Spies: The Rise and Fall of the KGB in America (53 page)

While the New York Times story gave Moscow hope that its old source
had not merely weathered his November 1939 difficulties but had risen to
new heights, the reality was different, as it soon learned when "elan" finally met with Duggan. Even sitting down with Duggan proved difficult.
On the phone with "elan," Duggan had suggested meeting at the Cosmos Club (which catered to senior government officials). "elan" carefully
showed up earlier at Scholl's Cafeteria (not cafe), as provided by Akhmerov's 1938 instructions, in case Duggan remembered them, and then
walked over to the Cosmos. Duggan, however, didn't appear at the appointed time, and "elan" called him at home. Duggan apologized, claimed
he had been held up, but promised to come over. He finally arrived, and
the two then had dinner at a nearby hotel and talked for several hours.
"elan" reported that Duggan "`thinks he is not trusted at work and his situation there is unstable.' (19 is no longer a division chief but an adviser on
S. American affairs. He sees it as a diversion from more important work,
without having to lose face: no one reports to him, and no one asks his advice. They had wanted to send him off to Paraguay as 1st secretary.) `To my
question as to why he had not been fired in the `presence' of distrust toward him and had instead been promoted, Nineteenth [Duggan] replied
that `they' didn't have any evidence and were afraid of the scandal he could
cause."' What appeared to have happened was that Duggan's mentor,
Sumner Welles, intervened and prevailed against Berle's attempt to force
Duggan from the State Department. But Berle had succeeded in getting
him removed as chief of the Division of the American Republics and
kicked upstairs to the more prestigious but less operationally important
post of adviser to the secretary of state. "elan" went on to say:

"He insists that his attitude toward us has not changed and that in theory he
has no objection to working with us again; however, he firmly asserts that for now it doesn't make any sense, that he can't be of use to us and doesn't want to
meet again, at the very least for the rest of 1941. He said he was disillusioned,
because when he started working with us, he had been guaranteed complete
secrecy, but the incident of his having to appear before the authorities convinced him that there was a leak somewhere in our line....

Before we parted ways, Nineteenth [Duggan] asked me not to call him on
the phone anymore, for any reason. He said that despite the fact that the FBI
was still `like children lost in the woods' in matters of counterintelligence, nevertheless he knows for a fact that all the phones in Washington are tapped.
Naturally, I gave him my word. Speaking of tradecraft, it should be noted that
he completely forgot the meeting place, password, and material evidence.
Only at the end of the meeting did I say to him, with a smile: `Here you talk
about peace of mind and security, yet how could you forget all the arrangements? You didn't even make an attempt to verify who it was that was meeting
with you or speaking to you.' He turned very red and admitted that he had
made a mistake in that regard. I handed him the envelope with material evidence, which he looked over and tore up in front of me."

The purpose of "Glan's" visit had been to reestablish a full agent relationship with Duggan. Despite Duggan's reluctance, "Glan" concluded:
"`I think it is entirely possible to resume work with Nineteenth, but I also
think it will require an enormous amount of time, attention, and patience
just to get him re-accustomed to meetings at first, and then to shorten the
intervals between meetings and begin work, progressing very slowly and
gradually from very minor, general concerns to individual, concrete problems and general political information. -75

While nothing was done for a year, Moscow Center thought reviving
Duggan worth the effort. In late 1941 it urged Vasily Zarubin, the new
U.S. station chief, to use Duggan for information on German activities
in South America and internal State Department organization and to
exploit his relationship with Sumner Welles. With American entrance
into the war in December, Moscow became even more optimistic about
reviving Duggan. In January 1942 it told Zarubin that the establishment of a wartime Soviet-American alliance should assuage Duggan's
"waverings." It urged that Iskhak Akhmerov, newly returned to the
United States as chief of the revived illegal station, reestablish contact. Since he had worked with Duggan in 1939, he would be able to
quickly restore "complete mutual trust." It also suggested Helen Lowry
as the principal courier to Duggan. As an American, she would be better
able to meet with him in Washington without attracting FBI atten-
tion.76

In February the KGB New York station reported that Akhmerov had
succeeded in meeting with Duggan and that "he was willing to help us,"
"promised to tell us everything he knows," and agreed to monthly meetings. But Duggan had also cautioned that his opportunities were limited,
as Akhmerov reported: "A month ago Berle, after drinking a good deal of
wine, reminded 19 [Duggan] about his affinity for left elements. 19 says
that as long as Berle is with the firm [State Department], 19 will not be
able to get ahead." In a plan for diplomatic and political work written in
April 1942, Moscow Center listed Duggan as its only source in the State
Department, characterizing him as a "very valuable agent" but noting his
full potential had never been realized because of his fearfulness. This
continued to be the case. In July Akhmerov related:

"My relationship with him has improved significantly He is not displaying his
former nervousness and conveys the impression of a person who is sincerely
sympathetic to us.... Unfortunately "Frank" [Duggan] is not especially active
in serving us needed information. True, events have confirmed some of his
principal reports over the past few months. He still refuses to meet more than
once every four or five weeks. He attributes the skimpiness of his information
to the fact that he deals primarily with his own area and doesn't have any access to materials in other areas. He views himself as mistreated and oppressed
in the office and doesn't seek out close contact with his colleagues. Just to be
on the safe side, I tried to introduce him to "Nelly" [Lowry]. He politely declined this idea. I offered him a phone number and address here or in Washington where he could call or write a message to me; he gently turned this
down, too. All this shows that he prizes his safety and doesn't want to become
tightly connected to us."

By November Akhmerov reported to Moscow that Duggan's cooperation
continued to be limited and that Duggan

"sympathizes with us and understands our role in this war, but at the same
time, he is an American patriot through and through. His intellect is shaped by
his continued, concrete work putting into practice America's influence on its
neighbors. He is not a fellowcountryman [Communist Party member] or a
paid probationer [agent], and he is absolutely determined not to risk his position. Having once been burned, he is prone to significantly exaggerating any
danger. He used to bring me bundles of the most interesting materials from
his office; now he does everything he can to avoid even citing his sources when
he reports something to me."77

Such news was not to Moscow's liking. The Center deemed "`your
[Akhmerov's] work with him unsatisfactory,"' pointing out that Duggan's position gave him "access to many materials that are of primary interest
to us." It demanded that Akhmerov "`take a firmer stance,"' demand
weekly meetings, and remind him, "'by agreeing to work with us in the
past, he took upon himself a kind of moral obligation toward us."' The
message hastened to add, "`We are not, of course, suggesting that he
should be blackmailed with the fact that he gave us documentary material in the past,"' but Duggan needed a stern talking-to. Moscow enclosed
a handwritten letter to Duggan from Borodin, his liaison in the late 1930s,
recalling old times, justifying the purge trials for eliminating a potential
fifth column, and chiding him for "`hardly doing your utmost"' in these
critical days. Akhmerov firmly replied that Moscow Center's suggestions
were unwise and Borodin's letter would more likely sever the KGB's relationship with Duggan than encourage greater cooperation. Akhmerov
explained:

"Shared ideology and personal friendship are the mainsprings of our connection with Frank [Duggan]. Because of his personal qualities-he is an exceptionally honorable man-he could never imagine that we might put pressure
on him, exploiting the work he did for us in the past. If this thought had ever
seriously occurred to him, he would have long since rid himself of us. Any hint
on our part (regardless of how delicately or diplomatically we put it) about the
fact that he is firmly connected with us and that, having agreed to work for us,
he took upon himself a certain obligation, would make it clear to him which
way the wind was blowing. I am absolutely convinced that he would become
angry with us and, sooner or later, break with us for good. We could afford to
try such an experiment if we had a few more people like Frank to spare. A
paid probationer [agent] could understand being treated this way; Frank
would never forgive us for it.

Suppose we did give him to understand more clearly his firm bond with
us, his responsibility, and so forth. Would we be able to frighten him and compel him to work? Of course not. He knows we would never deliberately expose
him. Moreover, he knows that we have nothing with which to compromise
him. It doesn't say on the documents we received through him from his department that he gave them to us. And as for his separate notes? He could say
they had been written as keepsakes for his personal use and that he can't imagine how anyone could have `swiped' them off his desk. He could use our efforts to compromise him in order to restore his position. This, roughly, is the
level on which his logic could operate. Pressure of this sort or any other can be
applied if it guarantees some measure of success. In Frank's case, this method
will lead to nothing. So far, I have only one method of working with him: serious politico-educational influence; instilling in him the thought that, in helping us, he is helping the very best of humanity; expressing our sincere gratitude;
persistently appealing to his conscience to help us more actively; and developing our personal friendship."

Surprisingly, Moscow Center deferred to Akhmerov's judgment, simply
urging him to meet Duggan more frequently and "devote more energy to
19's [Duggan's] ideological education. -78

Duggan continued to provide the KGB with American diplomatic information, reporting on Anglo-American plans for the invasion of Italy,
consideration of an invasion of Nazi-occupied Norway, U.S. diplomatic
approaches to Argentina's military government, and secret discussions
regarding a common Anglo-American policy toward Middle Eastern oil
resources. But the volume was not as much as he had provided in the
late 193os and never as much as Moscow Center wanted. When he returned to Moscow in 1944, Vasily Zarubin, in a retrospective report on his
tenure as New York station chief, judged that during the 1942-44 period
Duggan "verbally provided a certain amount of occasionally interesting
information, but not much, not complete enough and in most cases not
on his own initiative, but by way of responses to questions that had been
posed to him."79

Duggan resigned from the State Department in July 1944, following
his mentor, Sumner Welles, who had left in August 1943. Akhmerov admitted to Moscow that although Duggan had told him that his posting
had become "especially shaky" after Welles's departure, nonetheless his
"resignation came as a surprise to me." Optimistically, the KGB New York
station told Moscow, "Prospects for the future are being looked into."
Duggan was able to get a position with the United Nations Relief and
Rehabilitation Administration (UNRRA). More promising, in November
the New York station reported rumors that President Roosevelt would
shortly replace Secretary of State Hull with Henry Wallace as consolation for having dropped him as vice-president in the 1944 election. Duggan was close to Wallace, and the KGB New York station speculated he
might be able to reenter the State Department "in a leading post." Even
if Wallace did not get the appointment, the KGB cable went on to say,
Duggan could still be useful by "using his friendship" with Wallace for
"extracting ... interesting information" that would inevitably come to
someone of Wallace's political standing. Roosevelt did, in fact, replace
Hull but installed Edward Stettinius as secretary of state. A KGB memo
on Duggan simply stated that after he was at UNRRA "the connection
was lost and was never renewed."80

The KGB set about reinvigorating its American operations in 1948.
Reviving agents who had been put on an inactive status was a quick way
to get operations up to speed once more, and Laurence Duggan was on
the list. By that time he was president of the Institute of International
Education in New York, the organization founded by his father. Borodin
wrote a report pointing out that its work "`is undoubtedly of great interest with respect to our work in the USA, especially vis-a-vis the possibility of obtaining student entry visas into the USA for our European illegals
and eventually having them legalized in the USA and other countries."'
He went over the history of Duggan's nervousness but offered this judgment: "'I do not think that 19 [Duggan] will be too fearful about resuming work with us, considering that he does not currently work in a government department and therefore will not be afraid of being labeled an
`unloyal' American, providing, of course, that someone has a sensible talk
with him."'sr

In May 1948 Moscow ordered the New York station to arrange a
meeting with Duggan on the pretext of official Soviet cooperation with his
organization and suggested using Sergey Striganov, a Soviet diplomat who
had been working as a KGB co-optee since 1941. Among his other diplomatic duties, Striganov was American representative for the All-Union
Society for Cultural Relations (VOKS), the Soviet agency that oversaw
international cultural contacts and exchanges, so an approach would appear entirely aboveboard. Moscow told the New York station: