeshift Jack-in-the-Box dummy in his place. It was made from a Styrofoam head on which Ed had drawn a face; a brown wig; an orange-and-white baseball cap with the word “Navajo” on the front; a two-foot-long s
tick; and a tan waist-length jacket. Before he departed, Howard told his wife to drive straight home with the dummy in the passenger seat, open the garage door with the remote control, pull in, and close the door.

  The ruse was taught them by the CIA. But it wasn’t necessary. No one was following them. The lone FBI agent in the trailer, supposedly watching a video feed from the van, never saw Mary Howard’s return in the Oldsmobile with the dummy in the passenger seat. The surveillance teams never spotted the Oldsmobile either. When she was back home, Mary Howard dialed the phone number of her husband’s psychiatrist and played a tape over the phone of Howard’s voice, asking for an appointment. This was intended as a diversion. The voice was picked up by the FBI wiretap.13

  After his jump from the Oldsmobile, Howard jogged to his office in Santa Fe, wrote out a resignation letter to his boss, and caught an airport shuttle to Albuquerque under the alias “J. Preston.” He flew to Tucson, Arizona. In a motel room there, he dyed his hair but didn’t like it and washed out the dye.14 Early Sunday, he went to the airport and bought tickets for flights from Tucson to St. Louis, New York, London, and Copenhagen, arriving in Denmark on Monday morning. He paid for the $1,053 ticket on his TWA credit card. He then flew on to Helsinki.15

  While Howard was jetting off, the FBI knocked on his front door in Santa Fe. It was 3:05 p.m. on Sunday. The special agents had just received word from Texas of an interview the FBI conducted there with Howard’s friend Bosch. The FBI agents felt that Bosch had corroborated the accusation that Howard gave information to the Soviets.16

  The FBI special agents asked Mary where Howard was. Mary said he was out jogging and would return in half an hour.17

  He never did.

  On Monday, a federal warrant was issued for the arrest of Edward Lee Howard on charges of espionage.18 But he had eluded the FBI, and they would never catch up. In Helsinki, Howard contacted the Soviets on Monday and crossed the border on Tuesday, smuggled in the trunk of a car. He was granted asylum by the Soviet Union in 1986, the first CIA officer ever to defect.

  In the subsequent investigation, Mary Howard was interviewed repeatedly by the FBI. She gradually revealed what she knew about his trips to Vienna and contacts with the Soviets. Mary “admitted her knowledge and participation in Ed’s espionage activities” and passed two polygraph tests, the FBI records show. With her help, the FBI dug up Howard’s buried ammo box in the desert, recovered the makeshift Jack-in-the-Box head and disguise, and learned of his Swiss bank account in Zurich. She eventually “disclosed all that could have been helpful” to the FBI. Mary continued to receive phone calls from Howard and visited him in Moscow. She was never prosecuted. They divorced in 1996.19

  Howard published a memoir, Safe House, in 1995, that is full of deceptions, including a denial that he betrayed Tolkachev.20

  He died at fifty years old in Moscow on July 12, 2002, as a result of a fall at his home.21

  21

  “For Freedom”

  Adolf Tolkachev fell into the dark place he feared most—the hands of the KGB. He was interrogated in prison and confessed to spying but steadfastly insisted his family did not know. The KGB found plenty of incriminating evidence, including stacks of rubles, the Tropel spy cameras, and the CIA’s maps, sketches, and meeting schedules. The KGB also discovered the library sign-out sheet the CIA forged to cover Tolkachev’s tracks and the pen with the L-pill inside.1

  Tolkachev was convicted of espionage and sentenced to death by a three-member military tribunal. As the sentence was announced, Tolkachev stood straight upright, wearing a loose-fitting sport coat and open-collared shirt, eyeglasses in his breast pocket. Two guards flanked him, seated.

  “Give your name correctly,” the judge demanded.

  “Tol-ka-chev,” he replied firmly. “Adolf Georgievich.” He gave his age, birthplace, and education.

  Where did you work before the arrest, and in what position?

  “Before my arrest, I had worked at the Research Institute of Radio Engineering, in the position of chief designer.”

  The judge read out the verdict: guilty of treason in the form of espionage, punishable by death.

  Tolkachev looked straight ahead, emotionless. The two guards stood and grasped him by the elbows.

  Later, his appeal for clemency was rejected.2

  After the sentence was declared, Tolkachev was granted a farewell visit by his son, Oleg, for fifteen minutes in a crowded prison conference room. Tolkachev had worried about his son all the years of his spying. The moment was difficult for both of them. Oleg was just as scornful of the Soviet system as his parents. He remembered his mother and father reading the prohibited works of Solzhenitsyn. But he never asked where the Western rock music and the drawing pens had come from. He never knew of his father’s spying.

  Tolkachev told his son he was sorry. Oleg replied, “No, no, no”—that he shouldn’t say it.3

  President Reagan, who was briefed by Stansfield Turner on the eve of his first inaugural about the agent in Moscow, now got the whole story of how Tolkachev had been betrayed. The President’s Foreign Intelligence Advisory Board laid out the details in a secret report that Reagan took to Camp David to read on September 26, 1986. Both the CIA and the FBI were sharply criticized in the report; the CIA was taken to task for not reporting sooner to the FBI that Howard could be a security risk.4 The advisory board came to the Oval Office on October 2 to brief Reagan. In handwritten notes from the meeting, the White House chief of staff, Donald T. Regan, noted that “in one year” of training at CIA Howard “picked up quite a bit.”5 All of which was now lost.

  On October 22, 1986, the Soviet news agency Tass announced that Tolkachev had been executed for “high treason in the form of spying.”6

  Natasha was also prosecuted on grounds that she knew of Tolkachev’s espionage activity. Libin, her former supervisor and family friend, wrote later that she did not confess, but was betrayed to the KGB by an informer in prison. She was sentenced to three years. She served the first at Potma, a harsh labor camp 242 miles southeast of Moscow that had been part of the Soviet gulag. For the second year, she was transferred to a less severe penal colony, making bricks, in Ufa, 730 miles east of Moscow, where Oleg managed to visit her. She was released after two years under a broad amnesty and returned to Moscow in 1987. She could not resume her profession as an engineer, so she found work as a duty operator in a boiler room. She kept her head high, read books, and paid attention to the lively politics of the Gorbachev period. She went to Memorial, the group formed during the glasnost era to preserve the memory of those who perished in Stalin’s camps, and wrote out the details of how her parents had been repressed, noting that both were rehabilitated after Stalin’s death.7

  In 1990, Natasha was stricken with ovarian cancer. She wrote to the American embassy saying she was seriously ill and asking for medical assistance. She said she was the wife of Adolf Tolkachev, who “worked for the benefit of America and for freedom in our country for many years,” according to Libin, who helped her draft the letter. Libin recalled that the embassy wrote back simply saying they got many requests and could not help everyone who asked. The embassy apparently did not recognize who she was. The CIA only learned of her appeal years later.8

  Natasha remained angry about only one thing: Adik had misled her and continued his espionage after he promised to stop. It was not the spying that she objected to but the danger to the family. She died of cancer on March 31, 1991, just as the Soviet party-state that she and Adik had both loathed was about to expire. She was laid to rest alongside her father, Ivan Kuzmin, the newspaper editor, in Moscow’s Donskoye Cemetery.9

  On August 11, 2014, the CIA hung a portrait of Tolkachev at headquarters alongside other paintings that depict the agency’s greatest operations. The portrait by the artist Kathy Krantz Fieramosca of New York shows Tolkachev in his apartment, his hands grasping the Pentax 35 mm camera, photographing a secret docum
ent illuminated by two desk lamps. A clock shows 12:30 p.m., the end of the lunch break. At the unveiling ceremony, a senior CIA official said that Tolkachev is portrayed in the painting with “fierce determination,” “intense concentration,” and, knowing his fate if caught, “a trace of fear.”

  Epilogue

  On January 19, 1991, the third day of Operation Desert Storm, Larry Pitts roused himself at 4:00 a.m. at the King Faisal Air Base at Tabuk, northwestern Saudi Arabia. He ate a breakfast of scrambled eggs and pita bread, listened to the intelligence briefing, suited up, fastened on his survival vest, grabbed his helmet bag, and headed out to the tarmac. In the predawn darkness stood an F-15C fighter, the most advanced warplane ever built by the United States and the most lethal air-to-air combatant in history. Sixty-four feet long, with a wingspan of forty-three feet, built of aluminum, titanium, steel, and fiberglass, the fighter had twin Pratt & Whitney turbofans that could send it straight up in the sky, like a rocket. Everything about the F-15 was the pinnacle of American technology, from a powerful pulse-Doppler look-down radar, to wings that could survive battle damage, to sophisticated electronic jammers inside a black box tucked behind the pilot.

  Pitts was preparing to fly a fighter that was designed, down to the smallest detail, to defeat Soviet MiGs. Saddam Hussein’s air force possessed one of the largest fleets of MiG warplanes outside the Soviet Union. In the first two days of war, the aerial battles over Iraq followed the same scenario that had been written for the skies over Europe if hostilities broke out in the Cold War. Both the United States and the Soviet Union designed, built, and deployed air superiority fighters that, it was assumed, would face each other over Germany and Czechoslovakia. But the battles over Iraq showed they were not evenly matched. The American pilots and their warplanes had an edge, gained from intensive training and penetrating intelligence, especially the fruits of espionage by Adolf Tolkachev.