Circle of Treason (19 page)

This is perhaps a good juncture to describe the makeup of the components that were to be involved in the search for the solution to what had gone wrong in 1985, and to sketch the key players. The Soviet and East European Division had been headed by Burton Gerber since June
1984, when he succeeded Dave Forden. Gerber, a tall, black-haired craggy Midwesterner, knew he was in a serious business and took it seriously. He had a razor-sharp memory, followed all the events on his watch with a close eye, and, although he tried conscientiously, found it difficult to delegate authority. An SE professional, he had served as chief in Sofia, Bulgaria, and Moscow. Wolves were his avocation, and pictures and artifacts of them decorated his office.

Ken Wesolik was Burton's first deputy. A seasoned SE hand, he was slated for the Chief of Station, Moscow, position but had to bow out for health reasons and moved on to become head of the Directorate's Information Management staff. He was replaced by Milt Bearden in July 1985. Milt, though well liked at the time, was an outsider from Africa Division with no tours in the USSR or Eastern Europe. He was perhaps more suited to Third World derring-do than to trying to outwit the wily and experienced KGB. In any event, he stayed in the job only ten months, departing for Islamabad to take over the CIA's Afghan program in May 1986.

Paul Redmond was chief of the CI Group in SE Division. A Boston Irishman, Harvard graduate, and catalytic rather than analytic, he was full of energy, always eager to forge ahead, although not foolhardy. He was also dogged and impatient at the same time. Like most of his peers, he had served in Eastern Europe—in his case, as chief in Zagreb. Later, Redmond moved up to become deputy chief of SE.

The role of SE Division was to run operations against the Soviet and East European target, as earlier described. The counterintelligence component of the division ran selected operations involving Soviet intelligence officers, performed CI analysis of the division's operations, and produced CI reporting. The Division did not have any responsibility for investigating penetrations of the Agency, a function that was carried out by the CI staff and the Office of Security.

In 1985 the chief of the CI staff was David Blee. A Near East specialist, he had served for a term as chief of SE Division, and as associate deputy director for Operations. In the spring of 1985, Blee retired and was replaced by Gardner “Gus” Hathaway, who remained a central player for several years in the search for what had gone wrong. A courtly Virginia gentleman and a World War II combat veteran, having marched up from the south of France as part of the pincer movement in support of the
1944 D-day invasion, Hathaway was another SE professional. Like Gerber after him, he had served as chief of station, Moscow and as chief of SE Division. Hathaway, Gerber, and Redmond are the three senior officers who were closest to the hunt for the mole, and who cared most about catching him. Redmond has received proper recognition for his contribution but, sadly, Hathaway and Gerber have been overlooked.

The Office of Security also did its part. While we in the CI staff primarily took an analytical approach, Security carried out investigations, commencing with people who had served in Moscow. Ray Reardon, who had a broader outlook than many of his colleagues in Security and who later became deputy chief of that component, was in charge of this effort. Among the officers who worked for Reardon was a young man named Dan Payne, who will play a major role in this story.

FIRST ATTEMPTS

N
OW THAT MOST OF THOSE
who were privy to the information about the lost cases were convinced that, whatever its nature, something was seriously wrong, the question was: What should we do about it? Defensively, the answer was to institute, in Redmond's phrase, draconian compartmentation. This was the inception of what became known as the “back room.” It was necessitated by the appearance of a new Soviet source in January 1986 and Gerber's personal crusade that this one be kept alive. Because one of the theories was that we had a mole in our midst, knowledge of the new asset's existence was limited to a select few. Another prominent theory was that our communications had been compromised, so the decision was made to handle him without recourse to any of our electronic links. Dick C, an experienced SE officer who, like many others who appear in this story, had served in Moscow and spoke Russian, traveled indirectly from Washington to the new source's location, transiting several countries en route and using various methods of transportation. Dick never appeared at the local U.S. embassy and any required field support was handled by a single officer from the CIA station in that country, who met him briefly in some secure location. After meetings with the asset in a safe house, Dick returned to his hotel room, where he transferred his written notes to a laptop computer and then encrypted them. Following completion of each meeting schedule, Dick returned to Washington, where the reporting was decrypted.

Offensively, it was decided to undertake two probes. In the first, Milt Bearden went to Nairobi and proudly reported back through our communications channels that he had recruited a specific KGB officer. Actually, he had done nothing of the kind. The reporting was a test of the security of our communications, the thought being that if the KGB was reading them, the KGB officer would be sent home in short order. Nothing of that nature happened. He remained in Nairobi for another year or two.

A similar probe of our communications involved Moscow. Barry Royden, deputy chief of the CI staff, went to Moscow to brief COS Murat N that he would be getting a cable to the effect that we had recruited a named KGB officer in Bangkok. The cable duly arrived in Moscow Station after Royden's trip. Again the information was not true. The outcome was the same as the Nairobi probe. The KGB officer remained in place for a substantial period.

In mid-January 1986 a seeming breakthrough occurred. A self-declared KGB officer volunteered to CIA via a letter to one of our officers in Bonn. This volunteer, who never had a formal CIA cryptonym but who was referred to as Mister X, told us that we had a mole in our communications component, which was located outside the Washington area. He further conveyed the news that Gennadiy Grigoryevich Varenik had been caught because his father found his spy gear. Through the summer of 1986 Mister X sent us a total of six letters, four of which repeated the theme that we should be looking to our communications component for the source of our compromises. In response to his request we dead-dropped considerable sums of money to him in East Germany.

This case was handled like the other 1986 European volunteer case. When the first cable came in announcing this supposed breakthrough, Redmond got on a plane, flew to Europe, and then, in the interests of speed, took a long-distance—and highly expensive—taxi ride. He wanted to prevent any possible follow-up electronic communications. From then on the case was handled without cable traffic and was subject to further compartmentation.

Eventually it was concluded that Mister X did not exist, and that the letters had been a KGB attempt to deceive us. If so, the answer to our problems was not to be found in our separately located communications component, but we were no closer to determining where it might be.

While Mister X was peddling his bogus reporting, we continued to learn of the compromise of our operations. In late January 1986, a GTABSORB shipment was opened by customs officials in the USSR. GTABSORB was a clever CIA technical operation involving the shipment of containers shaped as flowerpots on the Trans-Siberian railroad. Concealed in the containers were sensors that allowed us to monitor nuclear activity.

On 10 March 1986, Moscow Station officer Mike Sellers was ambushed trying to meet Sergey Vorontsov. Vorontsov, an officer in the KGB's Moscow City Directorate, had volunteered to us in 1984.

Two months later, on 7 May, Moscow Station officer Erik Sites was ambushed trying to meet with GTEASTBOUND, an engineer from Novosibirsk. At the time, we considered that GTEASTBOUND was a bona fide case, and we included it in our analysis. Later, however, we came to the conclusion that it had been a dangle to our station and never valid at all.

Meanwhile, on 4 April, Sergey Mikhaylovich Motorin, the KGB covert action specialist who had been assigned to Washington, DC, until January 1985, called his girlfriend at the Soviet embassy. This indicated to us that he was not compromised. It was a rare piece of good news. In October, however, we learned that both Motorin and Valeriy Fedorovich Martynov, the KGB scientific and technical officer who was being run jointly with the FBI, had been arrested some months before. Motorin's calls to his girlfriend were presumably made under KGB duress to mislead us.

While some prior attempts had been made to determine what was wrong, it was not until late October 1986 that the first organized efforts were undertaken. Jeanne returned from her tour in Libreville to work for Gus Hathaway, then-chief of the CI staff. Hathaway was in charge of the investigation and he appointed Jeanne as chief of the small group that would be carrying out the analytical work. The unit was entitled the Special Task Force, CI/STF for short.

Gus chose Ben Pepper, a retired SE operations officer who had been chief of SE's counterintelligence component in the late 1970s; Dan N, another retired officer, who had vast experience in the CI staff; and Fran Smith, who transferred from her job as chief of the branch in SE Division that ran our operations inside the Soviet Union. Ben had a wealth of
historical knowledge of SE operations and their counterintelligence ramifications but he was somewhat out of date and had to do some extensive reading to become current. The same was true for Dan, whose area of expertise was China. Fran was the best prepared, possessing up-to-date and in-depth familiarity with the operations that SE had been running in recent years.

When Jeanne arrived in the CI staff, she was shown to her office, just a few doors away from where Gus sat. The office contained an empty safe, a desk and chair, and a manual typewriter. The manual typewriter was explained by the fact that David Blee, the previous chief of the CI staff, had disliked and distrusted computers, and did not want them around. (Blee also had a problem dealing with women, and never gave them an even break. Among a number of others, Jeanne and Sandy were subjected to his discriminatory treatment. Both took it with amusement or a shrug of the shoulders because by the 1980s it was obvious he was out of step with the times.) Gus was a more open-minded person and, when asked, readily agreed to provide a stand-alone computer for the unit. Thanks to him, we were able to carry out the first computer-assisted counterintelligence investigation in CIA history.

The first order of business was a review of the files on the cases that had been, or at least might have been, compromised. This was a labor-intensive process, for two reasons. First, it was SE's policy to document its cases in minute detail. This meant that there could be ten, fifteen, or more thickly packed file folders for each case. Secondly, we did not know what we were looking for. We took copious notes, and prepared individual chronologies, including every fact that we thought might be useful in an investigation.

Jeanne's job was to enter all of this material into a computer database. She devised one that eventually had some forty-eight fields, including the obvious ones such as name of the asset, date the case began, date it ended (insofar as we could determine it), places where operational activity took place, names of case officers involved, units providing technical support, whether the case was known to other organizations in the intelligence community, whether it was known to any friendly liaison services, whether any compromising materials had passed through our pouch system, and so forth. Deliberately, we made this database as broad-ranging as
possible. Thus we also included cases that, as far as we knew, were experiencing no problems.

While we tried to cover everything, we made at least one error of omission—we did not enter the type of currency used to pay each asset. Only later did it occur to us that rubles were not a convertible currency, and had to be obtained clandestinely. It was possible that the rubles could be tagged in some way and the chain of acquisition contaminated. Once we realized this, we had to go back through all the files to determine who had been paid in rubles and who had not. This was of no investigative use in the long run, but it is an example of how our time was consumed.

In the meantime, Ray Reardon's group in the Office of Security was starting some investigative work. First they compiled a list of every CIA employee who had resigned, retired, or died in the 1985–86 period. This was in support of the theory that the KGB would not have been so quick to roll up the compromised cases if they had a goose who was continuing to lay golden eggs for them. On the other hand, if they had received their information as a one-time shot, perhaps from someone who was no longer in a position of access, they would be less hesitant. The list was scoured in an effort to determine if any of the individuals on it were likely to have been in positions that would have given them access to the compromised cases. This venture did not lead to any useful outcome. It was just one of those things that had to be done.