Spies: The Rise and Fall of the KGB in America (90 page)

The Sterns performed some useful tasks for the KGB but never came
close to living up to the potential Moscow saw in them. But if they were
a disappointment, the assistance provided to the KGB by Boris Morros,
their one-time business partner, was eventually dwarfed by the damage
he inflicted.

A Soviet diplomat working with the KGB first met Morros in 1934,
when he came to the New York consulate to arrange for his father's return to the USSR. He had five brothers in the USSR, and several were
Communist Party members, and his father was going back because of his
avowed disgust with living in a capitalist country. Boris, who was born in
Russia in 1895, had made his way to the United States in the early 192os and worked for Paramount Studios chiefly on projects arranging music for
films. The report on his visit to the consulate noted that he might be
amenable to providing cover jobs at Paramount for "`our workers.- In
subsequent conversations, Morros was assured that he was trusted and his
brothers respected, and he agreed to obtain a job for someone in Paramount's Berlin office, provided the person was knowledgeable about the
industry, spoke German, and was not Jewish. Morros understood "`that
this is not an ordinary favor he is doing for a Soviet official."' The man to
whom he eventually provided Paramount credentials, known to him as
Edward Herbert, was Vasily Zarubin, an experienced Soviet intelligence
officer and later station chief in the United States.26

Moscow Center stated that "`having an opportunity to get our illegals
jobs at capitalist companies appeals to us,"' calling Morros "`a valuable acquisition, one worth holding onto,"' and envisaged placing its agents in Paramount offices around the world, particularly in the Far East, but agreed that
it would be a mistake to put too much pressure on Morros too quickly, lest
he be scared off. In addition to using Morros to give its agents cover jobs
abroad, Moscow wanted to use him to get people visas to enter the United
States. Meanwhile, Morros reported that he had been promoted to a Paramount Studios executive office post in Hollywood, and the KGB anticipated
having him admit its agents to Paramount's training programs as "`a wonderful way to create cadres for underground work abroad.' "27

When Morros returned to Russia in August 1935 to visit his dying
mother, the KGB arranged to meet him in Moscow "`to agree with him
on a plan for use."' But, when he returned to the United States, the New
York station began to worry about his commitment and veracity. A KGB
officer traveled to Los Angeles in December to contact Morros but was
first rebuffed by a secretary, had to use a ruse to reach him on the telephone, and even then sensed coldness. When they finally met, Morros
pleaded that the press of business had prevented him from carrying out
a KGB assignment. Operative "Archimedes" also concluded that Morros
was not as highly placed at Paramount as he had led the KGB to believe,
a fact confirmed at a later meeting, when Morros admitted that "`his functions are minor and administrative"' and that he had no authority to hire
anyone. Assimilating this information, station chief Peter Gutzeit concluded that Morros wanted to break his ties to the KGB and, in any case,
lacked the opportunities to help that he had promised. His location in
far-away Los Angeles limited the ability to pressure him (at that time the
KGB had little presence on the West Coast), but Gutzeit promised to
meet him again in a few months and try to persuade him to help.28

Even though Morros was not to be the magical source of cover jobs
for KGB agents envisioned earlier, he did give concrete assistance to
Zarubin, who attested to his usefulness in a 1938 report, noting that Morros had provided papers that had enabled him to function effectively in
Germany for three and a half years and had regularly sent him money.
Since Morros was so busy, all of these arrangements had been handled by
his secretary, giving the relationship a protective veneer of ordinary business dealing. Zarubin noted that Morros's potential had not been realized: his large number of contacts in both the United States and abroad
had never been cultivated properly, and he had been neglected. But now
he "`can and should be used primarily as someone who can arrange for
our people to be legalized."' Zarubin concluded by noting that "`everything this man says or promises, he "29

Despite this endorsement, contact with Morros remained sporadic
for the next several years. Moscow Center requested that he be contacted
in late 1940, and Ovakimyan met him in New York in November. He reported that even after a two-year hiatus, Morros, code-named "Frost,"
was willing to help and was "well-disposed toward us." (Boris's original
Russian name, "Moroz," is also the Russian term for frost.) Although he
was not immediately given an assignment, in February 1941 Ovakimyan
conveyed a request that he help obtain visas for three people to enter the
United States. That request was apparently not fulfilled because some
time later a query from Moscow asked about the status of that project
and whether Morros would consider going to Japan, using the pretext of
studying Japanese music to renew his claimed ties with the brother of
the prime minister.30

Morros's relationship with the KGB moved to a new level at the end
of 1941. Vasily Zarubin arrived on the West Coast from the USSR en
route to his new posting in New York as KGB station chief. Before traveling east, he met with Morros in Los Angeles; in April he wrote a report
for Moscow that his old friend had "made a very good impression." He
was, however, worried about his family in Russia, who faced a variety of
difficulties. Zarubin asked that they receive assistance and that news of
their situation be sent every month to help cement Morros's loyalty. Morros had agreed to create business cover jobs for two people in Switzerland; one, "West," would be tasked to lift the Swiss ban on one of Morros's movies, The Flying Deuces. The KGB fulfilled its part of the bargain,
at least in part. It not only provided money and better living conditions
for some of Morros's family in Russia, but it also allowed his father to immigrate to the United States in 1942 "as a special case."31

But while the KGB's foreign intelligence arm arranged for assistance
to Morros's family, its internal security arm had wreaked havoc on it. In
October 1946 the KGB prepared a memo on the fate of Boris's brothers
and sisters who remained in the Soviet Union. In bureaucratic prose it
laid out the tragedy of a family in the Stalin era. While two sisters and one
brother escaped the attention of the Soviet security services, four other
brothers did not:

"A brother, Yuly Mikhailovich Moroz, b. 1906 in Zaporozhie, UkrSSR,
[Ukrainian SSR] higher education, non-Party man; worked as an economist
on the Volkhovsky Front Directorate until 1943. In December 1943, the Volkhovsky Front Military Tribunal sentenced Y. M. Moroz to 1o years' imprisonment, with 5 years' subsequent disenfranchisement with confiscation of personal property, pursuant to article 58-1o, part z and 193-17 `a' of the UK
RSFSR [Criminal Code of the Russian Socialist Federal Soviet Republic]. Following a petition by the NKGB [People's Commissariat of State Security]
USSR in July 1944, Moroz was released early by decree of the Presidium of
the Supreme Soviet of the USSR and sent to the front. While at the front, M.
was awarded the Order of the `Red Star' and medals: `For the capture of Warsaw' and `For victory against Germany.' M. currently lives in Leningrad....
He works at the Trade Institute.

A brother, Savely Mikhailovich Moroz, b. 1912 in the city of Zaporozhie,
USSR, incomplete higher education, worked as an engineer on engine maintenance and repair for the `Artiksnab' organization. In January 1944, the Irkutsk
Region Court sentenced S. M. Moroz to 1o years' imprisonment, with confiscation of all his personal property and with 5 years' subsequent disenfranchisement, pursuant to statute p. `a' p. 31 of the UK RSFSR from 7 August 1932.
Following a petition by the NKGB USSR in October 1944, S. M. Moroz was
released early by decree of the Presidium of the Supr. Soviet of the USSR and
sent to the front. In 1945, following demobilization from the army, S. M.
Moroz went to live in the city of Zaporozhie, where he continues to live at
pres....

A brother-Aleksandr Mikh. M., b. igoo in the city of Bobruysk, worked
as chairman of Starobelsky city council of the Donetsk Region until 1937. In
Dec. 1937, A. M. M. was sentenced to VMN [Supreme Penalty: execution] by
the Military Board of the Supr. Soviet of the USSR for participation in a counterrevolutionary Trotskyite terrorist org. His wife, Lyubov Grigorievna M., was
sentenced to 8 years' imprisonment by the Special Board in Dec. 1937, as a
family member of a traitor to the Homeland.

A brother, Zaromsky-Isaak Mikh. Moroz, b. 1898 in the city of Bobruysk,
has an incomplete higher education in laww Worked until 1938 as chairman of the Region Planning Commission in the city of Yoshkar-Ola in Mariysk ASSR
[Autonomous Soviet Socialist Republic]. In 1938, he was arrested by the organs [units] of the Mariysk ASSR NKVD [People's Commissariat of Internal
Affairs]. I. M. M.'s current whereabouts are unknown. According to documents in his file, in 1942-43 he was living in the city of Tulun in the Irkutsk
Reg.; according to the same files, I. M. M. died in a prison hospital in 1938."

How much of the fate of his brothers Boris Morros knew is difficult to say.
His father would surely have told him something about the 1937 and
1938 arrests of two of his brothers, but not necessarily their fate. Boris's
brother Aleksandr had been shot in 1937, but most executions during the
Terror were secret, and family members were often told that the prisoner had been sentenced to the Gulag without the right of communication. Years later they might get a notice that the prisoner had died of an
illness.32

Through 1943 the KGB toyed with ways to use Morros more productively. Zarubin hit upon the scheme to create a new business, the
Boris Morros Music Company (discussed above), which would provide
cover jobs for KGB agents, and he persuaded Alfred Stern to finance it.
In a report he wrote for Moscow in September 1944, Zarubin boasted
about the company's great promise and pledged it would be ready for
"`us to use as a cover"' by the winter. "`We can trust F ... t ["Frost"/Mor-
ros]; he won't take off with the money."' Pleased by his role in midwifing
a potentially valuable KGB asset, Zarubin handed Morros off to Jack
Soble upon his recall to Moscow in mid-1944.33

It soon became apparent that Morros was not as reliable as Zarubin
had thought. The business collapsed and hopes that the Morros Music
Company would provide a cover for KGB operations came to nothing.
Soble's 1945 report on the investment fiasco soured the KGB on Morros
for a time. In addition to his commercial incompetence, he had also
boasted that he knew Beria personally and that Zarubin had introduced
him to Molotov during one of his New York visits. Just as worrisome as
his garrulousness was his inability to observe elementary security precautions. In June 1945 he called Soble at the latter's apartment in New
York, demonstrating not only that he knew his real name, but also possibly exposing him to the FBI. Anatoly Gorsky, the new American station
chief, reported that Morros "knows which organization he works for; he
is not averse to boasting about it, and sometimes, completely out of place,
he will bring up his acquaintance with Cde. Pavel [Beria]." Notwithstanding his wide circle of acquaintances, he was also a scamster; he had recently summoned Soble to Chicago to give him urgent information he
had obtained from Archbishop Francis Spellman, widely considered the
most powerful Catholic prelate in America, but as soon as he relayed it,
Soble realized it was a warmed-over report from a recent New York Times
article. Gorsky also warned that Soble thought Morros viewed the KGB
"as a goldmine from which he can extract money."34

Moscow took the warning signs to heart and on 14 June ordered that
Morros be deactivated and that Soble stay away from him because of the
danger. "`Under no circumstances"' should he meet Morros. Yet in December Soble reported that on Morros's invitation, he had visited him in
New York to hear that the record business stock had been largely sold,
Morros was back making movies, and he was willing to partner with the
KGB to create a distribution company to release them if it would ante up
200,000.3.5

While it appears that the KGB decided to pass on this opportunity,
Jack Soble, like Zarubin before him, had joined the Boris Morros fan
club. In a report he wrote in August 1947 Soble praised Morros as "'talented, energetic and enterprising."' His problem was that living in Hollywood, "`he does not understand the value of money. Thousands of dollars are thrown right and left."' But he was honest; when informed he
had to return money to Stern, he had agreed and kept his word, transmitting $1oo,ooo to partially reimburse Stern. Soble reconsidered the
Morros Music Company failure, blaming Stern, not Morros, and commenting: "`One must be a man of steel to put up with Alfred Stern when
doing business, especially in America, where risk, enterprise, and speed
are the main elements of any commercial undertaking."' Soble was much
taken with the critical and financial success of Morros's latest film release,
Carnegie Hall, and even more by the close friendship it had revealed between the Hollywood operator and recently named Cardinal Spellman.
And perhaps he was dazzled by Morros's reiterating a desire for a KGBfinanced business in which he, Soble, would play a key role.36

In a series of reports about his meetings with Morros in New York
and Paris in mid-1948 Soble argued, much as KGB officers had done
more than a decade before, that Morros "`could undoubtedly do a lot of
good for our cause in every respect, namely: major connections, getting
people jobs, getting entry visas through various channels, transferring
funds to various countries, legalizing people through film divisions in the
USA and in Europe, and setting up courier links between the USA and
Europe."' As Morros dropped the names of his friends and exaggerated
his relationships with them, Soble practically salivated at the possibili ties. Not only was he a confidant of Cardinal Spellman, but he also
claimed to be a drinking buddy of Eisenhower's brother, to have given
Republican presidential candidate Thomas Dewey elocution lessons, and
to have trolled for women with General Bedell Smith's aide, who had also
introduced him to the wife of General Lucius Clay (U.S. Army commander in Germany), who was, according to Morros, cheating on her
husband "`with gusto., " At one gala charity event at the Louvre, which
Soble attended, Morros skillfully orchestrated the crowd, including ambassadors, generals, and ministers, leaving the KGB agent agape at the
"`extent to which "John" [Morros] can pull the wool over this entire distinguished public's eyes."' It never occurred to him that the Hollywood
charm, celebrity dazzle, and gift of gab that Morros used to confound the
crowd in Paris were also employed to confound the KGB. Morros told
Soble that he wanted to work with the KGB but insisted that he could not
be supervised by amateurs, denigrating his previous handlers for lacking
the elan and imagination to take advantage of his prodigious talents. Soble
occasionally qualified his star-struck dispatches, warning that Morros
could be immensely valuable, "`but only on one firm condition: supervision, strict supervision on our part."' He concluded one report with a
gushing: "'That's all in a nutshell. I am sure that this amounts to 1/2oth
of the info. John [Morros] has.... And so, my dear comrades, the word
is with you! Act!"'37