Good Hunting: An American Spymaster's Story (36 page)

When starting TAG, right away we had two important cases that helped get the operation up and running. One client was a multinational company that had been massively defrauded by local construction firms in Asia. For good reason, the client suspected that it was being undercut by a competitor in collusion with the local government. We uncovered, deciphered, and analyzed a raft of documentation and found evidence of fraud. Then we cultivated local sources who helped us understand the reputation and business practices of the construction firm. Our client filed a lawsuit, which was ultimately resolved in its favor.

The other was a sensitive case for a mining company with an extensive manufacturing operation in Asia. The client’s concern was that it had made a significant infrastructure investment in an area that had become embroiled in civil unrest—a local insurgency, labor strife, student revolutionaries, and unpredictable government rulings. Rather than pulling up stakes, the client had us use strategic intelligence to help it stay in front of events and respond quickly to the unexpected. We put together a network of people on the ground to monitor events and anticipate developments, then passed regular briefings through operatives in Manila and London to ensure operational security. The retainer was substantial in both these cases and allowed us to build our staff quickly.

Another early case that mostly featured Stanley’s talents involved his representation of the Russian-born banker Natasha Kagalovsky, who headed up the Eastern Europe Division at the Bank of New York and was one of the most prominent Western bankers in Moscow. The bank had placed her on leave on the grounds that the FBI suspected her involvement in a Russian money-laundering scheme. Although Kagalovsky was ultimately cleared of any wrongdoing, Stanley’s initial efforts to negotiate with the bank on her behalf were rebuffed. Looking to create some leverage, Stanley flew to Moscow to meet with a Russian human rights lawyer, who agreed to bring a case against the bank there. Once it was filed, Stanley held a press conference in Moscow with more than a hundred Russian journalists and said he was seeking justice for his client, who had been mistreated by the Bank of New York only because she was Russian. The Bank of New York settled with Kagalovsky shortly thereafter.

Less than a year later, in February 2001, I found myself reflecting on Russian counterintelligence yet again after the FBI discovered that one of its own agents, Robert Hanssen, was the second mole. I had known of a second mole during my final years at the Agency, and had carried this troubling secret with me when I walked out of headquarters. I’d felt a deep sense of regret that I hadn’t been able to help apprehend the traitor. All this came flooding back when FBI agents apprehended Hanssen at Foxstone Park in Vienna, Virginia, while trying to tape a garbage bag full of classified data to the underside of a footbridge. His only comment was, “What took you so long?”

Robert Hanssen became an FBI agent in 1976. Three years later he contacted the Soviet military service GRU for the first time and offered his services. He spent more than two decades as a spy for the Russians, working under the pseudonym Ramon Garcia. His relationship with Russian intelligence agencies shifted over the years among the GRU, the KGB, and its successor, the Federal Security Service of the Russian Federation (FSB) depending on his sense of a personal threat to his own well-being and his warped mental state. In the mid-1980s he became part of the FBI’s sensitive unit designed to identify Russian spies in the United States. It was an ideal spot for a mole.

During his time working with the Russians, Hanssen did immense damage to our national security. His treachery may have exceeded that of Aldrich Ames. He passed on the identities of our most valuable and sensitive Russian agents, including the CIA penetrators Valery Martynov and Sergei Motorin, who were unknown to Ames. All these agents were later executed. Hanssen also compromised sensitive MASINT (electronic intelligence).

One of Hanssen’s more aggressive acts was to compromise the FBI investigation into Felix Bloch, a seasoned State Department official who was under suspicion of being a Russian agent. Bloch had been spotted by French intelligence in 1989 passing material to a known KGB operative. Eight days after that pass, Hanssen alerted the KGB that the FBI was onto Bloch. The KGB officer told Bloch, “A contagious disease is suspected,” after which Bloch broke off all further contact with the Russians. While Bloch wasn’t prosecuted, the State Department fired him and denied him his pension.

Regrettably, by 1998 the FBI had come to believe that one of the CIA’s top-notch counterintelligence officers, Brian Kelley, was the Russian mole. Although I was abroad in the late 1990s and had no visibility into this investigation, it is my understanding that the FBI came to the conclusion that Kelley was one of very few people who could possibly have known about Bloch and the KGB meeting witnessed in France, and that therefore he must have been the one who leaked it to the Russians. For whatever reason, they never turned the mirror inward and looked at who at the Bureau might have known about it, even though by then Hanssen had raised a number of security flags that might have attracted suspicion. Kelley had worked for me earlier in his career. He was a stand-up officer and the last person one would have suspected of spying for the enemy. He had none of the security warts that Hanssen and Ames had. Nonetheless, the FBI put him and his family through the ringer during more than two years of surveillance, wiretaps, and interrogations. Kelley said that during one four-hour interrogation session in 1999, he told his FBI questioners, “Your facts are wrong. Your conclusions are wrong. Your underlying hypothesis is wrong”—to no avail. None of his colleagues who knew him well would have ever included Kelley on a suspect list, as officers had done with Ames.

Hanssen was eventually compromised in November of 2000 by one of the CIA’s Russian sources. While the file didn’t include his name, all the telltale indicators were there, including audio of a voice that the FBI agents were able to recognize as Hanssen’s. From that point forward, the Bureau undertook a very careful investigation of Hanssen, placing him under full-time surveillance. It even smartly had one of his FBI subordinates, Eric O’Neill, download information off Hanssen’s Palm PDA, which contained damning evidence of his espionage activities.

In July 2001, Hanssen pleaded guilty to fifteen counts of espionage-related charges and was sentenced to life in prison, where he remains today in Florence, Colorado. The supermax federal penitentiary where he serves his time is the most secure prison in the country, which houses the worst of the worst, including serial killers, Mafia and drug cartel heads, al-Qaeda members such as Zacarias Moussaoui and Umar Abdulmutallab, and domestic terrorists Terry Nichols and Ted Kaczynski. It is a fitting home for the perpetrator of the worst counterintelligence disaster in U.S. history.

When Hanssen’s life was investigated in great detail, the picture that surfaced was of a true oddball who had many traits similar to those of Ames, including being the son of a difficult father. Hanssen had a split personality that vacillated between religious zealotry and sexual deviation. Despite his professed religiosity, he had a quirky sex life, to say the least. He made it a regular practice to videotape his sexual activities with his wife, Bonnie, and proceeded to share them with his neighbor, eventually even transmitting these sex tapes via closed-circuit TV.

For his lifetime of spying for the Russians, Hanssen received only $1.4 million in blood money. While this is not an insignificant amount of money, its value is diminished considerably when you consider that it was spread out over approximately twenty years by his Russian employers. By all accounts, the money did not fundamentally change Hanssen’s middle-class lifestyle. If he had altered his behavior, it could have been a tip-off to his FBI colleagues. The limited role that money played in his actions is important to keep in mind when evaluating his motivation for betrayal. For Ames, deep psychological dysfunction was the real motivating factor. Both Ames and Hanssen had a deep-seated resentment of their superiors for not recognizing their misperceived brilliance and talent. This was the imperative behind Hanssen’s aberrant behavior. This powerful psychological issue, along with his distorted sense of self-importance and narcissism, drove him to become a highly damaging Russian mole against his own country. In its simplest form, it provided an opportunity for revenge and for inflating his ego. Interestingly enough, many of these same vulnerabilities are what CIA operatives look for in sizing up potential targets in foreign governments.

