TIME: Almanac 1990/1990 Time Magazine Compact Almanac, The (1991)(Time).iso/time/022089/02208900.027

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WORLD, Page 50

COVER STORY: Moscow Station

How the KGB penetrated the American Embassy

By Ronald Kessler


    After the spy scandal among Marine guards at the U.S. embassy
in Moscow burst onto front pages two years ago, Ronald Kessler,
former investigative reporter for the Washington Post and the Wall
Street Journal, spent months interviewing Marines, diplomats,
Government investigators and intelligence sources to find out what
had happened. The author of three previous books (including Spy vs.
Spy: Stalking Soviet Spies in America), Kessler discovered that
Defense Secretary Caspar Weinberger had been correct when he
described the Soviet penetration of American security as "massive."
At a diplomatic mission with a striking lack of security, female
KGB agents seemed to have little trouble luring lonely Marines into
spying. In a cover story and numerous articles, TIME made a similar
assessment. But as suspects recanted their confessions, only one
Marine, Clayton Lonetree, was convicted of espionage. Embarrassed,
U.S. Government agencies took to minimizing the damage, contending
that the KGB had not looted the embassy of its secrets after all.
The spy furor quickly faded away. Yet, as Kessler details in the
following excerpts from his book Moscow Station: How the KGB
Penetrated the American Embassy, the security breach was even worse
than originally feared.

    GUARDING THE JEWELS

    The jewels to the CIA's Moscow station were shielded by a metal
shack behind a vault door on the ninth floor of the American
embassy. Known as the Communications Programs Unit, or CPU, the
shack was a metal chamber within a room as large as the Situation
Room of the White House, roughly 30 ft. by 20 ft. Made of
galvanized steel, the CPU looked like a huge walk-in refrigerator.
A dozen CIA, National Security Agency and State Department code
clerks worked inside it, protecting some of the U.S. Government's
most sensitive information.

    Within the CPU was the CIA's code room, the inner sanctum of
the mustard-colored beaux arts embassy building on Tchaikovsky
Street. Here, gleaming gray cipher machines encoded and decoded
messages transmitted by commercial satellite at 9,600 characters
a second between Moscow and CIA headquarters in Langley, Va. These
machines were the most precious commodity at Moscow station.
Through them flowed top-secret details of CIA operations targeted
against the Soviet Union. Other crypto machines in the CPU
transmitted the results of National Security Agency eavesdropping
on Kremlin communications, as well as instructions from Secretary
of State George Shultz to Ambassador Arthur Hartman on dealing with
the Soviets. If the Soviets could read the messages, they would
know how to counter American arms-negotiating strategies and evade
NSA eavesdropping techniques. Most damaging of all, they would be
able to identify the CIA's informants in the Soviet Union. For such
informants, this would almost certainly mean execution.

    The CIA was supremely confident that the codes couldn't be
broken. Yet in recent years the KGB's efforts to penetrate the
embassy had grown from a drizzle to a downpour. By 1984 the KGB had
managed to implant bugs in 13 IBM Selectric typewriters used in the
Moscow embassy and the consulate in Leningrad. The bugs recorded
the movements of the typing balls and transmitted the information
in coded bursts to a KGB listening post in an apartment next to the
embassy. As a result, all of the highly classified data prepared
on the bugged typewriters -- including names of CIA officers
stationed at the embassy -- found their way to the KGB's
headquarters.

    But bugging typewriters and breaching the inner chamber of the
CPU were entirely different matters. All the ingenuity and
technical resources of U.S. intelligence agencies had been
marshaled to make sure the embassy's communications were secure.
Beyond that, U.S. Marines were there to guard the jewels with their
honor and their lives. The Marines were the front line of defense.
Of all the services, they had the reputation of being the fiercest,
the most patriotic, the toughest.

    But their adversary was shrewd. Ever since the U.S. and Soviet
Union had established diplomatic relations in 1933, the Soviets had
been trying to compromise embassy employees and gain access to U.S.
codes. What better way to do that than by having KGB officers and
informants work in the embassy right alongside the Americans? It
seems inconceivable that the Americans would allow such a thing.
Certainly neither the CIA nor the State Department would ever
permit a Soviet national to work at their headquarters in
Washington, not even to sweep the floors. Nor had the Soviets ever
let an American work inside their embassy in Washington.

    Yet over the years the KGB had woven such a cocoon around the
Americans in Moscow that they actually wanted Soviets to work in
the U.S. embassy. When Americans came to Moscow, they found that
everything from looking up a telephone number to hiring a plumber
took an inordinate amount of time. It was easier and cheaper to
employ Soviet nationals at the embassy to cut through Moscow's
bureaucratic jungle. And only Soviets supplied by UPDK, a state
agency controlled by the KGB, could work in foreign embassies in
Moscow.

    So the Americans used the Soviets to drive them to the ballet,
cut their hair, fix their radios, answer their phones at the
embassy switchboard. A would-be defector had to talk first to a
Soviet before he could plead for help from an American. The KGB had
206 Soviet informants working in the U.S. embassy, outnumbering the
Americans.

    SOME FUZZY RULES

    For the Marines stationed there, arriving in the Soviet Union
was like stepping onto another planet. Driving from Sheremetyevo
International Airport, they were impressed by how shabby everything
seemed. The embassy, a ghastly yellow, looked more like a grubby
warehouse than an office building.

    The Marines entered the embassy through Post 1, which controls
access to the building. To the left of the entrance, just inside
the door, the post was enclosed in bulletproof glass. It was the
size of a highway toll booth. Video monitors and switches lined
the cubicle. Keys dangled from hooks on the walls. The post guarded
the central wing of the embassy that housed offices and some
residences. The south and north wings housed mostly residences.
Including the Marines, roughly 100 Americans lived within the
embassy.

    On the second floor of the north wing was part of the Marine
House, a depressing area that included a bar, pool table and
kitchen. Yellow, peeling linoleum barely covered the floor. The
Marines actually lived on the second, third and fourth floors of
the central wing. The seventh and higher floors of the central wing
were the embassy's secure areas. The CIA was on the seventh floor,
along with the State Department's political section.

    More than half of the ninth floor was taken up by the CPU. On
the rest of the floor were the offices of the ambassador, his
deputy and the regional security officer, or RSO. On the tenth
floor were NSA employees, who eavesdropped on Soviet
communications, and the military attaches, who gathered information
on Soviet military strength. An attic contained sending and
receiving equipment and a shredder and incinerator.

    To get to the secure floors, the Americans had to take the main
elevator to the ninth floor. There, in a small anteroom, was Post
3, the most critical guard post in the embassy, a platform
surrounded by a high, horseshoe-shaped Formica counter. Anyone who
wanted to enter the CPU or the ambassador's office, or the other
secure floors, had to pass by the Marine at Post 3.

    According to the rules, Marines could have female guests only
in the lounge area in the north wing. Another rule said Marines
"will not fraternize with foreign nationals of either sex from any
of the following countries: Bulgaria, Rumania, Hungary,
Czechoslovakia, Poland, the U.S.S.R., Yugoslavia or East Germany."
Any contact, except at an embassy function, was to be reported to
the noncommissioned officer in charge. At the same time, a Navy
rule said any "form of contact, intentional or otherwise, with any
citizen of a Communist-controlled country . . . must be reported
to the Naval Investigative Service."

    This placed the Marines in an ambiguous position. The NIS had
no representative in Moscow. Moreover, a State Department rule said
contacts should be reported to the RSO. Worse yet, many Marines
felt they could get in trouble for reporting any contacts. As a
result, each Marine had his own interpretation of what should be
reported.

    One of the Marines' most important functions was to write up
embassy employees who violated the rules on safekeeping of
classified documents. A violation could lead to suspension or
dismissal. Yet when the Marines issued violations, Richard H.
Klingenmaier, the RSO, would often refuse to ratify them.

    The Marines were also unhappy about the video monitors they
were supposed to watch to determine whether they should let cars
enter the embassy's courtyard. If they did not recognize the
drivers, they were not supposed to let them in. But the cameras
produced blurry pictures, froze up or didn't turn on at all. "You
could barely make out if it was a car or if it was a Soviet or an
American," said one Marine sergeant.

    Another concern was Ambassador Hartman's approach to security.
An avuncular man with thinning white hair, blue eyes and a round
face, he was one of the brightest officers in the Foreign Service.
He knew little about security, nor was he supposed to. But he was
convinced he knew more than the experts.

    When Master Gunnery Sergeant Joey Wingate arrived in Moscow,
he was shocked to learn that Hartman did not allow the Marines to
wear weapons. "He said, `I just don't want an incident where we
shoot a Soviet,' " said Wingate. "I felt he'd rather have a Marine
killed." Wingate finally got Hartman to agree to let the Marines
wear guns -- unloaded. The ammunition was to be kept at their guard
posts in a drawer. "One of the things you're there for is to make
contact with (Soviet) society, not to cut yourself off," Hartman
would say. "If the idea is to build a bunker, you might as well
close it down."

    The same reasoning led Hartman to say he preferred Soviets over
Americans for certain tasks. "I'd rather have a basic number of
them doing things like running my car and a few other jobs, and
they would find out no more than the guys watching us from the
windows," he said. He maintained he wanted the Soviets to hear most
of what he was saying anyway. "I wanted them to know my view of
what was going on. We would go in the (secure) room on sensitive
stuff."

    PROMOTING A LOSER

    Given the well-documented tactics of the KGB, the last thing
anyone would want to do is send a young, immature, single man to
Moscow. Almost perversely, that is what the State Department and
the Marine Corps had been doing since 1934. And of all the
candidates sent there, it would be difficult to imagine anyone less
qualified than Clayton Lonetree.

    Self-pitying, naive and impudent, Lonetree had unrealistic
expectations of himself, a consuming need to be loved and barely
enough intelligence to fire a weapon, let alone defend himself
against the sophisticated onslaught of the KGB.

    Not that he did not come from a distinguished family. His
grandfather had been chief of the Winnebago Indians of Wisconsin.
His great-uncle Mitchell Red Cloud, a descendant of Chief Fighting
Bull, had won the Congressional Medal of Honor during the Korean
War. His father Spencer Lonetree, a Winnebago and Sioux, was active
in Indian affairs and had gained the respect of a number of local
politicians. But he was also a stubborn, vain man, and Clayton felt
he had a drinking problem.

