Deception

by Edward Lucas

  It is against this background that all the public information relating to the detained illegals such as Ms Chapman must be judged. The American authorities weighed every line of the criminal complaints they issued against the arrested spies. Clearly, it was necessary to provide enough information to crack the defence of those arrested, leading to an immediate admission of guilt. The American authorities did not want to risk a trial in which FBI agents could have been subject to embarrassing and potentially damaging cross-examination about sources and methods. Another priority was to cause maximum annoyance and confusion to the Russian side, chiefly by making the ‘damage control’ effort as painful, costly and disruptive as possible. That meant overstating what the American side didn’t know, and understating what it did. In the world of mirrors and mind-games, planting doubts is a powerful offensive weapon. Exaggerating the time during which the spies were under surveillance, for example, discredits everything they did in their bosses’ eyes. A cardinal principle of intelligence work is that anything provided by a compromised source must itself be considered as compromised. The farther back in history that the taint goes, the bigger is the area of contamination. Similarly, the Americans may not have succeeded in intercepting and decoding everything sent from Ms Chapman’s laptop.ad But the Russians cannot be sure. If burst transmissions over ad-hoc networks between nearby laptops are hard to monitor then it would be a neat counter-measure to mention them frequently in the criminal complaint. It will be a bold Russian spy who includes them in his operational planning in future. A correctly concocted mixture of overstatement and ambiguity will cast a corrosive cloud over Russian intelligence operations for years.

  It is also necessary to understate some bits of a successful operation. If the key to cracking the spy ring was a flaw in Russian tradecraft, it would be a mistake to highlight it: after all, the other side may make the same mistake again. If the vulnerability came from code cracking, that too must be concealed. If the clues came from a penetration agent in Moscow, his welfare must be weighed against the need to curb or catch the spies he has betrayed. Is he so valuable, and will he be at such great risk, that he must be exfiltrated before the spycatchers pounce on their quarry or limit his activities? Protecting him may set off alarm bells and send the hostile agents scurrying into hiding. The spycatchers’ nightmare is a failure on all fronts: damage done, the horse bolted, and nothing gained.

  America’s criminal complaints against the illegals were nicely balanced. They trumpeted the Bureau’s success, humiliated the Russian side, but gave away rather little about sources and methods. It is not clear, for example, how the FBI obtained the ‘was it in Beijing?’ code word that one of its agents used to gain the confidence of Mikhail Semenko, a Russian working under his own name in Washington DC. They put heavy emphasis on traditional surveillance: bugging phones, entering premises with a search warrant, looking at safety-deposit boxes. That the FBI can do that will surprise nobody. They highlight what look like some bad mistakes in the Russians’ tradecraft. Donald Heathfield’s wife had a photographic negative in a safety deposit box that bore a Russian brand name, Tasma (TACMA in Cyrillic). For someone purporting, as she did, to be a Canadian real estate agent, that was a huge breach in a cover story. Another of the illegals is said to have written a vital email password on a bit of paper next to a computer, which was noted by FBI agents during a clandestine visit to the apartment. If these blunders indeed happened, those in the Russian intelligence headquarters in Yasenevo responsible for training illegals will be unpleasantly surprised.ae But the FBI may have exaggerated or misleadingly portrayed the slip-ups. During their debriefing sessions the agents may deny having made these errors. Ideally, both their competence and their loyalty will be questioned.

  The complaints published by the American authorities are also interesting for what they do not say. They do not give any detailed account of the illegals’ tasking: what were they really trying to do, and how? The overall instruction is to create convincing cover stories: but for what purpose? Heathfield is said to have tried to find out about America’s bunker-busting bombs. The complaint alludes indirectly to his attempts to befriend Leon Fuerth, a former senior administration official, and to contacts between ‘Cynthia Murphy’ and a Democratic Party bigwig (which I cover in more detail in the next chapter). The reader learns a lot – perhaps a surprising amount for those unused to the spy world – about the mechanics of spying: the cover stories, the foreign travel, the code words and the use of laptops. He learns very little about the substance.

  The official explanation is that the Russian illegals indeed failed to make any real headway in America. They consumed much of Moscow’s money and time, but succeeded only in infiltrating suburbia. A neat twist in this portrayal is that even this bit of the Russians’ mission looks unsuccessful. They may have deceived their neighbours, but from the very beginning they were under the eagle-eyed scrutiny of the FBI. Nobody in America needs to feel embarrassed, because no secrets were stolen. That is comforting but not wholly plausible. For a start, the idea that the FBI and its overseas partner agencies would manage (or want) to keep ten people, some of them seasoned intelligence officers, under constant surveillance in multiple countries for a period of many years is fanciful. Even for a well-funded US government agency, the cost in time and money would be colossal. More to the point, it would be risky: a small slip-up would set alarm bells ringing in Moscow and quite possibly lead to the quarry vanishing. It is more likely that only some were under long-term surveillance and that even this was not constant. It is probable that all ten came under complete observation only at the end.

  Establishing assets able to move easily in a hostile environment is in itself a major achievement for an intelligence service. Whether they were spotting potential recruitment targets, collecting information, or servicing other agents, the illegals’ activities cannot be regarded as harmless or benign. As I show later, even the junior Ms Chapman had previously helped out with a questionable money-transfer operation, involving apparent identity theft and other shenanigans. It is hard to believe that all her counterparts in America were less active. She and Mikhail Semenko were regularly conducting secret communications with Russian intelligence officers. It is unlikely that they were merely exchanging test transmissions or remarks about the weather.

  Another factor that may have sanitised the FBI’s account of the illegals’ activities is the political climate. Anybody who had fallen seriously into the clutches of one of these illegals would be unhappy to have the fact broadcast. Humiliating influential people by highlighting their cooperation with Russian espionage would be a mistake on almost any count. It would make unnecessary enemies – something that an agency with acute political antennae knows to avoid. It would raise the question of whether these individuals should be prosecuted, with all the embarrassment and unwelcome publicity involved. Nor would the FBI see any great need to make an example, assuming such people are dupes, not traitors. The Bureau could just identify the people acting as sources for the illegals and deliver a quiet but sorrowful warning, explaining that they were on a slippery slope that could have all too easily ended up in disgrace or jail. Such a conversation would almost certainly end with an admonition to discuss its content with nobody – a course of action strongly in the interests of both sides. In short: absence of evidence that the illegals were effective is not the same as evidence that they were not.

  A second political dimension is US–Russian relations. As noted earlier, for all its shortcomings, the ‘reset’ is one of the few bits of Mr Obama’s foreign policy to have shown any sign of success. Although the White House could not ignore the FBI’s evidence of extensive and potentially damaging Russian espionage, it would be quite natural for the country’s political leaders to try to limit the wider diplomatic fallout by presenting the illegals as more comic than sinister. Were the public to believe that the spies had done serious harm to the nation’s interests, it would be a lot harder to explain why senior figures
in the administration saw fit to hobnob so cordially with their Russian counterparts.

  For all these reasons, the illegals’ arrest was presented to avoid any great sense of alarm or urgency. The message from background briefings was of patronising sorrow rather than anger: it was a pity that Russia still felt the need to play these strange old-fashioned games, both because of what it said about the thinking in Moscow and also because these fossilised spies – sad relics of the old days of superpower rivalry – had achieved so little. Yet as I show in the next chapter, the illegals’ activity in America and elsewhere gives no grounds for such complacency.

  6

  Spies Like Us

  Gathered in the same room, Richard and Cynthia Murphy, Donald Heathfield and Anne Foley, Juan Lazaro, Vicky Peláez, Michael Zottoli and Patricia Mills, Mikhail Semenko and Anna Chapman would have seemed like a bunch of unremarkable Americans. They spoke English fluently, with varying accents; they had jobs ranging from the humdrum to the glamorous. Their neighbours and work colleagues noticed nothing extraordinary about them. But when they did meet for the first time, it was in a courtroom, shortly before their deportation to Russia. The ten were at the centre of the FBI’s most spectacular and successful counter-intelligence operation for decades: Operation Ghost Stories. According to the American authorities’ criminal complaints, they and persons unknown

  unlawfully, wilfully and knowingly, did combine, conspire, confederate, and agree together and with each other to commit an offense against the United States.

  It stated that the FBI’s investigation has revealed that

  a network of illegals is now living and operating in the United States in the service of one primary, long-term goal: to become sufficiently Americanized, such that they can gather information about the United States for Russia, and can successfully recruit sources who are in, or are able to infiltrate, United States policy-making circles.1

  Richard and Cynthia Murphy lived in the New York suburb of Montclair.2 She had two undergraduate degrees from New York University and an MBA from Columbia Business School, and she worked in a financial services firm in New York. Her stocky, bearded husband had studied economics at the New School in New York, where his heavy accent and gloomy manner aroused only mild curiosity. Nina Khrushcheva, his Soviet-born supervisor, was puzzled by his claim to be of Irish extraction; to her well-tuned ear he sounded ‘instantly Russian’.3 But America is built on the idea that people can reinvent themselves, shedding identities from the old world and adopting new ones. Murphy was no different. Nothing else he did seemed to arouse any interest at all. As far as any outsider could see his main job was caring for the couple’s young daughters Katie and Lisa, aged eleven and seven in June 2010. That was when their parents – real names Vladimir and Lidiya Guryev – were arrested.

  Murphy’s mission in America was unexciting, ferrying cash to other illegals. His wife had a more glamorous life at Morea Financial Services, a specialist tax firm dealing with the rich and famous. That was a perfect cover for her clandestine mission, to befriend wealthy Americans with political connections – including Alan Patricof, a close friend of Hillary Clinton. According to the criminal complaint issued by the Department of Justice, Mrs Murphy’s bosses in Moscow described Mr Patricof as:

  a very interesting ‘target’. Try to build up little by little relations with him moving beyond just [work]af framework. Maybe he can provide [MURPHY] with remarks re US foreign policy, ‘roumors’ [sic] about White House internal ‘kitchen’, invite her to venues (to [major political party HQ in NYC], for instance) etc. In short, consider carefully all options in regard to [financier].4

  Two more of the illegals were equally unremarkable. Michael Zottoli and Patricia Mills (real names Mikhail Kutsik and Natalya Pereverzeva) studied and worked in Seattle before moving to Arlington, Virginia. Their task, as reported by the FBI, was also little more than to ferry sums of money around between other agents. The supposedly Uruguayan-born Juan Lazaro (Mikhail Vasenkov) was a ‘bag man’ too, bringing money from an unnamed South American country to America, apparently in collaboration with his wife, a radical Peruvian journalist called Vicky Peláez. His illegal mission had started in 1976.5 It clearly included some spying, as this bugged exchange from 2003, involving his wife’s trip to an unnamed South American country, indicates.

  Lazaro: When you go . . . I am going to write in invisible [ink] and you’re going to pass them all of that in a book.

  Peláez: Oh, OK.

  Lazaro: I’m going to give you some blank pieces of paper and it will be there . . . about every thing I’ve done . . .6

  It is easy to mock the pointlessness of these people, apparently the least serious of the illegals, sent at vast trouble and expense to a foreign country in order to carry out tasks that most people manage with a mouse click. But it is not a laughing matter.7

  By far the most serious of the spies in terms of intellectual firepower and access to decision-makers in America and elsewhere was Andrei Bezrukov, who lived in Cambridge, Massachusetts under the alias of Donald Howard Heathfield, with his wife Yelena Vavilova (Tracey Lee Ann Foley). The elder of their two sons, Tim, was a student at Georgetown University in Washington, DC. Ms Foley was a real-estate broker. Her website carried convincing if fictional pabulum, describing her as:

  a native of Montreal [who] lived and was educated in Switzerland, Canada and France. Prior to her career in real estate she worked as a Human Resources officer in Toronto and ran her own travel agency in Cambridge, Massachusetts that specialised in organising trips to French wine regions for small groups of enthusiasts. Ann’s cultural awareness and international experience make her sensitive to the needs of other people. She strives for excellence in everything she does. Ann succeeds through her ability to ensure quality service, honesty and integrity. You will appreciate Ann’s enthusiasm and commitment to make sure that your real estate goal becomes a reality.

  Ann resides in Cambridge with her husband and two teenage sons. She and her family are fond of travel. They have enjoyed visiting much of Europe but are particularly in love with Asia. Ann also appreciates gourmet food, ballet and spending time with her children.8

  Her husband’s cover story was similar: bland and at least superficially convincing. Months after his deportation, his website www.futuremap.com was still promoting his consultancy firm’s expertise:

  Future Map Institute is [sic] global think-tank focusing on creating practical policy proposals (strategies) for dealing with most pressing problems. It collectively maps anticipated developments in a number of domains and tracks their evolution. The institute relies on the network of on-line collaborators and organises virtual conferences on critical issues.9

  Behind this waffle was a serious mission. Heathfield, in the view of American officials close to the case, was by far the most important of the spies they had under surveillance. His cover story gave him an entry into the highest levels of American business, academia and government, and a convincing reason for seeking the innermost thoughts of the people at the top of any organisation. For Heathfield’s career was only partly phoney. Although he used the stolen birth certificate of a Canadian baby who died in 1963, his qualifications were genuine. He had indeed studied international economics at York University in Toronto,10 earned a master’s degree in public administration from Harvard’s John F. Kennedy School and worked as a management consultant.

  His striking quality was blandness: not one of the dozen or so associates I have quizzed can remember a distinctive quirk, foible or habit that made him stand out. He was bilingual in French and English (although with a faint accent in both). He joined professional bodies on his own merits, and networked assiduously with alumni, colleagues and other business associates. For Heathfield did not just pretend to be a management expert: he actually became one. He is probably the only spy in history to write an academic paper as part of his cover story. It appears as a chapter in Scenarios for Success,11 a collection of papers originally presented
at a ‘Future Studies’ meeting in Oxford in 2005. One of the editors of the volume, Bill Sharpe, recalls a colleague ‘deeply involved in the subject’ and a friendly and collaborative editing process12 that mainly involved the ‘debranding’ of Heathfield’s work – in other words removing the frequent references to his trademarked ‘FutureMap’ decision-mapping software. Piquantly, Heathfield seems to have become rather fond of his assumed identity. ‘I know it was his cover but it bled through the surface and got into his soul,’ says a former associate.13 Since his return to Russia, he has tried to reknit the shreds of his reputation. His profile on LinkedIn, a business-networking site, has been updated with his new job, as an adviser to the chief executive of Rosneft, an oil company with close ties to the Kremlin.14 But it also gives a fragment of his real life: five years studying history at the Tomsk State University, from 1978 to 1983 (though what he did between graduating and appearing in Canada in 1992 remains a mystery).ag

  Aficionados of ‘Future Studies’ believe that it offers organisations useful tools for analysing the future. Critics dismiss it as ‘bullshitology’ – a caricature of management expertise, laden with buzzwords, clichés and impenetrable jargon, both sententious and unfalsifiable. But in a country like America where management expertise is a kind of lay priesthood, its practice gave Heathfield access to the secrets of the confessional. When Bill Sharpe heard of Heathfield’s arrest, he realised what ‘jolly good cover’ his contributor’s role would have been: