Circle of Treason (16 page)

Vasilyev provided a variety of intelligence to the CIA. However, because communications with him were difficult and infrequent, we did not always understand the nature of his access nor do we have a clear view of his motivation. Among the most significant items he passed were copies of top secret documents emanating from the U.S. Army in Germany. Since 1978 the CIA had been aware, from East European sources, that there was massive leakage from U.S. forces in Germany to the Hungarians, but our sources' reporting was oral. The anecdotal and somewhat vague information had duly been passed to our military counterintelligence and to the FBI. An investigation had been opened but had not borne fruit. Now we had the actual documents, and they were chilling; they outlined in detail what the Western response would be to a Soviet invasion. Vasilyev had no idea who the source of the top secret documents was, but he knew that Hungarian military intelligence immediately passed the documents to the GRU in Budapest, that the GRU had them flown to its headquarters in Moscow on a priority basis, and that the GRU was footing the bill for the operation.

In brief, the information provided by Vasilyev dealt the final blow to the espionage activities of former U.S. Army sergeant Clyde Conrad and his partners in crime. Conrad was arrested in Germany, where he had retired, in August 1988 thanks to cooperation between U.S. military
counterintelligence and the German criminal police. He was tried in a German court in early 1990 and sentenced to life in prison. This case, probably because it was run by East Europeans and not by the Soviet Union, has never received the attention it deserves. As former CIA Associate Deputy Director for Operations (ADDO)/CI Paul Redmond is fond of remarking, if there had been a hot war we would have lost because Conrad had compromised all the plans for the defense of Western Europe.
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Vasilyev was compromised in two stages. His first betrayer was Edward Lee Howard. According to Yurchenko, during Howard's first meeting with the KGB, which took place in Vienna probably in late 1984, he reported on an unnamed “angry colonel” who was being run by the CIA in Budapest. Howard was accurate in that Vasilyev had complained angrily about the way we were handling him. Whether Howard was under the misapprehension that Vasilyev was from the KGB, or whether the KGB made an unwarranted assumption, is unknown. In any event, this report unleashed an investigation of all the KGB colonels in Budapest, of which there were several. As far as we know, no special attention was paid to GRU colonels. And, as it happened, Vasilyev had already left for a new post in Moscow by the time the investigation got under way.

The reporting from Ames was much more definitive. Ames would have had his facts straight because much of this case was handled by SE CI, where he worked, and he would have had access to the cable traffic. One of his subordinates had been responsible for the translation of the written messages we exchanged with Vasilyev. The most probable date for Ames' initial betrayal of Vasilyev is 13 June 1985. However, according to everything we have heard, Vasilyev was not arrested until early June 1986. Like others, he was subsequently tried and executed.

Much has been made of the one-year gap between Ames' reporting on Vasilyev and his arrest. When he left for Moscow, Vasilyev had a detailed plan for internal communications, which he began to implement. In August 1985, when we had the benefit of Yurchenko's reporting and when we began to realize that we were having other difficulties in our Soviet operations, a debate opened as to whether we should continue to receive materials from Vasilyev. However, after receiving our green light, on 11 December he dropped a package to us. This was our last contact with him.

There are some, for instance the interagency Ames Damage Assessment Team convened after Ames' 1994 arrest, who have concluded that the documents in this package were manufactured by the KGB to mislead us as to Vasilyev's well-being and continued access. To be sure, as described elsewhere in this book, the KGB undoubtedly did undertake such deception operations. However, this package contained valuable intelligence covering a broad range of topics and emanating from a variety of Soviet official institutions. It was not CI-related and did not contain any material that would mislead us in our investigations.

Some will say that it would have been impossible for Vasilyev, who had been compromised several months earlier, to put down a genuine drop without being observed and arrested by the KGB. Yet even the KGB had its limitations. Because of reporting from Howard, Ames, and Hanssen, they were forced to open perhaps as many as twenty espionage investigations against U.S. penetrations of their country's secrets. Resources must have been strained to the limit. Furthermore, they would have had to establish some sort of priority list. In retrospect, we can see that the highest priority was given to our KGB and GRU assets abroad, who were out of their control. It was necessary to lure them back to the Soviet Union, so they could be arrested, and this had to be done using various believable pretexts. If the KGB had started mass arrests in Moscow, our assets abroad would presumably have learned of these actions and asked us to arrange their orderly defections. Only when the KGB's first priority task was accomplished, which happened in mid-November with the orchestrated departure of Varenik from Germany, could it start giving undivided attention to the second priority—persons inside the Soviet Union who had some means of communicating with us. Vasilyev belonged in this group.

By way of comparison, when the FBI opened its full-scale investigation of Rick Ames in the spring of 1993, this was the major undertaking of the Washington Metropolitan Field Office and much of the local FBI's resources were allocated to it. Yet the FBI did not surveil Ames twenty-four hours a day, seven days a week. First of all, surveilling a trained intelligence officer is no easy job. If the suspect, because of his training and experience, detects that he is under surveillance, he might flee the country. At best, he might just cease any operational activity. Obviously, the FBI did not want this to happen, so they hung back at times, depending
on telephone coverage to keep abreast of Ames' comings and goings. They made one mistake, however. On 7 September the surveillance team deployed to Ames' residence early in the morning as usual. However, when they got there shortly after 6:30, they saw that Ames' car was sitting in the driveway instead of the garage. They deduced that he had gone out, and they were right. It was later ascertained that he had signaled to his KGB handlers by making a chalk mark on a mailbox. Later that day they lost him again for an hour when their radio system broke down. We do not find it surprising that the Moscow KGB, with all the investigations being handled, might have had the same sort of problems and limitations that the Washington FBI did.

Gennadiy Aleksandrovich Smetanin, a GRU officer under military attaché cover in Lisbon, Portugal, volunteered to the CIA in late 1983. He was handled by our Lisbon office, which had personal meetings with him under the guise of tennis dates. There are two unusual aspects to this case. First of all, it is a rare example of a spouse also cooperating with the CIA. Mrs. Smetanin, who worked in the consular section of the Soviet embassy, did not have access to real state secrets but she shared with us the information that came across her desk. She also participated in at least one meeting with her husband's CIA handlers.

The second unusual aspect of the case involves the polygraph. It was not customary to polygraph our Soviet assets. However, early in our relationship with Smetanin he demanded the sum of $330,000 saying that he had embezzled it from GRU funds in Lisbon. (As an aside, neither Sandy nor Jeanne was around when that happened. Both were very familiar with GRU regulations and practices, and knew that it was totally unlikely that the GRU would have anywhere near that amount of cash locally. Only a few years earlier, Polyakov's large residency had a limit of $10,000.) Anyway, this was during the Casey era. He was consulted and decided that Smetanin could have the money if he passed a polygraph. A polygrapher was duly summoned to Lisbon, Smetanin submitted to the examination, the polygrapher was satisfied with the results, and Smetanin got his money.
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Sad to say, Smetanin's request for a large sum was just his way of testing us. He never spent the bulk of the money.

In the summer of 1985 Smetanin and his wife were due for a normal home leave. He was supposed to meet his handler in Lisbon on 4 October, after his return, but never showed up. According to stories we heard later, he was arrested as he was about to take the train back to Portugal. As was the norm, he was tried and executed. His wife was sentenced to five years in prison. His downfall is directly attributable to Ames, who knew the case well and compromised it in the “big dump.”

Ames did not confine his identification of American assets simply to those recruited and handled by the CIA. Two important FBI sources in Washington, DC, were also among those he chose to sacrifice. According to his own statements, in June 1985 he informed the KGB that Valeriy Fedorovich Martynov, a KGB scientific and technical officer, and Sergey Mikhaylovich Motorin, a KGB political intelligence officer who was an “active measures” specialist, were spying for the Americans. (Active measures is the Russian term for what is called covert action in the West, and entails, among other things, disseminating rumors and lies designed to discredit or disrupt governments and individuals hostile to the USSR.) Approximately four months later, in October 1985, Ames' reporting on Martynov and Motorin was confirmed by a write-in to the Soviet embassy in Washington, DC—FBI Special Agent Robert Hanssen.

Martynov arrived in the United States in the fall of 1980, assigned to the cover position of an embassy third secretary. A year or two after his arrival he caught the attention of a CIA case officer working in the Agency's Washington field office. The case officer had met Martynov at a series of scientific presentations and immediately concluded that he was far from the typical standoffish, stern-faced Russian diplomat serving on the territory of the Main Enemy. Quite the contrary—he was affable, self-confident, and socially comfortable among strangers. The case officer felt he deserved further attention from U.S. intelligence.

The CIA case officer's assessment was provided to officials in the newly created FBI/CIA joint operations unit known as COURTSHIP, one of whom was Diana Worthen, a major player in the future Ames investigation. Martynov became one of the unit's primary targets and after approximately a year of pursuit he was recruited as a penetration of the KGB.

Code-named GTGENTILE by CIA and PIMENTA by the FBI, Martynov was handled jointly by the two services. (As an aside, the FBI chose the code name PIMENTA in honor of Ben Pepper, a CIA officer who had been a driving force in setting up the joint unit.) His FBI case officer was Jim Holt, who six years later would join the CIA/FBI task force to search for the answer to the compromise of his agent as well as others. Martynov's CIA case officer was Rod Carlson, a senior officer with a great deal of experience working against the Soviet target. As we explain later in this book, Carlson later became Ames' chief when Ames was assigned as Soviet branch chief in SE Division's CI Group, a position that allowed Ames access to and intimate knowledge of the sources he would later betray, obviously including Carlson's.

Holt and Carlson met with Martynov twice a month for the next three years, during which time he provided information on the residency's scientific and technical officers, including their activities and targets, and identified other members of the local KGB contingent. In his book
Spy Handler
, Viktor Ivanovich Cherkashin, KGB CI chief in Washington at the time and the individual to whom both Ames and Hanssen volunteered, stated that Martynov turned out to be the mole he began looking for in 1984. Early in that year Cherkashin began to conclude that someone in the residency was telling the FBI who was KGB and who was not. He based his conclusion on his analysis of FBI radio intercepts, which showed that the FBI had changed its surveillance patterns and was following only KGB officers, allowing non-intelligence officials to go about their business without coverage. To Cherkashin's irritation, KGB higherups found his analysis unconvincing.
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