The Billion Dollar Spy: A True Story of Cold War Espionage and Betrayal (6 page)

On February 3, the man appeared again. This time, he approached Fulton’s car on a street very close to the embassy at 7:00 p.m., after dark. Fulton happened at that moment to be sitting in his car with the engine running. There was a Soviet militia post nearby, but the car was obscured by a high snowbank along the street. The man’s face appeared at the driver’s side window, and he tapped on it. When Fulton rolled down the window, the man dropped a note into the car. He then turned and left. No one was following him.

The note again proposed a signal and a meeting. The man said the signal should be delivered on the next evening, by parking the car on a nearby street. Fulton sent a cable to headquarters, saying the man’s motives were “still not clear,” so he did not respond.

Two weeks later, on February 17, Fulton left the embassy around 6:45 p.m. and, as he approached his car, noticed the man leave a phone booth that was nestled in the shadows of an apartment building, about thirty feet away. Fulton was climbing into the car when the man approached him.

“What do you want?” Fulton asked.

The man said he wanted to give Fulton another note. He tossed a folded letter into the car, turned on his heel, and quickly left. Fulton saw no one around, got in his car, and calmly drove home. He saw no one following him.

When he opened the letter, Fulton found four handwritten pages. He sent a rough translation to headquarters the next morning. The man wrote that he realized why his repeated requests were being ignored. “My activities may have brought suspicion,” he said, adding that he understood full well the CIA was fearful of being trapped by the KGB. But, the man added, if he had wanted to do that, he could have done so already. This was not his intent or his method. “I’m an engineer and not a specialist in secret matters,” he said, promising to provide more information about himself to dispel the mistrust but urging the CIA to handle his next message very carefully. “I work in a closed enterprise,” he said, which meant a secret Soviet facility, probably related to defense or military work. In order to pass notes, the man wrote, he had been waiting for hours at more than one location to find just the right moment, a time-consuming and stressful vigil. He implored the CIA to make it easier and to show up for his next note on the following Friday.

Fulton asked CIA headquarters for permission to go ahead. He was impressed by the man’s tenacity. He told headquarters that the risk wasn’t great to park his car on the street and wait for the man to thrust an envelope through the window. The man “has essentially already done this twice,” he said, and the KGB could have ambushed them earlier if they had wanted to.

Fulton realized there would be doubts at headquarters. They might well ask, wasn’t it rather unlikely that a Russian man in Moscow, without any help at all, would have singled out the CIA’s station chief to deliver a note? At the time of the first note in January, the United States had just expelled a KGB officer at the United Nations—could this be the setup for retaliation? Still, something about the man led Fulton to think he was genuine. Fulton told headquarters he believed the man had chosen him by coincidence at the diplomatic gas station and probably memorized the car’s license number, and thus it was “not unusual” that he would continue to seek him out. Fulton said he would “under no circumstances” proceed to other sites that could be a trap.
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Headquarters was wary and told Fulton not to give the man a signal.

Just a few months later, in May 1977, the man approached Fulton for the fourth time. He had been hiding in a phone booth near Fulton’s car and was carrying a package. Fulton saw KGB guards nearby, so he did not take the package.

The man banged on Fulton’s car to get his attention.

Fulton ignored him, as headquarters instructed.
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By the summer, Fulton’s tour was over. The new chief of the Moscow station was Gardner “Gus” Hathaway, who brought a different style. He had grown up in southern Virginia and never lost his slight accent, with its gentle rolling
r
’s, or his gentleman’s manners, which combined with a powerful sense of mission. Hathaway, fifty-three years old, served in Berlin for the CIA in the late 1950s and later in Latin America and had a hard-charging way about him, a zeal for operations.

All through the spring and early summer of 1977, the Moscow station struggled with setbacks in the Ogorodnik case. A hollow log was left for him in February, but he did not show up. He emplaced a dead drop on schedule in April, but when the station’s technical officers opened it, they concluded it was put together by someone else. His photography, usually perfect, seemed careless.

Hathaway wanted to recontact Ogorodnik and get the operation back on track. The CIA sent the agent a message by a coded shortwave radio broadcast, instructing him to leave a signal with a small red mark on a “Children Crossing” traffic sign if he was ready for another dead drop.

Early on the morning of July 15, 1977, Peterson drove by the sign, and the mark was there, but something didn’t look right. It was bold, cherry red, as if it had been deliberately stenciled. A real agent doesn’t have time to
stencil
a signal like that. She went to the station and told the others what she had seen. The signal was there, yes, but it seemed odd. Peterson suggested that someone else place the next drop. She had a knot in her stomach. The stenciled mark should have made Hathaway more cautious, but it didn’t. He was eager to keep going.

That day, Peterson worked her usual day hours at her cover job. At 6:00 p.m., she went to the station and reviewed the operations plan at the small conference table in Hathaway’s office. Then she went home, changed into comfortable clothes, a summer blouse and platform sandals, and pulled back her hair, streaked with blond. She would never look like a Russian, but she wanted to blend in as much as possible. She attached a tiny CIA radio receiver that detected KGB transmissions to her bra with Velcro. She connected the neck loop antenna and then inserted a very small wireless earpiece, entirely concealed by her hair.

By car, she went on a long, winding surveillance detection run around town, designed to flush out any KGB monitors. She parked her car, entered the subway, changed at three stations, and exited at the sports stadium just as a crowd was leaving a soccer game. She slipped into the crowd, finally arriving at the site for the dead drop, located in a small stone tower on a railroad bridge spanning the Moscow River.

She walked up forty stairs to a point on the bridge where she had left packages for Ogorodnik before. In her bag was a piece of crumbly black asphalt that had a hidden compartment inside holding messages and a miniature camera for Ogorodnik. At 10:15 p.m., barely dusk in Moscow during the summer, Peterson left the chunk of black asphalt in a narrow square window in the stone tower of the bridge, pushing it exactly one arm’s length from the edge. She began to descend the steps when she saw three men in white shirts rushing toward her. She had nowhere to escape and wasn’t about to jump into the river. Grabbed by the men, she felt a jolt of anger that it was the KGB. A van pulled up, and more men clambered out. Peterson kicked one of them hard, but they restrained her. A KGB officer began to take flash pictures. Then, groping her, they discovered the radio receiver but didn’t know how to peel apart the Velcro. Next, they produced the black asphalt chunk they found in the tower. Peterson insisted, loudly, that she was an American citizen, they should call the embassy, they could not detain her. “Let me go!” she shouted. One of the KGB men said, “Please keep your voice down.” Peterson kept repeating the embassy phone number. Finally, they got the radio receiver off the bra and found the neck loop. However, they never discovered the small wireless earpiece.

Peterson was taken to KGB headquarters, the Lubyanka, and interrogated. She had a sinking feeling when they brought out the asphalt chunk, removed the four reverse-threaded screws, took off the lid to the hidden cavity, and emptied it in front of her, a technician pulling out each item as the interrogator watched. There was a message for Ogorodnik imprinted in tiny letters on 35 mm film, contact lenses and fluid, rolls of tightly wound rubles, and emerald jewelry. When the big black fountain pen was pulled out, the chief interrogator sharply instructed the technician to put it down and not touch it. His tone suggested that he was aware of the cyanide capsule the CIA had given to Ogorodnik. In fact, Peterson knew this pen concealed a camera, not the cyanide capsule, but she realized very quickly, by the interrogator’s manner, that Ogorodnik had been caught.

She was released later that night, the usual procedure in espionage arrests. The embassy’s consular affairs officer came to get her. His eyes were wide with disbelief; he thought she had been a bureaucrat, not a case officer on the streets. The consular affairs officer drove her to the embassy, and Peterson went immediately to the Moscow station, knowing that shortly she would be declared persona non grata in the Soviet Union. Over the next few hours, well past midnight, sitting in the middle of the station, she recounted the events, sometimes with profanity, as her colleagues listened, and one of them took notes for a cable back to headquarters. The cable was sent out at 3:30 a.m. Moscow time.

Sad, exhausted, and uncertain about how Ogorodnik had been discovered, Peterson had little sleep before she flew out of Moscow the next day, Saturday, July 16.

At headquarters, it was a crushing blow. Ogorodnik was a prized agent, the first to show the Angleton years had finally been left behind. He had been lost, and no one knew why. James Olson, a case officer, recalled the scene at headquarters soon after word reached the Soviet desk. “The entire USSR desk, from the lowest clerk to the crusty old chief, were all crying,” Olson remembered. “It was because we lost
trigon
. We knew
trigon
was gone.”
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Peterson later learned that Ogorodnik had been arrested at his apartment. He was stripped to his underwear. Knowing the KGB would be eager to learn every detail of his work with the CIA, he offered to write a confession. They handed him his pen, and he bit down on the barrel with the cyanide capsule inside. He died on the spot, before the KGB could learn any more.
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O
n the long trip home, Marti Peterson struggled with the unanswered questions. She didn’t know why the case had fallen apart. Her surveillance detection run had been long and thorough, and she had seen no signs of the KGB, yet they were lying in wait at the bridge. Even after they grabbed her, they still didn’t know she was CIA; she had eluded them for two years. So how did they figure out the precise time and place for the dead drop? Was there a slipup? Was there surveillance she didn’t see? A communications leak? Did Ogorodnik make a mistake? Or something worse?
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Peterson left Moscow quickly in the clothes she was wearing the night of the ambush. In Washington, she bought a new dress. On Monday, July 18, less than seventy-two hours after the debacle in Moscow, she walked up the steps to the main entrance of CIA headquarters at Langley. In her new identification photograph taken that morning, she is smiling, a bit hesitantly, her eyes clear and bright. The debriefings revived the same questions she had asked herself about Ogorodnik’s missed meetings, the deteriorating quality of his photographs, the inexplicable events in the forest, and the woman with the ponytail. Then, in a corridor at headquarters, she saw Fulton, her mentor, for the first time since he had left the Moscow station. They embraced and fought back tears, no words to speak the sorrow they felt.

On the seventh floor of CIA headquarters, Peterson entered the large office suite of Admiral Stansfield Turner, the new director of central intelligence, who after four months in the job was still finding his way. Turner had a very forceful public presence, but in private he was cordial and reserved. He sat down at the head of a long conference table, dismissed the CIA officer who had brought Peterson, and motioned to her to take a chair at his right. After she recounted everything that had happened, Turner asked her to accompany him to meet President Jimmy Carter at his regular briefing the next day. There would only be nine or ten minutes to tell her story.

On Tuesday, they entered the Oval Office. On the coffee table in front of Carter, Peterson placed a replica of the black asphalt chunk used to hold the secret messages for Ogorodnik and the CIA’s site sketches, to help illustrate what happened. The president was engrossed by her account. At one point, the national security adviser, Zbigniew Brzezinski, spoke up, filling in details, such as the name of the agent, Ogorodnik, and the name of the Moscow railroad bridge where she had been ambushed. Brzezinski, whose father had been a Polish aristocrat and diplomat in the anticommunist Polish government before World War II, devoted his career as a professor to chronicling the decline of Soviet communism. He knew perhaps better than anyone in the room how valuable and unusual this spy had been. “I greatly admire your courage,” Brzezinski told Peterson as she was leaving. Ten minutes had stretched to more than twenty. Peterson left the Oval Office alone and had to ask a White House secretary how to find her way out to the street. Later that day, Turner sent her a breezy, handwritten thank-you note. “You are the only person who has stood face-to-face with the KGB and the President of the United States all within three days,” he said. “I admire and congratulate you.”

But privately, Turner was brooding about her expulsion. The events in Moscow meant something was wrong.

Stansfield Turner grew up in Highland Park, Illinois, an affluent small town on the lakeshore north of Chicago with stately homes and tree-lined streets. His father, Oliver, was a self-made businessman who filled the house with books. His mother drilled into him values of honesty and integrity. Turner became an Eagle Scout and president of his high school class, went on to Amherst College, and, after a lobbying campaign by his father, won admission to the U.S. Naval Academy. When he graduated in June 1946, Turner stood at 25th in a class of 841. He was at the top of the class in aptitude for service—qualities of leadership, integrity, reliability, and other traits of a superior officer. But Turner chafed at the academy’s courses, heavily oriented toward engineering, seamanship, and science. His interests ran far beyond. Rather than plunge immediately into a navy career, Turner won a prestigious Rhodes Scholarship to Oxford University, where he studied politics, philosophy, and economics.
2

On returning to the navy, Turner went to sea on destroyers but was impatient with the minutiae of shipboard life. He wanted to think big and be at the center of change. In the 1950s, he was selected by a new chief of naval operations, Arleigh Burke, to put together a group of junior officers to tell Burke what was wrong with the navy and how to fix it, an assignment Turner found exhilarating. Then Turner was selected to work with the whiz kids under Robert McNamara in the 1960s, when systems analysis was all the rage. When Admiral Elmo Zumwalt became the new chief of naval operations in 1970, he put Turner in charge of new initiatives in his first sixty days. Through it all, Turner became convinced the military was hidebound and desperately needed new thinking. He once used systems analysis to study naval minesweeping and showed how it could be done better and faster from a helicopter than from a ship. Yet Turner’s zeal for change often ran headlong into inertia, especially in the Vietnam War years, when military morale and discipline were sapped by defeat and a loss of support at home. Appointed commander of the Naval War College in 1972, Turner seized the opportunity to overhaul the curriculum, making it more rigorous and demanding. Through all his assignments, he preached the virtues of discipline and accountability.

Turner’s class at the U.S. Naval Academy included a somewhat shy and skinny fellow from a backwater peanut farm in Georgia, Jimmy Carter, who also applied for a Rhodes Scholarship but did not get it. Carter stood at fifty-ninth in the class. Carter and Turner did not know each other then. Carter went on to become a nuclear submariner, farmer, and governor of Georgia. In 1973, Turner invited Carter to speak at the war college and was impressed. The following year, in October 1974, they met again at Carter’s offices in Atlanta. Carter fired rapid questions at Turner for half an hour about the state of the U.S. military and the navy. When it was over, Carter said, “By the way, the day after tomorrow, I am announcing that I’m going to run for president of the United States.”

Carter triumphed in the 1976 presidential campaign by emphasizing trust to a nation battered by the Vietnam War and the Watergate scandal. He projected a fresh, moralistic approach to government—“I’ll never tell a lie”—and a break with the sordid scandals in Washington. Among them, in Carter’s view, were the disclosures, starting in late 1974, of illegal CIA surveillance of American citizens, including antiwar activists. Three separate investigations of the CIA followed over the next sixteen months, revealing more unsavory operations. When Carter took office in January 1977, the CIA was still reeling from these probes.
3
The agency had three directors in four years. The outgoing director, George H. W. Bush, a Republican appointed by President Ford, was affable and well liked at the CIA, and he wanted to remain, but Carter demanded a clean break. Carter at first chose Theodore Sorensen, the Kennedy speechwriter and a Democratic lawyer, to lead the CIA, but Sorensen withdrew when it was disclosed he had once been a conscientious objector and opposition to the nomination mounted in Congress.

At the time, Turner had become a four-star admiral and was serving as commander in chief of Allied forces in southern Europe. When Turner first got the call to come to Washington, he hoped he was being considered for a military appointment as chief of naval operations or vice-chief. At the White House, Carter greeted Turner warmly in his private office, then asked him to head the CIA.
4
Turner was not ready for this and protested that he might be better in a military position. But Turner quickly grasped that Carter had made up his mind. In fact, it was Turner’s military career and reputation for discipline and integrity that appealed to the new president, who had promised to turn a new leaf at the CIA. Turner took the CIA job, but “I walked out in a real daze.”
5

In the early months in office, Turner and Carter were both fascinated by stunning advances in technology, such as the revolutionary KH-11 satellite that transmitted electronic images directly to the ground, rather than using the cumbersome previous method, in which film canisters were ejected from a satellite and captured by airplanes on descent. The KH-11 images could be seen in real time instead of days or weeks later. By coincidence, the first images were received at the CIA just hours before Carter was inaugurated president. The next day, Carter was shown the photographs in the White House Situation Room. “It was a marvelous system,” Turner later recalled, “much like a TV in space that sent back pictures almost instantly.”
6
Turner saw the technical side of intelligence collection as the wave of the future. He wanted intelligence that could be delivered when it was needed.

As CIA director, Turner took home draft National Intelligence Estimates on weekends and marked them up with red pencil. The estimates are the highest product of “finished” intelligence that the CIA provides to decision makers in government, reflecting the results of espionage as well as analysis, and they are usually created and polished by dozens of officials before being disseminated. It was unheard of for a director to take them home and personally edit them. Separately, Turner displayed an independent streak in his thinking about the world and a fondness for analysis of it. He strongly questioned the U.S. military’s gloomy estimates of the expanding Soviet military threat. This deeply irritated the Pentagon, but Turner insisted that aspects of American strength were far superior and should be taken into account. He wanted a genuine balance sheet, not just a catalog of the latest Soviet threats.
7

However, Turner was singularly unprepared for the risky world of running spies. Espionage meant persuading people to betray their country and to steal secrets. Unlike most other agencies in the U.S. government, the CIA’s purpose was to violate the laws of other countries. In the clandestine service, the people who engaged in this practice believed they served a noble cause. Turner never understood them, and they saw him as distant and aloof. Robert Gates, who served for a while as Turner’s executive assistant, recalled that “the cultural and philosophical gap between Turner and the clandestine service was simply too wide to be bridged.”
8
Turner said he wanted the CIA to have a higher ethical standard and efficient structure, like a corporation. But people in the clandestine service were put off by his preaching and moralism. Their work was often dirty and ruthless. They also resented how one of Turner’s coterie of assistants, Robert “Rusty” Williams, went poking into private lives, asking about affairs and divorces, which were common in the high-stress world of operations.
9
Also, in 1977 Turner eliminated hundreds of positions in the clandestine service. The cuts were overdue—the directorate was overstaffed from the Vietnam War—but Turner was brusque and maladroit in carrying them out. Many old-timers were offended, and resentments ran deep.
10
“He was never quite convinced about human intelligence,” recalled a CIA official who worked closely with Turner. “Sometimes it was good, and sometimes it was bad. He thought we got more out of technical intelligence, it was more reliable.”

Within weeks of his meeting with Marti Peterson in the Oval Office, Turner’s suspicions deepened that something was wrong with the Moscow station.

On the evening of August 26, 1977, Dick Combs, a political officer, was working late in the U.S. embassy in Moscow, writing a report. His office was on the same floor—the seventh—as the CIA station. A marine guard burst into the office and asked Combs, “Do you smell smoke?” Combs had been puffing on a pipe and did not, aside from his own. But he soon realized a fire was spreading across the eighth floor, just above him. It started after hours when a transformer ignited in the economics section. The embassy had been a firetrap for years. A recent refurbishment used paneling that was highly flammable, and the marine guards were unable to stop the flames with fire extinguishers. The Moscow fire department did not arrive immediately, and the first firemen on the scene seemed poorly trained, with outdated equipment and leaky hoses. The ambassador, Malcolm Toon, rushed to the building from a diplomatic dinner, still in black tie, and was on the street below, while the deputy chief of mission, Jack Matlock, hustled to the ninth floor. Matlock loved books and tried to save his library as the fire worsened. Later, more experienced firemen arrived, some of them KGB officers, certainly aware that the CIA’s Moscow station was in the building, hoping to scoop up sensitive documents or enter classified areas. At one point when it looked as if the entire building might be consumed in fire, the ambassador gave orders to find the CIA station chief, Hathaway, and order him to leave. A staffer found Hathaway guarding the station on the seventh floor, dressed in a London Fog raincoat, his face smudged with soot, blocking the way for any KGB “firemen” who might try to break in. He refused to budge, despite the ambassador’s order.
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How did the fire start? At headquarters, the CIA knew that the Soviets routinely bombarded the U.S. embassy in Moscow with microwave signals. Turner brought this up constantly, saying he was worried about the “beams” at the embassy. Separately, after the fire, Turner wondered if the KGB could have deliberately caused the spark that started it, if not using the “beams,” then some other way. What was going on in Moscow? First, the loss of Ogorodnik. Now a mysterious fire and KGB “firemen.”

Still more trouble followed. In September, the Moscow station lost another agent, Anatoly Filatov, a colonel in Soviet military intelligence who had begun working for the CIA while stationed in Algiers in earlier years. Filatov was swapping a package with a CIA case officer, a “car toss,” or quick exchange as two vehicles pulled alongside each other. The KGB was lying in wait. They arrested Filatov, and the CIA case officer and his wife were expelled.
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