    Spencer never married Clayton's mother Sally Tsotie, who is
part white and part Navajo. When Clayton was eight, his mother took
him and his younger brother Craig to New Mexico, where she worked
as a cook in an Indian mission. After four months she returned to
the Navajo reservation, leaving the children at the mission. Asked
why she did so, she replied that Spencer "didn't give me money to
pay rent or buy food. Men never pay." Clayton never recovered from
the hurt of being rejected.

    Spencer Lonetree took the children to Minnesota. At Johnson
High School in St. Paul, Lonetree handed his American-history
teacher a notebook with a swastika and the inscription "Hitler
Lives" on the cover. His teacher returned the notebook to Lonetree.
Later Lonetree handed in the notebook again with the inscriptions
"Holocaust is a lie" and "Adolf Hitler." Inside he wrote, "Jews are
our misfortune" and "Hitler had the right idea."

    In the summer of 1980, Lonetree enlisted in the Marines, in
part to get away from his father. He was one of the smaller
recruits at 121 lbs. and 5 ft. 7 1/2 in. tall. After making
corporal, he decided to become a Marine security guard. He said he
wanted to become a guard because he was "looking for a little
adventure."

    Many excellent Marines had served in the program, but by
Lonetree's day it was known as a dumping ground. Between 1980 and
1987 no fewer than 545 Marine guards -- 10% of the total on duty
during that time -- had been removed for infractions including
black-marketeering, rape, fraternizing and drug use. If there ever
were a case for dropping Marines as embassy guards, it was
contained in those records.

    Almost from the beginning of his Moscow assignment in 1984,
Lonetree, then 22, was in trouble. Usually it only took a few
drinks for him to become unruly. One night he locked himself out
of his room, passed out on the floor and showed up 7 1/2 hours late
for guard duty.

    It was a mystery to Wingate how Lonetree had ever got into the
guard program. "He was a loner, not very articulate, borderline in
the mental category," he would say later. Yet within several months
of his arrival, the Marine Corps promoted Lonetree to sergeant.
Wingate objected but was overruled.

    In the summer of 1985, a Navy officer found Lonetree asleep on
guard duty. Wingate recommended that he be sent back to Quantico,
reduced in rank to corporal and removed from the guard program.
Again he was overruled. Having made the mistake of sending Lonetree
to Moscow, the Marine Corps now compounded the error by ignoring
evidence that he was unfit to guard a grocery store, let alone the
CIA station in Moscow.

    ONE-NIGHT-STANDS AND SWALLOWS

    Five embassy wives, dubbed by the Marines "the home wreckers,"
routinely picked up Marines at Uncle Sam's, the embassy disco, on
Friday nights. Typically, one wife would sit with a Marine and
mention that another wife was interested in him. "If he wants her,
she's up for grabs," was the not-so-subtle line leading to a
one-night stand. One young State Department employee made it a
practice to sleep with as many Marines and Seabees as she could.
In September she took on three Marines in one of their rooms.

    In a hostile environment like Moscow, the affairs invited KGB
blackmail. Yet Wingate was less concerned with the home wreckers'
activities than with the number of Marines seeing Soviet women. One
guard had been going with a well-built Soviet woman for six months,
leaving her pregnant. Her father was an intelligence officer
formerly stationed in Washington.

    For months Lonetree had had his eye on a 25-year-old Soviet
woman who worked in the embassy. To Lonetree, she had everything:
5 ft. 9 in., 130 lbs., fair skin, high cheekbones, good figure,
large gray eyes, sandy brown hair cut to her neck. She dressed
stylishly, wore makeup well, spoke almost perfect English. UPDK,
the Soviet agency that supplied workers, had sent her to the
embassy in May 1985. Initially, the woman, Violetta A. Seina, was
a receptionist for the ambassador. Hartman's wife Donna took an
immediate dislike to her: "She was like a pussycat, always waiting
and watching." Hartman had Violetta reassigned to the customs area,
where she worked no more than 10 ft. from Post 1. Lonetree could
not help noticing her.

    Lonetree loved to ride Moscow's marble-floored, chandeliered
subways, which cost five kopecks -- about 6 cents. In September
1985, he saw Violetta on the subway. He thought the meeting was a
chance encounter; most likely the KGB had set it up. Lonetree had
just gone through disciplinary proceedings and was known to become
boisterous after only a few drinks -- a ripe target. The two
chatted for a few minutes, then parted.

    He saw her again on a subway train in October. After she missed
her stop, they got off at the next one and took a walk. They met
again at the Marine Corps ball on Nov. 10. Violetta showed up with
two women, Galya and Natasha, who worked at the embassy; the CIA
later identified them as KGB officers. Lonetree danced with
Violetta several times. He was hooked.

    Lonetree met Violetta at a subway station again in December,
and she invited him to her home. She showed Lonetree books, records
and her childhood photos. They discussed the fact that the embassy
had just fired her and that UPDK had assigned her to work at the
Irish embassy.

    Lonetree began having sex with Violetta in January 1986, and
the KGB began stepping up the pressure. Some weeks later, Violetta
introduced Lonetree to a man she said was her Uncle Sasha. Sasha,
33, was 6 ft. 4 in. tall and had a large frame and graying brown
hair. According to CIA files, Sasha in fact was Aleksei G. Yefimov,
a KGB officer.

    Pretending he did not speak English well, Yefimov asked
Lonetree about life in America. It seemed to Lonetree that Yefimov
treated Violetta like a daughter. Lonetree did not suspect that
Yefimov was anything other than her Uncle Sasha.

    Now the KGB moved in for the kill. Violetta told Lonetree that
Uncle Sasha wanted to see him again. Already subject to blackmail
and eager to continue seeing her, Lonetree agreed to meet him early
in February 1986. This time, Yefimov's English had improved; he no
longer needed Violetta to translate. She had previously told
Lonetree the Soviets wanted peace, and Lonetree empathized with
that view, saying he was a friend of the Soviet Union.

    Now Yefimov said, "If you are a friend of the Soviet Union,
you will help me and Violetta."

    "How is helping you going to help her?" Lonetree asked.

    "She's your friend, but you would also be helping the Soviet
people."

    Yefimov pulled out a list of questions he said had been
prepared by a friend who was a KGB general. Was Michael Sellers,
a second secretary of the embassy, in the CIA? Lonetree did not
always know for sure. But from the locations of staffers' offices
and whom they associated with, he could make a few deductions.
About a month later, the Soviets expelled Sellers for allegedly
engaging in spying. It is likely the Soviets knew about Sellers and
were testing Lonetree to see if he would confirm the CIA identity.

    Yefimov next asked about Murat Natirboff, widely known to be
the CIA station chief. Lonetree confirmed that he was. Yefimov
asked Lonetree if he could plant bugs in the offices of Natirboff
and Hartman. Lonetree said he would not.

    The fact that Yefimov did not ask Lonetree to place bugs in the
CPU is significant. Indeed, nearly all his questions had to do with
the seventh floor, where the CIA was located, rather than the ninth
floor, site of the CPU. In retrospect, this raised the question of
whether the Soviets already had bugs in the CPU.

    Yefimov asked Lonetree if he could get the plans to the seventh
floor, and he said he would try. From having an affair with a
Soviet woman, Lonetree had passed over the line to espionage.

    A few weeks later, Lonetree brought along floor plans that he
stole from the embassy. Yefimov produced a folder containing photos
of more than 300 embassy personnel. He asked Lonetree to arrange
the photos to show who was married to whom. Lonetree did so.
Yefimov pulled out an embassy phone book and asked about the
functions of each person. Besides Sellers and Natirboff, Lonetree
disclosed the names of two other CIA employees who were never
expelled.

    Turning to the floor plans, Yefimov asked Lonetree to mark
sensitive spaces, secret doors and security devices on the seventh
floor. Lonetree told him how the alarm systems worked and how the
Marines reacted to them. Yefimov was particularly interested in
Hartman's desk. Several times he asked Lonetree to describe it,
presumably so the KGB could design a listening device for it.
Repeatedly, he asked if Lonetree would place listening devices in
the embassy, and repeatedly Lonetree declined.

    Lonetree tried to tell himself that the nature of the visits
had not changed, that they were still social, that Violetta had no
connection with the KGB. If he had admitted to himself that she
was a KGB plant, he would have to face up to the fact that she did
not love him. She gave him the love he had craved as a child, and
that was more important to him than their four sexual encounters.

    Transferred to the Vienna embassy in March 1986, Lonetree
received love letters from Violetta ("Clay, I'm just scared to
death of losing you"). He also continued to meet with Uncle Sasha,
giving him information on Vienna embassy personnel and floor plans.
But he was in an alcoholic fog much of the time.

    Confused and apprehensive, Lonetree approached the CIA station
chief at an embassy Christmas party on Dec. 14, 1986. Edging the
man toward a crackling fire, Lonetree said he had been seeing
Soviet government officials in Vienna.

    For the next ten days the CIA debriefed Lonetree. Since the CIA
is not a law-enforcement agency, it was not interested in
preserving evidence or making sure he would talk in the future --
only in how much damage Lonetree had done and whether he might be
used as a double agent. These deficiencies reveal a weakness in how
the U.S. Government handles espionage by Americans overseas, a
weakness that would haunt the CIA later.

    Thick-skulled to the end, Lonetree said he bore no ill will
toward Violetta. He told a CIA officer, "If Sasha was really her
uncle, then she was somewhat obligated to support him."

    A STRAIGHT-UP MARINE

    After Hartman in early 1986 decided to cut the size of the
Soviet work force in hopes of minimizing complaints about the
security dangers it posed, two Soviet cooks were dismissed. Nina
Sheriakovo, the senior cook, was blond and busty and, at 40, wore
low-cut dresses. But the Marines did not think she was particularly
attractive, partly because she did not bathe often.

    Her assistant, Galina N. Golotina, had been with the embassy
since January 1985. More petite than Nina, Galya was 28, weighed
115 lbs. and stood 5 ft. 3 in. tall. She had green eyes and brown
hair. The Marines made fun of Nina, claiming she made a habit of
offering to show them her breasts. But they liked Galya, a divorcee
with an eight-year-old son.

    As the noncommissioned officer in charge of ordering food
supplies, Corporal Arnold Bracy had the most contact with Galya.
Several times a week, the 6-ft. 1-in. Marine consulted her to find
out what food the cooks needed. Bracy was a straight-up Marine. The
fact that he did not drink or carouse with girls made him an
unlikely candidate for recruitment. But Bracy had one weak spot:
he had obviously developed a fondness for Galya.

