Spies: The Rise and Fall of the KGB in America (45 page)

n the late 1940s Elizabeth Bentley and Whittaker Chambers publicly identified dozens of U.S. government officials as having knowingly assisted Soviet intelligence in the 1930s and early 1940s. Their
revelations and subsequent charges by Senator Joseph McCarthy
precipitated a bitter and long-standing debate about the extent of Soviet
subversion. Chambers and Bentley, however, only knew the half of it.
KGB sources of whom they were unaware honeycombed the federal government and its scientific laboratories. But Senator McCarthy's charges
were also wildly off the mark. Very few of the people he accused appeared
in KGB documents (or the Venona decryptions), and by the time he made
his charges, almost all Soviet agents had been forced out of the government and Soviet intelligence networks were largely defunct.

The documents transcribed or summarized in Vassiliev's notebooks
confirm that those named by Bentley and Chambers were Soviet sources.
One internal KGB list alone included forty-two people who had worked
for the federal government and were endangered by their revelations. Although most of these people were also identified in the Venona decryptions or other material that has emerged from previously closed
archives, these newly available documents fill in previously puzzling gaps
in some of their stories. They demonstrate, for example, that one of the
figures named by Bentley, Harold Glasser, was one of the KGB's most
productive spies in Washington. More important, they expose a number
of other unlikely Soviet sources, some of whom came under varying levels of FBI suspicion or surveillance, and others of whom remained entirely under the counterintelligence radar, including a hitherto unsuspected Soviet source at the U.S. State Department.'

Identifies KGB source "Willy" as the 1934 chief of the State Department's Communications and Records
Division, a post held by the veteran civil servant David Salmon. Courtesy of Alexander Vassiliev.

Soviet intelligence had a source in the State Department with access to
all American diplomatic communications before Alger Hiss was recruited.
A 1934 internal Moscow Center memo stated: "Willy (chief of the DOS's
communication and archives division) ... (all telegraph correspondence,
ciphers, store of documents)." Another Moscow Center message said:
"`Willy-gives copies of reports addressed to the State Department from
ambassadors, consuls, and U.S. military attaches in Europe and the Far
East. The materials are very valuable to the corresponding echelons [Soviet foreign ministry and relevant agencies]. Could give cabinet resolutions regarding the affairs of StateD and G-z (war intelligence)."' Moscow
Center believed that "Willy's" material was so valuable that it proposed
doubling his KGB compensation: "`Willy gets 5,600 dollars a year at his
Department. From us, he gets 6,ooo dollars a year. We are suggesting
setting his salary at 12,000-15,000 dollars a year in order to get the most
he can give."'2

Why was the KGB considering paying "Willy" $15,000 annually (the
equivalent of $232,000 in zoo8 dollars) for U.S. State Department information? In the 1930s the Soviet Union did not regard the United States
as the "Main Adversary," as it did in the Cold War. America was distant
from Soviet concerns about the German threat in the West and the Japanese threat in the East. Nonetheless, in early 1934 Moscow Center sent
Valentin Markin, chief of the recently established illegal KGB station, a
memo emphasizing the key role played by the United States in world affairs:

"In the system of states, the USA is the deciding factor in questions of world
politics. There are no problems, not even `purely' European ones, that Amer ica doesn't take part in resolving by virtue of its economic and financial might.
It plays a special role in the resolution of Far Eastern problems. It follows that
America must be well informed about European and Far Eastern affairs, and
hence, in all likelihood-the active role of its intelligence. This situation necessitates from our intelligence in the USA (especially illegal intelligence) the
following highly important tasks: It is essential that available agents and those
intended for recruitment provide us with documents and agent-verified materials covering the USAs position with regard to what is mentioned above and,
in particular, the USAs position on the Far Eastern problem."3

Who was "Willy"? KGB documents in Vassiliev's notebooks do not
contain his real name, but details they provide are sufficient to identify
him, and he was a most unexpected Soviet source. David A. Salmon was
born in Connecticut in 1879 and joined the War Department in 1896 as
a junior clerk. His efficient work attracted the attention of Secretary of
War Elihu Root, and when Root became secretary of state in 1905, he
brought Salmon with him to bring order to the State Department's handling of codes, ciphers, and diplomatic communications. Salmon became
chief of the Bureau of Indexes and Archives in 1916 and its successor,
the Division of Communications and Records, in 1931. Although the position lacked the prestige of the diplomatic offices and divisions headed
by foreign service officers, with 150 employees it was the largest single office in the department. As its chief in 1934, Salmon's government salary
was $5,600. He held that position until he retired in 1948. A 1939 Washington Post story noted: "In times of international stress, the nerve center of the department is the obscurely placed Division of Communications and Records where the staff of the genial 6o-year-old David A.
Salmon (in the department since the days of Elihu Root) receives, decodes, and transmits the messages that flood in from the scene of discord. During the Munich crisis from 45,000 to 50,000 words and code
symbols were handled in the division daily, to say nothing of the trans-
ocean and domestic telephone calls."

In one of those stranger-than-fiction episodes, shortly after Salmon
retired, the House Committee on Un-American Activities asked him to
examine copies of 1938 State Department cables that Whittaker Chambers had produced to support his assertions that Alger Hiss had given
him DOS documents in 1938. Salmon stated that the cables were authentic and would have been encoded using the department's highest ci-
pher.4

There is something incongruous in looking back and seeing one hidden Soviet spy providing evidence that assisted in exposing another So viet spy, but the two had very different motivations. Alger Hiss was a secret Communist and regarded assisting Soviet intelligence as a moral
duty. There is no indication that Salmon had any sympathy for communism or the Soviet Union. His motive appears to have been entirely monetary, more than doubling his civil servant salary. Also, by the time of his
testimony, Salmon was an ex-Soviet source, the KGB having cut off contact with him in 1937.

The path that led the KGB to cease contact with such a valuable
source was an odd one, linked to the growing pains of the KGB's American station. Salmon was not recruited by a professional KGB officer, and,
indeed, it does not appear that a KGB officer ever met directly with him.
Instead, Ludwig Lore, an American agent of the KGB New York station,
recruited Salmon and handled all of the KGB's dealings with him.

The KGB conducted intelligence operations in the United States in
the 192os and recruited a number of sources. But for reasons that are
not clear, it largely shut down its American operations at the end of the
decade, not reviving its New York station until 1933. At first, however,
neither the legal nor illegal station had enough officers with adequate
English-language skills or familiarity with American society to operate
efficiently. By 1934 Moscow Center began to realize that its American
stations were having teething difficulties, and in a letter (written in roundabout language in case of interception) it ordered illegal station chief
Valentin Markin to travel to Denmark to meet with senior Moscow Center officials to discuss in detail the work of his station. Moscow explained:

"Your company's operations have expanded too far, and we are concerned that
your small apparatus will be unable to serve your clients in accordance with
the principles and fundamentals of our profession. Not to mention the dissipation of forces and insufficient attention to your main clients. During your stay
in the USA, your work expanded very successfully, but so quickly that there
was no opportunity to process, consolidate, and organize it. It is this in particular that attests to the timeliness and necessity of reevaluating the principles behind your company's existence, its finances, and its circle of clients." ... The
meeting place in Copenhagen-the Gorbaldsen Museum, room 32, at z P.M.
Holding the newspaper "Berliner Tagesblat." Password: You: "How do you get
to the exit." Reply: "I'm leaving myself, I can show you."5

One of the new station's problems was excessive reliance on American
agents who were sometimes inadequately supervised by professional officers, and Ludwig Lore was a prime example.

Lore (discussed in chapter 3) had readily accepted an offer from the newly established KGB New York station to become one of its American
agents, with a monthly stipend of $350 (equivalent to $5,500 in zoo8 dollars). A journalist, in 1934 he wrote a column, "Behind the Cables," for
the New York Post that focused on foreign affairs, and it was likely Lore's
search for diplomatic information that led him to David Salmon, through
whose office passed every American diplomatic cable and letter. Lore recruited "Willy"/Salmon at a premium rate, $5oo a month.6

It is not entirely clear if Lore told Salmon that his information was
going to Moscow or if he allowed Salmon to believe that the New York
Post paid so well that Lore could afford a $5oo-a-month bribe to get access to diplomatic cables to assist in writing his column. Salmon, however, could have had no illusions about where his information went after
the following fall 1934 incident, relayed in a message to Moscow from
Iskhak Akhmerov, an illegal officer who had just met with Lore:

"During Leo's [Lore's] meeting with Willy [Salmon] (about two weeks ago) in
Center [Washington], Willy reported that B. [U.S. ambassador Bullitt] ... had
reported from your city [Moscow] to Center that the contents of his reports
are known in your city. Willy was terribly dismayed and worried. He had a
nervous breakdown for a couple of days. The Assistant Secretary of this company [State Department] personally questioned the directors and Willy as to
whether these reports were being leaked here, in Center. The Assistant Secretary instructed Willy to run a check of his employees and to undertake an investigation of the division he oversees. Willy says (thinks) that a corresponding
investigation of this affair is also being undertaken through companies of our
sort [FBI]. Please use utmost caution when delivering B's reports to neighboring offices [Soviet foreign ministry and other agencies]. B's cunning, aptitude,
gregariousness, and connections among prominent individuals in your city give
him the opportunity to feel out a number of people. It is enough to drop an indirect hint during a conversation."7

As Akhmerov explained, Ambassador William Bullitt had complained to
the State Department that some Soviet officials appeared to have knowledge of the contents of his secret reports to Washington. All of Bullitt's
reports passed through Salmon's Division of Communications and
Records. Consequently one of the assistant secretaries of state had instructed Salmon to review his staff to see if there was a leak, and Salmon
also thought the FBI had been called in to investigate. Since the leaker
was Salmon himself, he was distraught. Akhmerov also asked Moscow
Center to be more careful with the distribution of the information
Salmon was providing and to warn its recipients (principally Soviet for eign ministry officials) of the dangers of displaying too much knowledge
of American diplomatic matters when meeting with the perceptive Bullitt. If Salmon had been under the illusion that Lore was just another
journalist seeking inside information, that fantasy had surely been dispelled.

The relationship with Salmon fell apart because the KGB concluded
that Lore had invented another State Department source, attributing
some of Salmon's genuine material to him, to obtain additional money
from the KGB by pocketing the subsidies for the nonexistent source. By
February 1937 Boris Bazarov, new head of the illegal station, told
Moscow Center that he had become convinced that Lore, possibly with
Salmon's assistance, had "apparently been deceiving the station." Moscow
Center judged Salmon's material authentic and highly valuable, but approaching Salmon directly was risky because no KGB officer had ever
met him and the KGB did not understand the basis of Lore's relationship with him. An independent approach bypassing Lore might panic
Salmon and cause him to go to security officials and initiate a diplomatic
scandal. Additionally, the KGB suspected that Lore had developed links
to the Trotskyists, a deadly ideological taint during the time of Stalin's
Terror.8