Spies: The Rise and Fall of the KGB in America (104 page)

It replaced him with Aleksandr Panyushkin, who was not a professional intelligence officer at all but a senior Soviet Communist Party international affairs adviser and sometime diplomat. He was also the Soviet
ambassador to the United States. His appointment as station chief was
part of a short-lived reorganization designed to centralize and unify So viet foreign intelligence. The Kremlin merged the foreign intelligence
arm of the Ministry of State Security (predecessor of the KGB) and Soviet military intelligence (GRU) into a new entity, the Committee of Information (KI), with a mandate not only to integrate Soviet intelligence,
but also to seamlessly coordinate intelligence with Soviet diplomacy. To
that end, Foreign Minister Vyacheslav Molotov, who had spearheaded
the campaign to create the KI, became its first chairman. As part of his
drive to bring foreign intelligence under the control of his foreign ministry, just as he doubled as foreign minister and head of the KI, Soviet
ambassadors doubled as KI station chiefs.

American policymakers had considered similar ideas but rejected
them as ultimately unworkable given the conflicting demands of diplomacy and intelligence. The Soviets also soon realized the awkward nature of the arrangement. Andrey Vyshinsky, who succeeded Molotov as
foreign minister in 1949, had little interest in intelligence and handed
the chairmanship of the KI over to a deputy. Meanwhile, the Soviet military general staff, complaining vehemently that it needed a dedicated
intelligence arm, successfully got GRU returned to its control. Everyone
soon realized that most Soviet ambassadors were not fit to direct the intelligence station, and the professional officers who served as the deputy
station chiefs became the de facto station chiefs but often found themselves in a difficult relationship with their nominal superior, the ambassador. In 1951 the KI experiment ended, and foreign intelligence returned to the Ministry of State Security, itself transformed in 1954 into
the Committee of State Security (KGB).

Meanwhile, however, Ambassador Panyushkin doubled as KI station
chief in Washington. His tenure coincided with the growing furor over
Soviet espionage in the United States. At first, Panyushkin enthusiastically
endorsed reactivating the sources who had proven so valuable in the past
and had been "put on ice" after Bentley's defection, but by the end of
1948 he had second thoughts. Laurence Duggan's suicide after a recontact and the surge in congressional and FBI investigations convinced him
to advise Moscow: "`Continuing to work with old agents and leads in
these conditions means giving American counterintelligence the chance
to investigate our connections and ourselves even more closely. Furthermore, through old agents and leads, the station could come across new incidents like the one with `Prince' [Duggan].... We could bring our country to serious harm."' Moscow did not agree. A report written for the
chairman of the Committee of Information scolded, "`The proposal in
question is, in our opinion, tantamount to terminating all intelligence work in the USA, b/c the station has not acquired new leads, not to mention valuable new agents in the principal agencies of the USA."' Gorsky
prepared an evaluation of the KGB Washington station work in 1949,
concluding: "`In its practical work, the station followed the path of least
resistance, either recruiting people widely known for their affiliation with
the U.S. Comparty [Communist Party] ... or trying to use as agents employees of delegations from People's Democracies [East European Communist nations] who are sympathetic toward us but do not have access to
information of interest."' Gorsky did not blame Panyushkin. He dismissed
the nominal head of the KGB station as "`busy with his principal work"'
as Soviet ambassador and put the blame on the deputy station chief,
Georgy Sokolov.00

Sokolov had arrived in the United States in November 1948 after
stints as station chief in Japan and Brazil and senior positions at Moscow
Center. But he did not get along with Panyushkin, who called him "`unsuited to intelligence work."' And a Moscow Center plan of work for the
American station adopted in March 1950 concluded that as a result of
11 'personal idiosyncrasies,"' Sokolov "'does nothing to establish or develop
external connections and has no organizational ability."' He had made no
useful contacts, was unable to manage the station, and "`should be replaced immediately.' "61

Moscow Center did replace Sokolov, but not until the end of 1950.
And when he got back to Moscow and found out he had been blamed
for the station's shortcomings, he wrote a bitter rebuttal. Admitting that
his lack of English-speaking ability had hindered his work, he denied
other flaws attributed to him, "`namely: cowardice, laziness, ineptitude at
organizing the station's work, biding time in the embassy."' Angry at never
being asked "`for an appropriate explanation, or to send someone trustworthy to Washington to check on both the station's and my work, or even
to summon me to give a personal explanation,"' he cited his prior good
record and wondered how he could have been transformed so quickly
"`into a good for nothing piece of shit."'02

Earlier in October 1950 the KGB Washington station had sent a message to Moscow Center. Vassiliev's notebook does not record an author for
this message, but given its tone, likely Sokolov, soon on his way back to
Moscow, was responsible. It was defiant in its rejection of Moscow's complaints about the paucity of intelligence from America:

"Instead of `berating' us in every letter, perhaps the authors of these severe
and scathing letters could come here themselves and show us by their own ex ample how one would go about acquiring people who work in the State Department and oth. gov't agencies of the country under the current fascist environment in the USA. Yelling, reproaching, and blaming others are the easiest
things in the world, but actually solving the concrete issue is considerably
harder. For example, in the last two years, Center has neither helped the station by sending over an illegal, nor by transferring agents from European or
other countries....

One should not forget that we are working here in a time when the cases
of almost 5o agents, who failed [were exposed] long before our time in connection with Myrna's [Bentley's] betrayal, are still under investigation; in a
time when Carp and Sima [Valentin Gubichev and Judith Coplon] have failed,
when roughly io people have failed on X [technical intelligence] line and failures on this line continue, when Vig [Lee Pressman] has chosen to betray us
and Vasin [William Weisband] has failed, when surveillance against our people
has been heightened as never before, when true Fascism has arisen in this
country, and harsh laws are passed both against Communists and against
Americans, punishing them for having ties to foreigners with severe penalties
-including death.

As for me personally, I insist that you send me replacements as soon as
possible, maybe even from among the quick-witted authors of those loud letters, who here could demonstrate their complete understanding of problems
and their skill and bravery in solving them."

Both Moscow's complaints and the Washington station's response were
vivid illustrations that the golden days of Soviet intelligence in America
were over.63

Bentley's defection was hardly the only issue confounding the KGB's work
in America. The Soviet Communist Party had accused Earl Browder of
ideological deviance in early 1945 via an article authored by a French
Communist leader, Jacques Duclos. American Communists swiftly ousted
Browder as their leader in mid-1945 and expelled him from the CPUSA
in 1946. The KGB had not been consulted about the decision, and Browder's expulsion presented it with a major problem. Golos and Bentley had
thoroughly briefed him on what they were doing and passed on to him
much of the intelligence they collected. Further, Browder was aware of
and participated in other aspects of the CPUSAs cooperation with Soviet intelligence, personally recommending a number of persons as potential sources.

Moscow had instructed Vladimir Pravdin in August 1945 to "carefully
check out all probationers [sources] acquired on H.'s ["Helmsman"/Brow-
der's] recommendation and think over what measures should be taken
with regard to these individuals (breaking off contact, temporary deactivation, and so forth)." Late in August Akhmerov bumped into Bill Browder, who asked him if he would pass along a letter from his brother Earl
to the KGB. When the KGB checked with the Soviet party, it vetoed the
idea, and Moscow Center advised Akhmerov not to accept the letter. Yet
when Merkulov sent instructions to Pravdin in early November 1945 on
measures to take in response to Bentley's betrayal, one was to brief
Bernard Schuster, the KGB's liaison to the CPUSA, and ask him to inform
Browder about her defection so he could be forewarned of possible FBI
inquiries .14

The KGB was reluctant to burn its bridges with Browder because,
like Bentley, he knew too much. A Moscow Center memorandum summarized just how damaging he could be:

"Our stations began to use "U's" ["Helmsman"/Browder's] capability on the
leadership line of the fellowcountryman organization [CPUSA] around 1933.
In organizational terms this was done through highly trusted individuals who
were personally handpicked by "H." and with whom the heads of our stations
maintained illegal contact at various times. "Steve" (a.k.a. "Storm" [Josef Peters]), "U's" brother "Bill," and "Sound" [Gobs] were used as such trusted
representatives.

a) "Steve" was seldom used by our station chiefs until 1936, after which
"H." relieved him of this work. "Steve" was used much more actively by GRU
operatives. "Steve" had his own group of agents comprised of illegal fellowcountrymen [Communists] working at various govt. agencies, through whom
he would receive information both for "H." and for the GRU.

b) "Bill" [Bill Browder] was used sporadically during the periods 19361937 and 1942-1944 only by our station chief "Maxim" [Zarubin] for contact
with "H."

c) "So." ["Sound"], who was our important group leader of a large group of
agents consisting of local citizens, was the principal trusted person for contact
with "H." from 1937 until 1940. But he had no relationship with GRU operatives and didn't meet with any of them.

