Spies: The Rise and Fall of the KGB in America (97 page)

Illegal station chiefs had their own problems. They also had to have
a cover job since people with no visible job might occasion notice or questions. But working for someone else involved risks, to say nothing of how
to explain or get permission for the frequent absences and irregular hours
that an espionage job necessitated. Lacking diplomatic protection, they
could not call on the Soviet Embassy for support if arrested. Living illegally in the United States required blending in with ordinary Americans
while avoiding official scrutiny. They socialized with people who might
become suspicious, and they had no entirely safe and secure place to
stash the tools of their trade. When things went wrong, the consequences
could be dangerous and unpredictable. The first illegal station chief in
New York, Valentin Markin, provided an object lesson when he died in
1934 under unclear circumstances, either murdered in a street robbery
or bar brawl or killed in a car accident. Moscow Center immediately ordered the illegal station to deactivate work on all lines and destroy letters
and telegrams. There were, however, complications. One of Markin's assistants, Iskhak Akhmerov, reported that Markin's partner in his cover
business knew his real name and had met other illegal officers. Even
more worrisome, Markin kept a safe deposit box that contained not only
money to finance his operation, but also notes he had written. Further, an
American lawyer would be needed to get access to this material. Nor did
the potential damage stop there. His American paramour knew what
Markin did and could expose not only his cover company but also Alexander and Helen Koral, KGB couriers, since "once, when `Davis' [Markin]
was drunk, he brought her to their apartment." The KGB attempted to
persuade her to move to the Soviet Union, but Akhmerov reported:
"`King [unidentified KGB officer] meets with her and carefully cajoles
her, trying to persuade her to do what is best both for herself and us. She promised to think it over and give us an answer soon. We are not sure if
she will go. She has never left this city and has relatives here. King thinks
that she is incapable of doing wrong. We will keep her under surveillance
and offer her temporary assistance if she is in need."' There is no indication that she moved to Moscow, but she also fulfilled the New York station's judgment that she would keep quiet.2

Even the best illegal station chiefs ran into problems. By most measures, Akhmerov, who served two tours as chief of the American illegal
station (late 193os and early 1940s), was one of the best. A Tatar born in
19o1, Akhmerov joined the Communist Party in 1919 and was quickly
singled out as a talented "minority" and marked for special schooling. He
became a KGB officer in 1930 and served an initial tour in China, where
he attended the American College in Peking posing as a Turk. Recalled
to Moscow in 1934, he was tapped for the illegal station in the United
States. He obtained false identity papers and enrolled at Columbia University to study English. He explained to young KGB officers how he
turned himself into an "American":

"The transition from being a foreign student to being an American in such a
large city as NY, with its population of millions, was not particularly difficult, as
it turned out. At Columbia U., I was known well only to the English language
instructor and nine or ten students-most of them foreigners-almost all of
whom intended to return to their countries after graduation. It was also unlikely that I would be remembered from university registration, which was typically done by thousands of people. Therefore, the only people who could have
known me well were one of the instructors and the landlord at whose apartment I was then living, a Jew by nationality. Thus, there was no particular risk
involved. If I had subsequently run into these people by chance, we could
have done little more than say `hello' and `goodbye' to each other. I therefore
thought that I was not risking much by switching to new identity papers.

Because I knew that I would have to switch to new identity papers, I had
made a point of not expanding my circle of acquaintances, and when I began
living under American identity papers, I did not restrict myself when establishing connections. After adopting local identity papers, I kept my previous cover
for a period of time: I attended classes, where lectures were given on economic, cultural, and sociopolitical sciences. I was not involved in any other
work and therefore had free time at my disposal to learn the language well,
study up on sociopolitical sciences, read magazines, go to libraries, etc."3

Akhmerov proved to be an effective illegal operative and became chief of
the illegal station after Moscow recalled Boris Bazarov in late 1937 and
executed him as an "enemy of the people." He further blended into
American society by marrying a girl from Kansas, Helen Lowry, a niece of CPUSA chief Earl Browder, who was working as a courier for the KGB
New York station. When Moscow Center recalled Akhmerov to the Soviet Union in 1939, it allowed him to take her with him.

Moscow Center sent Akhmerov back to the United States in December 1941 to once again run the illegal station, which had been shut
down after his recall. Helen Lowry returned with him, and they resided
at an apartment at 115 Cabrini Boulevard in New York. Akhmerov assumed the identity of Michael Adamec and claimed to have been born in
Chicago in 1904. (An FBI investigation later determined that Michael
Adamec's birth certificate was fraudulent, inserted into Cook County
birth registration records by a crooked staff member of the registrar of
births.) Vasily Zarubin, chief of the legal station and overall supervisor of
KGB activities in America, wrote a lengthy report to Moscow explaining
the difficulties that ensued from Akhmerov`s assumption of the identity
of a native-born American in wartime:

Laws related to mobilization were immediately enacted. M's ["Mee'/Akhmerov's]
age made him subject to military service, and he had to go through military
registration ... the need to find a cover and legalize himself immediately.
Even before I arrived, M. had gotten in touch with `Boss' [Henry Bookman]
... and joined his business as a partner. Through him he prepared the documents that were required for registration. M. was definitely going to be
drafted, but then a law was enacted that required the call-up only of persons
under 38 years of age for the army. M. was a little older, but there was still mobilization for military plants. This was no less dangerous, since it involved fingerprinting. He could not afford this, since he had entered the `country' [USA]
using documents from the `Territory' [Canada] and had been fingerprinted
when he received the `country's' transit visa.

Despite the uncertainty regarding military service, M. contacted the agents
and started working. His cover initially didn't seem solid to us. A shop selling
women's hats. The prewar crisis ... a decline in revenue, they could barely sustain themselves. I suggested that M. use `Frost's [Boris Morros's] business as a
cover and act as its representative in Tyre [New York]. M. didn't want to do that,
since he had already specified `Boss's' business everywhere ... didn't want to get
involved with a person whose relative had been repressed in the USSR.

We decided to move in the direction of expanding `Boss's' business. We increased the firm's volume and the business grew stronger, although it didn't
yield any profit. M. wanted to use Boss's facilities to open his own fur business,
but he wanted to buy furs from our trading orgs. I felt that he couldn't do this,
since all firms that work with the USSR are registered. M. has been with B.
["Boss"] for three years already, and the cover fits him. He works as a bookkeeper and furrier. He has complete control of his time.

The KGB invested $5,000 in Henry Bookman, Inc., at 19 West 57th
Street in New York. There were, however, complications. Akhmerov
wrote a letter Zarubin sent along to Moscow in 1942 in which he noted
that Bookman had rented a room to a relative of Walter Krivitsky but
thought it was not a problem: "I'm sure he and Krivitsky have not met
here. We can't ask them because it would cause suspicion."4

Anxious to develop a more secure cover, Akhmerov proposed a variety of capitalist schemes. The first was to become a stock market speculator:

"Hundreds of thousands of people live primarily by clipping coupons....
Even with a small amount of capital you can get into this business, set up relations with a reputable Wall Street banking firm, and establish a certain business position for yourself. In the U.S., the more you engage in all kinds of
commercial and financial business, the more respect you command and the
better your social position. Here any semiliterate businessman looks down on
a professor.

As another option establishing the following business: opening our own
shop of fur products. This is a fashionable and reputable business. There are a
great many small, stylish fur shops here. I understand a little bit in the fur
business: at one time my grandfather had a fur shop. When I was a boy I
helped him in the business. Now I could start studying the business. "Nelly"
[Helen Lowry] could also take an active part in it. She could be the shop manager and a saleslady. Meanwhile she could take fashion courses and train herself in a short time as a specialist.

The business could look like this: A nice shop selling fur products on
Madison Avenue or in the 5os between Fifth and Madison avenues. "Nelly"
and I are incorporated owners. "Nelly" is constantly at the shop as a saleslady
and generally runs the business. I also take an active part as an owner: I buy
furs from wholesalers, attend auctions, and so forth. It's not essential for me to
be continuously at the shop myself. What will be for sale will be silver foxes,
Persian lamb, and sealskin coats and jackets and other fur products. Besides
selling ready-made items, custom orders will be accepted."

But neither Zarubin nor Moscow bought these grandiose entrepreneurial plans, and Akhmerov remained at Bookman's shop until his final departure from the United States in 1945.5

When the KGB sent Peter Gutzeit to the United States in 1933 to set
up its first legal station, he did not have to concoct plans for a cover job,
but he did have difficulty balancing the time required to carry out his official duties as a Soviet diplomat and his "real" job as station chief. One
of the problems was that his KGB position was secret not only from Americans, but for security reasons was also unknown to most of the Soviet diplomats and support personnel with whom he worked. Moscow
Center received a number of complaints that he frequently absented
himself from his cover job and that some of the Americans employed by
the consulate wondered what he was doing. Additionally, due to the demands on his time, he rarely participated in mandatory Communist Party
activities among Soviet nationals, occasioning more grumbling.6

Gutzeit knew he was being criticized but could not figure out how to
do his KGB job and keep the consulate and the party happy. By mid1938, after nearly five years on the job, he had had enough and asked to
be recalled. He told Moscow Center: "`I don't attend meetings or clubs;
nor did I enter into an agreement on socialist competition. All this, of
course, could only have resulted in the fact that the Party community is
in some form or other blackening my name.... My own situation in
terms of time constraints and high levels of stress has also increased many
times over. I have already received an invitation from the [party] secretary to visit him for a discussion. It's obvious what this discussion will be
about, and it's also obvious to me that I cannot change a thing. The only
way out I can think of is to leave this place."' He also requested a recall
due to his "`severe exhaustion and anxiety"'; he and his wife were anxious
to get back to Moscow, where their son was being raised by elderly grandparents. Gutzeit got his wish. He was recalled late in 1938 but not to recuperate. Accused of being an enemy of the people, he was shot.7

Gutzeit's fate illustrated the consequences of Stalin's decision to purge
his own security services. Under Gutzeit and Boris Bazarov, chief of the
illegal station after Markin's death, the KGB had developed several wellplaced sources at the U.S. State Department (David Salmon, Laurence
Duggan, and Noel Field); an important source at the justice Department
(Abraham Glasser); and a scattering of lower-level but useful sources at
other federal agencies and on congressional staffs, even putting one congressman, Samuel Dickstein, on Moscow's payroll. Gayk Ovakimyan had
recruited an impressive array of technical and industrial informants in
the chemical industry, while Stanislav Shumovsky had done the same for
aviation. The American stations had also built an infrastructure of American couriers, talent spotters, and suppliers of false passports, safe houses,
and the like. Yet beginning in 1938 and continuing into 1940, part of what
had been built was destroyed entirely and much of the rest deactivated or left in disarray. This crippling attack came not at the hands of American counterintelligence but from Moscow.

The terror Stalin unleashed in the USSR beginning in 1934 consumed
much of the leadership and large portions of the rank-and-file of the Soviet
Communist Party. The KGB was both its chief instrument and one of its
major victims. Most of the senior officers who had supervised the early
years of the purges and hundreds of their subordinates were arrested as
enemies of the people. The KGB's foreign intelligence arm was not exempt; most of its overseers were executed. Scores of GRU and KGB officers serving abroad were recalled, declared traitors, and shot or sent to the
Gulag. Boris Bazarov and Peter Gutzeit were killed. Among the bill of particulars justifying Gutzeit's execution was the following: "`For more than
two years Gusev [Gutzeit] ignored the party organization, never attended
party meetings, didn't participate in Marxist-Leninist groups; he also didn't
attend the meeting where burning issues were on the agenda and where
the face of a Communist was unmasked in condemnation of counterrevolutionaries, Trotskyites.' (Gusev was surrounded by a group of Trotskyites
from among Soviet people sent on assignment.)"s