Deception

by Edward Lucas

  recalls Mr Bearden bleakly.12 Clearly the Kremlin had no desire and little ability to attack the West. It had wound down its involvement in regional conflicts in Latin America, Africa, Afghanistan and the Far East, and was making great efforts to bury past enmities. Particularly in France, Germany and the United States, some political leaders saw their spy services as a troublesome legacy of the bad old days. Friendly countries should not spy on each other, particularly if they wanted to stay friends. The cloaks and daggers belonged in the cupboard. The KGB’s aggressive behaviour was simply mirroring the similarly cowboyish behaviour of the Western agencies.

  This was a Panglossian approach. Soviet spying continued up to the moment that the USSR collapsed and carried on almost unbroken under the Russian flag. Even in the depths of the collapse, the SVR (as the First Chief Directorate of the KGB was renamed in December 1991) was preparing a new echelon of agents. In May 1992, two Russian illegals were arrested in Finland carrying British passports in the names of James Peatfield and Anna Marie Nemeth (two real people who were bewildered to find their identities being used in this way). The couple’s true names were Igor and Natalya Lyuskova, and they were apparently on a training assignment. Under political pressure, SIS and its Finnish counterparts downplayed the affair. Later that year, ‘Heathfield’ arrived in Canada to start his bogus studies. The most longstanding of the illegals caught in 2010, the ‘Uruguayan’ Juan Lazaro, had moved to New York in 1985, for a mission that began almost simultaneously with Mr Gorbachev’s reforms. Even more worrying for the West would have been the knowledge of the human time-bombs left behind by the KGB in the territory that it appeared to be vacating. As the empire retreated, it safeguarded copies of its most valuable asset: the secret police files showing past collaboration.

  Few worried about that in the hectic late 1980s and early 1990s. What kept the spies in business was instability. No sooner had Western leaders grasped that the new rulers in Moscow were friendly than they worried about their fragile grip on power. From its start in 1986 to its end in 1999, the era of openness in Moscow always looked temporary. Western politicians feared a coup, clampdown or electoral reverse that could put an authoritarian regime back in power (though when this turn of events actually came about, with the rise of Mr Putin and the Siloviki, politicians stubbornly ignored their intelligence services’ warnings).

  Some canny Western intelligence analysts had long noticed the growing resentment of Russian chauvinism and raised the unfashionable possibility that ‘nationalities’ might be the regime’s Achilles heel.13 That notion turned from academic theory to red-hot reality as the Baltic independence movements (and their counterparts in the Caucasus, Central Asia, Moldova and Ukraine) stirred from the shadows in the mid 1980s. But having once tried to subvert communism and free the captive nations, the West’s political leadership were unhappy when the supposedly longed-for day loomed close. It seemed much wiser to prop up the Soviet empire for the sake of stability. Analysts who trumpeted the joyful news of the impending collapse found themselves cold-shouldered. For a generation reared on the idea that the Soviet Union was a geopolitical fixture, it was also hard to grasp that its component parts were becoming countries in their own right. Though the Baltics had been countries at least in living memory, others, such as Georgia, had been off the map for most of the century and some Soviet republics – such as giant, oil-rich Kazakhstan – had never been states at all. Similar worries applied to the new Russian Federation after 1991. Would it stay together, or disintegrate under the continuing strains of economic hardship and ethno-nationalist ambition?

  The great fear for the West was of a Yugoslav-style conflagration. That country – another seemingly permanent entity – began its descent into war in 1991 in a botched but largely bloodless attempt to prevent Slovenian independence. Later, around 140,000 people were to die, with more than 4m displaced (I am glad that Dušan, Olgica’s uncle in Oxford, did not live to see it).14 A similar conflict in the former Soviet space would not only be bigger, but could involve nuclear weapons. According to the conventional wisdom of the time, radical nationalist politicians were pushing too hard and too fast for independence. An outbreak of chaos or bloodshed might give hardliners in Moscow an excuse to declare martial law and end the reform experiment. For countries neighbouring the Soviet Union, another nightmare was of a lawless, poverty-stricken conflict zone, bringing refugees, terrorism and extremism into the tranquil world that they had preserved throughout the Cold War. ‘There are no good outcomes to this,’ a Finnish official told me glumly in Helsinki in 1991 as I arrived to spread the joyful news of the impending end of the Soviet occupation of the Baltic states.

  But from an operational point of view, the disintegration of central power was an enormous bonus. The Baltics in particular were a spies’ sweetshop: accessible, target-rich and friendly. After decades when every trip across the Soviet frontier involved elaborate preparation, now all one needed to do was to hop onto a ferry from Helsinki or Stockholm. Within a few hours the foreign visitor could be in a bar near a military base, buying drinks for disgruntled officers and sounding out their availability for some lucrative ‘freelance research work’ for a ‘consultancy’. The spooks were so thick on the ground that their presence in the early 1990s was all too conspicuous. I remember a bunch of crew-cut Americans claiming to be ‘television researchers’ working on a film about the natural history of the Baltic coast. As a nature-loving former BBC correspondent, I was delighted at the chance of some informed discussion, only to find out that their ignorance of broadcasting was matched only by their indifference to singing swans and other fauna (though they certainly knew the topography of the coastline). Much of this happened under the noses of the nominal authorities, which although pro-Western, had neither the capability nor the interest to deal with foreign intelligence services. A delegation of top Estonian officials driving back from Leningrad in 1990 stopped at a roadhouse for refreshments and was surprised to see a group of taciturn and muscular German-speaking men, in military haircuts and jump suits, accompanying a truck headed in the same direction. Nobody in the Estonian government had any idea about these visitors’ presence or mission, and no explanation was forthcoming.

  That was soon to change. In early 1992 Estonia set up a spy agency specifically designed to work closely with SIS. Its origins were humble: three young men – a lawyer, a final-year history student and a computer programmer – none of them with any experience of intelligence work, sitting in a small office with a pile of spy books from the library. Their mandate was to build the agency from scratch, without the slightest involvement from anyone connected even tangentially with the KGB. They soon realised that Estonia had a big asset: a ready supply of well-educated and patriotic young men and women who knew the Soviet system from the inside. Once trained as intelligence officers, these people could conduct operations in Russia and other ex-Soviet countries far more easily than any Westerner. They would understand whom to target and how to approach them; they understood everything from body language to security procedures. Their Russian language skills were at a level that few Westerners could ever hope to reach.

  It was one thing to recruit such people, another to train them. How were they to learn the advanced spycraft needed to operate effectively? Generating that kind of expertise internally needed scale and time. Estonia was small and in a desperate hurry. The result, in September 1992, was an intelligence classic: a typed ten-page document in a buff-brown folder, with flow diagrams hand-drawn neatly between the paragraphs.15 Its key points included checks and balances, parliamentary oversight, compartmentalisation of operations, a ban on the use of intelligence for domestic political purposes, and the avoidance of an ‘information monopoly’. Spying and spycatching would be separated. And having analysed the other options, it said that cooperation with British intelligence was vital. Past blunders were put aside: the distant shadow of Operation Jungle seemed trivial against the task in hand. ‘I was not particularly interested
in these historical questions,’ says one of the authors. ‘What was the alternative?’ asks another official of that era. ‘The Finns? Too untrustworthy. The Swedes? Too soft. The Americans? Too bossy. The French? Too alien. The Germans? Screwed up here already. It had to be the British’.16

  The opening question from their first MI6 visitor to his young Estonian hosts was: ‘Are you legal?’ The British wanted to make sure that they were dealing with a properly constituted government agency, not an enthusiastic bunch of cowboys. What followed was a leap of faith in a normally cautious world. The British decided, in effect, to ‘adopt’ the newly formed Teabeamet (Information Board), and create a close partnership on the lines of those that existed with the ‘Anglosphere’ countries such as Canada or New Zealand. At a time when most of the world was still trying to find the Baltic states on the map, the first Estonian intelligence officers were starting accelerated training at Fort Monckton. The experiment was a resounding success. The baby spies soon became the darlings of the grizzled veterans of British intelligence.

  Russia’s spymasters regarded the new developments with intense suspicion. Estonian spies were brazenly approaching any official with saleable secrets, and often walking off with precious pieces of military technology from under the noses of their ill-paid and under-motivated guardians. In the late summer of 1994 Russia delivered what it believed was a severe warning to the Estonian authorities to stop assisting Western special services in stealing military secrets. For the Russians the warning was unambiguous. Passed through diplomatic channels they expected it to be acted on at the highest level. But on the Estonian side it was taken merely as a bit of routine grumbling. The message was not heeded – and possibly never even received in the right quarters. In 2005 a belated Estonian parliamentary inquiry concluded:

  Russian equipment was of potential interest to foreign intelligence authorities of various foreign countries and other special services and representatives of private capital military industry companies, possibly for the purpose of industrial espionage. The Committee reached the conclusion that Estonia might have procured . . . special equipment or high technology of the Russian army, which was of great interest to the intelligence services of various countries.

  According to the report, this included:

  space electronics, high technology directing and surveillance devices (like underwater radio buoys, radars), as well as anti-aircraft complexes . . . and electronic control systems . . . In one concrete case, Estonian military intelligence was officially offered for sale a device of Russian space electronics that enabled military reconnaissance with infra-red cameras . . . In the beginning of the 1990s also other military technology was available in Estonia, like night vision devices for military use. In the opinion of a specialist of Estonian special services it could have been possible that in the first half of the 1990s also the so-called nuclear briefcases were taken out of Russia . . .17

  The reason for this remarkable glimpse into Western intelligence activity in Estonia was a tragic one. On 28 September 1994 a civilian ferry, the MV Estonia, sank to the bottom of the Baltic Sea during an overnight trip to Stockholm, killing 852 passengers. The vessel was sloppily maintained, poorly loaded, and heading into heavy seas for which it had not been designed. But on two occasions in previous weeks, on September 14 and 21, the same boat had been used to carry ex-Soviet military equipment to Sweden, under the auspices of MUST, the Swedish defence intelligence service, which was working closely with SIS and the CIA.18

  At the time officials pooh-poohed speculation linking the tragedy with any cargo on board. A strange report from a Russian group calling itself ‘Felix’ claimed that the captain had stopped in mid voyage and opened the bow doors in order to try to send a lorry carrying contraband (cobalt and heroin) to the bottom of the sea in order to avoid an impending customs search in Sweden.19 That appears to have been pure disinformation. But the idea that Estonia helped the West obtain Soviet technology was not a surprising one. Much of it was on semi-public sale in Russia anyway. As an editor of a Tallinn-based newspaper at the time, I was certainly aware of the trade.20 However I assumed that the spies in charge of such operations, presumably wily and expert, would use some form of secure and discreet transport – perhaps a private plane or boat. It never crossed my mind that such sensitive cargos would be transported on a civilian ferry.

  The puzzling loose ends from the tragedy were partly tied together in 2005 when a Swedish customs official claimed that the shipments of classified material in the weeks before the sinking had indeed taken place under a special arrangement with the defence authorities. Rather shamefacedly, the Swedish authorities confirmed this, claiming that the operation had been authorised by an Estonian official whose name they had forgotten. Some intelligence sources say that the GRU indeed planted a bomb on a lorry carrying stolen Russian military technology on the fatal night. The aim was not to sink the vessel, but to cause a scandal that might stop future operations. By a savage fluke, the explosion on the lorry led to the failure of the Estonia’s poorly maintained bow doors. Roll-on, roll-off ferries are inherently dangerous: water in the car decks can quickly render them unstable and prone to capsize very fast. As the water poured in, the ferry listed, turned over and sank, leaving most of the passengers with no time to get to the inadequate lifeboats.

  Whatever the cause of the inrush of water, the investigation of the sinking was not a high point for transparency.21 Official diving expeditions at the wreck suggest an unusual degree of interest in a disaster that supposedly stemmed solely from mechanical failure. Independent attempts to investigate the wreck have been shooed away: it is now out-of-bounds as a marine mass grave, thanks to an international agreement signed (interestingly) by the United Kingdom (which had only one citizen perishing in the accident) as well as by Sweden, Finland, Estonia, Poland, Denmark and Russia. Neither Norway (six dead) nor Latvia (seventeen) signed the treaty. Survivors and the victims’ families remain suspicious that they were the collateral damage in a war of nerves between Russia and the West. Limited forensic tests conducted by outsiders have failed to prove any explosion conclusively. Though I am sceptical of conspiracy theories, the official explanation of simple mechanical failure does not fully convince me. If foul play was involved, blame would lie first and foremost with those who placed a bomb on a passenger ferry. Yet at a minimum, the proven fact that ferry passengers were repeatedly used, in effect, as human shields for spy games deserves forthright criticism. A lot more people died in the Estonia than in Operation Jungle.

  11

  The Traitor’s Tale

  In the chaotic conditions of the former Soviet Union in the early 1990s, Herman Simm was a reassuringly solid figure. In January 1967 he had taken the standard pledge of the Soviet police force, ‘I, a citizen of the USSR, hereby taking the oath of the Soviet Militsiya, do solemnly swear that I will serve faithfully to the end the Soviet people, Soviet homeland and Soviet government.’ Since then he had a stellar record of competence and hard work. He had forty-four awards, including three medals for exemplary behaviour. At a time when brusque Soviet official manners still plagued public service, he was polite and pleasant. As well as Estonian and Russian, he spoke excellent German with smatterings of other languages. Unlike many officials from the old days, he counted as a patriot. As head of security at Toompea Castle, the country’s seat of government, he had masterminded its defence against an assault by pro-Kremlin demonstrators on 15 May 1990 – the closest Estonia came to an armed clash during its struggle to regain independence. By his account, if the defence failed he stood ready to escort the country’s then prime minister, Edgar Savisaar, through a secret tunnel to the town below, where a speedboat would whisk him to safety in Finland. Later he claims to have ferried Estonia’s hard-currency reserves in suitcases to safety in Helsinki for the nascent central bank, forestalling a possible Soviet attempt to seize them.1

  After independence was restored in August 1991 Simm moved onwards and upwards, becomin
g in early 1993 the regional police chief in Harju County, the area around the capital, Tallinn. That was one of the hottest beats in Estonian policing: as well as dealing with endemic organised crime, toxic waste spills and smuggling, his patch included a Soviet nuclear submarine training base at Paldiski, which was still out of the control of the Estonian authorities and had become a magnet for organised crime. Simm supervised the withdrawal of Soviet nuclear fuel elements and the handover to the constitutional authorities. Two months later, he became the top police officer for the whole country, where he showed a courtier-like ability to ingratiate himself with the powerful and the up-and-coming. In interviews with dozens of former associates, the adjective that comes up repeatedly is ‘helpful’. One not particularly close colleague was startled when Simm, having learned of his upcoming wedding, offered the services of a patrol car and two police officers to direct the traffic and organise parking.

  In 1995, Simm moved to the Defence Ministry, initially to a low-key job as head of the analysis bureau, where he stood out as an efficient bureaucrat. The then Defence Minister, Andrus Öövel, said proudly that hiring a former police chief for the young ministry was like ‘winning the lottery’.2 Few worried when Simm then added to his portfolio the handling of classified documents. It was an unpopular job: Estonia was plagued by scandals involving missing, supposedly secret, papers. Too many items were classified and the rules for safeguarding them were onerous and badly drafted. Simm’s bureaucratic habits, honed in the Soviet era, helped him sort out the chaotic paper flows inside a still half-baked bureaucracy. Estonia’s foreign friends, keen to see order prevail over chaos, quickly talent-spotted the new official as someone worth cultivating. Britain’s government (noting that his orientation was more towards Germany and Finland than to the Anglophone world) paid for him first to learn English at an intensive course at the Foreign Office language school and then to study security policy and practice at Chicksands in Bedfordshire, the citadel of Britain’s Defence Intelligence Service.3 On his return, he was a natural choice to oversee the ministry’s move to NATO’s security standards. His efforts received high marks: drills and tests showed Estonia’s ability to handle secrets to be first class – and indeed better than in some old members of NATO.