The chiefs of our stations received through the aforementioned trusted
representatives of "H.": i) Persons who had been checked out from among
local fellowcountrymen for use as agents, illegal couriers, and illegal group
leaders; z) Background information on persons of interest to us for recruitment; 3) Leads for the purpose of recruitment to so-called illegal fellowcoun trymen working at various govt. agencies, private companies, and defense
plants and laboratories.

The persons who had been recommended by the fellowcountryman leadership and checked out were used by the stations for various intel. purposes:
for infiltration into local Trotskyite organizations, as illegal couriers, owners of
apartments for konspiratsia and secret meetings, group leaders for obtaining
passports and other citizenship papers, for direct use as agents and, finally, to
carry out various special assignments. Through these trusted representatives
the stations sporadically also received information, various documents, and
other intel. materials.

Note: In certain cases the chiefs of our stations, with special permission
from the center, personally met with "H.," in especially secretive conditions, to
conduct important discus sions. -65

Browder had been asking for the opportunity to come to Moscow to
defend his views, and Merkulov, while avoiding saying anything about
the ideological matters at issue, asked Stalin to approve his visit so the
KGB could talk with him or, failing that, "`to recommend to the Executive Committee of the CPA [Communist Party of America], under a convenient pretext, that Br. [Browder] be reinstated in the party and that a
more tactful line of behavior be adopted toward him."' This was an ex-
traordinaiy KGB intervention into a matter of CPSU concern, but
Merkulov explained, "`Eighteen people were recruited for agent work
on the NKGB USSR line on Br.'s [Browder's] recommendation,"' he
knew of another twenty-five secret CPUSA members who were working
for the KGB, and he was cognizant of more people whom he had either
recruited for GRU or knew were working for it. Merkulov warned that
Browder's expulsion from the CPUSA "`may prompt him to turn to extreme means of struggle against the Com. Party and cause harm to our
interests."'66

Stalin was sharpening, not relaxing, ideological discipline in the Communist movement, so Browder's reinstatement was off the table. But he
was given a visa to visit Moscow. (Moscow's decision to allow Browder's
visit shocked CPUSA leaders. After all, they had ousted their long-time
leader at Moscow's behest.) When he came to Moscow, Soviet party officials listened to his defense of his ideological views but gave him no
encouragement. Separately from his party talks, Browder met with
Ovakimyan and Zarubin, both of whom he knew from their days as station chiefs in America. Fitin reported that in this meeting Browder "proposed that both he himself and his contacts be utilized in our work," but
given his prominence and their belief that he would face strict scrutiny because of Bentley, "we deem it inadvisable to use him in agent work."
Nonetheless, to encourage his continued loyalty, Soviet authorities gave
Browder a franchise to market Soviet books in the United States that provided him a modest income. In 1948 a KGB agent also gave him $1,500
to pay for his wife's medical costs. Browder occasionally met with KGB
officers, passing along ideological memos (Moscow Center judged them
"tendentious"). In July 1949 the KGB Washington station told Moscow
Center: "`In the view of friends of the emb. [embassy], Br.'s [Browder's]
official connection with Soviet publishing houses is keeping him from
making anti-Sov. statements and from disclosing secrets he knows. Our
friends don't rule out the possibility that if we officially break with Br., this
could prod him in the direction of reactionaries and complete betrayal.
Taking this into account, Cde. Panyushkin believes that we should continue to maintain contact with Br. for another year or year and a half,
until the spy mania campaign and the uproar over the Com. Party and
`Sov. spy centers' die down."' To the end of his life, long after he ceased
to consider himself a Communist, Earl Browder never said a word about
his role in Soviet espionage or the dozens of agents and sources he
knew.67