Spies: The Rise and Fall of the KGB in America (75 page)

William Malisoff continued to be an XY line source for the rest of
World War II, but the relationship became quarrelsome as he felt increasingly underappreciated and Moscow Center (more than the New
York station) began to think the KGB wasn't getting its money's worth
and that "Talent" was a bit of a blunderer. In 1942 the New York station,
under pressure to produce atomic intelligence, reported: "In the past,
"Talent" [Malisoff] had been acquainted with Grosse, Urey, Wittenberg,
and Gamow. At pres., however, he has no means of approach. He met
with Wittenberg and tried to draw him into a conversation about nuclear
fission but was unsuccessful." Moscow Center, however, was not pleased
with how Malisoff conducted himself:

The practice of discussing "Enormous" [atomic bomb project] directly with individuals who were working on it should be ruled out in advance. Such discussions can only arouse suspicion on the part of these individuals. This work requires the application of truly agent methods of cultivation. It is obvious from
"Talent's" report, received in mailing No. 2-42, that these methods of direct
discussions are just the kind he uses when he secures meetings with individuals working on E. In view of this, we propose giving up working with "Talent"
in this cultivation. Discontinue the meetings to discuss this matter between
"Talent" and Urey, Grosse, and Wittenberg. He can be told that this problem
no longer interests us and that we think it is unrealistic in practice.42

(Other KGB attempts to approach atomic scientists Harold Urey, Aristide
Grosse, George Gamow, and Davrun Wittenberg are discussed in chapter 2.)

But if Moscow Center was unhappy with Malisoff, Malisoff was unhappy with Moscow. In 1943 Malisoff's KGB contact reported:

At the meeting on 26.03.43, "Talent" [Malisoff] said that several years ago he
discovered that some of the personal processes he had developed and given to
us had been used by some of our chemists and published in Sov. publications
as their discoveries. As for him, he had never received a reply regarding how
his material was being used. He had spoken about this with "Gennady" [Ovakimyan]. If it had been someone else in his place, we would have turned a
friend into an enemy. "Gennady" supposedly assured him that this would not
happen again in the future. The list of winners of the Stalin Prize for research
in the field of chemistry and oth. branches of industry was recently published.
He found a topic on which he had given us his work a year and a half ago. He
isn't asking for money, only that his work be referenced.

But public recognition was the last thing the KGB could, or would, give
its American espionage source S.43

Until the end of 1944 Malisoff continued to supply information but
was increasingly discontented. In May 1944 Kvasnikov, the New York station technical intelligence chief, met with him. The station reported:

Anton [Kvasnikov] has informed Talent [Malisoff] of the impossibility of largescale one-time aid. Just as we expected, Talent took this announcement exceptionally morbidly. Talent considers that his request has not been conveyed to
the leadership of the House [Moscow Center]. He declared that the refusal to
help him set up a laboratory or manufacturing business has been repeated several times.... With irritation he states that the materials handed over by him
on one question alone-oil, by his estimate had yielded the Union [USSR] a
saving of millions during past years, and the aid requested by him was trifling. In a lengthy talk he said that his help to us was the result of his views on the
Union and that he would meet us. However he emphasized that in future he
will be unable to have extensive dealings with people and firms and consequently it is impossible to expect much help from him. There can be no responsible conversations about the prospect of work with him at present. One
cannot put him into cold storage in this condition, it will look like an attempt
to get rid of him altogether. We shall continue meeting.44

And meet they did. In December 1944 Kvasnikov noted in a cable to
Moscow Center that he had met with Malisoff twenty times since his arrival in the United States in 1943. But by this point Moscow Center had
decided to cut the connection, in part due to concern that the FBI had
begun surveillance of Malisoff. Kvasnikov suggested that it would be wise
to meet one last time with Malisoff to explain the decision; otherwise he
might attempt to contact someone at Amtorg, where he was seeking a consulting contract, and attempt to reestablish contact himself. It isn't clear
if there was a final meeting, but in January 1945 Moscow Center declared
it wanted a total break: "`As you have already been told, there is documentary evidence confirming that both `Henry' [Malisoff's new cover
name] and our workers [KGB officers] who were connected with him
were the objects of an active investigation by the competitors [American
security].... In light of this, we suggest intercepting any attempts by
`Henry' to renew ties with you, efforts to meet with our people, visits to our
agencies, and under no circumstances should you allow `Henry' to realize
his intention of getting a job at `Amtorg."" Malisoff's business soon collapsed; United Laboratories closed in 1945, and he died 16 May 1947.45

One of the most exotic Soviet spies in America was Leon Theremin, a
Soviet citizen who came to the United States to promote his cutting-edge
musical instrument and other inventions but also worked as an industrial
spy on the side.

