Spies: The Rise and Fall of the KGB in America (59 page)

While the Silvermaster network was the largest espionage apparatus reporting to the KGB, that headed by Victor Perlo was a close second. Although it didn't have sources as highly placed as Harry White and Lauchlin Currie, in Harold Glasser, Charles Kramer, and Donald Wheeler (see
chapter 5) it possessed well-connected and highly productive agents. Like
Silvermaster, Perlo, a long-time leader of the Communist underground
in Washington, drew his sources from mid-level government officials who
were veteran members of the party's secret organization and ran his apparatus like a party unit.141

Perlo prepared an autobiography for the KGB, and in December
1944 Anatoly Gorsky, KGB station chief, sent a summary to Moscow Center:

Victor Perlo, born in Queens, New York, in 1912 to a family of Jews who had
come to the USA from Tsarist Russia as children. Father-Samuel-is a
lawyer; mother-Rachel-is a teacher.

Graduated from Columbia U. in 1933.

Worked: Summer 1932-waiter and gardener at a children's camp in Great
Barrington.

Middle of 1933-June 1935-statistical analyst, assistant to a division chief at
the National Recovery Administration. June 1935-Oct. 1937-assistant sta tistical analyst at the Federal Home Loan Bank Board. Oct. 1937-November
1939-researcher at the "Brookings Institution." November 1939-November
194o-secretary to the economic adviser at the Department of Commerce.
November 1940-March 1943-head of the economic statistics division at the
Office of Price Administration. March 1943-Sep. 1944-head of the Aviation
Division of the Bureau of Programs and Statistics at the WPB [War Production Board]. September 1944-to present time-special assistant to the director of the Programs and Statistics Bureau of the WPB. Salary-$6,5oo a
year....

Raid [Perlo] himself describes his present job as a sinecure, where he is
tolerated only because there is no one to replace him. Through his job, "Raid"
has access to the minutes of the WPB and of its various committees, to interdepartmental econ. summaries (about which "Gor" [Joseph Gregg] had previously informed us), and to various documents on military industry.

R. joined the Columbia University cell of the Comparty at the end of 1932
or the beginning of 1933, and during that time, he took part in propagandistic
work among cafe workers. In 1933, he moved to Washington, where he did
some kind of work individually with the unemployed.... In 1935, Raid belonged to the Washington Communist organization under the leadership of
"Steve" [Josef Peters]. During this time, he met once or twice on "Steve's" instructions with V. J. Jerome, Gene Dennis, Roy Hudson, and a certain "Eugene" [unidentified]. "Vadim" [Gorsky] is not yet aware of the nature of the
connection or the position of these people. R. repeatedly wrote various econ.
articles for various Comm. newspapers and magazines, signing with various
pseudonyms, and transmitted them through his Party leaders. In 1942-43, R.
secretly helped "Pancake" [I. F. Stone] compile materials for various exposes
by the latter.142

In the wake of Bentley's defection Perlo left the Treasury Department. The House Committee on Un-American Activities asked him to
testify in 1948. He initially presented himself as a liberal and told the
committee that he had only been "helping in my humble way to carry out
the great New Deal program under the leadership of Franklin D. Roosevelt" but then invoked the Fifth Amendment to refuse to answer questions on his Communist and espionage links. In later years the theoretical journal of the American Communist Party announced that Perlo was
"chairman of the Economic Commission of the CPUSA.'>r43

Ample evidence has existed since 1948 that Harold Glasser had assisted
Soviet intelligence. Whittaker Chambers identified him as a member of the Communist underground in Washington in the mid-1930S who assisted his GRU-linked apparatus. Elizabeth Bentley identified him as a
source of the Perlo network in World War II. Eleven KGB cables deciphered by the Venona project discussed his work for the KGB under the
cover name "Ruble." The documents in Vassiliev's notebooks not only
add considerable depth and detail to what was known of Glasser's cooperation with the KGB, but also show that in 1945 the KGB Washington
station, with very good reason, regarded Glasser as its most valuable
source. The volume of high-level U.S. government documents he turned
over to Moscow was astounding and unexpected. (Harold Glasser was
not related to Abraham Glasser, discussed above.)144

Glasser and his wife both prepared short autobiographies for the
KGB. His parents were Lithuanian Jews who settled in Chicago, where
he was born in 1905. His father, a garment worker, died in 19og, and
Harold, youngest of seven children, grew up in poverty. Nonetheless, he
was able to graduate from the University of Chicago and pursue advanced
studies at Haivard University. He secretly joined the Communist Party in
1933 while teaching at the People's Junior College in Chicago and became an active member of the CPUSAs clandestine party organization in
Washington when he obtained a post as an economist at the Treasury Department in 1936.145

Glasser briefly discussed his work with Chambers's GRU network in
his KGB autobiography (see chapter 1). After a cooling-off period to see
if Chambers's defection resulted in FBI interest, GRU attempted to revive contact with his sources and did succeed in reestablishing contact
with Alger Hiss. But it was unsuccessful in Glasser's case because Maxim
Lieber, its agent, contacted Glasser just as he was about to depart on a
two-year Treasury Department assignment to Ecuador. In his autobiography Glasser also noted that while on assignment in Ecuador "`the FBI's
secret police were conducting an investigation. I was unable to get any information about the nature of this investigation, except for a suspicion
that it was my membership in the Comparty [Communist Party] that was
under investigation."' He wrote that he was supported by the U.S. ambassador, Boaz Long, and nothing happened, but later, "`when I applied
to the embassy for a passport, [Assistant Secretary of State] Berle ... refused to issue me one, b/c I was supposedly still under investigation.
Under pressure and attack from Harry White, Berle gave up and issued
me a dip. [diplomatic] passport. Since then, I have not had any more
problems getting a passport."' Glasser had been protected in these security probes by the hidden network of Communists within the Treasury Department. At various times in his Treasury career, fellow Communists
and Soviet agents Frank Coe and Ludwig Ullmann determined his promotions and job ratings and Harry White reviewed and endorsed his civil
service ratings. The FBI report on its suspicions about Glasser's party
links went to White and nothing happened. And, as Glasser noted, White
intervened with the State Department to see that the investigation didn't
prevent him from getting an American diplomatic passport .146

The KGB attempted to enlist Glasser in early 1943 but aborted the
recruitment when he left for Algeria on a Treasury Department assignment with American forces in North Africa. Following his return further
delays developed over concern that he was still connected to GRU and
the recall of Vasily Zarubin in mid-1944. A November 1944 memo by
Elizabeth Zarubin discussed this first attempt and touched on the KGB's
reliance on the CPUSA, personal rivalries among American Communists
over assisting Soviet intelligence, and muddled lines of communications
with Soviet military intelligence:

"In his time, `Maxim' [Zarubin] arranged for the recruitment of `Ruble'
[Glasser] as our agent with Gene Dennis, who had received a corresponding
directive from `Helmsman' [Browder]. At the time, `Ruble' was leaving on a
business trip on behalf of the Treasury Department-to North Africa, where
he was supposed to create a separate investigative branch of the Treasury Department.... Already there was no chance of our person setting up a personal meeting with `Ruble,' b/c `Ruble' departed without warning for his
destination. Through Dennis, a password was specified with `R.,' by which
someone on behalf of Dennis was supposed to have contacted him in North
Africa; furthermore, `R.' was warned about the fact that this person might be
Russian. Home [Moscow] was informed of this password, but no one contacted `R.' in North Africa. When `R.' came back from N. Africa, `Maxim'
asked Home for permission to have `R' handed over to `Pal' [Silvermaster] for
a connection. When `Mer' [Akhmerov] was informed of this, he said that `Pal'
told him that in a conversation with him, `R.' had wanted information. `Pal,'
who has known `R.' a long time, did not like being spoken to like this by `R.,'
and on the basis of his conversation with `Pal,' `Mer' got the impression that
the personal relationship between `Pal' and `Ruble' was strained somehow.
... `Maxim' and `Mer' stopped insisting to `Pal' that he take `Ruble' as a contact.

During her last conversation with `Helmsman,' `Vardo' [Elizabeth Zarubin] told him that we wanted to make 'Ruble' a direct contact of ours. 'Helmsman' agreed and said that he would give a corresponding order to Gene Dennis, who maintained contact with `Ruble' on the Party line after his return from North Africa. Because our stations were under surveillance and `Maxim'
left, `Ruble' failed to have been handed over to our worker.

`Ruble' should be familiar to `Storm' (`Steve') [Josef Peters] as a member
of the CPUSA, b/c he belongs to that group of Communist officials in Washington, with whom `Storm' was affiliated several years ago. `Ruble' is also
known as a member of the CP to John Abt, whom `Storm' used as a liaison
with this group-for receiving party dues and information from them for
`Helmsman.' `Reyna' [Marion Bachrach] had described `Ruble' to Maxim and
`Vardo' as a secret member of the Party and a very loyal and reliable Communist of many years. `Reyna' and her brother, John Abt, keep up a personal
friendship with `Ruble' and his wife.

`Pal' knows about John Abt and about the fact that he had a group of Communist workers from various government departments in Washington. It is
possible that `Pal' knows individual people from this group as well-besides
`Ruble.' There has always existed a kind of rivalry between `Pal' and John Abt
when it came to working with secret Communists in Washington, judging from
our old files (see, for example, `Pal's' file) and from certain remarks made by
`Sound' [Gobs] in conversation with `Vardo' and in the latter's conversation
with Abt. Maybe Bayer, one of the editors of `Soviet Russia Today' in Washington, was using Abt for the neighbors [GRU]. With regard to Bayer, we had certain pieces of information about the fact that he was the neighbors' worker.
Soviet Russia Today is published by Jessica Smith, who is John Abt's wife.
`Ruble' could be adopted as a contact for our worker with the help of 'Helmsman's' brother, who could contact Dennis and arrange with him on 'Helmsman's' behalf to hand `Ruble' over to someone by means of a password, or at a
personal meeting."

(Dennis ran the CPUSA while Earl Browder served a prison sentence
for use of a false passport. GRU cables deciphered by the Venona project confirm that Theodore Bayer was a GRU agent. Abt managed a group
of government officials who were secret CPUSA members. On Browder's
orders, in 1944 Abt turned over his group to Elizabeth Bentley, who referred to it as the "Perlo group" from its most influential figure and group
manager, Victor Perlo. Bentley in her FBI deposition treated Glasser as
a Perlo group source.)147

Moscow Center told Anatoly Gorsky in December 1944, "`Considering that `Ruble' [Glasser] might become one of our most valuable probationers [sources] ... it would be expedient to contact him directly,"'
bypassing Perlo. Gorsky reported on Christmas Eve that he had made
direct contact and another meeting would take place shortly. On New
Year's Eve he forwarded to Moscow Glasser's description of what sort of information he could obtain, details of his public and private life, and
how his role in the Communist underground might affect cooperation
with the KGB. Gorsky noted: ""R." ["Ruble"/Grasser] undoubtedly knows
which country and organization he works for, by name. According to him,
no one has told him about this explicitly, but `he is not such a child that
he doesn't realize where and to whom exactly his materials have been
going all these years."' There was, however, considerable disentangling to
do in regard to Glasser's dual role in the party underground and Soviet espionage. So loose had security been under Golos and Bentley that everyone in their Washington networks appeared to know what many of the
others were doing. One can only imagine professionals at Moscow Center shaking their heads as they read Gorsky's report explaining that
Glasser and his close friend Allan Rosenberg, an economist with the
Foreign Economic Administration "discuss information that they send
through "Raid" [Perlo] with each other, show it to each other, and essentially work together." Or the discomfort they felt when they learned that
in Rome in early 1944 on a Treasury Department mission, Glasser had revealed to Italian Communist leader Palmiro Togliatti that he was a secret
Communist and had given Togliatti information and American documents that would assist the Italian Communist Party.141

Also exasperating to Moscow would have been Gorsky's news that Silvermaster, apparently jealous that Perlo's group had in Glasser a source
in the Treasury Department nearly as good as his own group's Harry
White, was lobbying the KGB New York station to get Glasser handed
over to his apparatus (already grossly too large in the KGB's view).
Moscow Center told Gorsky: "Try to isolate "R." ["Ruble"/Glasser] from
"Raid's" [Perlo's] group. Tactfully teach him the skills of konspiratsia [espionage tradecraft]. Tell him that a repeat of the Italian incident would
be unacceptable." It also approved use of Faye Glasser as a courier between the KGB station and her husband Harold. Gorsky brushed away
Silvermaster's attempt to get control of Glasser and also extracted him
from the Perlo group. When Glasser proved inept with the Leica camera
the KGB gave him, Gorsky decided to take advantage of his close friendship with Allan Rosenberg, an amateur photographer with a dark room at
his home, by using him for that job.149