Spies: The Rise and Fall of the KGB in America (48 page)

By the end of 1948, however, Aleksandr Panyushkin, the new ambassador and KGB station chief, became fearful about the growing assault on Soviet intelligence. Warning Moscow that news in the press suggested that mass arrests of people named by Bentley were in the offing,
he thought continued use of old agents such as Wahl was risky and that,
in any case, Wahl's information was "of no value." The last mention of
Wahl appeared in 1950: ""Saushkin" [Striganov] has worked with P
["Pink"/Wahl] since '48. Since he started working, Pink recruited 5 people and gave a large amount of valuable doc. information. He never
aroused suspicion. He went to Israel in '48, where he met with its leaders." The memo added: "Later transferred to the GRU." Exactly why
Wahl had been returned to Soviet military intelligence is unclear. But his
GRU connection, if it remained a live one, might have later given the
USSR access to some very significant information.32

It is not known what Wahl did between 1950 and 1956. But in 1956
he became chief librarian at the Weizmann Institute in Israel, remaining
in that position until 1963. One of its major financial benefactors was
Abraham Feinberg, Truman's old friend and Wahl's former boss at Americans for Haganah. Feinberg remained committed to building up Israeli
security. In the late 195os Ben-Gurion's government used him to secretly
finance construction of the Dimona nuclear reactor, where Israel built
its nuclear weapons in a program carefully hidden from the United States. Feinberg led a secret fund-raising campaign for the nuclear project,
which garnered about $40 million ($250 million in 2008 dollars) from
"some twenty-five millionaires." Many of the scientists working on the
project had affiliations with the Weizmann Institute, Israel's preeminent
technical research center. Was David Wahl still working for GRU while
he lived in Israel? Did he ever break with Soviet intelligence? These
questions are, for now, unanswered. Wahl came back to the United States
in 1963 and died three years later.33

Henry Ware's name never surfaced publicly during the investigations into
Soviet espionage. Even though the FBI briefly investigated him, he escaped intense surveillance and personal or professional problems. He
had been, however, a useful KGB source for a period. It was Ware's good
luck that no defector had known him and he had managed to disengage
from the KGB in time to avoid American counterintelligence.

Ware was born July 11, 1908, in New Jersey, the second son in a family steeped in the abolitionism and reformism of liberal Protestantism. His
father, Edward, although born in Georgia, was not a native Southerner but
the son of Edmund Asa Ware, a leading figure in the American Missionary
Association and later the Freedman's Bureau, who was instrumental in the
founding of Atlanta University (AU) as a center for Negro education after
the Civil War. The elder Ware served as AU's first president from 1869 until
his death in 1885. Edward, born in 1874, graduated from Yale and after
serving in several positions at AU, including chaplain, became its third president in 1907. During his tenure he clashed with the school's most prominent faculty member, W. E. B. DuBois, whose increasingly radical writings
threatened philanthropic support; DuBois resigned to join the National
Association for the Advancement of Colored People in 1910. Edward remained president until 1919 when, suffering from tuberculosis, he moved
for treatment to Colorado and then Claremont, California, dying in 1927.
His widow, Alice, joined numerous Communist fronts in the 193os and
early 1940s, including the American Peace Mobilization, League of American Writers, and National Council of American-Soviet Friendship. The
Daily Worker positively reviewed Scorched Earth, her play about Soviet
partisan warfare behind German lines, and she also wrote Mighty Wind A'
Blowing for the Communist-aligned New Theatre League in 1936 and The
Freedom Bell for the National Negro Congress (also a Communist-controlled body) in 1944.

Henry Ware was raised on the Atlanta University campus. He moved
to California with his parents and attended Pomona College, from which
he graduated with honors in 1932. Shortly afterwards, he went to
Moscow, where he taught at the Anglo-American School; studied at the
Plekhanov Institute of National Economy; and wrote for the Moscow
Daily News, an English-language newspaper controlled by the Soviet
regime and edited by former Comintern operative Mikhail Borodin (father of KGB operative Norman Borodin). A 1948 KGB memo on Ware
stated: "In '35, he was recruited by the 00 NKVD USSR to cover the
American colony in the Soviet Union." The 00 NKVD was the "special
department" of the NKVD (predecessor to the KGB) that conducted internal counterintelligence. In other words, Ware was an informant reporting on fellow Americans in Moscow. The KGB memo also noted that
Ware's NKVD Moscow handler, Mulyarov, had been arrested in 1938
during the purge of the security services and confessed that Ware had
recruited him to spy for American intelligence in 1935. The memo noted
that this confession "`was not verified,"' a polite euphemism indicating
that Mulyarov had been forced to confess to non-existent crimes.34

Ware returned to the United States in 1937 and obtained his master's
and doctorate in economics from Columbia University. He moved to
Washington in 1940, becoming acting chief in the Office of International
Trade in the Commerce Department. He was not recontacted by Soviet
intelligence until 1942, after the New York station "obtained a positive
reference" about him from the CPUSA and, using Elizabeth Zarubin, it
"independently decided to recruit him." From 1942 to 1944 Ware provided "information about his agency's [Commerce Department's] activities." In his summary report of his tenure as station chief, Zarubin noted:
"With tips from fellowcountrymen [Communists] we recruited `Vick'
Henry .... assistant chief of the Russian desk at the Commerce Department." A letter from Moscow to Zarubin in March 1943 concluded:
"`Judging by the information you have received from `Vick' [Ware] to date,
the section he works in possesses information not only on our country. Let
us know what tasks in obtaining valuable information for us you have given
him, considering his capabilities, and how he is carrying them out."'35

Zarubin was ultimately disappointed in Ware, noting that he "`did not
fulfill the hopes we pinned on"' him, mostly because he left the Commerce Department to join the Army "`and therefore could not be put to
wider use by us."' He did, however, provide leads for other KGB sources
from among his former economist acquaintances at Columbia. Referring
to the recruitment of Bela Gold, a government economist, Zarubin noted: "`We first learned about him from Vick as someone who was close to fellowcountiymen [CPUSA] and was well disposed to us."' After Golos vetted Gold, the KGB recruited both him and his wife Sonia. Likewise, Ware
recommended William Remington (also an economist) "`as a very serious
and devoted comrade." "36

The KGB's greatest disappointment with Ware, however, came after
he entered the U.S. Army. Ware's Russian-language skills landed him a
position with the American Military Mission to Russia (headed by General John Deane), where he served as an interpreter. To have a Soviet
source as Deane's interpreter would have been an intelligence coup, but
the 1948 KGB report on Ware explained, "In Oct. '44, Vick was in
Moscow, on the staff of Deane's mission. The 2nd Directorate of the
MGB attempted to establish agent ties, but he refused." He went on to
translate at Tehran, Yalta, and Potsdam and at Germany's surrender negotiations and served as a liaison officer in the Ukraine. Ware came back
to the Commerce Department to work on Soviet economic issues after
the war.37

Ware briefly attracted the FBI's attention in June 1946, when a wiretap on the home of William Remington picked up a telephone call from
Mrs. Ware and the Bureau learned that he worked at the Commerce Department and was in frequent contact with Joseph Gregg and Remington,
both identified by Elizabeth Bentley as Soviet sources. But after a cursory
investigation the FBI turned its attention elsewhere. In the 195os Henry
Ware went into business with his wife and also worked for the National
Education Association before establishing a bartering service in Fairfax
County, Virginia, that was emulated around the world. A founder of the
Fairfax Unitarian Universalist Church, president of the Friends of the
Library, and an adviser to the Boy Scouts, he died in 1999.38

The KGB had another, earlier, source in the Commerce Department, but
frustratingly little is known about him. William Akets was a professional
staff member of the Commerce Department's Bureau of Foreign and
Domestic Commerce. A 1933 KGB memo described Akets as

"a lieutenant in the reserve corps of the Army intelligence corps. Speaks,
reads and writes Japanese fluently. Was on active service in Japan and China
and the Philippines during and following the World War. Is kept in more than
ordinary close touch with current operations of the intelligence corps work at present time, engages in special studies at the War College and is better
posted on Japanese internal affairs than most reserve officers or regular officers for that matter, as he keeps in close touch with Far Eastern economic
data through employment in the Bureau of Foreign and Domestic Commerce.
His own specialty is Scandinavian Commerce."

The KGB reported Akets providing "military information, about mil. industry" with specific material on American intelligence reports on the
Japanese military, the delivery of American military aircraft to China to
assist it against Japan, increases in U.S. naval shipbuilding, and the American Army's attitudes toward diplomatic recognition of the USSR. But
after a brief burst of productivity in 1933, Akets is not mentioned again.39

Gerald Graze was one-half of an unusual set of brother spies (Stanley,
who worked for the OSS, is discussed in chapter 5). Although the FBI
concluded that both were secret Communists and possibly involved in
covert activities, it never had enough evidence to prosecute either one.
Their uncooperative testimony before congressional committees attracted little press coverage. No defector identified them as sources.
Their cover names, "Arena" and "Dan," appeared in deciphered KGB
cables, but NSA/FBI analysts misidentified the former and were unable
to identify the latter.

Their parents were Russian Jews living in Great Britain, where Gerald was born in 1914 along with another brother, Cyril. Several younger
children were born in New York, including Stanley in 1918, where Alfred Graze owned a neon sign company. Gerald and Stanley both graduated from the City College of New York.

In 1936 Iskhak Akhmerov asked Josef Peters "`to find me one or two
decent chaps among the Washington officials"' who were part of the
CPUSAs underground organization in Washington that Peters supervised. Peters in turn asked Victor Perlo, leader of one of the larger Washington underground party units, for a recommendation, and he suggested
Gerald Graze, who, with his wife Ruth, belonged to Perlo's CPUSA
group. Peters told Perlo that Graze, who was quickly given the code name
"Arena," was needed "`for special fraternal [Communist] work."' Akhmerov met with Graze in July 1937 and told Moscow Center:

"I established a connection with an official of the Civil Service Commission
and had two meetings with him. We will call this official by the cover name "Arena." ... "Arena" and his wife are members of the Comparty; moreover, he
is in the Communist organization illegally. "Storm" [Peters] introduced me to
"Arena" as a Comparty official and told "Arena" that he should help me any
way he can. "Arena's" work consists of investigating claims by officials who are
dissatisfied with their position or salary at work. "Arena" thus has the opportunity to find out every detail about the nature of the work of an official who
submits a claim. During my meetings with "Arena," I asked him in depth
about the sort of work he does and explained which materials were of interest
to us. These materials were brought by "Arena" to the second meeting.

I asked that in the future, "Arena" write down the addresses of persons
who were of interest to us, and try to determine, by means of discreet personal
conversations, the political identity of various officials whose cases he will be
investigating, along with their financial situations, and so forth. "Arena" promised to carry out my request. I hope that "Arena" could become useful to us as
a talent-spotting agent. He could also find out what job openings are available
and where. We could then attempt to plant someone close to us in some government department."

Akhmerov also noted that Graze at this early stage "`thinks that I am a
local Communist who works for a Communist organization."' By 1938
that illusion had vanished: "`I haven't told them [Gerald and Ruth Graze]
explicitly that they work directly for Hammer [USSR], but from the nature of our conversations they understand that Arena's materials are sent
to Hammer and that they benefit the fraternal movement and Hammer., '40

Moscow was intrigued by Graze's potential but worried that his ties
to the CPUSA posed security risks and that Peters knew about his "'special party assignments."' It told Akhmerov that Graze "`must be completely isolated from the Comparty"' and "`be known to everyone around
him as nothing more than an average joe."' Dutifully, the KGB New York
station reported that it had arranged to cut Gerald off from CPUSA activities while continuing to supply him with party literature and to collect
party dues ($1o a month). Akhmerov also had to take on some ideological training, such as when Graze voiced misgivings about the charges that
high-level Soviet leaders had become traitors. Akhmerov educated him
-about the roots of counterrevolutionary Trotskyism.' "41

Gerald Graze's position gave the KGB the opportunity to access U.S.
government personnel records. On the KGB's instructions, Graze rented
a small apartment for $25 a month that was used by Norman Borodin, his
direct KGB liaison, to photograph materials Graze brought by. He did
not receive a salary but "occasionally, he would be given a one-time pay ment." Whatever he was paid, Graze was worth it. A report written in
1940 noted: "`Arena [Graze] gave us lists with layouts and detailed work
descriptions for employees of the American secret police, military and
naval intelligence agencies, the secret service (intelligence agency of the
Treasury Department), the State Department, and other important government agencies.' "41