Spies: The Rise and Fall of the KGB in America (66 page)

Once reactivated, Wheeler again demonstrated his worth. One June
1945 report noted, "In accordance with instructions, `Izra' is constantly
working to uncover specific OSS agents." Wheeler exposed a number of
OSS agents working covertly in Soviet-controlled territory. A spring 1945
report from Gorsky stated:

"`Izra' [Wheeler] spoke with Lieutenant of airborne troops Bookbinder ...
who works in `Cabin's' [OSS's] secret intelligence division. From the conversation, he found out that Bookbinder had just returned from a secret mission
across Russian lines in Germany. He and his group (a major and a captain)
stayed in Berlin, visited a calculating machine factory contacted the wife of
the factory director, and supposedly set up an informing network to report on
any movement of equipment by Sov. agencies.

The factory is located in the city of Spandau-a center of heavy industry.
According to B., the director has been working for an Am. company for many
years. This trip took place around May zznd. B. said that he also set up an informing network in Plosht, where he had gone the day before the Russians arrived. He made a similar illegal trip to Transylvania accompanied by Robert
Wolff, who works in the balance division of Cabin's research and analysis department. B. speaks fluent Russian, knows a little German, and speaks English
well, though with a Jewish accent." (Detailed description of Bookbinder's distinguishing marks, including a large ring on the middle finger of his left hand.
The ring is made of gold with a blue semi-transparent stone.)

In June Wheeler exposed another clandestine American agent to the
KGB: ""Izra' discovered that Wayne Voosling, a correspondent for `Life'
magazine, is an OSS agent. `Izra' got a look at a cover letter addressed to
the OSS from Voosling, which was attached."' In addition to outing
American intelligence officers and foreign sources, Wheeler also reported on internal disagreements within the government about policies in the
military government occupational administration for Germany.37

Responding to President Truman's decision to abolish the OSS in the
fall of 1945, Gorsky cabled Moscow that he had

instructed the agents to stay in Cabin [OSS] for now and to transfer onto the
staff of the org. that is being created in its place. Such a directive was given to
Izra [Wheeler] in particular. I. ["Izra"] was in complete agreement with it but
said that any vetting prior to his joining the new intel. org. could uncover his
past. At pres., all the functions and affairs of the division where I. and "Akr"
[unidentified] work are being taken over by Bank [State Department], and its
employees are being individually selected to work in Bank. Akr hopes he will
be admitted to Bank. Izra can't say anything for certain yet but hopes that in
October his position will become clear.38

Wheeler successfully made the transition, and by November he was
installed at the State Department as part of the Interim Research and
Intelligence Service (IRIS). He provided the KGB with his assessment of
the new organization's prospects, noting that it was in a difficult administrative and bureaucratic position, having lost its military personnel and
facing hostility from State Department veterans who resented the new organization injected into their midst. Despite these problems Wheeler
continued to supply documents, sending the OSS's final reports on events
in the USSR, correspondence between OSS officers in Germany and
Washington, and State Department evaluations of the Middle East situ-
ation.39

Wheeler also stole reports from the joint Technical Intelligence Subcommittee, which coordinated Army, Navy, and Air Force technical intelligence efforts. Leonid Kvasnikov offered his colleagues a positive evaluation of Wheeler's material:

"I am sending you an assessment of the following materials: i. Report of the
Joint Technical Intelligence Subcommittee of Amer. Military Intelligence,
`German guided missiles.' Source "Izra" [Wheeler], mailing No. 17 of 1945.
Material is of interest. z. Report of the Joint Technical Intelligence Subcommittee of Amer. Mil. Intelligence, `Description of the German X-4 rocket.'
Source "Izra," mailing No. 17 of 1945. Material is of interest. 3. Report of the
Joint Tech. Intelligence Subcommittee of Amer. Mil. Intelligence, `On soundabsorbent submarine hulls.' Source "Izra," mailing No. 16 from 1945. Material
is valuable. 4. Report of the Joint Technical Intelligence Subcommittee of
Amer. Mil. Intelligence `On trends in the design of German tanks.' Source
"Izra," mailing No. 16 from 1945. Material is of info. interest."40