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Seven months after Hanssen’s arrest, with the business Stanley and I had created starting to take off, I set up a meeting with Ken Sagat, a talented lawyer and client with whom we had worked on a number of cases. It was September 11, 2001. As I arrived at our downtown meeting location in a taxi, I noticed a long line of Town Cars pulled to the side of the street, with drivers talking frantically on their cell phones. It was clear something troubling was happening. I asked my driver to turn on the radio, where it was reported that a Cessna aircraft had smashed into one of the World Trade Center’s Twin Towers. I was saddened by the inevitable loss of life, but I imagined a very different scenario than the one unfolding. If I had known it was a commercial aircraft, I would have drawn a very different conclusion. Sagat and I reflected on the tragedy and then headed to a nearby coffee shop to discuss a commercial matter in Brazil. We sat down next to a large glass window, one of the worst things you can do in a terrorist setting. Over the next hour, we were in an oblivious bubble as the second of the Twin Towers and then the Pentagon were struck by commercial aircraft. The day would end with four planes hijacked and nearly three thousand people killed in New York, Virginia, and Pennsylvania. We were finally shaken from our conversation when the South Tower collapsed in a thunderous cloud. Executives in expensive suits staggered into the coffee shop covered with dust from head to toe. All around were scenes of sheer terror. Then the second tower fell. It immediately was clear that this was a major terrorist event, and my mind went back to the fatwa that Bin Laden had put out in 1996. I couldn’t help wonder if this was his doing. I still did not know what specifically had happened, however. I spotted a bank of pay phones and placed a call to Pat, who told me about the horrific scenes she had just seen on TV. As I walked up the FDR Drive with thousands of other New Yorkers, looking over my shoulder to see those two buildings gone, I knew that life would never be the same for any of us. This event would have an enormous effect on the political, economic, and military life of our country. The full impact of September 11, and the actions taken in Iraq and Afghanistan, and all the actions taken here at home, will not be fully understood for generations to come.

At The Arkin Group, 9/11 and the subsequent mysterious anthrax attacks had a significant impact on our business. Up until then, our clients were mostly concerned about the risks they faced doing business overseas. Now these same clients were concerned about the risks to their companies and families right here in New York. Business continuity and emergency planning are typically the orphan children at the bottom of a corporate manager’s to-do list. For financial firms in particular, these issues were now front and center. Quickly we recruited a cutting-edge group of WMD and terrorism researchers and medical experts to help us respond to our clients’ concerns. Many of our clients, who could afford to hedge any risk, wanted to know what could be done. At their urging, we evaluated military-grade gas masks, hazmat suits, mail sanitizers, escape vehicles, and pop-up WMD shelters. We mapped out safe locations away from likely terrorist targets and put together a team that could detect biological, chemical, and radiation hazards at public events.

Perhaps our most important contribution to the safety of our clients, however, was to help them institute standard operating procedures so that managers were prepared to take control during a crisis. Much of this training was drawn from my Agency experience. When the H1N1 pandemic flu emerged with such rapidity and uncertainty, we had already helped several companies and law firms prepare for just such an eventuality.

In the immediate aftermath of 9/11, Paul Tudor Jones, the billionaire founder of the enormously successful Tudor Investment Corporation, hired us with a proposition that was difficult, to say the least: securing Madison Square Garden before, during, and after a benefit concert sponsored by his Robin Hood Foundation for 9/11 victims, first responders, and their families. The concert was to be held on October 20, and concerns about another terrorist incident were high. In addition to the World Trade Center attack, New Yorkers had been coping with a series of mysterious anthrax attacks starting on September 18. In his trademark take-the-bull-by-the-horns style, Jones asked if we could provide a system for monitoring the Garden for any traces of radiological, chemical, or biological material. A tall order at any time, it was especially so in the fall of 2001, before companies started to specialize in terrorism and WMD preparedness and response options for the private sector. Luckily, we worked with an extremely adept and well-connected British biomedical research scientist and physician with deep ties to government experts in chemical, biological, radiological, and nuclear (CBRN) detection. With his assistance, we brought in a government-level CBRN monitoring team to work with the professional Garden security team to inspect the heating and air-conditioning system and set up and man high-tech monitoring devices throughout the concert.

A year later, Paul Tudor Jones and Mark Dalton invited me to attend their management conference in the Bahamas to talk to their top investment team leaders about the situation in Afghanistan and the unfolding terrorist challenge. The presentation went well, and I was invited to join them in a game designed to test their strategy and risk management skills. As you might imagine, most of the successful people in this field make money for their investors by smartly developing risk management strategies for investments. As in the Agency, managers must decide on a moment-by-moment basis how much risk they can withstand to gain a meaningful reward. Also as in the Agency, they rely heavily on quality information to make this judgment call.