Cassidy's Run (17 page)

When Gene Peterson
had relayed the disappointing word from headquarters on June 3, Parker recalled, he said the Justice Department attorneys, in refusing to authorize the arrest, “had alluded to the entries in Austin.” Yet the department’s internal-security lawyers had known of the taps, bugs, and videos of the
PALMETTOS
before Parker ever went to Minneapolis to confront the Lopezes.

The decision to let the spies go was due in part to the complex legal issues involved but also to a confluence of external political factors. The
PALMETTO
case came at a time when the law governing electronic eavesdropping in espionage cases was evolving, and the government’s power to intrude in the life of the individual for purposes of national security was being reexamined by Congress and the courts.

Probably no murkier area of law existed at the time than that surrounding wiretaps, bugs, and surreptitious entries in foreign-intelligence cases. The FBI’s use of these methods reflected the long and continuing tension in America between liberty and security. The Constitution was designed to protect against government intrusions and violations of the rights of the individual. The FBI, with responsibility for catching spies and terrorists, focused primarily on its mission. And the courts tended to give the bureau more latitude in counterintelligence investigations against foreign targets than in ordinary criminal cases.

In 1936, President Franklin D. Roosevelt authorized J. Edgar Hoover to collect intelligence on domestic “subversive activities.” In 1940, Roosevelt approved warrantless wiretaps in such cases, as well as against spies. Wiretaps can be installed from outside a building, but installing bugs to pick up room conversations normally requires entry into the premises. Hoover, a bureaucratic master at protecting himself, pressed the Justice Department for permission to plant bugs in national-security cases, authority he finally won in 1954. In 1965, however, Lyndon Johnson’s attorney general, Nicholas Katzenbach, changed the rules; from then on, the attorney general would have to give written approval in order for the FBI to plant bugs.

Under Hoover, the FBI had carried out literally hundreds of “black bag” jobs—illicit entries—many to install bugs. Hoover ostensibly banned the practice in 1966 after a subordinate pointed out that burglaries were “clearly illegal,” but the break-ins continued. In any event, the prohibition did not apply to break-ins to plant bugs against or search premises of foreign targets.

Two years later, Congress passed the Omnibus Crime Control Act of 1968, which required court warrants for wiretaps and bugs in criminal cases. Congress said nothing, however, about national-security targets, a loophole that allowed such practices without a warrant in spy cases. The law also contained a disclaimer that said the statute did not limit the powers of the president to authorize whatever was necessary to collect foreign intelligence or to protect against foreign spies.

In 1972, the Supreme Court in
United States
v.
United States District
Court for the Eastern District of Michigan,
known as the Keith case, barred warrantless wiretaps for domestic-intelligence purposes, but it was and has remained silent on the use of taps in foreign-intelligence cases. Between 1971 and 1976, when the various techniques were used against the
PALMETTOS
in Salt Lake City, Austin, and Minneapolis, the law was unclear on the status of warrantless wiretaps, bugs, and entries in espionage cases. During the early 1970s, the approval of the attorney general was required by Justice Department policy but not by law or presidential executive order.

In 1976, President Ford issued an executive order on foreign counterintelligence requiring the attorney general, then Edward H. Levi, to issue guidelines allowing warrantless taps and bugs in espionage cases with the approval of the attorney general. The guidelines were classified. In 1978, President Carter issued a similar executive order.

Finally, in 1978, Congress attempted to dispel some of the legal fog by passing the Foreign Intelligence Surveillance Act (FISA) and creating new machinery to govern eavesdropping and entries by the government in espionage cases. Since October 1978, when FISA was signed into law, wiretaps or break-ins to place bugs to eavesdrop on agents of foreign powers must be authorized by a special court.
⁷
This judicial machinery did not exist, however, when the
PALMETTOS
and
IXORA
were subject to electronic surveillance.

In the
PALMETTO
case, it was not entirely clear why the Justice Department raised questions about the FBI’s entries at the eleventh hour, after Lopez had confessed. “The Justice Department knew everything about the case all along,” Parker said. “I talked to Tafe about the entries.”

Because some of the FBI’s actions in the case had not been approved by the attorney general, Parker said, “we all knew it might be a problem. We knew that from the beginning, but we were willing to go to court with it. If DOJ [the Department of Justice] wasn’t, why didn’t they say that at the start?” Given the fuzzy state of the law at the time, Parker felt the department might well have prevailed had it chosen to prosecute.

In meetings with the Justice Department lawyers, FBI officials insisted that there had not even been any unauthorized entry in Austin. Some weeks before the confrontation in Minneapolis, Peterson recalled, he and Parker met with John Martin. “We told Martin unequivocally that nothing was acquired from any unauthorized techniques. There was no trespass.”

Peterson’s argument rested on the unusual physical circumstances in Austin, where a camera had been installed in a crawl space that was above but not part of the
PALMETTOS
’ duplex. But the camera’s pinhole in the ceiling, however minute, could be regarded as an “entry.”
⁸
And the bureau’s agents had gone into the Lopezes’ house when they were away. On the other hand, since Lopez had freely sent a key to Aurelio Flores, it could also be argued that the entry was consensual. But a defense attorney would certainly maintain that the key had not been given to Flores so that his associates could copy Lopez’s code pads and remove his shortwave radio.

Peterson said Martin was noncommital in response to his arguments and indicated he would take the matter under advisement. On June 3, Peterson said, after receiving word from Parker that Lopez had confessed, he went to see Martin again. “Martin said he could not approve prosecution because of the entry in Austin. Martin said something about the political climate not being right to prosecute where the use of the techniques is going to come out. John Martin had never lost an espionage case. That was a factor.”

Bureaucratic confusion also played a part in the department’s refusal to authorize the arrest of the
PALMETTOS
. In 1971, a message went out from FBI headquarters to Tampa and Salt Lake City informing both offices that President Nixon’s attorney general, John N. Mitchell, had authorized an entry into the Lopezes’ apartment at the University of Utah to install a microphone. Mitchell, Nixon, and the president’s national security adviser, Henry A. Kissinger, were all briefed regularly on the progress of the
PALMETTO
case.

As a result of this message, the FBI agents who tapped and bugged the Lopezes in Salt Lake City believed they were acting under the authority of the attorney general. The message, however, was in error. There is no record in the FBI’s files that the request for approval by the attorney general ever left the bureau.

In retrospect, it is clear that several external events, and politics, played at least as great a role in the department’s decision as any points of law. It was the post-Watergate era; six years before, Richard Nixon had tried to use the CIA and the FBI to coverup a burglary at Democratic National Committee headquarters. Then, in 1975, the Senate intelligence committee headed by I daho Democrat Frank Church had revealed abuses by then ation’s intelligence agencies—drug testing on unsuspecting subjects, assassination plots, and mail opening by the CIA, and “black bag” jobs by the FBI. The intelligence agencies were on the defensive.

In April 1978, less than two months before Parker flew to Minneapolis to interview the Lopezes, a federal grand jury had indicted two senior FBI officials, Mark Felt and Edward Miller, for authorizing break-ins to search the homes of relatives and acquaintances of fugitive members of the Weather Underground.
⁹
“The government has to speak with one voice,” said a Justice Department attorney who worked on the
PALMETTO
case. “We’re prosecuting somebody at a high level in the FBI for illegal activities, then we’re going to go prosecute a case where the bureau was doing the same thing?” The searches in the Felt-Miller case did not take place as part of a foreign counterintelligence investigation, however. But from a political viewpoint, prosecution of the
PALMETTOS
might have appeared inconsistent.

Finally, the espionage convictions in May of Ronald L. Humphrey, an employee of the United States Information Agency, and David Truong, an anti–Vietnam War activist, also influenced the department’s response. Attorney General Griffin Bell had authorized the use of a video camera in Humphrey’s office and a bug in Truong’s apartment in Washington, both without warrants, but the attorney general had not approved the camera in Austin.
¹⁰

Some weeks after the
PALMETTOS
had fled to Mexico, the Justice Department sent formal notice to the FBI of its decision not to prosecute the Lopezes, citing the wiretaps and entries as the chief reasons. The case had been reviewed by the deputy attorney general, Benjamin R. Civiletti. By that time, however, the horse was long since out of the barn.

There remained several
unexplained aspects to the way the Justice Department handled the case at the end, allowing the two spies to escape. Phil Parker never found any of the department’s explanations either satisfactory or clear. Nor was he told why the criminal complaint was never filed in Tampa. The bottom line was that the government permitted two Soviet spies to escape. For Parker, it was particularly galling.

Even two decades later, the Justice Department’s decision to let the Lopezes go still rankled inside the FBI’s National Security Division, which has responsibility for counterintelligence. John F. Lewis, Jr., who retired in 1998 as assistant director of the FBI in charge of the division, was blunt in his assessment. “Despite the years of intense investigation, a confession from the male
PALMETTO
, photographs of both subjects receiving classified information, and the loss of two special agents’ lives, the
PALMETTOS
were allowed to board a plane in Minneapolis bound for Mexico on June 5, 1978.”

After watching the
PALMETTOS
’ plane disappear into the Minnesota sky, a gloomy Phil Parker drove back to town. There was one more chance to gather additional evidence against Lopez. “We wanted a search warrant for his apartment,” Parker recalled. “The owner of the apartment said the commode was stopped up. We immediately thought Lopez had been getting rid of stuff.”

But Parker and the other FBI agents were spared the indignity of delving into the Soviet agent’s toilet. It was catch-22: “DOJ wouldn’t authorize a search warrant,” Parker said, “because there was no plan for prosecution.”

C H A P T E R: 18

ENDGAME

In the wilderness
of mirrors that is counterintelligence, both sides now studied the shadows and reflections and engaged in intricate probability analyses of each other’s stratagems. When an espionage operation goes bad, the intelligence agency responsible for the case conducts a damage assessment that normally explores multiple possibilities: The operation may have been betrayed by a mole or by a double agent; a spy may have practiced sloppy “tradecraft,” such as neglecting to evade surveillance; or the opposition may have penetrated the agency’s codes and communications.¹

Back in FBI headquarters in Washington, Phil Parker decided to try to turn the flight of the Lopezes to the bureau’s advantage. Perhaps their departure could still be used to sow confusion inside the GRU. “In their damage assessment, they would have to figure out where it went wrong,” Parker said.

It had been more than five years since Lopez had appeared at Cassidy’s last drop in Florida; the GRU, Parker reasoned, might trace the trouble back to Cassidy, but it might also logically assume that Lopez had been detected in more recent espionage activity. The FBI had followed Lopez north toward the Canadian border a year earlier because it thought he might be picking up material from real Soviet spies, not just from Joe Cassidy. “We had a strong suspicion Lopez was servicing others,” Parker said.

The intelligence division believed, therefore, that the FBI’s questioning of the Lopezes would not automatically lead the GRU to conclude that Cassidy was a double agent. For that reason, the FBI decided to try to keep Cassidy in play. Jack O’Flaherty recalled, “We had Joe try to continue to contact the Soviets and follow his instructions. And he did get some more messages.”

Parker agreed that Cassidy should continue to try to maintain contact with the Russians. “There were so many potential scenarios as to how we got onto Lopez. We certainly didn’t know what Lopez told them. Did he tell them he’d been approached by the FBI? . . . They [the GRU] could have thought it was tradecraft lapses,” he said. “They might figure the FBI saw Cassidy meeting with someone from their embassy. The FBI could have followed Cassidy to Tampa and then picked up Lopez’s trail.”

And Lopez himself, Parker reasoned, would have fallen under suspicion in Moscow, since the Russians would not have known about the battle over the case between the FBI and the Justice Department. “The Soviets would have to wonder, Why did we let him go? We wanted to make them leery of why Lopez was allowed to leave the United States. We were hoping they would think Lopez had been turned.”

Keeping Cassidy in play with the Russians presented other hurdles, aside from the possibility that the operation had been compromised once the FBI had confronted the
PALMETTOS
. In April 1977, six months after his last meeting with the GRU, Cassidy received an envelope through the mail with a fictitious New York City return address. The one-page letter in secret writing canceled the 1977 drops and meets with no explanation. It instructed him to wait for a postcard that would give the dates of future meets and told him to check for radio messages as well. In November, however, he received another letter terminating radio transmissions until further notice. In February 1978, the FBI passed word to its counterintelligence agents that it had learned that the GRU was freezing its agent operations in the United States pending a reevaluation. Cassidy might have been caught up in an across-the-board suspension of activities.

By late summer, however, Cassidy’s link to the Russians seemed even more tenuous. On August 2, two months after the Lopezes had flown the coop, Cassidy received a plaintext greeting card from the Russians: “Departing for Europe, I’ll get in touch next summer. Mike.” The Soviets appeared, for the moment, to be keeping their options open. But the message could also be read as a good-bye note, which is how Cassidy took it.

“I was kind of down in the dumps,” he recalled. “I figured this might be the end of it. Somehow my cover was blown. And I really didn’t want it to end. It was exciting to me.” Despite Cassidy’s momentary gloom, the FBI instructed him to not give up and to try to keep in contact with the Soviets. The rock he had received at his last meeting in New York had contained instructions and specific dates for reestablishing contact should it ever be lost. The FBI approved a plan for Cassidy to attempt re-contact in New York the following year.

But a month before he left for New York, Cassidy found himself literally thrust into the public spotlight. It was an unnerving experience. Spies like to remain in the shadows, and they normally avoid attracting attention to themselves. Yet in September 1979, Cassidy unexpectedly ended up onstage with Kathie Lee Gifford at Disney World.² The son-in-law of Cassidy’s old army buddy Woodrow James was appearing on the same bill in Orlando and had arranged a front-row booth at the show for the unsuspecting Cassidy.

At the time, Gifford had gained a measure of fame as the featured singer on the television game show
Name That Tune.
The Cassidys, enjoying the nightclub act from their ringside seats, were in for a surprise. “I didn’t know it was a setup,” Cassidy said. “She was singing and came and got me and said, ‘This is my number-one fan, the president of my fan club.’ She was on the TV show where you were supposed to guess the songs. She told me she would sing a little and when we get to the title you hum it.” They would do this a couple of times, Gifford indicated, and then she would sing all the words, revealing the title to the audience. Flustered by suddenly finding himself in the glare of the spotlight, Cassidy blew it. The acting skills that had been good enough to fool the Russians for two decades failed him. He recognized the songs. “I sang the title,” he said. “I did it each time.”

In October, Cassidy drove to New York. On the last Saturday of the month, one of the alternate dates he had been given to reestablish contact with the Soviets, he once again waited in front of the antiques store in Brooklyn, yellow package in hand and pipe in mouth. He brought along a hollow rock containing the film of the emergency planning document and his report, in secret writing, of his trip to the nuclear-weapons depot in Charleston.³ But no one showed, either that day or the next.

Cassidy made one last attempt. He telephoned the Soviet mission to the United Nations and asked for Mike.

“We don’t have any Mike,” he was told. “Nobody’s here.”

“Mike owes me a lot of money,” Cassidy protested. “I want my money.”

“Nobody’s here,” the operator said. “They’ve all gone to the beach.”

Cassidy was skeptical of the explanation. “It was October!” he recalled. “So I went back to Florida. That was the end of it.” It had been almost twenty-one years since Joe Cassidy had begun his risky career as a spy on a spring evening in Washington.

Not long afterward, the FBI learned that Mikhail Danilin had been posted to Canada. The bureau proposed a joint operation with Canadian intelligence. Under the plan, Cassidy would be sent to Ottawa and accidentally bump into Danilin. The GRU officer would immediately realize the encounter was no accident, that Cassidy was under American control. That in turn would jeopardize Danilin’s own position: His prime source had turned out to be a double. “The hope was that Danilin, seeing Joe, might be impelled to defect,” Jack O’Flaherty said.

The bureau contacted Cassidy, who was ready and willing to take part. “But the Canadians said no, the political climate was not right,” O’Flaherty said. “The bureau then proposed that Joe just go on his own, but Ottawa said no to that, too.”

Phil Parker pushed for the Canadian operation, though he did not really expect to turn Danilin. “I don’t know that we thought he would actually defect. He seemed a pretty solid Soviet. There was no real hope in my mind that Danilin was going to roll over and start working for the FBI.

“But if Danilin ran into Joe, he would have to report it, and that would cause some disruption. The whole idea was to play with their minds. . . . It would make them wonder—at what point was the case under control of the FBI? From the beginning? After two years?” In other words, the GRU would wonder whether Cassidy had been a double agent from the start or whether he was a genuine spy for Moscow who had been detected and turned by the FBI.

Soon after the FBI proposed the operation to the Canadian service, however, Danilin left Ottawa. O’Flaherty wondered whether the Canadians had approached Danilin on their own and tried to “pitch” him to defect. Danilin would have been obliged to report the approach, and he would automatically have been sent back to Moscow.
⁴

On September 16, 1980, Joe and Marie Cassidy journeyed to Washington for another secret award ceremony, this time at FBI headquarters. Cassidy’s work was done. Once again, his case officers gathered to honor the man who had, in total anonymity, given so much to his country. Jimmy Morrissey was there, along with Donald Gruentzel, Jack O’Flaherty (resplendent in a three-piece suit), and Charlie Bevels.

Cassidy was presented with a simple certificate with a blue border. Its langauge was cryptic: “The Federal Bureau of Investigation expresses its appreciation to Sergeant Major Joseph Edward Cassidy for service in the public interest.” The certificate was signed “William H. Webster, Director.”

Webster also wrote a letter to Cassidy thanking him “for your accomplishments in the sensitive area of national security. You have over an extended period of time assisted FBI personnel in achieving our goal whenever called upon and your efforts were absolutely vital to our country’s defense.”

Marie Cassidy, too, received an award from the FBI, a gold plaque that read simply: “Marie Cassidy, in appreciation 6/68–9/80.”

Near the conclusion of the ceremony, someone handed Cassidy his Distinguished Service Medal that General Abrams had taken back more than six years earlier at the Pentagon. With a self-conscious smile, Cassidy, now in mufti, posed for pictures holding a case that displayed the DSM, a gold eagle set against a blue background below a broad red-and-white-striped ribbon.

Now, at last, it was his to keep.