But the good times came to an end. Reacting to Igor Gouzenko's defection, General Fitin ordered the American station in October 1945 to
"safeguard from failure" five of its most valuable sources-Donald
Maclean, Harold Glasser, Victor Perlo, Charles Kramer, and Donald
Wheeler-by reducing "meetings with them to once or twice a month."
Then the KGB learned in November that Elizabeth Bentley had defected
and named Wheeler to the FBI. His days as a Soviet source and government employee were over. He left the State Department in June 1946. In
the face of several subpoenas from federal grand juries and the House
Committee on Un-American Activities, Wheeler refused to answer questions, invoking his Fifth Amendment rights. He settled his family on a dairy
farm in Sequim, Washington, and became a leader in the local Communist
Party. He later earned a doctorate at Oxford, taught at Canadian and American universities, and remained a devoted Communist until his death in
2002. He never spoke candidly of his work for Soviet intelligence.41

In the 1930s Maurice Halperin was a Latin American specialist at the
University of Oklahoma and at some point secretly joined the Communist Party. Although he kept his party membership secret, Halperin was
a highly visible champion of far left political causes. With Communists
coming under public opprobrium over the Nazi-Soviet Pact, he got into
trouble in 1940. Although he vigorously denied CPUSA membership, the
Oklahoma legislature pushed for his dismissal. The university's president,
however, believed Halperin and arranged a paid year-long sabbatical,
after which Halperin resigned and joined the Office of the Coordinator
of Information's research department. After the United States entered
the war, the agency divided, and Halperin became head of the Latin
American division of the OSS's Research and Analysis Branch.42

Halperin first made contact with the Washington party underground
through Bruce Minton, who worked as a talent spotter and agent handler for Jacob Golos. Golos agreed that Halperin was a promising new
source and sent Elizabeth Bentley to contact him and eventually receive
material he passed along. Moscow Center, however, was disappointed
with the limited quantity of information Halperin supplied during 1942:
"`Hare [Halperin] promised to compile for "Sound" [Gobs] weekly summary reports of materials accessible to him. Since then, however, we have
received only two brief reports of little value, whereas you emphasized
that he has access to all the materials coming in to the "Cabin" [OSS].
Have you given him any specific assignments? Why didn't "Hare" indicate from which sources he obtained the information about the German offensive that is being prepared against Vologda?"' By early 1943, Moscow
Center allowed that Halperin was finally providing "`some interesting information"' but continued to think the volume "`stingy and sporadic"'
and urged the New York station to "`show the appropriate persistence'
in pushing Halperin to deliver more.43

Whether it was the station's persistence or some other factor, Halperin's
productivity accelerated. Twenty-two KGB cables, spanning June 1943 to
September 1944, show him delivering OSS reports and American diplomatic cables that ranged far beyond his area of responsibility at the agency.
Halperin handed over U.S. diplomatic cables regarding Turkey's policies toward Rumania, State Department instructions to the American ambassador in Spain, U.S. embassy reports about Morocco, dispatches from Ambassador John Winant in London about the stance of the Polish exile
government toward negotiations with Stalin, reports on the U.S. relationship
with various exile French groups, accounts of peace feelers from dissident
Germans being passed on by the Vatican, U.S. perceptions of Tito's activities in Yugoslavia, and discussions between the Greek government and the
United States regarding Soviet ambitions in the Balkans.44

As the KGB began to professionalize Golos's operations after his
death, Halperin was one of the first of his sources removed from Bentley's control. By 1944 Joseph Katz had become his supervisor. When he
wrote an account of his years as station chief in America, Zarubin characterized Halperin positively as having "`provided interesting, sometimes
documented information.' "45

Moscow Center ordered contact cut with Halperin as soon as it heard
that Bentley had defected. By that time the OSS had dissolved, but
Halperin had managed to transfer into the State Department. He resigned in 1946 and emphatically denied to the FBI that he was a Communist, had ever met Bentley, or had any contact with Soviet intelligence.
Halperin was able to ride out the initial storm after Bentley's public testimony in 1948, but in 1953, while he was serving as head of Boston University's Latin American studies program, the Senate Internal Security
Subcommittee called him to testify. He took the Fifth Amendment and,
at first, refused to answer questions put to him by a university committee. After agreeing to a compromise in which he assured Boston University that he was not a Communist, Halperin abruptly left for Mexico when
the justice Department released an FBI report that described him as a
Soviet spy. When he refused to return, he was fired. Initially Halperin
remained in Mexico, but by 1956 he became nervous that the United
States government might extradite him. A KGB memo stated: "`He gave us valuable information, which he personally dictated to "Myrna" [Bentley] at their meetings. After M.'s betrayal he fled to Mexico. On 20.03.56
Halperin officially applied to our emb. in Mexico for citizenship and permanent residence in the USSR. Department 1 of the PGU [First Chief
Directorate, the KGB's foreign intelligence arm] gave instructions to handle the matter officially through the MID [Ministry of Foreign Affairs].
There was no supervision on our part. We need to find out ... what the
Halperins' situation is and make an offer for the H's to move to the
USSR."' Halperin moved to Moscow in 1958 and was given an academic
post. But he did not find Soviet life to his taste and decamped to Communist Cuba in 1962. By 1967, disillusioned with Castro-style communism as well, he accepted a teaching job in Canada, where he remained
until his death. Later in his life Halperin became critical of communism
but never admitted to his cooperation with Soviet intelligence.46