Descended from a wealthy Huguenot family (possibly the inspiration
for his KGB cover name, "Frenchman") that had settled in Russia,
Theremin was born in 1896 in St. Petersburg. A child scientific prodigy,
he became a protege of famed physicist Abraham Joffe after serving in
the Russian Army during World War I and also embraced Bolshevism.
While working on high-frequency oscillations in 1920, he invented a new
musical instrument, the "Theremin." Without touching the instrument, the musician's hands moving between two antennas modify the pitch and
volume of surreal and eerie-sounding electronic music coming from the
instrument's electronic speakers. Theremin's performances across Russia,
including one for Lenin, gained him fame. He followed this discovery
with the invention of a "radio watchman," a motion detector that emitted
a signal when someone approached, and did early work on television. His
inventions interested the KGB, anxious to develop means of border surveillance, and he was recruited as an agent by Soviet military intelligence
(GRU) just before a trip to Germany in 1925, where he applied for
patents for his work and attempted to gain access to Western technology.

Hailed as "the Russian Edison," Theremin arrived in the United
States in December 1927. He performed several concerts under the auspices of the CPUSA but focused his efforts on producing Theremins; by
1929 he had made arrangements with RCA to manufacture the instrument. While this venture proved unprofitable (the onset of the Great Depression didn't help), he worked on a variety of technical problems in his
personal laboratory, including altimeters, remote-control devices, and autopilots, all the while using his research contacts with American electronic firms and other scientists as an opportunity to ferret out American
industrial secrets. Later in his life, he told a biographer, "I did a lot of
spying work for the military department in connection with secret information on airplanes. I had my tactics for these things. To find out something new, and foreign, I wouldn't ask about it, I would suggest something new of my own. When you show something of your own it's easier
to find out what the other people are working at." While initially working
for GRU, at some point he became an agent of the KGB New York sta-
tion.46

Theremin had a messy personal life. His Russian-born wife, Katerina
Konstantinova, had followed him to New York, but they soon separated
and divorced in 1934, and she became an ardent anti-Bolshevik. Theremin had numerous affairs; in 1938 he married Lavinia Williams, a black
dancer with the American Negro Ballet. The first mention of him in Vassiliev's notebooks actually dealt with his ex-wife. In 1935 one of the KGB
New York station sources, Thomas Schwartz, a former German diplomat,
reported that a German national, Count Alfred Sauerman, had come to
the United States and had been promoting the story that the Reichstag
fire trial in Germany, blamed on Communists by Nazi authorities, was a
fraud and that Marinus Van der Lubbe, the man arrested and guillotined
by Nazi authorities for the affair, had actually been secretly sent to the
United States under an assumed name and someone else executed in his place. The sensationalistic report noted: "Sauerman has disappeared. His
wife has not filed a report about S.'s abduction, but she looks despondent. `Sauerman's wife is the daughter of a German colonel or general.
Sauerman himself had been castrated, and his wife-according to
Schwartz-is a hermaphrodite. Sauerman's abduction had something to
do with a Russian woman named Konstantinova, a Nazi agent-provocateur. She is the former wife of Prof. Theremin, who in his day invented
an extraordinary musical instrument."' Peter Gutzeit, head of the KGB
New York station, explained to Moscow: "`We tried to find out about Kon-
stantinova's activities through Frenchman [Theremin], but all our efforts
came to naught. Frenchman says that he and K. have nothing in common and that he has known nothing about her way of life or her activities
for a number of years. A year ago, Frenchman filed for divorce from Kon-
stantinova at the consulate.' "47

Oddly, the KGB New York station took upon itself the task of selling
(taking a very generous seller's commission for itself) several of Theremin's prototype inventions to Soviet industrial representatives in the
United States who were there purchasing advanced American technology
on the commercial market:

"We received a $6,ooo order from Siniavsky [Soviet purchasing agent] and
sent $4,000 to Frenchman [Theremin] for the manufacture for them of two
two-way radio stations that will transmit and receive dispatches by printing
them on typewriters. The devices will be finished in January and sent to your
address. You will receive Siniavsky's money in Moscow"

Regarding the designs for the theatrical television: "For the designs, we
are receiving $2,000 from the clients, which they have agreed to pay. We ourselves are paying Frenchman almost Soo dollars, which is consistent with the
actual value of draft work. Bear in mind that we quoted the clients a price of
$30,000 for the television. We will have to pay Frenchman around $9,000....
For the airplane television, we quoted Bordovsky [Soviet purchasing agent]
(also works in NY) a price of $i5,ooo. It will cost us 6 or 7 thousand."48

As innovative as Theremin's devices were, the New York station noted
his limitations: "`Frenchman's [Theremin's] work is entirely satisfactory,
but it is worth bearing in mind that he is an inventor who runs a makeshift
workshop. He can manufacture one or two devices at a time, and of
course as far as construction goes, his installations cannot be streamlined
to the same degree as would be done in factories with standard mass production."' With that in mind, it told Moscow Center: "The major American corporation Bendix ordered a capacity altimeter (for aircraft) from Frenchman + Bendix offered Frenchman a job at his [Bendix's] company
and promised to pay him $1,000 a week. `We instructed Frenchman to accept this offer and keep us informed at all times about negotiations. If
this can be accomplished, we will gain access to work of Bendix's that is
extremely important for our ... industry .... including his [Bendix's]
work on blind flight and blind landings. Frenchman's altimeter is important to Bendix precisely as part of that work.' "49

For some reason the arrangement with Bendix did not get implemented, and by 1938 Theremin's business pursuits floundered, creditors
secured judgments against him, and American officials became more reluctant to continue extending his temporary visa. He decided to return to
the Soviet Union, confident that his work for Soviet intelligence and
knowledge of American industrial secrets would ensure a welcoming reception. Smuggled abroad a Soviet ship (to avoid creditors), Theremin
returned home, but what he found was not a warm welcome but a nation
in the grip of Stalin's Terror. In the United States he had cooperated with
the KGB's external foreign intelligence arm. Back in the USSR, the KGB
internal security arm arrested him, and in March 1939 he confessed to
being a member of a fascist organization and a Western spy and was sentenced to eight years in the Gulag. Although initially sent to a hard labor
camp in Kolyma (among the worse in the Gulag system), he was recalled
in December 1939 to a sharashka, a special Gulag prison/laboratory
where imprisoned scientists, engineers, and academics worked on scientific and technological problems for the Soviet state. Living conditions,
while very austere, were nonetheless much better than in a regular Gulag
labor camp. (Sharashkas are best known in the West as the setting of
Aleksandr Solzhenitsyn's novel The First Circle.) During the war he
worked on military radio beacons and also made special devices for the
Soviet security services. In 1945, Soviet schoolchildren presented a twofoot wooden replica of the Great Seal of the United States to American
ambassador Averell Harriman as a symbol of American-Soviet friendship,
and Harriman hung the seal in his office at the U.S. Embassy. In 1952 a
routine security check discovered that it contained a sophisticated radio
broadcasting microphone and a cleverly designed resonant cavity that
could be stimulated from an outside radio signal. Leon Theremin had
designed the system.50

Released from the Gulag at the end of World War II, Theremin received the Stalin Prize in 1947 for his technological contributions to the
Soviet state. He remarried (Lavinia had not been allowed to accompany
him to the USSR) and continued to work on technological devices for the Soviet security services and, consequently, to have restrictions on his
residence and outside contacts. In 1962 one of his former American
music students met him in Moscow. Word that he was still alive gradually
trickled back to the West. In 1987, during the freer Gorbachev period,
the English-language Moscow News published a series about him and his
secret work. He was allowed to travel and received accolades on visits to
Paris and the United States, where his electronic musical instrument, the
Theremin, continued to have a cult following and even influence on popular music via the Beach Boys' ground-breaking album, Good Vibrations.
Still devoted to communism, he joined the Communist Party of Russia in
1991 just as the Soviet system imploded. He died in November 1993.51