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

by David E. Hoffman

  13. Weiser, Secret Life, 230–32. Also Hathaway, interview with author, Aug. 28, 2013.

  14. Bob Wallace (former head of the CIA’s Office of Technical Service), interview with author, Oct. 7, 2013.

  15. Moscow station to headquarters, March 11, 1981, 111439Z. In this cable, Rolph said, “Although CKS did not mention his original production plan, we cannot help but recall that he may be reaching the limits of what he can reasonably and easily get his hands on in the way of desirable material.”

  16. Moscow station to headquarters, March 11, 1981, 111439Z.

  17. Moscow station to headquarters, April 2, 1981, 020732Z.

  18. Moscow station to headquarters, June 23, 1981, 231244Z.

  19. Headquarters to Moscow station, June 26, 1981, 260019Z.

  20. Moscow station to headquarters, June 26, 1981, 261440Z. Separately, two confidential sources said the device antenna was too small and Moscow was at the very outer limit of the Marisat satellite’s workable footprint. Also see Moscow station to headquarters, July 2, 1981, 021348Z. About two years later, the device was returned to the Moscow station for testing. On Monday, March 7, 1983, the deputy chief of station, Richard Osborne, took it to an open field in Moscow known as Poklonnaya Gora. Osborne set up the device. He was arrested on the spot by the KGB. The Soviet news agency Tass reported that Osborne, identified as a first secretary at the U.S. embassy, “was detained red-handed in Moscow on March 7, this year, while working with espionage radio apparatus. Confiscated from him was a set of portable intelligence special-purpose apparatus for the transmission of espionage information via the U.S. ‘Marisat’ communications satellites, and his own notes which were written in a pad made of paper quickly soluble in water, and which expose Osborne’s espionage activities.” Osborne was declared persona non grata and expelled from the Soviet Union. See John F. Burns, “Moscow Ousts a U.S. Diplomat, Calling Him a Spy,” New York Times, March 11, 1983, 11.

  21. Moscow station to headquarters, April 11, 1981, 110812Z.

  22. Headquarters to Moscow station, Nov. 25, 1981, 251829Z. Some of these topics were also included in earlier rolls of film.

  13: Tormented by the Past

  1. Except where otherwise noted, details of Tolkachev’s family and work in this chapter are drawn from his letters and comments to the CIA, primarily three cables: Moscow station to headquarters, March 2, 1978, 021500Z, in which the station reports on Tolkachev’s note revealing his identity; Moscow station to headquarters, April 26, 1979, 261013Z, transmitting Tolkachev’s answers to questions from headquarters; and Moscow station to headquarters, Dec. 10, 1980, 101150Z, providing answers to questions concerning a possible exfiltration. The author also interviewed a confidential source close to the family.

  2. It was the Church of the Nine Martyrs of Kizik, founded by a patriarch who had opposed Peter the Great’s reforms of the seventeenth century.

  3. The aviation and rocket elite who lived there are honored by stone tablets at the base of the tower.

  4. Most Russian men his age were married by about age twenty-five. See Sergei Scherbov and Harrie van Vianen, “Marriage in Russia: A Reconstruction,” Demographic Research 10, article 2 (2004): 27–60, www.demographic-research.org.

  5. Lyogkaya Industriya, Jan. 1, 1937, 1, Russian State Archive of the Economy, Moscow.

  6. Lyogkaya Industriya, Jan. 19–Feb. 1, 1937, Russian State Archive of the Economy.

  7. Robert Conquest, The Great Terror (New York: Oxford University Press, 1990), 252.

  8. Robert Conquest, Stalin: Breaker of Nations (New York: Viking, 1991), 206.

  9. Conquest, Great Terror, 239. According to Orlando Figes, of the 139 members of the Central Committee elected at the Seventeenth Party Congress in 1934, 102 were arrested and shot, and 5 more killed themselves in 1937–38; in addition, 56 percent of the congress delegates were imprisoned in those years. Of the 767 members of the Red Army high command, 412 were executed, 29 died in prison, 3 committed suicide, and 59 remained in jail. See Figes, The Whisperers: Private Life in Stalin’s Russia (New York: Metropolitan, 2007), 238–39.

  10. An examination of a mass grave outside Moscow showed that blue-collar and white-collar workers were prominent among those who suffered. Together with the peasants, they were about two-thirds of the victims. See Karl Schlögel, Moscow, 1937 (Malden, Mass.: Polity Press, 2012), 490.

  11. Figes, Whisperers, 240; Schlögel, Moscow, 1937, 492–93.

  12. Conquest, Great Terror, 240.

  13. Ibid., 256–57.

  14. The Pale of Settlement was a section of imperial Russia, in the west, to which permanent residency by Jews was confined. The Jews were often poor and concentrated in areas that made them targets for attacks, or pogroms.

  15. Bamdas, S. E., fond 1, opis 1, delo 282, 1–2, Archives of Memorial International, Moscow.

  16. Kuzmin, I. A., fond 1, opis 1, delo 2543, 1–2, Archives of Memorial International.

  17. Conquest, Great Terror, 235.

  18. Cathy A. Frierson and Semyon S. Vilensky, Children of the Gulag (New Haven, Conn.: Yale University Press, 2010), 167.

  19. Confidential source close to the family. It is not known why Sofia’s sister did not take in her daughter, but relatives were often fearful of accepting children of “enemies of the people.” Sofia’s sister, Esfir Bamdas, was married to Konstantin Starostin, a Moscow party leader, who was arrested in December 1937 for “anti-Soviet activity” and sentenced to ten years in prison. He died in 1939. Esfir, also a party member, was arrested in 1951 as a result of a denunciation and sentenced to five years but was released in 1953 under an amnesty.

  20. Kuzmin, I. A., fond 1, opis 1, delo 2543, 1–2, Archives of Memorial International, Moscow.

  21. Vladimir Libin, “Detained with Evidence,” New York Novoye Russkoye Slovo, June 27, 1997. Libin was a close family friend. A confidential source close to the family recalled Natasha reading Pasternak and Mandelstam.

  22. Rodric Braithwaite, Moscow, 1941: A City and Its People at War (London: Profile Books, 2006), 184–207. Soviet engineers and scientists had been studying the new radar technology since the 1930s but lagged behind Britain and the United States, hampered by rivalries, indifference in the armed forces, and Stalin’s purges. One of the country’s most knowledgeable radar scientists, Pavel Oshchepkov, was arrested in 1937 and spent the next ten years in prison. John Erikson, “Radio-location and the Air Defence Problem: The Design and Development of Soviet Radar, 1934–40,” Social Studies of Science 2 (1972): 241–68.

  Also see http://en.wikipedia.org/wiki/Radar_in_World_War_II for details on Factory No. 339.

  23. Tolkachev was born in Aktyubinsk, a railroad town, the scene of a major battle in the civil war that followed the Bolshevik Revolution. The Bolsheviks captured the town from the White Army in 1919. Local archives show that in September 1919 a man named Tolkachev was chosen to be secretary of the local Bolshevik organizing bureau in Aktyubinsk. He was probably Tolkachev’s father, Georgi. About a decade later, by 1928, Soviet authorities were attempting to turn the local government over to Kazakhs, and the Tolkachev family departed for Moscow. See “History of Aktyubinsk Oblast: A Historical Chronicle of the Region in Documents, Research, and Photographs,” http://myaktobe.kz.

  24. “Phazotron: From 20th to 21st Century,” Phazotron-NIIR Corp., 2003. The author is grateful to Rustam Rahmatullin, a historian of Russian architecture, for context on the buildings and the history.

  25. In the early Cold War, the nuclear threat came from high-flying bombers. The United States planned a new, manned penetrating bomber, the XB-70 Valkyrie, that would reach altitudes of 77,000 feet and three times the speed of sound. See National Museum of the U.S. Air Force, “North American XB-70 Valkyrie,” fact sheet, http://www.nationalmuseum.af.mil/factsheets/factsheet.asp?id=592. Also, starting in 1956, the CIA’s U-2 spy plane was overflying the Soviet Union at altit
udes of 68,000 feet and higher. In response to these high-altitude threats, Soviet aircraft designers began work on what became the MiG-25 interceptor. The radar was designed at Phazotron. The Soviet Union also built improved surface-to-air missiles that could shoot down aircraft at high altitudes. On May 1, 1960, a Soviet surface-to-air missile exploded near the U-2 being piloted by Francis Gary Powers at 70,500 feet above Sverdlovsk, downing Powers and bringing the CIA’s overflights of the Soviet Union to an end. Gregory W. Pedlow and Donald E. Welzenbach, “The Central Intelligence Agency and Overhead Reconnaissance: The U-2 and OXCART Programs, 1954–1974,” Central Intelligence Agency, Washington D.C., 1992, declassified 2013. The United States canceled the XB-70 bomber in 1961, and the U.S. Air Force changed its strategy for threatening the Soviet Union. Instead of dropping bombs from very high altitudes, the air force decided to send in low-flying, penetrating bombers. The Soviet air defenses at low altitudes were weak. In fact, both superpowers had struggled with this problem; radars of the 1960s could not detect flying objects that were very low because of the uneven contours of the earth. But the radar gap was more of a threat to the Soviet Union because of its vast borders, the longest in the world, and because NATO was sitting on its western front in Europe. The European flash point for conflict was far away from the United States but adjacent to the Soviet Union. The United States also sought to close the low-altitude gap with the E-3 airborne warning and control system (AWACS), able to spot low-flying targets for two hundred miles out, and the F-15 fighter, the first with look-down, shoot-down capability.

  26. Phazotron, “From 20th to 21st Century,” notes that NIIP built the radar on parts from Phazotron. The handoff to NIIP is also described in “Overscan’s Guide to Russian Avionics,” http://aerospace.boopidoo.com/philez/Su-15TM%20PICTURES%20&%20DOCS/Overscan%27s%20guide%20to%20Russian%20Military%20Avionics.htm.

  27. Lyudmila Alexeyeva and Paul Goldberg, The Thaw Generation: Coming of Age in the Post-Stalin Era (Boston: Little, Brown, 1990), 4.

  28. Andrei Sakharov, Memoirs (New York: Knopf, 1990), 282–85.

  29. Ibid., 292–93. Michael Scammell, Solzhenitsyn (New York: W. W. Norton, 1984), 640.

  30. Joshua Rubenstein and Alexander Gribanov, eds., The KGB File of Andrei Sakharov (New Haven, Conn.: Yale University Press, 2005), 144.

  31. Ibid., 150.

  32. Sakharov describes his meeting with the correspondents in his Memoirs, 385–86, and reproduces some of the attacks on him, 631–40. Also Robert G. Kaiser, Russia: The People and the Power (London: Martin Secker, 1976), 424–25.

  33. Rubenstein and Gribanov, KGB File of Andrei Sakharov, 155.

  34. Tolkachev wrote, “I would not begin to establish contact for any kind of money with, for example, the Chinese embassy. Why, the money does not smell? The money, yes. But societies, created by people, sometimes exude bad smells.” Moscow station to headquarters, April 26, 1979, 261013Z.

  35. Libin, “Detained with Evidence.”

  14: “Everything Is Dangerous”

  1. Moscow station to headquarters, Nov. 12, 1981, 120858Z; Rolph interview with author, May 6, 2012.

  2. “MASHINA,” undated, map and description of signal site, given to Tolkachev, released to author by CIA.

  3. On September 3, 1981, a CIA case officer had gone to meet an agent who was a Soviet citizen. The agent had been compromised. At the site, the case officer and the agent were detained. The newspaper Izvestiya identified the arrested man as Y. A. Kapustin. Dusko Doder, “Moscow Arrests Soviet Citizen as Agent of CIA,” Washington Post, Sept. 4, 1981, A25.

  4. Rolph, interview with author, May 6, 2012; Moscow station to headquarters, Nov. 12, 1981, 120858Z and 121233Z.

  5. Royden, “Tolkachev,” 21. Each broadcast lasted ten minutes, a burst of dummy messages with a genuine one mixed in. Tolkachev could later break out the genuine message by scrolling numbers on the demodulator. The first three digits of the message would indicate if it included a genuine message; if so, he could view the message, contained in five-digit groups, and then decode it using a onetime pad. He could receive up to four hundred five-digit groups in any one message. It was complex and cumbersome but a way to avoid the KGB.

  6. Casey, “Progress at the CIA,” memo, May 6, 1981.

  7. Burton Gerber, interview with author, Jan. 30, 2013.

  8. Gus Weiss, “The Farewell Dossier,” Studies in Intelligence 39, no. 5 (1996). On the explosion, see Thomas C. Reed, At the Abyss: An Insider’s History of the Cold War (New York: Ballantine Books, 2004). For more on Vetrov, see Sergei Kostin and Eric Raynaud, Farewell: The Greatest Spy Story of the Twentieth Century, trans. Catherine Cauvin-Higgins (Las Vegas, Nev.: Amazon Crossing, 2011).

  9. Moscow station to headquarters, Dec. 9, 1981, 091105Z.

  10. Headquarters to Moscow station, Nov. 25, 1981, 251829Z.

  11. Moscow station to headquarters, Feb. 16, 1982, 161100Z.

  12. This description of deep cover is from confidential sources.

  13. Moscow station to headquarters, Jan. 13, 1982, 130801Z, draft station ops note.

  14. Moscow station to headquarters, Feb. 16, 1982, 161100Z.

  15. Moscow station to headquarters, March 9, 1982, 091400Z.

  16. Moscow station to headquarters, March 15, 1982, 150742Z.

  17. Moscow station to headquarters, March 17, 1982, 171006Z.

  18. Royden, “Tolkachev,” 23.

  19. Moscow station to headquarters, May 25, 1982, 250800Z, and confidential source.

  20. William Plunkert, correspondence with author, March 28, 2014.

  21. Moscow station to headquarters, Dec. 8, 1982, 081335Z.

  22. Moscow station to headquarters, Dec. 10, 1982, 101400Z, and Dec. 22, 1982, 220940Z. Tolkachev had raised eyebrows at the CIA by suggesting in his ops note that he might use his money from the CIA to buy silence from a colleague at work if he was caught. The CIA thought this was alarming and unrealistic and told Tolkachev later that he had other options besides bribery. See headquarters to Moscow station, March 1, 1983, 010053Z.

  23. Moscow station to headquarters, Dec. 10, 1982, 100945Z.

  24. Thomas Mills, interview with author, Feb. 16, 2013, and correspondence Dec. 19, 2013.

  25. Headquarters to Moscow station, Feb. 19, 1983, 190143Z.

  26. Headquarters to Moscow station, March 1, 1983, 010053Z.

  27. Robert O. Morris, interviews with author, May 4, 2012, and Dec. 19, 2013; Robert O. Morris, Fighting Windmills (Virginia Beach, Va.: Legacy, 2012), 144.

  28. Moscow station to headquarters, March 17, 1983, 171555Z.

  29. Headquarters to Moscow station, March 22, 1983, 220128Z.

  30. Moscow station to headquarters, March 22, 1983, 221210Z.

  31. Headquarters to Moscow station, April 1, 1983, 010055Z.

  32. Moscow station to headquarters, April 25, 1983, 250900Z.

  33. Moscow station to headquarters, April 25, 1983, 251445Z.

  34. Headquarters to Moscow station, June 13 and 23, 1983, no time-date stamp on either cable.

  35. Headquarters to Moscow station, June 23, 1983, no time-date stamp.

  36. Headquarters to Moscow station, July 6, 1983, no time-date stamp.

  15: Not Caught Alive

  1. Except where otherwise noted, this account is based on the translation of Tolkachev’s ops note passed to the CIA describing the events in detail, contained in Moscow station to headquarters, Nov. 17, 1983, 171810Z. The cable translates the regime as a “procedures” department, but the author believes “security” better reflects the purpose and duties.

  2. In these weeks of early 1983, there was a renewed campaign for “discipline and order” imposed by the new Soviet leader, Yuri Andropov, who used the KGB and the Interior Ministry to attack the problems of absenteeism and poor economic performance. People were “caught loafing” during working hours in su
bways, saunas, and shops. Tolkachev would certainly have known about the new climate, although it seems unlikely to have triggered the investigation. Andropov’s campaign is described in R. G. Pikhoia, Soviet Union: History of Power, 1945–1991 [in Russian] (Novosibirsk: Sibersky Khronograf, 2000), 377–79, and in Mikhail Gorbachev, Memoirs (New York: Doubleday, 1995), 147.

  3. Tolkachev was named as the inheritor of the house by the owner but had no explicit title, and a dishonest owner could change it at any time. Libin, “Detained with Evidence.” Other sources confirmed to the author this was a common technique.

  4. Ibid.

  5. For details about ckelbow, see Wallace and Melton, Spycraft, 138–56; Bearden and Risen, Main Enemy, 28–29; and Rem Krasilnikov, Prizraki s ulitsy Chaikovskogo [The ghosts of Tchaikovsky Street] (Moscow: Gei Iterum, 1999), 179–88.

  6. Moscow station to headquarters, Nov. 17, 1983, 171007Z.

  7. Moscow station to headquarters, Nov. 17, 1983, 171810Z.

  8. Moscow station to headquarters, Nov. 22, 1983, 221400Z, on the suggestion to bury the cameras.

  9. Headquarters to Moscow station, Nov. 30, 1983, time-date stamp redacted. Headquarters said Tolkachev’s handwritten materials had never left the division. When his material was translated, it was disseminated only in top secret, blue-bordered memorandums. The material was marked at a level of sensitivity above top secret, and the blue borders were a control system indicating it was extremely sensitive. No defense contractors ever saw it. When sent to the government “customers,” it was kept in secure vaults at each agency dedicated to such blue-border sensitive reporting, and only a select few had access to it. “This, unfortunately, would not preclude loose talk,” headquarters said in a cable to Moscow. But “we are aware of no leak, verbal or written, of No. 19 material.”