Duncan Lee was descended from the Lees of Virginia. His father was an
Episcopalian priest, former missionary to China, and rector at Chatham
Hall, an elite girl's school in Virginia. Duncan attended the prestigious St.
Alban's preparatory school in Washington, went to Yale, played football,
and graduated first in his class in 1935. He then went to Oxford as a Rhodes
scholar, returned to Yale to get a law degree, and in 1939 joined the Wall
Street firm of Donovan, Leisure, Newton and Lumbard. In 1942 he joined
the Office of Strategic Services, headed by William Donovan, the senior
partner of his law firm. Elizabeth Bentley described Lee's cooperation with
Soviet intelligence in detail in her 1945 FBI deposition and testified publicly about it in 1948. Lee also testified, did not resort to the Fifth Amendment, and firmly denied the charges, stating emphatically that he was not
and had never been a Communist and had known Bentley only as a social
acquaintance he had met through his friend Mary Price.47

The FBI, however, did not credit the story Lee had earlier told when
it interviewed him in 1947. Lee admitted meeting with Bentley and Golos
privately on a number of occasions over a period of two years, both in
Washington and during trips to New York. But, he insisted, he had known
Bentley only as "Helen," had never known her last name, and knew nothing of her activities. Lee also said he had known Golos only as Helen's
friend "John." Nor did the FBI believe that an OSS lieutenant colonel
engaged in intelligence work in wartime would meet someone privately
over two years without learning her full name or occupation. (When Lee
testified to the House Committee on Un-American Activities a year later, he did not advance the claim that he had never known Bentley's name.)
Lee also told the FBI he was a New Deal liberal and had no links to the
Communist Party. The FBI agents conducting the interview noted: "At
the outset of the interview Lee appeared to be visibly shaken and extremely nervous. After talking for approximately an hour, he became calm
and stopped trembling. His shaking was so noticeable at the outset of the
interview that it was noted he had difficulty in lighting a cigarette." FBI
investigations also turned up his active role in various Communist-led organizations, including service on the executive board of the China Aid
Council, a group supporting the Chinese Communist Party and headed
by Mildred Price, Mary Price's sister and a secret Communist. The question of Lee's cooperation with Soviet intelligence ended in the mid-199os
with the release of the Venona decryptions; nine of the deciphered KGB
cables confirmed Lee's cooperation with Soviet intelligence.4s

New KGB documents fill in missing parts and provide more detail of
Lee's role in Soviet espionage. The FBI was convinced that Lee was a Communist but unsure if he had joined when at Oxford in the mid-1930s or in
1939 while attending Yale Law School. A 1942 memo on Lee prepared by
Jacob Golos stated, "He joined the party in 1939, while he was at Yale University. His wife joined the party around the same time." Bentley told the
FBI that during her period of contact Lee had provided verbal briefings
and avoided delivering documents and that his production was episodic
and the information sometimes vague. Although she recalled few details,
she stated that from time to time his information was of value. During the
period when Bentley was his primary liaison, KGB documents confirm,
Lee generally avoided providing documents; although he did so on a few
occasions, his delivery was irregular, and the quality varied from useful to
materials that were often, in the view of Moscow Center analysts, "`not
specific enough and have no value."' He passed along reports on the OSS's
relationship with Polish intelligence, discussions between the American
and Chinese ambassadors in Moscow, discussions between the American
ambassador in London and Polish leader Wladyslaw Sikorski, and OSS reports on internal Bulgarian politics. Reviewing the first quarter of 1944, a
KGB Moscow officer commented on Lee's productivity: