The Billion Dollar Spy: A True Story of Cold War Espionage and Betrayal (12 page)

“We still are not certain what motivated
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to seek us out and work for us,” Kalaris said. “Our best reading at this time is that he is inspired by vengeance. Up to this point and for the foreseeable future, the Division intends to treat this case with extreme caution because the chances of being ‘taken for a ride’ are high.” But he also wrote, Tolkachev “has produced some extremely high quality intelligence which is already impacting on our Air Force; and he has promised more for the future.”

The stakes were high, but Kalaris noted that the disagreements over money were creating “serious doubts about us in
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’s mind.” Kalaris recommended that the CIA make a payment so generous that Tolkachev’s doubts would be erased: 300,000 rubles, or about $92,000, at the December meeting. “I think it is important to demonstrate to him that we are not always going to nickel and dime him,” Kalaris wrote.

He added that while the money should be delivered as proof of good faith, Tolkachev would have to be warned again about “the high risks he will be running by the mere possession of such a large amount.” Still, “meeting his specific monetary request for the first time in toto will provide a good foundation to talk about the future.”

Then Kalaris moved, gingerly, to the more difficult question.

“
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has asked for ten million dollars, more or less, over the next ten years,” he wrote. “We have not agreed to that and I propose that we do not agree to any such amount at this time.” Instead, Kalaris proposed to leave things somewhat vague. The CIA could point to the 300,000 rubles and tell Tolkachev “we will commit ourselves to pay him properly in the future, but the size of the payment will depend on our evaluation of the product.” He added, “I think we should add that if he produces what he has promised, our estimate is that the material will be valued in the seven figures area. I would say no more than that.

“Having talked about a seven figure amount allows us to raise once again the idea of an escrow account for security reasons,” Kalaris said. “If he balks, as I think he will to the suggestion of an escrow account, we can ask him to think about the possibility of leaving the USSR with our help.”

This was a brand-new wrinkle. Kalaris informed Turner that the CIA would not have to actually commit itself to exfiltration—smuggling the agent out of the country—they could just gently suggest it. Although Kalaris didn’t say so, the CIA had never before carried out a successful exfiltration from Moscow. Kalaris said he didn’t know if Tolkachev had thought of leaving or would be interested. But there was another benefit of talking about it. It might help dissuade Tolkachev from the suicide pill. “We want him to live and enjoy the fruits of his labor,” Kalaris wrote. “If he insists again that he wants the pill and will not accept no as an answer, we can agree in principle. We can delay delivery by almost a year by asking for his recommendations for appropriate concealment devices, etc.”
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Charles Battaglia, an assistant who was close to Turner, was in the office when Tolkachev’s demands for a big payment came up for discussion with the director. In Turner’s mind, human agents were fallible and unpredictable, and this one was asking for millions of dollars. “I will never forget the look on Turner’s face,” Battaglia recalled. “He gulped.” And then gave a green light.
11

On December 15, headquarters sent word to the Moscow station that “we have received the go-ahead from the director” to give Tolkachev 300,000 rubles at the next meeting as “proof of our good faith and the value we place on the information he has provided.” Headquarters cautioned that Tolkachev “cannot realistically expect us to commit ourselves to a specific dollar amount for his future product, although if he produces what he has promised us, it may be valued totally in the area of seven figures.

“We fully intend to pay him properly in the future but we will decide the size of each payment,” the cable said, “based on the value of the information to us.”
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In fact, the “value” of Tolkachev’s intelligence to the U.S. military and intelligence agencies was soaring, already considered to be worth hundreds of millions of dollars. But CIA headquarters did not want to reveal this to Tolkachev. They needed to find a way to impress him, to show that his espionage was prized, while not forking over millions of dollars. The plan was to deliver a very impressive brick of rubles. Three hundred thousand would seem large enough to a Soviet engineer whose monthly salary was 350 rubles. (The value was much less, however, than the $300,000 approved for Tolkachev at headquarters seven months earlier.) Guilsher, who would deliver the cash, was instructed to ask again about paying Tolkachev in precious stones or valuables or with deposits in an escrow account in the West. Guilsher was also instructed to suggest the CIA would work out a plan for Tolkachev to escape the Soviet Union, a promise of exfiltration some time in the future, not immediately.

On the sticky question of the suicide pill, Guilsher was told to keep stalling and attempt to discourage Tolkachev. This was the demand that Tolkachev felt strongest about yet headquarters was most reluctant to meet. “You may tell
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that we are seriously considering his request,” headquarters told Guilsher, “but still feel he would be making a mistake in having this item in his possession.”

I
n subfreezing cold, walking for twenty minutes in a vacant lot by some old garages, Guilsher met Tolkachev for the fifth time on December 27, 1979. Tolkachev was in a good mood and seemed glad to see Guilsher again. He had threatened to stop spying for the CIA in his October letter, but Guilsher realized right away that Tolkachev had done just the opposite. He was working with more energy and determination than ever. As they strolled, Tolkachev slipped a package to Guilsher. Inside were five electronic components from a Soviet radar and a line diagram with each. Tolkachev told Guilsher they were left over from “the time when I worked on experiments finalizing the RP-23 complex.” This was the radar the CIA had described as being “of utmost value” earlier in the year. The electronic components were an intelligence windfall that would help the United States determine how Soviet radars and avionics worked—and build countermeasures to blind them.

Tolkachev also gave Guilsher eighty-one rolls of exposed 35 mm film, carrying hundreds of pages of secret documents. The Pentax camera had jammed and wouldn’t advance the film, so he returned it to Guilsher, asking for two replacements. As they walked, Guilsher handed Tolkachev a package with four miniature Tropel spy cameras for the months ahead, color coded: blue, gold, silver, and green. Tolkachev returned to Guilsher the red and black Tropels he’d been given in October for “testing,” with exposed film inside.

Guilsher, who had taken a briefcase with him, handed Tolkachev the big brick of cash, 150,000 rubles. The CIA had obtained the bills from a banker in Switzerland so they could not be traced to the United States. It was only half the amount that Kalaris had suggested, but the impact was immediate. Tolkachev was pleased by the money and said it was in line with the value of his work—not the paltry 5,000 rubles he’d been given at earlier meetings that year. Tolkachev said that he didn’t really need the money and would probably just stash it away somewhere.

Then he confessed to Guilsher that his demand for millions of dollars was “not realistic” and not meant to be taken literally.

Guilsher again raised the possibility of an escrow account in the West. This time, Tolkachev didn’t reject it out of hand.

Very carefully, Guilsher brought up a possible exfiltration. Tolkachev brushed it off. He said he would never even consider it.

Tolkachev brought some worrisome news. The procedures for handling secret documents in his office had tightened. Previously, he could check out classified reports from the First Department by signing for them on a permission sheet that remained on file with the department. At lunchtime, he could conceal the documents in his coat, leave the building, photograph them at home when he was alone, return to the institute after lunch, and put the documents back. At the main gate, where he showed his building pass, they would rarely check whether he was carrying anything.

Now, Tolkachev said, in order to check out documents from the First Department, he was required to leave his building pass with the clerks in that department. Without the pass, he could not leave the building at lunch nor photograph secret documents at home. The only documents he might be able to take home were less sensitive technical journals. Tolkachev boasted to Guilsher he had beat the system—he pulled a “ruse”—on December 24 and slipped some top secret documents out of the building. He photographed them in his apartment. But he was facing a big setback; his usual habit of just walking out with documents in his coat pocket was not going to be possible.

Tolkachev sternly reminded Guilsher of his still-unfulfilled demand for the suicide pill. He felt he was in more danger. He had been signing out documents that were clearly not related to his current work. If questions about a leak were raised, his signatures were all over the permission sheet. He implored Guilsher to get the suicide pill—no more delays.

Before parting, Guilsher surprised Tolkachev. As a gift for the holidays, Guilsher brought him two books by dissidents that were unavailable in Moscow, including one by Alexander Solzhenitsyn, who had been exiled from the Soviet Union in 1974. Despite all that had happened that year, Guilsher reported, Tolkachev “was delighted.”
1

As they parted, Guilsher walked away from the vacant lot, and Tolkachev abruptly came running back in his direction. Guilsher was startled and feared that he was about to be ambushed. But Tolkachev caught up to him and explained that he had written an ops note and forgotten to give it to him. He handed the note to Guilsher and slipped away into the night.
2

Back in the station, Guilsher read the ops note. Tolkachev insisted that the suicide pill was becoming “more essential for me.” He told Guilsher that he felt increasingly vulnerable to “unforeseen circumstances,” perhaps even a leak from the United States. Then he explained that every time he took a document from the First Department, he signed the permission sheet, with his last name and signature. It was on file if the KGB ever decided to investigate. He wrote,

The number of documents drawn by me greatly exceeds my productive needs. For example, I will never be able to explain why I needed the technical descriptions of the AVM RLS RP-23, N-003, N-006, N-005 … This is also hard to explain because our laboratory has stopped overseeing the RLS RP-23, N-003, N-006 in September, 1978, and our laboratory was never even involved in issuing the documentation for the RLS N-005 or its serial introduction. The listed considerations induce me, already for the third time, to turn to you with the request that I be passed the means of self-destruction at once.
3

Behind the codes and numbers in Tolkachev’s note lay an astounding intelligence take. He had provided the United States with blueprints for several of the most modern radars then being developed and installed on Soviet interceptors and fighter planes. In December, the Defense Department told the CIA in a memorandum that as a result of Tolkachev’s trove of documents the air force had completely reversed its direction on a $70 million electronics package for one of the latest U.S. fighters.
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But Guilsher could see a larger crisis looming. Tolkachev had signed out so many documents he had left a road map of his own treachery. That permission sheet could wreck the whole operation. And now Tolkachev’s easy method of copying documents at home at lunchtime was imperiled by the new restrictions, requiring him to turn in his building pass.

For two and a half years, Gus Hathaway had fought hard to keep the lights on in the Moscow station. He pushed back against Turner and the stand-down. He insisted that Tolkachev was genuine. He brought Guilsher to Moscow. He stood guard against KGB intruders during the embassy fire. He suffered through the loss of Ogorodnik and Kulak but knew that losing an agent was a constant risk in the battle against the KGB. Hathaway eventually got the Moscow station back into spy operations, and even with setbacks the CIA had come a long way since the paralysis of the 1960s, when there hadn’t been an agent in Moscow worth talking about.

Hathaway was preparing to end his tour and return to headquarters to become chief of the Soviet division, but his last weeks in the Moscow station were filled with anxiety. In late December, 1979, the Soviet Union invaded Afghanistan, setting off a new period of tension with the West. The decade of détente was over. The SALT II Treaty was shelved in the Senate, a new European arms race got under way, and the United States threatened to boycott the upcoming Moscow Olympics.
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For the Moscow station, the Afghan invasion meant trouble. Hathaway warned headquarters on January 9, 1980, that the KGB would intensify surveillance on the streets. Having come so far with Tolkachev, he was determined not to lose him and vowed to step up security measures in the “deteriorating political situation.” He said the CIA station would monitor, electronically, “all known and suspect surveillance frequencies” on days when they were planning to meet Tolkachev. They would also pay special attention to the surveillance around the embassy and keep watch on Tolkachev’s apartment windows for signs of activity.
6

Tolkachev’s words to Guilsher and his letter in late December—describing the new security procedures at his institute, warning of his vulnerability for having signed out so many documents, and his “ruse” to steal more—worried headquarters. “Chilling,” observed one headquarters cable.
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The new security restrictions preventing Tolkachev from taking documents home to photograph might prompt him to take an even bigger risk, the CIA feared, such as sneaking the tiny Tropel cameras into his office. Already, Hathaway and Guilsher realized, Tolkachev was ignoring their plea to be careful. They needed to do something that would strengthen his confidence and their sway. On January 8, they wrote to headquarters, insisting it was time to give Tolkachev the L-pill that he so often demanded. They hoped it would reassure Tolkachev the CIA was paying attention to his needs.

Tolkachev’s appeal for the suicide pill the previous month made “valid points and draws logical conclusions,” they told headquarters. Tolkachev was right to feel vulnerable, they added. His security situation was worsening because of his own tendency to overproduce, to take out documents without a justifiable cover, and to carry them home. Guilsher and Hathaway told headquarters, “
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is not heeding our requests to proceed slowly and is charging ahead, following his desire to pass the maximum amount of materials in the shortest period of time.” They were not surprised by his willingness to commit suicide for a cause, they wrote. “He is apparently following course of action inculcated in every Russian citizen from childhood, i.e., it is glorious, courageous, and manly to make the ultimate sacrifice for the Motherland. There is no immoral connotation to making courageous and glorious decision to end one’s life while fighting for the cause.
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’s cause is to do the greatest damage to the Soviet authorities that he possibly can.” Guilsher and Hathaway recalled that Tolkachev “calmly and logically” promised that “he has the control and willpower” to refrain from using the L-pill until the very last moment. They reminded headquarters that if compromised, Tolkachev would certainly face KGB interrogation, trial, and execution. “We must reexamine his request” for a suicide pill, they wrote.
8

The question was taken to Turner, the CIA director, on January 17, 1980, in a memorandum carried by hand to his seventh-floor office. It was signed by Warren E. Frank, who was acting chief of the Soviet division until Hathaway arrived. In his memo, Frank predicted that Tolkachev “will probably continue to press hard” for the suicide pill, and he offered an excerpt of Tolkachev’s note in December saying the suicide pill was becoming “more essential for me.”

The Moscow station had made a strong appeal for the L-pill, but it was watered down by Frank before reaching Turner. Frank proposed that Guilsher “make another effort” to persuade Tolkachev “of the inadvisability of having an L-pill.” Guilsher had already done this. Frank laid out four “talking points” that Guilsher could use in talking with the restive agent. Guilsher had already received similar talking points from headquarters eight months earlier. However, in this list, a new point was included: “The Director of our organization has very strong, personal reservations, on both moral and operational grounds, against the issuance of this capability.”

The Moscow station wanted a clear and straightforward decision to give Tolkachev what he demanded. Instead, headquarters responded with fog and caution. Frank proposed giving the spy a vague promise the CIA would deliver the L-pill later. This was another way to stall. Even if Turner approved the L-pill in February, Frank suggested, “we will still easily be able to defer the issuance of the pill until winter of this year, based on the summer hiatus as well as manufacturing and concealment delays.” Frank’s memo asked for Turner’s approval for what was essentially a compromise—a vague promise to provide the pill someday, but only if Tolkachev “continues to feel it is necessary.”

Turner was unhappy with all of it. As Frank had written, Turner opposed the L-pill on both moral and operational grounds, and on the memo he scribbled the operational reasons. “We are concerned (in part from experience) that availability of L-pills can encourage an agent to take risks that are not prudent.” He also wrote, “The KGB is well aware of our distribution of L-pills to an agent and would doubtless be thorough in searching.”

At the bottom of the memo, the division had typewritten “APPROVED” with a space for Turner’s signature. On January 24, Turner wrote “Not” in front of “APPROVED” and said Guilsher should keep stalling and attempt once again to dissuade Tolkachev.

“Do not make commitment on this exchange.

“Stan.”
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Guilsher and Hathaway were sorely disappointed. Guilsher felt he understood Tolkachev’s thinking and feared an angry reaction. He archly reminded headquarters that “talking points” had already been covered with Tolkachev and further discussions along those lines “will only alienate him.” Moreover, he said, if Tolkachev were told the request was still pending, it could “lead to loss of this valuable asset.”

“Do we want to risk this?” he asked plaintively.

Guilsher also reminded headquarters that Tolkachev had warned them in October not to play games with him and had threatened to quit. At the time, Tolkachev had written, “I understand perfectly that I will only be able to end my cooperation by committing suicide.” Guilsher pointed out that he wouldn’t need the CIA’s suicide pill to take his own life. It was a very tough message to headquarters, suggesting the operation could collapse and they might forever lose Tolkachev, both the man and the espionage operation, because of Turner’s refusal to approve the suicide pill. Guilsher offered one last-ditch idea. In the next meeting, he said, he could tell Tolkachev that he should write a “personal letter” to the head of the CIA, appealing for the L-pill.