Spies: The Rise and Fall of the KGB in America (77 page)

Benjamin Smilg had access to too much highly valuable aviation information for the KGB to drop the matter, and the New York station tried
blackmail, but to no avail: "Meeting with "Goose" [Gold] at "Lever's"
[Smilg's] apartment (the city of Dayton). "Goose" showed documents and
receipts, but "Lever" flatly refused to work." When both were students at
MIT, Shumovsky had paid Smilg for tutoring him in some subjects. Possibly the tutoring did assist Shumovsky's studies, but it was also part of his
cultivation of Smilg, and he kept the receipts he asked Smilg to sign at the
time. The KGB had Gold show them to Smilg with the implied threat
that the receipts might be construed as evidence of espionage if turned
over to American security officials. Smilg, however, refused to be bullied,
and the KGB did not carry out the threat. Instead, the New York station
tried another tack, first sending Semenov to attempt to reestablish contact, but Smilg "categorically refused to meet" him. It then reported:
"Blerio [Shumovsky] is meeting with Lever in an attempt to restore the
friendly relations that had once existed between them. It is difficult to
meet, however, b/c Lever was drafted into the Armed Forces and walks
around in an officer's uniform." This didn't work either. The KGB gave
up, and its 1944 summary of the Smilg case concluded that after being a
productive source in 1935, 1936, and into 1937, "In 1937 the materials
stopped coming in. In the fall of '38 he was turned over to "Goose," but
it proved impossible to set up a working relationship with him." This was
not, however, the end of the matter.62

In 1950 Harry Gold confessed to his long career as a Soviet industrial source, courier, and agent handler. During the course of his statements he discussed his contacts with Benjamin Smilg, then working as a
research aeronautical engineer at a government laboratory at Wright-Patterson Air Force Base. Smilg was called before government loyalty board
hearings and asked about their relationship. He acknowledged meeting
with Gold but denied knowing that Gold was engaged in espionage and
strenuously disclaimed any spying on his part. Smilg maintained that Gold
had tried to blackmail him with the threat of using the signed receipts,
but he had refused. He was suspended from his job, and in 1952 a U.S.
grand jury indicted Smilg for perjury for denying knowledge of Gold's
status as a spy. Gold was the chief witness against Smilg at a subsequent
trial in November held in Dayton, Ohio. He testified that Smilg had refused to provide espionage data but certainly knew that he was a KGB agent. Smug testified that he had thought Gold was some sort of a radical "screwball" rather than a spy. Smilg's lawyer convinced the jury that
Smilg could not have been sure that Gold was a spy and that, at any rate,
he should get credit for refusing to provide espionage information, and
he was acquitted. Smilg did tell the truth about rebuffing requests to spy
after 1937 and being threatened with blackmail. However, from 1934
until late 1937 he was a KGB source, something he never admitted to
American authorities .13

Stanislav Shumovsky was not the only KGB officer who concentrated on
aviation intelligence. So did Andrey Shevchenko, cover name "Arseny."
While Shumovsky's aviation heyday was in the mid-1930s, Shevchenko
operated in the early 1940s, during America's wartime alliance with the
USSR. Shevchenko had a cover job as an aviation engineer with the Soviet Government Purchasing Commission, and his trips to American aviation plants to inspect aircraft being supplied to the USSR under LendLease provided the opportunity to recruit aviation sources for the KGB.
The chief aircraft supplied the Soviets (nearly five thousand) was the
P-39 Airacobra and its successor, P-63 Kingcobra, single-seat fighters
produced at Bell Aircraft plants in upstate New York, and many of
Shevchenko's sources came from aviation plants in that region. A February 1945 report had a chart of agent assignments on the XY line that listed
Shevchenko with ten sources, all devoted to aviation intelligence. Their
cover names were "Zero," "Bugle," "Ferro," "Thomas," "Nemo," "Armor,"
"Noise," "Author," "Bolt," and "Hong." It further elaborated:

"Zero"-Mrs. Leona Oliver Franey 32 years old. Works in the secretariat of
the head of the design office at factory No. 2 of the "Bell" Company. Has access to secret work. Gives "Arseny" [Shevchenko] materials in return for
money.

"Ferro"-Alex N. Petroff. 46 years old, Russian. Living in the USA since 'zz.
Kolchak veteran. Did his doctoral work at MIT. A professor of aerodynamics.
Married to a very religious American woman from Kansas City. Two daughters. With Arseny-z years ago when they were working together at the Curtis
factory. Good personal relationship. "Arseny"-occasional rewards, gifts. His
wife does not know. A fanatic. Does not believe in science or medicine. Her
daughter cut off one of her fingers, and she forbade calling a doctor and called
a nun instead. Family strife. His wife berates him for working at a factory and
making so little money, even though he is a professor.

"Noise"-Michael K. Cham. 27 years old, b. in Canada, Ukrainian, a U.S. citizen. Works at the "Douglas" airplane factory in Chicago. From 42 to 43, he
worked at the Curtis factory in Buffalo, where he was recruited by "Arseny"

"Armor''-Harold Smeltzer, 31 years old, a U.S. citizen. Graduated from Massachusetts ins-t. From '39 to 43, he was a division chief at factory No. i of the
"Bell" Company in Buffalo. Moved to NY, but the connection was lost.

"Nemo"-William Pinsly 31 years old. Aeronautical engineer. "Curtis" factory,
Buffalo. Married. Only gives materials to "Arseny" at the factory. Occasionally
-gifts. Thinks of himself as unlucky in his personal life. On 1.1.45, he bought
a child in Chicago for $4,000; he spent all his savings and took out a loan at the
bank.

"Author''-Vladimir Borisovich Morkovin. 29 years old, Czech. PhD in technical sciences, an aerodynamics engineer. With "Arseny"-a year and a half.
Tech. info. orally.

"Bolt"-Inoke N. Varie (Innokenty Nikol. Vorozheyka). 44 y.o. Russian. Living
in the USA since 'zo. Recruited by "Arseny" in 44. Told us about a radio-controlled bomb.

"Hong"-Loren Haas. 37 years old. Motor-mechanical engineer at the Bell
factory.

"Bugle" and "Thomas" were not identified.64

An anonymous letter sent to the FBI in August 1943 (see chapter 9)
identified Shevchenko and other Soviet officials in the United States as
KGB officers. Initially unsure of what to make of the bizarre letter, the
Bureau eventually decided that it should be taken seriously and put
Shevchenko under periodic surveillance. Agents observed him meeting
with Leona and Joseph Franey on z6 July 1944. Leona/"Zero" was chief
librarian at Bell Aircraft, while Joseph worked in the rubber section of
nearby Hooker Electro-Chemical. Bureau agents observed a second
meeting on 30 July, during which Shevchenko met the Franeys on a parkway near the Niagara Falls and took them to a leisurely dinner.

FBI agents contacted the Franeys in August 1944, and they agreed to
assist the government. They reported that Shevchenko, whom Leona had
met the previous November, when he first began using the Bell Aircraft
library, gave them theater tickets and small gifts; took them out to dinner;
and related how social conditions in the USSR were superior to those in
the United States. Leona told the FBI, and later publicly testified, that
she had not actually given Shevchenko any Bell Aircraft documents at
that point. (Deciphered KGB cables and these new documents suggest
that she had actually begun to supply him with material prior to the FBI
approach.) The Franeys continued their relationship with Shevchenko, and Leona supplied him with Bell Aircraft material that had FBI approval. In 1949 they testified to a congressional committee about their
work as double agents. They stated that the KGB officer gave them cash
bonuses and provided a camera to photograph secret documents to which
Leona had access in the secure section of Bell Aircraft's library. Leona
testified that Shevchenko was particularly interested in material on Bell's
development of the prototype American jet aircraft, the P-59; technical
questions about jet engine design; and design problems with the innovative swept-back Wing. 65

Bureau agents also observed Shevchenko's cultivation of Loren
Haas/"Hong," a Bell engineer who assisted in the technical training of
Soviet personnel in maintaining the P-39 and P-63. Haas also agreed to
assist the FBI. As with the Franeys, Shevchenko provided Haas with a
camera to assist his espionage. One late 1944 deciphered KGB cable
noted that Haas had given Shevchenko detailed drawings of a jet engine
under development. Haas left Bell in 1945 to take a position with Westinghouse, soon to become a major producer of jet aircraft engines.
Shevchenko renewed contact with Haas, and he continued to function
as a double agent for the FBI. KGB contact with Shevchenko's aviation
sources likely was cut by early 1946 in the wake of the Bentley, Budenz,
and Gouzenko defections.66

One of the longest serving and most eccentric Soviet XY line agents was
Tasso (Thomas) Lessing Black, born 5 July 1907 in Bloomsburg, Pennsylvania, where his father taught Shakespeare at Bloomsburg State Teachers College. He attended Pennsylvania State University, studying chemistry, but left in 1929 without a degree. Old friends interviewed by the
FBI recalled that he was constantly in trouble. In one incident he poured
benzene on the floor of the dormitory and set it on fire. He took morphine and talked constantly about the coming American revolution.67

Black moved to the New York area in 1931, found a job at a chemical company, and joined the CPUSA. But he found party activities boring and decided he wanted to emigrate to the Soviet Union. He dropped
out of the CPUSA in part because he had heard that the party might refuse him permission to go on the grounds that Communists were needed
to build the movement in the United States. He began to take lessons in
Russian and visited Amtorg with his friend Fred Heller to explore
whether there were jobs for chemists in the Soviet Union. At Amtorg he was directed to Gayk Ovakimyan. In 1950 Black explained to the FBI
that he told Ovakimyan that from his work he was well informed about
key areas of industrial chemistry and thought that in the Soviet Union he
could put that knowledge to work. He then recounted what happened
next: "So Ovakimian wanted to know what I knew and what information
was available. I told him well I could get him probably a lot of information on the manufacture of sulphinated oils, textile specialties, leather
specialties, industrial chemicals generally. He said that would be of very
great interest to the Soviet Union. He said that perhaps it could be
arranged that we could go to the Soviet Union to work, but first he would
like to have samples of the sort of information that was available and also,
before he could recommend that we be sent to the Soviet Union to work,
he wanted to know how good a chemist we were." Black stole some proprietary chemical processes from his employer and brought them in, and
Ovakimyan asked for more. Ovakimyan, however, was a KGB officer, not
the Amtorg official that he pretended to be, and was not really interested
in finding Black a job in the USSR. Gradually, Ovakimyan converted
Black from a job seeker stealing information from his old employer and
offering it to a possible new employer into a full-fledged industrial spy. He
first appears as a KGB source in 1935 with the cover name in Russian of
"Cherny," which is simply Russian for "Black." While initially a source of
technical intelligence, Black later undertook a variety of tasks for the
KGB, working as a courier, agent handler, and recruiter."

Deactivated in 1946 along with many other agents, Black likely would
have faded into obscurity except that one of his recruits was Harry Gold.
Like Black, Gold had gone from being an industrial intelligence source
to a KGB courier and agent handler. Klaus Fuchs identified Gold as his
courier in 1950, and Gold implicated Black as the man who had first recruited him into espionage.

The FBI first interviewed Black on 15 May 1950, at which time he denied almost everything. Agents were convinced he was not telling the
truth; he also bemused them with his odd lifestyle and habits. Acquaintances described Black as "very shabby in appearance and dress, carefree, and good-hearted but very eccentric." He kept mice, rats, and
snakes in his home, as well as a pet crow, and sometimes carried out
smelly chemical experiments in his residence. Occasionally he brought
what were described as "downtrodden individuals" to his apartment to
live with him for a time. Within a month, however, he had become more
forthcoming and eventually the transcripts of his interviews with FBI
agents were many hundreds of pages in length.

Black also gave the FBI access to material he had stored at a warehouse. Black appears to have been one of those individuals who couldn't
bring himself to throw anything away. In addition to piles of old laboratory equipment, chemicals, and a variety of household items, FBI agents
were surprised and pleased to find that Black had ignored elementary
rules of intelligence tradecraft (and common sense) and had saved memorabilia from his espionage career. Included in his stored papers was the
contact information the KGB had given him in 1942, when he went to revive its relationship with biochemist Earl Flosdorf, as well as the original
signed letter from Grigoiy Rabinovich that he had shown to Flosdorf.
Also in the papers was a mid1930s autobiography he had prepared for his
KGB contact with the following incriminating statement: "Joined FSU
[Friends of the Soviet Union] and later CP [Communist Party], Fall 1931;
started to work for National Oil Products Company, Spring 1933, as Analytical Chemist; made Research Chemist, Fall 1933; dropped out of all
radical activity (CP, FSU) because opportunity was present for obtaining
technical information of value to the Soviet Union."69