A Brief History of the Spy (18 page)

The article was yet another attack on the Agency, and prompted the formation of both a commission headed by Vice President Nelson Rockefeller and the United States Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities – chaired by Senator Frank Church, and known as the Church Committee. The headings of the latter’s final report give an indication of the concerns it
threw up: ‘(A) Violating and Ignoring the Law (B) Over-breadth of Domestic Intelligence Activity (C) Excessive Use of Intrusive Techniques (D) Using Covert Action to Disrupt and Discredit Domestic Groups (E) Political Abuse of Intelligence Information (F) Inadequate Controls on Dissemination and Retention (G) Deficiencies in Control and Accountability.’

While there were concerns that Senator Church was using the Committee to further his own political ends, it undeniably threw light on the CIA – as well as the FBI and the NSA – which the Agency didn’t want. For example, at the first televised hearing, Church displayed a CIA poison-dart gun as a way of illustrating the committee’s discovery that the CIA had directly violated a presidential order by maintaining stocks of shellfish toxin. Over the months it took evidence, many previously hidden CIA operations came to light – from the drug experiments of MKULTRA to the assassination plans against Castro and Patrice Lumumba; from the financial assistance for political parties in foreign countries to the support of indigenous populations during time of war.

Helms had been replaced as DCI by James Schlesinger, but Nixon soon tapped him to serve as Secretary of Defence. The attitude of his successor William Colby, was to reveal what needed to be revealed and create a working relationship with those who had been set up to monitor and investigate them. Unfortunately, there were those on all the various committees set up – as well as the Rockefeller Commission and the Church Committee, there was also the Pike Committee set up by the House of Representatives – who were determined to bring the various agencies to heel, and the hearings became power plays between the committee members, the CIA and even, at times, the White House.

Chairman Otis Pike did come out of the hearings with an improved respect for the CIA:

We did find evidence, upon evidence, upon evidence where the CIA said: ‘No, don’t do it.’ The State Department or the White House said, ‘We’re going to do it.’ The CIA was much more professional and had a far deeper reading on the down-the-road implications of some immediately popular act than the executive branch or administration officials. One thing I really disagreed with Church on was his characterization of the CIA as a ‘rogue elephant.’ The CIA never did anything the White House didn’t want. Sometimes they didn’t want to do what they did.

Colby was certain about the effect that the work of the various committees was having on the CIA: ‘These last two months have placed American intelligence in danger,’ he said in May 1975. ‘The almost hysterical excitement surrounding any news story mentioning CIA or referring even to a perfectly legitimate activity of CIA has raised a question whether secret intelligence operations can be conducted by the United States.’

The end result of the various committees was that the CIA came under increased government scrutiny, not just operationally but also in terms of its budget. Its days of plausible deniability and acting at one remove from the president were gone. Thirty years after its creation, with a new DCI, future US President George H.W. Bush, the CIA was forced into a new role.

In addition to the openness being imposed on it by demands from the oversight committees, the CIA also had to deal with information being revealed publicly by one of their own former officers. Philip Agee, who had left the Agency in 1969, published
Inside the Company: CIA Diary
, an exposé of CIA practices, in Britain in January 1975. Supported by the KGB, it named 200 officers worldwide, and accused the CIA of corrupt practices: ‘In the CIA we justified our penetration, disruption and sabotage of the left in Latin America – around
the world for that matter – because we felt morality changed on crossing national frontiers,’ Agee wrote. He added to his revelations in the extreme left-wing magazine
Counterspy
– and as a direct result, Richard S. Welch, the CIA station chief in Athens, was murdered in December 1975.

Agee willingly passed information to the KGB, who in return gave him more material: his books
Dirty Work: The CIA in Western Europe
and
Dirty Work: The CIA in Africa
, blowing the cover of a further 2,000 agents, were supplemented by the
Covert Action Information Bulletin
, which was able to publish secret CIA documents.

In 1980 the US Senate Intelligence Committee, set up in the wake of the Church and Pike committees, revealed how damaging Agee had been to the CIA. This led to the Intelligence Identities Protection Act (known as the ‘anti-Agee’ bill), which made it a federal crime to intentionally reveal the identity of a covert intelligence agent. (One of those who voted against the act was Barack Obama’s vice-president, Joe Biden.) This curtailed Agee’s activities considerably.

The general dismay within the Western intelligence world was not alleviated by the discovery of Gunther Guillaume at the heart of the West German government. The self-described ‘partisan for peace’ had become one of chancellor Willy Brandt’s most trusted aides following the 1972 election. Even though Guillaume came briefly under suspicion the following year, the charges weren’t taken seriously, particularly by Brandt, who later admitted he had overestimated his knowledge of human nature. Guillaume was able to pass over material sent to Brandt by President Nixon, as well as the many pieces of confidential NATO documentation that passed through the office. However, the West German counter-intelligence department was still suspicious, and in April 1974 Guillaume and his wife were arrested and admitted their guilt. Willy Brandt resigned the following month,
something that the Stasi didn’t really expect, or want, according to its former chief Markus Wolf. It was ‘equivalent to kicking a football into our own goal’ – a simile that could have applied to many other agencies’ activities during that period.

The late seventies would see both sides in the Cold War try to regain the ground that had been lost in the earlier part of the decade. New ideas were tried out, new agents recruited – although the KGB noted that it was much harder to gain ideological recruits during this time. The majority of agents were motivated by money.

One of the more unusual Soviet plans sought to gain intelligence on American military capabilities, but was derailed by the CIA’s Operation Silicon Valley. Unlike the KGB scheme to ruin the area as seen in the 1985 James Bond movie,
A View to a Kill
(in which Soviet agent Max Zorin attempted to flood Silicon Valley), this was espionage by stealth.

Described by the CIA later as ‘part of . . . a broad Soviet effort to acquire Western technology for military and commercial purposes’, the Soviet plan, developed in 1973, was to buy banks that were financing developments in Silicon Valley, the heartland of American technological progress, and thereby gain access to their secrets. Three banks were targeted to be
approached by their intermediary, apparently wealthy Hong Kong businessman Amos Dawe: the Peninsula National Bank in Burlingame, the First National Bank of Fresno, and the Tahoe National Bank in South Lake Tahoe. At the same time, Dawe’s associate Y.T. Chou was trying to gain a half-interest in the Camino California bank in San Francisco.

The manager of the Singapore branch of the Moscow Narodny bank offered to finance Dawe’s future plans if he would travel to the States to make the purchases. The KGB hoped to eventually gain control of twenty separate institutions, each worth around $100 million. The genius of the plan was that such a takeover wasn’t illegal at the time under American law – once the sale had taken place, Dawe could appoint whosoever he wished to be his representative on the board. And, of course, that would have been a KGB agent.

A $1.8 million first down payment on the triple transaction was made before an astute agent at the CIA noticed a peculiar lending pattern by the Narodny branch: money was going from Singapore to the Pacific Atlantic Bank in Panama, to the Commerce Union Bank in Nashville, Tennessee, and, finally, by letters of credit, to Dawe in San Francisco. Rather than simply expose Dawe’s actions, the CIA set up Operation Silicon Valley; in October 1975, the Agency leaked their information to the publisher of the Hong Kong financial newsletter,
Target
. As soon as the story was published, the Narodny bank withdrew its funds, leaving Dawe vulnerable and broke – and then the Soviets even tried to sue him for the return of the monies already supplied. Contrary to some reports, Dawe was eventually convicted of fraud in Hong Kong, and sentenced in 1985 to five years’ imprisonment, serving only half. He disappeared after his release and his Hong Kong company was compulsorily wound up in 2009.

Similarly motivated by greed was one half of a pair of spies who would gain notoriety under their code names, the Falcon and the Snowman, particularly after a film of their exploits
was made starring Timothy Hutton and Sean Penn as the eponymous KGB assets. Although the film was a fictionalized version of events, based on a book by journalist Robert Lindsey, many spy histories have treated it as a documentary.

‘The Falcon’ was Christopher John Boyce, who had taken up falconry as a hobby as a youngster; ‘the Snowman’ was Andrew Daulton Lee, whose nickname derived from his drug-dealing activities. While it was Boyce who found himself in a position to benefit the KGB, Lee was the one who walked into the Soviet embassy in Mexico City in April 1975 offering the secrets. The two had known each other since they were boys; Lee had drifted into drug-dealing while Boyce had been able to find a job working at the TRW Corporation in Redondo Beach, California. TRW had been at the forefront of development of America’s first Inter-Continental Ballistic Missiles, as well as the Pioneer spacecraft for NASA. At the time Boyce was employed there, they operated the satellites in the Defence Support Program, and Boyce worked in the ultra-secret ‘black vault’ room, which housed the coding equipment for the CIA, his job being to change the ciphers daily.

Boyce accordingly had access to some of the most secret material in America, including details of the Rhyolite satellite and its planned successor, Argus, an essential part of the surveillance of both the Soviet and Communist Chinese. He would also see other ‘chatter’, including information regarding the CIA’s alleged role in influencing the Australian labour unions against the then-prime minister Gough Whitlam. He therefore proposed to Lee that he would copy material which Lee could then take to the Soviets and sell – although Boyce would maintain that his primary purpose for his treason was his disgust at American behaviour: ‘I have no problems with the label traitor, if you qualify what it’s to,’ he told an Australian reporter in 1982. ‘I think that eventually the United States government is going to involve the world in the next
world war. And being a traitor to that, I have absolutely no problems with that whatsoever.’

Although appalled at the lack of sense demonstrated by Lee in coming direct to the highly watched embassy in Mexico, the KGB realized that they had access to prime material. Over the next eighteen months they not only provided Lee and Boyce with around $77,000 for their efforts (of which Boyce only received around $20,000), but also trained Lee in basic tradecraft. Unfortunately, Lee’s drug use increased with his available spending money, and he became more and more careless.

Boyce eventually travelled with Lee to Mexico, where their KGB handler proposed that Boyce leave TKW and go back to college, with a view to becoming a longer-term agent working for Moscow Centre. Boyce agreed to do one final job – photographing the technical drawings for TRW’s new satellite, the Pyramider. This would net a further $75,000.

Lee missed his rendezvous with the KGB on 5 January 1977, and, in total breach of all tradecraft and common sense once more, threw a package containing the negatives of the designs into the Soviet embassy grounds the next day. He was instantly arrested by the Mexican police, and the films were developed. Lee eventually admitted he was a spy, but claimed he was working on a disinformation operation for the CIA.

Boyce was arrested a few days later. The two men were tried separately; Boyce claimed that the material on Pyramider had been over-classified, since the project didn’t go ahead, and that Lee had blackmailed him into continuing with the treachery. He was found guilty and sentenced to forty years’ imprisonment. He would later escape and go on the run, allegedly planning to fly from Alaska into the Soviet Union, but he was recaptured before he could try. Lee’s lawyers maintained his story that he was part of a CIA disinformation plan, and that both he and Boyce had been abandoned by the Agency when they got into trouble. Lee was sentenced to life imprisonment.

*  *  *

As in Britain, during the seventies the KGB concentrated on scientific and technical espionage against the country they regarded as ‘The Main Adversary’ – the United States. Their attempts to penetrate the inner circles of the Nixon and Ford administrations met with little success, although Secretary of State Henry Kissinger was one of many policymakers to grant favoured access to Soviet ambassador Anatoli Dobrynin, much to the annoyance of the KGB, who wanted to cultivate their own ‘back door’ to the power players in Washington. They had slightly more luck with the United Nations, with KGB agents becoming personal assistants to the secretaries-general from U Thant to Javier Pérez de Cuéllar. However they had to admit in 1974 that ‘For a number of years the Residency has not been able to create an agent network capable of fulfilling the complex requirements of our intelligence work, especially against the US.’ When Jimmy Carter became president in 1977, attempts were made to capitalize on previous friendly relationships between Soviet officers and Secretary of State, Cyrus Vance, and National Security Advisor, Zbigniew Brzezinski. Neither succeeded. Valdik Enger and Rudolf Chernyaev, two KGB agents at the UN, were arrested by the FBI in May 1978 after accepting classified information about anti-submarine warfare from a US naval officer who was actually working for the FBI and the Naval Investigative Service (the forerunner of the NCIS, as featured in the popular TV show).