    Certainly there was nothing in Bracy's background that would
lead one to suspect that he could be compromised. Born on Nov. 28,
1965, he grew up in a religious family in Queens. His father,
Theodore R. Bracy, is a subway motorman and an evangelist deacon
at Calvary Full Gospel Church in Woodside, N.Y. Both he and his
wife Frieda have bachelor's degrees in theology.

    After high school, Bracy joined the Marines in June 1983. He
later signed up for security-guard school and chose Moscow as his
first post. There he at first retained his prim view of sex. While
he had previously dated a few girls, he had remained a virgin
because of his religious convictions. Before Marine parties,
several women would change clothes in Bracy's room in front of him,
hoping to attract his attention. He would walk out so he wouldn't
see them naked.

    But Galya was different. She was not pushy and did not run
around with other men. Bracy admired that. Her English was not
good, and that made him feel protective toward her. In the months
before Galya was fired, several of the Marines noticed that she and
Bracy seemed to have become quite close. Sensing the same thing,
Wingate warned Bracy about fraternizing. He appeared to see her
less after that. But many of the Marines thought the relationship
had not cooled.

    Frederick Mecke, who had succeeded Klingenmaier as regional
security officer, was at the embassy on Sunday, June 29, 1986, when
Bracy asked if he could talk with him. They went into the secure
"bubble" on the ninth floor, and Bracy began unraveling a bizarre
tale. He said he had run into Galya in a park near the Kosmos
Hotel, and they began chatting. By then she was working as a nanny
for the family of Philippe Duchateau, the embassy's deputy press
secretary. After some pleasantries, she blurted out that someone,
possibly from the KGB, had asked her to bring Bracy to a certain
apartment. The idea was to entrap him sexually. If she did not
cooperate, she told Bracy, UPDK would fire her. After ten minutes,
Bracy went back to the embassy. Or so he told Mecke.

    Mecke reported the incident to State Department security. He
decided Galya should not be fired as the Duchateaus' nanny; after
all, she had reported the KGB attempt. But Mecke let Bracy know he
should have nothing to do with her.

    Mecke was in his office on the afternoon of Aug. 20, 1986, when
Duchateau came in with a strange tale. He and his wife had let
Stephen Wright, an ABC-TV sound man, and his wife stay in their
apartment while they were away on vacation. When the Duchateaus got
back, Wright told them a black Marine and Galya were having sex in
the bedroom as they arrived at the apartment. Flustered, the Marine
told the Wrights he had been inspecting the place. He quickly left.

    Bracy's report of nearly two months earlier flashed through
Mecke's mind. He checked the liberty log for the day when the
Wrights arrived at the Duchateaus' apartment. Bracy was the only
black Marine who had signed out.

    Mecke immediately called him in. Bracy seemed nervous. He said
he had been in the apartment with Galya but denied having sex with
her, claiming he went to the apartment because the former embassy
cook was pressuring him to cooperate with the KGB. He wanted to
tell her he would have no further contact with her. Mecke did not
believe a word of it. Why would anyone visit someone to say he
would not see her?

    The next day Mecke told Hartman about it, saying of Bracy: "He
is very vulnerable. It's in our best interests to get him out of
the country immediately." Hartman agreed. On orders from Mecke,
Duchateau fired Galya.

    That night Corporal Robert J. Williams went to see Bracy in
his room at the Marine House. Williams later informed the Naval
Investigative Service that Bracy told him he had fallen in love
with Galya and had given the Soviets classified documents in
exchange for thousands of dollars. Williams subsequently recanted,
saying the NIS coerced him. Bracy also denies making the comments.

    Yet others have said Williams told them essentially the same
thing. His former girlfriend, Taina Laurivuori, a Finnish citizen
who worked as a nanny to a U.S. embassy employee, said she
accompanied Bracy and Williams to the airport four days after
Duchateau reported the incident in his apartment. Laurivuori said
Bracy looked sad, and she asked Williams what was wrong with him.
Williams said a Soviet girl had set Bracy up.

    Later, after Bracy was arrested, Williams called Laurivuori
from Vienna, where he was then based. Recalling the ride to the
airport with Bracy, Williams said to her, "Don't tell anybody, but
the day before we went to the airport, Arnold told me he was doing
that spy stuff."

    Lance Corporal Philip J. Sink, a Marine security guard
stationed in Vienna, also said Williams told him that Bracy had
confessed to him. Sink quoted Williams as saying, "Bracy came to
me one night and was crying and telling me he was in over his head.
He had done things he shouldn't have done, and he didn't know what
to do." Williams said something about a $1,000 payment.

    Bracy was demoted to corporal and sent to the Air Ground Combat
Center at Twentynine Palms, Calif.

    "WE'VE GOT ANOTHER SPY!"

    On Dec. 22, 1986, after Lonetree's confession in Vienna, the
NIS began an investigation of security breaches at Moscow station.
The NIS would interview 487 Marines and 1,285 other people and
administer polygraph tests to 260 people.

    As espionage cases go, it should have been easy. Lonetree had
already confessed to taking $3,500 from the Soviets in return for
classified information. He was still talking. It remained for the
NIS to warn Lonetree of his rights, take his confession and tie up
a few loose ends.

    But the NIS proved to be as good at investigating espionage as
the State Department was at protecting security. In fairness, the
FBI normally handles espionage investigations. Only when the target
of the investigation is a military man and no civilians are
involved do the military services have exclusive jurisdiction.

    NIS agents took Lonetree to a suite in the Strudlhof hotel near
the Vienna embassy. After waiving his right to a lawyer, he held
forth about his escapades with Violetta and Sasha. He almost seemed
to be enjoying the attention. At one point, Lonetree told the
openmouthed agents that he knew Yefimov liked him because of the
way he smiled at him.

    The next morning, the agents flew Lonetree to London, into the
Holiday Inn near Heathrow airport. After 2 1/2 days of interviews,
Thomas E. Brannon, an NIS polygraph agent, talked with Lonetree for
six hours. The following day he began administering polygraph
tests. After Lonetree signed a second statement based on what he
told Brannon, he began registering deceptive responses on the
machine. Brannon thought the Marine was holding something back.

    Brannon decided Lonetree must have taken documents from the
embassy in Vienna and began pressing him. Lonetree continued to
deny taking any documents. As Brannon increased the pressure,
Lonetree finally said, "Do you want me to lie to you?" "Yes,"
Brannon replied.

    Lonetree said he stole three top-secret documents from the
embassy's fourth-floor CPU and 200 secret documents he was supposed
to burn at the embassy. Then he began hyperventilating and went
into the bathroom to splash cold water on his face. When he
returned, he said he wanted a lawyer.

    Slow as he was, Lonetree saw no point in talking to someone
who told him to lie. Within 48 hours the NIS established that he
had in fact lied: the secret documents never existed, nor had he
been on watch when he said he took them. But the damage had been
done. By pressing Lonetree too hard and losing his confidence, the
NIS had lost the cooperation that is so vital in an espionage case.

    By March 1987 the NIS had interviewed 200 Marines, CIA
officers, diplomats and military attaches who might have known
anything about Lonetree. Still the NIS had not interviewed Bracy.
He was thought to be a 5.0 Marine -- the perfect performance score
-- and was low on the interview list.

    That changed on March 16, 1987, when veteran NIS agent David
Moyer was in Vienna to discuss Lonetree's case with the CIA station
chief. Now Moyer learned something startling from the chief:
Lonetree had mentioned that Bracy told him in Moscow he was
secretly seeing the Soviet cook, Galya, and that she wanted to
introduce him to her uncle. Recognizing that the KGB might have
recruited yet another spy, Moyer cabled NIS headquarters and said
Bracy should be interviewed immediately in California.

    The last thing to do at this point was to interview Bracy. In
any investigation, all the facts must be assembled before the
target is confronted. Had the NIS gone about its job properly, it
would have done a thorough background investigation into Bracy's
history and character. But NIS special agent R. Michael Embry in
Twentynine Palms was ordered to interview Bracy immediately. He
began doing so on March 18, 1987.

    Embry felt Bracy was lying when he said he had not had sex with
Galya. But he did not think Bracy had committed espionage. The next
day, two NIS polygraph agents took Bracy to a motel near Twentynine
Palms for lie-detector tests. When the operators told him he was
registering deceptive reactions, Bracy began changing his story
about his meeting with Galya in the Duchateaus' apartment. In a
statement he signed after the test, he said, "She moved closer to
me and initiated the sexual contact, and we began making out. After
a short time she suggested we go to the bedroom, where we had sex.
After having sexual intercourse, she told me that they had been
putting pressure on her family so she would arrange for me to meet
`Uncle Sasha.' She implied that he really was not her uncle but
that was what she was supposed to tell me." She said her uncle
would be interested in learning "who was leaving the embassy and
who was going to replace them, and the names of the people working
for the CIA."

    The following day, Bracy signed another statement, one that
would rock the intelligence community. According to that statement,
Bracy ran into Lonetree one night in the kitchen of the Marine
House in January 1986. Lonetree "was very drunk," Bracy said. "He
was obviously pretty worked up and mad at the system and how the
Marine detachment was run. He remarked that he was paying them back
in his own way. I asked him what he meant, and he said, `I've been
letting people in the embassy.' I knew he was talking about
Russians. He said he had done it many times."

    About two weeks later, Bracy said, he saw Lonetree escorting
a Soviet man into the courtyard one night and on another night saw
him escorting someone through the embassy itself. "I felt sort of
sorry for him, so I decided not to report what he had told me,"
Bracy said. "He told me at that time that this had been going on
all the time. I had been standing duty with him, and if I did not
cooperate, I would be just as guilty as he was."

    Beginning in February, Bracy said, he agreed to turn off the
alarms while Lonetree brought Soviets into secure areas. He also
warned him if the sergeant-of-the-guard was coming. He said he
helped let Soviets into the CPU three times for an hour each time.
Bracy said Lonetree gave him $1,000 for helping him.

    Bracy signed this final incriminating statement on Friday,
March 20, 1987. At that point, he overheard the agents talking
outside the room. One of them said, "We've got ourselves another
spy!"

    As soon as he heard the comment, Bracy told the agents he
wanted to retract his statement. They told him he could be charged
with perjury for swearing falsely under oath. He said he would
rather go to jail for perjury than espionage. The next day, Bracy
said he wanted a lawyer. He never talked to the NIS again. The NIS
then compounded its blunders by arresting Bracy on the spot. After
he retracted his statement, the NIS had no evidence to hold him on.

    IGNITING A FIRE STORM

    When I interviewed Bracy at the coffee shop outside the
Quantico Marine base, he said that the NIS agents got him to
implicate himself by telling him that the statements would only
help in their investigation of Lonetree. According to Bracy, the
agents came up with the scenario that Lonetree and Bracy let the
Soviets into the embassy. He said they asked him hypothetical
questions, then wrote the answers as fact.

    But it was one thing to implicate others in crime and another
to confess to espionage himself. Unless he had been tortured, it
was difficult to see why Bracy would confess -- unless he was in
fact guilty. What made me decide he was telling the truth when he
confessed to letting the KGB into the embassy was the fact that his
subsequent accounts clashed repeatedly with the accounts of other
witnesses I interviewed. Indeed they even clashed with Bracy's own
version of the events. I was to find that every time he opened his
mouth, Bracy told a different version of what took place between
him and Galya.

    Also persuasive was Bracy's detailed knowledge of how easily
the guard at Post 3 could let the KGB into the CPU at night. As
Bracy told me, the Marine at Post 1 guarding the main entrance left
at 11:30 p.m. At that point, the Marine at Post 3 on the ninth
floor controlled access to the entire embassy through video cameras
and intercoms. That Marine could not only let the KGB through the
front door; he could also let the KGB into the secure areas and
provide combinations to the CPU vault.

    To be sure, the combinations were encased in plastic pouches.
After sealing them, a CPU communicator wrapped them in tape that
he signed. If a pouch were opened, it could not be resealed. The
next morning, a communicator checked to make sure it was intact.
But it would have been relatively easy for the KGB to substitute
a pouch complete with tape and forged signatures.

    The one defense against a surreptitious entry -- the CPU alarm
system -- was useless. When the CPU alarms were triggered, a buzzer
sounded, and a red light went on at Post 3. By flipping a switch,
the Marine could silence the buzzer and turn off the red light. A
yellow light then went on to show that the alarm had gone off. Only
a communicator from the CPU could turn off the yellow light by
resetting the alarms. But the system did not show when the alarms
had been triggered. The Marine on Post 3 could easily let the KGB
into the CPU at 2 a.m. Then at 6 a.m. he could tell the CPU
communicators the alarms had just gone off.

    In the end, the answer to the puzzle lay in Bracy's six-page
confession. Most Marines did not realize, as Bracy did, that they
could silence the alarms in the CPU and lie about when the alarms
had gone off. When CIA officers read his statement, they felt it
was authentic.

    On the other hand, there was an air of unreality to Bracy's
description of Lonetree's involvement. The two were not close. It
was unlikely the reclusive Lonetree, even if drunk, would tell
Bracy he was letting the Soviets into the embassy.

    Ultimately, it became clear even to the NIS that Bracy had made
up the story that Lonetree let the KGB into the embassy. Bracy had
claimed he helped Lonetree let the Soviets into the CPU in February
1986. But the two stood posts together at night only twice -- in
October 1985 and in November 1985. Lonetree passed lie-detector
tests on his statement that he had not conspired with Bracy.

    Bracy's confession was like a picture of a human face drawn by
a schizophrenic. One side was real, the other -- relating to
Lonetree's actions -- was not. But what if Lonetree were taken out
of the picture? What if Bracy let the Soviets in by himself? Then
the face became whole.

    According to this version, Bracy first began having sex with
Galya in January 1986, as he confessed. Galya then introduced him
to her "uncle." Afraid that he would be found out, Bracy began
letting the Soviets into the CPU in February. The report of seeing
Galya in the park in June 1986 was a ruse to throw off suspicion.

    When the NIS confronted him, Bracy realized that the agents
were after Lonetree, not him. To clear himself, he made up the
story of Lonetree's involvement, thinking he would shift the blame.
He may not have realized that a co-conspirator is just as culpable
under the law as the perpetrator.

    Most compelling is that this version of events conforms with
Yefimov's demands of Lonetree. The KGB officer asked Lonetree to
place bugs in the offices of the CIA station chief, the ambassador
and the regional security officer. He did not ask him to place bugs
in the CPU, which should have been the KGB's first target -- unless
the KGB had already penetrated it.

    By this scenario, the KGB was not trying to recruit Bracy to
replace Lonetree. It was the other way around. By the time Yefimov
began meeting with Lonetree in early February 1986, the KGB had
already recruited Bracy, according to Bracy's statement.

    The NIS, wedded to the idea that two or even three Marine
guards were needed to let the KGB into the embassy, never came to
this conclusion. Recognizing that Lonetree had not conspired with
Bracy, the NIS spent countless hours trying to fit other Marine
suspects into the conspiracy.

    Unlike the NIS, the FBI concluded that only the guard standing
Post 3 was needed to let the KGB into the CPU. In fact, the FBI
decided that security was so lax that the KGB could have got into
the CPU by simply distracting the Marine at Post 3, possibly with
a girl.

    Ultimately, this was the most scandalous fact of all: that the
security of Moscow station and the protection of many of America's
most important global secrets depended on the integrity of a single
young Marine stationed on the KGB's home turf.

    "I didn't let anybody in the building," Bracy told me. "If I
did anything, I'd be in the brig like Lonetree. I'm out of the
brig, so it didn't happen."

    Bracy's confession ignited a fire storm in Washington. Now it
seemed there was no question that the KGB had got into the jewels
at Moscow station. There was only one problem: Bracy had recanted.
Nor was there any corroboration for his story.

    The Marines announced Bracy's arrest on March 24, 1987, saying
he was suspected of espionage. Two days later, the Marines
announced that additional charges had been filed against Lonetree.
According to the new charges, Lonetree let the Soviets into the CPU
and other sensitive areas of the embassy while Bracy acted as
lookout. The new charges were based solely on Bracy's confession.
Suddenly the Marine security-guard scandal was front-page news.

    Unfortunately, interrogations that brought out allegations of
espionage tended to collapse as soon as the Marines left the
interrogation rooms. On April 19, 1987, Williams retracted his
statements against Bracy. The Marine Corps charged Williams with
making false statements. On May 10, 1987, Bracy formally retracted
his statements, saying they were coerced by the NIS. Five days
later, the Marine Corps dropped the charges against Lonetree that
had been based on Bracy's confession. Finally, on June 12, the
Marine Corps dropped espionage charges against Bracy.

    In recommending dismissal of the charges, Bracy's prosecutor,
Major Charles A. Ryan, admitted there was no corroboration for his
confession but said he still believed Bracy was guilty. Unless
there was "significant coercion," he wrote in a memo, "there is no
conceivable reason why any Marine would ever confess to a crime
such as espionage unless he had actually engaged in this conduct
against his country. The inescapable conclusion I am forced to draw
is that Corporal Bracy was involved in espionage." (Bracy, no
longer a Marine, nonetheless still lives on the Marine base at
Quantico, Va.; he married a woman in the service.)

    As for Lonetree, he was convicted by a military jury of 13
counts of espionage and sentenced to 30 years in prison. This was
later reduced to 25 years. He will be eligible for parole after
serving a third of his sentence. Even as he sat in the brig at
Quantico because of the trap Violetta Seina had laid for him,
Lonetree pined away for her. He asked his father to find her and
tell her he was O.K. Insisted Lonetree: "I believe she loves me."

    A CHILLING DISCOVERY

    By the end of 1987, the State Department had begun leaking
stories that no evidence of a penetration of the embassy in Moscow
had been found. The stories overlooked the fact that the KGB had
penetrated the embassy by introducing bugged typewriters into
secure areas and obtaining secret information about the embassy and
its employees from Lonetree.

    What the State Department and the press did not know is that
evidence of a penetration had been found -- but the CIA and the NSA
covered it up. In the summer of 1987, the State Department shipped
the entire CPU and all the communications equipment from both the
Moscow and Leningrad missions -- 120 crates from Moscow alone --
to Virginia. After the FBI took custody of the material, some 20
NSA technicians began examining each part, using X-ray,
spectroscopic and infrared analysis.

    In August 1987 the NSA made a chilling discovery. The power
line to the CPU in Moscow had been replaced. That meant the KGB
could have diverted signals from cipher machines within the CPU to
the outside. Next the NSA found that 8-in. by 14-in. circuit
boards, along with chips the size of quarters, had been replaced
in the printers. The new components appeared to be diverting
uncoded signals from the "red side" of the communications circuits
to the power line. The NSA later found similarly sinister devices
in the CPU from Leningrad.

    The KGB had turned the CPU into a gigantic listening device.
Because the Soviets could compare the uncoded "red side" signals
with the encoded "black side," they most likely could replicate the
cipher keys -- the unique data that was needed to decipher the
messages -- used by other American embassies throughout the world.
That raised the possibility that the KGB had been listening in on
communications not only from Moscow and Leningrad but also from
Vienna, Helsinki and London. Since equipment in the CPU had been
replaced in 1984, the penetration of the jewels to Moscow station
could have gone back that far.

    Only a dozen people, including President Reagan, were told of
the findings. In deciding to keep the findings secret, the CIA and
the NSA could always claim that there were legitimate national
security reasons for doing so. But there was another reason for the
secrecy. "There's a cover-up to hide embarrassment, to cover ass,"
said one intelligence official.

    According to these sources, the result of the communications
penetration was the decapitation of the CIA's operations in the
Soviet Union. Nearly a dozen CIA officers have been expelled, and
at least 25 Soviets have been executed in the Soviet Union since
1983 on suspicion of collaborating with the CIA. At least two of
those executed were, in fact, Soviets working for the CIA. The rest
were innocent.

    While Edward Lee Howard, the former CIA officer who defected
to the Soviets, was responsible for several of the executions, he
knew CIA agents only by their code names. Intelligence sources
believe the majority of the damage to CIA operations was caused by
a penetration of Moscow station communications.

    The same ineptitude that led to the security breaches in the
first place now conspired to protect the perpetrators. Bracy, who
probably would not have been the first Marine to let the KGB into
the embassy, got off scot-free. As the scandal faded from the
newspapers, the cover-up became complete.

    It was the ultimate irony that Ronald Reagan, who came to
office with a mandate to strengthen the nation's defenses, wound
up presiding over the worst intelligence debacle since the CIA's
abortive 1961 invasion of Cuba at the Bay of Pigs.