Spies: The Rise and Fall of the KGB in America (89 page)

Martha Dodd followed this demand with another letter in which she
explained that she had gone a bit further, telling Alfred Stern that the organization with which she was connected was not dealing with refugees
but illegally plotting "`the overthrow of Hitler in occupied countries"'
and that its activities were directed from the USSR. As she "'knew he
would be, he was extremely enthusiastic and extremely thankful that the
work was in such reliable hands."'15

Zarubin discussed Martha's letters in a message to Moscow in April,
explaining that the increasing ties between the Sterns and various Communists had been hurting Martha's ability to develop "`interesting connections"' and her proposal to recruit Alfred had been her solution. He
was scornful of their amateurish effort to buy an ambassadorship for Alfred, noting that he lacked "`any attributes that would support seeking
such a career."' Nevertheless, the station had recruited him, and "Louis,"
as he was dubbed, "`knows who he is working for, and he is gradually assimilating the rules and interests of our work."' Zarubin was not overly
impressed by his potential. While Martha thought that Alfred was "`a
brilliant man with the qualities of a leader,"' he actually "`conveys the
impression of a man of average abilities, not very smart, but energetic
and with quite a bit of initiative. He seems to be an honest and modest
man. He has a very good attitude toward us."'1e

Moscow was even less impressed. A message sent to Zarubin in June
complained that Martha's reports "`are of no practical value."' Her old connections in Europe had become useless, and her assessments devoted
-more attention to describing their appearance ('a blond man,' `pretty
eyes,' and so forth) than to information about how these people could be
useful to us in our work."' (She did, however, spot and recommend Jane
Foster for recruitment. Foster worked as a KGB agent while on the staff
of the OSS and after World War II in Europe until the mid-1950s; see
chapter 5.) In late 1943 Moscow ordered New York to "`deactivate agents
without future prospects,"' including Martha Dodd.''

Vasily Zarubin had, however, figured out a way to use Alfred Stern. In
1936 Zarubin had first contacted a Russian emigre working as a musical
producer for Paramount Pictures, Boris Morros, and in return for assistance to his relatives, still living in Russia, Morros obtained a cover job for
Zarubin as a Paramount talent scout in Germany. Morros also agreed in
1943 to join with a wealthy investor in a sheet music company that would
serve as a cover for Soviet espionage. In December Zarubin and Morros
visited the Sterns at their Connecticut home, and Alfred invested
$130,000 (over $1.5 million in zoo8 dollars) in the Boris Morros Music
Company. In the fall of 1944 Zarubin handed supervision of Morros and
Stern to Jack Soble. But by early 1945 Morros had frittered away the initial capital. During one trip to Hollywood, Stern and Morros got into a
heated argument. Jack Soble explained to Moscow that instead of publishing sheet music, as had been planned, Morros had decided to manufacture records, a decision that complicated future plans to use the business to provide cover for hiring agents in foreign countries. All of Stern's
initial investment of $130,000 was gone; so were virtually all of Morros's
funds, and he wanted Moscow to invest another $150,000. Soble was
skeptical, warning that the business was unlikely to succeed with Morros
in charge and that Zarubin "`made a big mistake"' in trusting him with so
much money and guaranteeing Stern that his investment would be protected without his having any responsibility for the business or risk.
Moscow issued instructions to liquidate the company, pay Stern $1oo,ooo,
and assure him that it would give him an opportunity "to conduct a commercial operation with Amtorg so that he can recoup his losses." Anatoly
Gorsky, Washington station chief, assured Moscow in June 1945 that the
incident had not soured Alfred on working with the KGB: he remained
ready and willing "to invest up to 250,000 Am. dollars into any solid business of our choosing." The Sterns' usefulness, however, never very impressive, was coming to an end. A memo records that they were both deactivated in 1945.18

By 1948, however, a new set of KGB officers manned the station, and they had very few sources, malting eager, if dilettantish, old agents like the
Sterns more attractive. Valentin Sorokin, a KGB co-optee and staff member of the Soviet Information Bureau, met them at a January party attended by Communist writers like Howard Fast, James Allen, and A. B.
Magil. Martha asked to meet with one of the Soviet operatives whom she
had known in Berlin. The Center suggested Sorokin probe how she felt
about the USSR, "what capabilities she has for work as a talent-spotter,"
and whether the KGB should resume meeting with her. At other meetings she chastised the Soviets for maintaining ties with Earl Browder,
began demanding more secretive ways to arrange future meetings, revealed that she had contacted a Soviet consular official to check on
Sorokin's bona fides ("'After all, we don't know whether you're a good
Sov. cit. or some Kravchenko [Soviet defector], maybe after the meeting
with us you'll go to the FBI and tell them everything"'), and boasted of
the Sterns' close ties to Henry Wallace. Martha explained that they could
influence him, "`but we need to receive direction."' Sorokin asked her to
provide information about Michael Straight and the New Republic and to
compile a memorandum on American writers and Alfred to do an analysis of the Progressive Party. That concerned Alfred, who said, "`As long
as it was a matter of talk and discussion, that was one thing, but writing
for you is something else. In the first case everything remains words. Nobody can prove that we were the ones who said this. A document is different."' While he was willing to write the analysis, he wanted clarification of Sorokin's status. The Sterns were convinced that American
security was watching them and that their phones were tapped.'9

These meetings produced little besides political gossip from Progressive Party circles and claims about the Sterns' influence. Martha
maintained that Wallace had asked her to write campaign speeches, and
she wanted the Soviets to give her themes; that elicited a warning from
Moscow that using her for such work was "inadvisable." Alfred asked
Sorokin to tell Soviet authorities that it could assist the Wallace campaign
by having a senior official, such as Andrey Vyshinsky, deliver a speech recalling "`the joint struggle by the USSR and the U.S. against fascist Germany and precisely what the USSR did, what casualties it suffered in
order to save the world and in particular the U.S. from German fascism."'
Alfred claimed such a speech "`would make an impression. We need this
right now."' The Washington station wrote to Moscow that in its view
Martha was "`talkative, not completely serious, and not secretive enough.
Keeps trying to impose herself for establishment of an agent contact."' It
recommended against reestablishing an agent relationship.20

When Olga Kasenkina, a teacher at the Russian Consulate in New
York, decided to defect in 1948, the consul, Yakov Lomakin, led a raid on
the upstate farm where she had sought refuge, forcibly brought her to
the consulate, and refused to allow her to leave, at one point displaying
a visibly drugged woman who, he claimed, now wanted to go home.
When state Supreme Court justice Samuel Dickstein (himself a one-time
Soviet agent) ordered her appearance in court, Lomakin refused to comply. The next day, Kasenkina jumped out of a window. Severely injured,
she was rescued over the furious protests of consular officials, taken to a
New York hospital, where she recovered, and was granted political asylum. The Sterns complained about the inept way the affair had been handled, and Martha insisted that it had convinced her of the need to reactivate "`our group"' to give advice to such Soviet leaders as Molotov and
Vyshinsky.21

The Sterns' behavior only became more bizarre. In mid- 1949 Martha
gave Sorokin a list of fifty-three people who were potential contacts. It
was in the form of a movie script, with thumbnail sketches of such people as Howard Fast, Herbert Biberman, John Abt, and Charles Kramer.
The undermanned station thought the information she provided was
insufficient and was unable to check the names out. The Sterns were
transferred to another KGB officer a month later and, while attending a
reception at the Soviet Embassy drank too much and "behaved indiscreetly," introducing the two officers to each other. The KGB dropped
contact with them.22

But the KGB was not yet through with this odd couple. In March
1955, still in dire need of leads for agents and sources, it decided to reactivate them but discovered they lived most of the year in Mexico.
Moscow Center asked the Mexico City station to investigate and determine if Martha was a suitable and willing candidate for "`re-establishing
a confidential relationship."' But in the midst of this renewal, the Sterns
came under increasing pressure from congressional subpoenas and possible indictment for espionage. After Jack Soble's spy ring was exposed,
they asked for assistance in leaving Mexico. Their Mexican attorney paid
$io,ooo to a Paraguayan diplomat who arranged for them to become naturalized citizens and given Paraguayan passports. They went into exile in
Czechoslovakia and promised to "continue cooperating" with the KGB.
Once there, they pondered moving to Moscow or China, offered to donate artwork and a Mexican villa to the Soviets, and demanded that the
KGB help extract a friend, Maurice Halperin (discussed in chapter 5),
from Mexico since he was known to American authorities as a Soviet agent. Moscow Center was not anxious to have them settle in the Soviet
Union, rejected the villa for fear it could cause diplomatic problems,
didn't want the paintings ("otherwise we will find ourselves indebted to
the Sterns"), and explained that Halperin had already applied to come to
the USSR and his case would be moved ahead.23

The Sterns were upset they were refused permission to live in the
USSR and also complained that Jack Soble had bilked them out of money.
The KGB reversed course and arranged their visit to Moscow in September 1957, but they eventually decided to seek permanent residence
in Czechoslovakia. In a letter delivered to the Czechoslovak Embassy in
Moscow, Alfred explained:

"After careful thought and experience we believe that Czechoslovakia is the
country in which we can best adjust for the following reasons: i. We are more
familiar with the customs, habits and way of life in Czechoslovakia. z. Until we
can acquire a working knowledge of the Czech language we are able to communicate more freely with most of the people with our limited knowledge of
German. 3. We are attracted to the quieter way of life and to the more western
living conditions. Quite simply, we immediately loved the country and its
sturdy spirited people. Czechoslovakia is a beautiful and extremely important
country, a model in the heart of Europe of socialism in the making. We want
to contribute to its future in whatever way we are qualified. My wife thinks she
could be an editor and reader for a publishing house which translates and publishes books in the English language, or help in any other place where the understanding and writing of English is very important. She also wants to continue her own creative writing. I feel I can fit into and contribute most to some
aspect of the export-import field and perhaps advise in other lines such as
housing."

Before departing for Prague in January 1958, Alfred, who had been involved in public housing construction in the 1930s, sent Soviet leader
Nikita Khrushchev a letter offering to discuss housing and delivered a
detailed critique of Soviet apartment construction to authorities.24

The Sterns soon grew bored with Czechoslovakia. (Earlier they had
also sought permission to move to Communist China, but the government had refused to admit them.) Enamored by the glamour of Fidel
Castro, they moved to Cuba in 1963, but that adventure paled and they
returned to Prague in 1970. Wanting the option of returning to the
United States, where they remained under indictment for espionage, beginning in 1975 they offered to meet FBI agents in a Communist country to try to get the charges against them dismissed, but they would not agree to government demands for an interview in a Western nation. The
KGB was not inclined to interfere, and Moscow Center told its Prague
station:

"If the Sterns manage to reach an agreement with the Amer. authorities to
drop the past charges filed against them, we will scarcely be able to block their
effort to move to the U.S. for permanent residence. In that case it cannot be
ruled out that their return may be used by the adversary for propaganda purposes to whip up spy mania, even though those events occurred a long time
ago and were widely publicized in connection with the trial of "Czech" [Soble]
and "John" [Morros]. The information that the Sterns may possess about the
activities of Sov. intelligence is outdated and mostly known to the adversary
from the testimony of the traitor "John." Based on the foregoing, if we receive
an official inquiry from the relevant agencies of the CSSR [Czechoslovak Socialist Republic] regarding the Sterns, we deem it possible to respond that
there are no objections on our part to their moving to the West."

The final chapter in their saga came during the Carter administration,
when the Sterns enlisted the assistance of Congressman Don Edwards
(D-CA). Insisting that the indictment had little basis, he persuaded the justice Department to drop the charges. The FBI objected unless the Sterns
agreed to provide a candid statement of their activities, but the charges
were dropped in 1979 with no requirement of any cooperation from the
Sterns. (Alfred arranged campaign contributions for Edwards both before
and after this episode.) The Sterns, nonetheless, decided not to return to
the United States after all. Alfred died in 1986, and Martha Dodd Stern
died in Prague in 1990.25