TIME: Almanac 1993/TIME Almanac 1993.iso/time/022089/02208900.027

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                                                                                WORLD, Page 50

COVER STORY: Moscow Station


How the KGB penetrated the American Embassy By Ronald Kessler


    After the spy scandal among Marine guards at the U.S.
embassy in Moscow burst onto front pages two years ago, Ronald
Kessler, former investigative reporter for the Washington Post
and the Wall Street Journal, spent months interviewing Marines,
diplomats, Government investigators and intelligence sources to
find out what had happened. The author of three previous books
(including Spy vs. Spy: Stalking Soviet Spies in America),
Kessler discovered that Defense Secretary Caspar Weinberger had
been correct when he described the Soviet penetration of
American security as "massive." At a diplomatic mission with a
striking lack of security, female KGB agents seemed to have
little trouble luring lonely Marines into spying. In a cover
story and numerous articles, TIME made a similar assessment.
But as suspects recanted their confessions, only one Marine,
Clayton Lonetree, was convicted of espionage. Embarrassed, U.S.
Government agencies took to minimizing the damage, contending
that the KGB had not looted the embassy of its secrets after
all. The spy furor quickly faded away. Yet, as Kessler details
in the following excerpts from his book Moscow Station: How the
KGB Penetrated the American Embassy, the security breach was
even worse than originally feared.

    GUARDING THE JEWELS

    The jewels to the CIA's Moscow station were shielded by a
metal shack behind a vault door on the ninth floor of the
American embassy. Known as the Communications Programs Unit, or
CPU, the shack was a metal chamber within a room as large as
the Situation Room of the White House, roughly 30 ft. by 20 ft.
Made of galvanized steel, the CPU looked like a huge walk-in
refrigerator. A dozen CIA, National Security Agency and State
Department code clerks worked inside it, protecting some of the
U.S. Government's most sensitive information.

    Within the CPU was the CIA's code room, the inner sanctum of
the mustard-colored beaux arts embassy building on Tchaikovsky
Street. Here, gleaming gray cipher machines encoded and decoded
messages transmitted by commercial satellite at 9,600 characters
a second between Moscow and CIA headquarters in Langley, Va.
These machines were the most precious commodity at Moscow
station. Through them flowed top-secret details of CIA
operations targeted against the Soviet Union. Other crypto
machines in the CPU transmitted the results of National
Security Agency eavesdropping on Kremlin communications, as well
as instructions from Secretary of State George Shultz to
Ambassador Arthur Hartman on dealing with the Soviets. If the
Soviets could read the messages, they would know how to counter
American arms-negotiating strategies and evade NSA
eavesdropping techniques. Most damaging of all, they would be
able to identify the CIA's informants in the Soviet Union. For
such informants, this would almost certainly mean execution.

    The CIA was supremely confident that the codes couldn't be
broken. Yet in recent years the KGB's efforts to penetrate the
embassy had grown from a drizzle to a downpour. By 1984 the KGB
had managed to implant bugs in 13 IBM Selectric typewriters
used in the Moscow embassy and the consulate in Leningrad. The
bugs recorded the movements of the typing balls and transmitted
the information in coded bursts to a KGB listening post in an
apartment next to the embassy. As a result, all of the highly
classified data prepared on the bugged typewriters -- including
names of CIA officers stationed at the embassy -- found their
way to the KGB's headquarters.

    But bugging typewriters and breaching the inner chamber of
the CPU were entirely different matters. All the ingenuity and
technical resources of U.S. intelligence agencies had been
marshaled to make sure the embassy's communications were secure.
Beyond that, U.S. Marines were there to guard the jewels with
their honor and their lives. The Marines were the front line of
defense. Of all the services, they had the reputation of being
the fiercest, the most patriotic, the toughest.

    But their adversary was shrewd. Ever since the U.S. and
Soviet Union had established diplomatic relations in 1933, the
Soviets had been trying to compromise embassy employees and
gain access to U.S. codes. What better way to do that than by
having KGB officers and informants work in the embassy right
alongside the Americans? It seems inconceivable that the
Americans would allow such a thing. Certainly neither the CIA
nor the State Department would ever permit a Soviet national to
work at their headquarters in Washington, not even to sweep the
floors. Nor had the Soviets ever let an American work inside
their embassy in Washington.

    Yet over the years the KGB had woven such a cocoon around
the Americans in Moscow that they actually wanted Soviets to
work in the U.S. embassy. When Americans came to Moscow, they
found that everything from looking up a telephone number to
hiring a plumber took an inordinate amount of time. It was
easier and cheaper to employ Soviet nationals at the embassy to
cut through Moscow's bureaucratic jungle. And only Soviets
supplied by UPDK, a state agency controlled by the KGB, could
work in foreign embassies in Moscow.

    So the Americans used the Soviets to drive them to the
ballet, cut their hair, fix their radios, answer their phones at
the embassy switchboard. A would-be defector had to talk first
to a Soviet before he could plead for help from an American. The
KGB had 206 Soviet informants working in the U.S. embassy,
outnumbering the Americans.

    SOME FUZZY RULES

    For the Marines stationed there, arriving in the Soviet
Union was like stepping onto another planet. Driving from
Sheremetyevo International Airport, they were impressed by how
shabby everything seemed. The embassy, a ghastly yellow, looked
more like a grubby warehouse than an office building.

    The Marines entered the embassy through Post 1, which
controls access to the building. To the left of the entrance,
just inside the door, the post was enclosed in bulletproof
glass. It was the size of a highway toll booth. Video monitors
and switches lined the cubicle. Keys dangled from hooks on the
walls. The post guarded the central wing of the embassy that
housed offices and some residences. The south and north wings
housed mostly residences. Including the Marines, roughly 100
Americans lived within the embassy.

    On the second floor of the north wing was part of the Marine
House, a depressing area that included a bar, pool table and
kitchen. Yellow, peeling linoleum barely covered the floor. The
Marines actually lived on the second, third and fourth floors
of the central wing. The seventh and higher floors of the
central wing were the embassy's secure areas. The CIA was on
the seventh floor, along with the State Department's political
section.

    More than half of the ninth floor was taken up by the CPU.
On the rest of the floor were the offices of the ambassador, his
deputy and the regional security officer, or RSO. On the tenth
floor were NSA employees, who eavesdropped on Soviet
communications, and the military attaches, who gathered
information on Soviet military strength. An attic contained
sending and receiving equipment and a shredder and incinerator.

    To get to the secure floors, the Americans had to take the
main elevator to the ninth floor. There, in a small anteroom,
was Post 3, the most critical guard post in the embassy, a
platform surrounded by a high, horseshoe-shaped Formica
counter. Anyone who wanted to enter the CPU or the ambassador's
office, or the other secure floors, had to pass by the Marine
at Post 3.

    According to the rules, Marines could have female guests
only in the lounge area in the north wing. Another rule said
Marines "will not fraternize with foreign nationals of either
sex from any of the following countries: Bulgaria, Rumania,
Hungary, Czechoslovakia, Poland, the U.S.S.R., Yugoslavia or
East Germany." Any contact, except at an embassy function, was
to be reported to the noncommissioned officer in charge. At the
same time, a Navy rule said any "form of contact, intentional or
otherwise, with any citizen of a Communist-controlled country .
. . must be reported to the Naval Investigative Service."

    This placed the Marines in an ambiguous position. The NIS
had no representative in Moscow. Moreover, a State Department
rule said contacts should be reported to the RSO. Worse yet,
many Marines felt they could get in trouble for reporting any
contacts. As a result, each Marine had his own interpretation of
what should be reported.

    One of the Marines' most important functions was to write up
embassy employees who violated the rules on safekeeping of
classified documents. A violation could lead to suspension or
dismissal. Yet when the Marines issued violations, Richard H.
Klingenmaier, the RSO, would often refuse to ratify them.

    The Marines were also unhappy about the video monitors they
were supposed to watch to determine whether they should let cars
enter the embassy's courtyard. If they did not recognize the
drivers, they were not supposed to let them in. But the cameras
produced blurry pictures, froze up or didn't turn on at all.
"You could barely make out if it was a car or if it was a Soviet
or an American," said one Marine sergeant.

    Another concern was Ambassador Hartman's approach to
security. An avuncular man with thinning white hair, blue eyes
and a round face, he was one of the brightest officers in the
Foreign Service. He knew little about security, nor was he
supposed to. But he was convinced he knew more than the experts.

    When Master Gunnery Sergeant Joey Wingate arrived in Moscow,
he was shocked to learn that Hartman did not allow the Marines
to wear weapons. "He said, `I just don't want an incident where
we shoot a Soviet,' " said Wingate. "I felt he'd rather have a
Marine killed." Wingate finally got Hartman to agree to let the
Marines wear guns -- unloaded. The ammunition was to be kept at
their guard posts in a drawer. "One of the things you're there
for is to make contact with (Soviet) society, not to cut
yourself off," Hartman would say. "If the idea is to build a
bunker, you might as well close it down."

    The same reasoning led Hartman to say he preferred Soviets
over Americans for certain tasks. "I'd rather have a basic
number of them doing things like running my car and a few other
jobs, and they would find out no more than the guys watching us
from the windows," he said. He maintained he wanted the Soviets
to hear most of what he was saying anyway. "I wanted them to
know my view of what was going on. We would go in the (secure)
room on sensitive stuff."

    PROMOTING A LOSER

    Given the well-documented tactics of the KGB, the last thing
anyone would want to do is send a young, immature, single man
to Moscow. Almost perversely, that is what the State Department
and the Marine Corps had been doing since 1934. And of all the
candidates sent there, it would be difficult to imagine anyone
less qualified than Clayton Lonetree.

    Self-pitying, naive and impudent, Lonetree had unrealistic
expectations of himself, a consuming need to be loved and barely
enough intelligence to fire a weapon, let alone defend himself
against the sophisticated onslaught of the KGB.

    Not that he did not come from a distinguished family. His
grandfather had been chief of the Winnebago Indians of
Wisconsin. His great-uncle Mitchell Red Cloud, a descendant of
Chief Fighting Bull, had won the Congressional Medal of Honor
during the Korean War. His father Spencer Lonetree, a Winnebago
and Sioux, was active in Indian affairs and had gained the
respect of a number of local politicians. But he was also a
stubborn, vain man, and Clayton felt he had a drinking problem.

    Spencer never married Clayton's mother Sally Tsotie, who is
part white and part Navajo. When Clayton was eight, his mother
took him and his younger brother Craig to New Mexico, where she
worked as a cook in an Indian mission. After four months she
returned to the Navajo reservation, leaving the children at the
mission. Asked why she did so, she replied that Spencer "didn't
give me money to pay rent or buy food. Men never pay." Clayton
never recovered from the hurt of being rejected.

    Spencer Lonetree took the children to Minnesota. At Johnson
High School in St. Paul, Lonetree handed his American-history
teacher a notebook with a swastika and the inscription "Hitler
Lives" on the cover. His teacher returned the notebook to
Lonetree. Later Lonetree handed in the notebook again with the
inscriptions "Holocaust is a lie" and "Adolf Hitler." Inside he
wrote, "Jews are our misfortune" and "Hitler had the right
idea."

    In the summer of 1980, Lonetree enlisted in the Marines, in
part to get away from his father. He was one of the smaller
recruits at 121 lbs. and 5 ft. 7 1/2 in. tall. After making
corporal, he decided to become a Marine security guard. He said
he wanted to become a guard because he was "looking for a little
adventure."

    Many excellent Marines had served in the program, but by
Lonetree's day it was known as a dumping ground. Between 1980
and 1987 no fewer than 545 Marine guards -- 10% of the total on
duty during that time -- had been removed for infractions
including black-marketeering, rape, fraternizing and drug use.
If there ever were a case for dropping Marines as embassy
guards, it was contained in those records.

    Almost from the beginning of his Moscow assignment in 1984,
Lonetree, then 22, was in trouble. Usually it only took a few
drinks for him to become unruly. One night he locked himself out
of his room, passed out on the floor and showed up 7 1/2 hours
late for guard duty.

    It was a mystery to Wingate how Lonetree had ever got into
the guard program. "He was a loner, not very articulate,
borderline in the mental category," he would say later. Yet
within several months of his arrival, the Marine Corps promoted
Lonetree to sergeant. Wingate objected but was overruled.

    In the summer of 1985, a Navy officer found Lonetree asleep
on guard duty. Wingate recommended that he be sent back to
Quantico, reduced in rank to corporal and removed from the
guard program. Again he was overruled. Having made the mistake
of sending Lonetree to Moscow, the Marine Corps now compounded
the error by ignoring evidence that he was unfit to guard a
grocery store, let alone the CIA station in Moscow.

    ONE-NIGHT-STANDS AND SWALLOWS

    Five embassy wives, dubbed by the Marines "the home
wreckers," routinely picked up Marines at Uncle Sam's, the
embassy disco, on Friday nights. Typically, one wife would sit
with a Marine and mention that another wife was interested in
him. "If he wants her, she's up for grabs," was the
not-so-subtle line leading to a one-night stand. One young
State Department employee made it a practice to sleep with as
many Marines and Seabees as she could. In September she took on
three Marines in one of their rooms.

    In a hostile environment like Moscow, the affairs invited
KGB blackmail. Yet Wingate was less concerned with the home
wreckers' activities than with the number of Marines seeing
Soviet women. One guard had been going with a well-built Soviet
woman for six months, leaving her pregnant. Her father was an
intelligence officer formerly stationed in Washington.

    For months Lonetree had had his eye on a 25-year-old Soviet
woman who worked in the embassy. To Lonetree, she had
everything: 5 ft. 9 in., 130 lbs., fair skin, high cheekbones,
good figure, large gray eyes, sandy brown hair cut to her neck.
She dressed stylishly, wore makeup well, spoke almost perfect
English. UPDK, the Soviet agency that supplied workers, had
sent her to the embassy in May 1985. Initially, the woman,
Violetta A. Seina, was a receptionist for the ambassador.
Hartman's wife Donna took an immediate dislike to her: "She was
like a pussycat, always waiting and watching." Hartman had
Violetta reassigned to the customs area, where she worked no
more than 10 ft. from Post 1. Lonetree could not help noticing
her.

    Lonetree loved to ride Moscow's marble-floored, chandeliered
subways, which cost five kopecks -- about 6 cents. In September
1985, he saw Violetta on the subway. He thought the meeting was
a chance encounter; most likely the KGB had set it up. Lonetree
had just gone through disciplinary proceedings and was known to
become boisterous after only a few drinks -- a ripe target. The
two chatted for a few minutes, then parted.

    He saw her again on a subway train in October. After she
missed her stop, they got off at the next one and took a walk.
They met again at the Marine Corps ball on Nov. 10. Violetta
showed up with two women, Galya and Natasha, who worked at the
embassy; the CIA later identified them as KGB officers.
Lonetree danced with Violetta several times. He was hooked.

    Lonetree met Violetta at a subway station again in December,
and she invited him to her home. She showed Lonetree books,
records and her childhood photos. They discussed the fact that
the embassy had just fired her and that UPDK had assigned her
to work at the Irish embassy.

    Lonetree began having sex with Violetta in January 1986, and
the KGB began stepping up the pressure. Some weeks later,
Violetta introduced Lonetree to a man she said was her Uncle
Sasha. Sasha, 33, was 6 ft. 4 in. tall and had a large frame
and graying brown hair. According to CIA files, Sasha in fact
was Aleksei G. Yefimov, a KGB officer.

    Pretending he did not speak English well, Yefimov asked
Lonetree about life in America. It seemed to Lonetree that
Yefimov treated Violetta like a daughter. Lonetree did not
suspect that Yefimov was anything other than her Uncle Sasha.

    Now the KGB moved in for the kill. Violetta told Lonetree
that Uncle Sasha wanted to see him again. Already subject to
blackmail and eager to continue seeing her, Lonetree agreed to
meet him early in February 1986. This time, Yefimov's English
had improved; he no longer needed Violetta to translate. She
had previously told Lonetree the Soviets wanted peace, and
Lonetree empathized with that view, saying he was a friend of
the Soviet Union.

    Now Yefimov said, "If you are a friend of the Soviet Union,
you will help me and Violetta."

    "How is helping you going to help her?" Lonetree asked.

    "She's your friend, but you would also be helping the Soviet
people."

    Yefimov pulled out a list of questions he said had been
prepared by a friend who was a KGB general. Was Michael Sellers,
a second secretary of the embassy, in the CIA? Lonetree did not
always know for sure. But from the locations of staffers'
offices and whom they associated with, he could make a few
deductions. About a month later, the Soviets expelled Sellers
for allegedly engaging in spying. It is likely the Soviets knew
about Sellers and were testing Lonetree to see if he would
confirm the CIA identity.

    Yefimov next asked about Murat Natirboff, widely known to be
the CIA station chief. Lonetree confirmed that he was. Yefimov
asked Lonetree if he could plant bugs in the offices of
Natirboff and Hartman. Lonetree said he would not.

    The fact that Yefimov did not ask Lonetree to place bugs in
the CPU is significant. Indeed, nearly all his questions had to
do with the seventh floor, where the CIA was located, rather
than the ninth floor, site of the CPU. In retrospect, this
raised the question of whether the Soviets already had bugs in
the CPU.

    Yefimov asked Lonetree if he could get the plans to the
seventh floor, and he said he would try. From having an affair
with a Soviet woman, Lonetree had passed over the line to
espionage.

    A few weeks later, Lonetree brought along floor plans that
he stole from the embassy. Yefimov produced a folder containing
photos of more than 300 embassy personnel. He asked Lonetree to
arrange the photos to show who was married to whom. Lonetree
did so. Yefimov pulled out an embassy phone book and asked
about the functions of each person. Besides Sellers and
Natirboff, Lonetree disclosed the names of two other CIA
employees who were never expelled.

    Turning to the floor plans, Yefimov asked Lonetree to mark
sensitive spaces, secret doors and security devices on the
seventh floor. Lonetree told him how the alarm systems worked
and how the Marines reacted to them. Yefimov was particularly
interested in Hartman's desk. Several times he asked Lonetree to
describe it, presumably so the KGB could design a listening
device for it. Repeatedly, he asked if Lonetree would place
listening devices in the embassy, and repeatedly Lonetree
declined.

    Lonetree tried to tell himself that the nature of the visits
had not changed, that they were still social, that Violetta had
no connection with the KGB. If he had admitted to himself that
she was a KGB plant, he would have to face up to the fact that
she did not love him. She gave him the love he had craved as a
child, and that was more important to him than their four sexual
encounters.

    Transferred to the Vienna embassy in March 1986, Lonetree
received love letters from Violetta ("Clay, I'm just scared to
death of losing you"). He also continued to meet with Uncle
Sasha, giving him information on Vienna embassy personnel and
floor plans. But he was in an alcoholic fog much of the time.

    Confused and apprehensive, Lonetree approached the CIA
station chief at an embassy Christmas party on Dec. 14, 1986.
Edging the man toward a crackling fire, Lonetree said he had
been seeing Soviet government officials in Vienna.

    For the next ten days the CIA debriefed Lonetree. Since the
CIA is not a law-enforcement agency, it was not interested in
preserving evidence or making sure he would talk in the future
-- only in how much damage Lonetree had done and whether he
might be used as a double agent. These deficiencies reveal a
weakness in how the U.S. Government handles espionage by
Americans overseas, a weakness that would haunt the CIA later.

    Thick-skulled to the end, Lonetree said he bore no ill will
toward Violetta. He told a CIA officer, "If Sasha was really her
uncle, then she was somewhat obligated to support him."

    A STRAIGHT-UP MARINE

    After Hartman in early 1986 decided to cut the size of the
Soviet work force in hopes of minimizing complaints about the
security dangers it posed, two Soviet cooks were dismissed. Nina
Sheriakovo, the senior cook, was blond and busty and, at 40,
wore low-cut dresses. But the Marines did not think she was
particularly attractive, partly because she did not bathe often.

    Her assistant, Galina N. Golotina, had been with the embassy
since January 1985. More petite than Nina, Galya was 28, weighed
115 lbs. and stood 5 ft. 3 in. tall. She had green eyes and
brown hair. The Marines made fun of Nina, claiming she made a
habit of offering to show them her breasts. But they liked
Galya, a divorcee with an eight-year-old son.

    As the noncommissioned officer in charge of ordering food
supplies, Corporal Arnold Bracy had the most contact with Galya.
Several times a week, the 6-ft. 1-in. Marine consulted her to
find out what food the cooks needed. Bracy was a straight-up
Marine. The fact that he did not drink or carouse with girls
made him an unlikely candidate for recruitment. But Bracy had
one weak spot: he had obviously developed a fondness for Galya.

    Certainly there was nothing in Bracy's background that would
lead one to suspect that he could be compromised. Born on Nov.
28, 1965, he grew up in a religious family in Queens. His
father, Theodore R. Bracy, is a subway motorman and an
evangelist deacon at Calvary Full Gospel Church in Woodside,
N.Y. Both he and his wife Frieda have bachelor's degrees in
theology.

    After high school, Bracy joined the Marines in June 1983. He
later signed up for security-guard school and chose Moscow as
his first post. There he at first retained his prim view of sex.
While he had previously dated a few girls, he had remained a
virgin because of his religious convictions. Before Marine
parties, several women would change clothes in Bracy's room in
front of him, hoping to attract his attention. He would walk
out so he wouldn't see them naked.

    But Galya was different. She was not pushy and did not run
around with other men. Bracy admired that. Her English was not
good, and that made him feel protective toward her. In the
months before Galya was fired, several of the Marines noticed
that she and Bracy seemed to have become quite close. Sensing
the same thing, Wingate warned Bracy about fraternizing. He
appeared to see her less after that. But many of the Marines
thought the relationship had not cooled.

    Frederick Mecke, who had succeeded Klingenmaier as regional
security officer, was at the embassy on Sunday, June 29, 1986,
when Bracy asked if he could talk with him. They went into the
secure "bubble" on the ninth floor, and Bracy began unraveling a
bizarre tale. He said he had run into Galya in a park near the
Kosmos Hotel, and they began chatting. By then she was working
as a nanny for the family of Philippe Duchateau, the embassy's
deputy press secretary. After some pleasantries, she blurted
out that someone, possibly from the KGB, had asked her to bring
Bracy to a certain apartment. The idea was to entrap him
sexually. If she did not cooperate, she told Bracy, UPDK would
fire her. After ten minutes, Bracy went back to the embassy. Or
so he told Mecke.

    Mecke reported the incident to State Department security. He
decided Galya should not be fired as the Duchateaus' nanny;
after all, she had reported the KGB attempt. But Mecke let
Bracy know he should have nothing to do with her.

    Mecke was in his office on the afternoon of Aug. 20, 1986,
when Duchateau came in with a strange tale. He and his wife had
let Stephen Wright, an ABC-TV sound man, and his wife stay in
their apartment while they were away on vacation. When the
Duchateaus got back, Wright told them a black Marine and Galya
were having sex in the bedroom as they arrived at the
apartment. Flustered, the Marine told the Wrights he had been
inspecting the place. He quickly left.

    Bracy's report of nearly two months earlier flashed through
Mecke's mind. He checked the liberty log for the day when the
Wrights arrived at the Duchateaus' apartment. Bracy was the only
black Marine who had signed out.

    Mecke immediately called him in. Bracy seemed nervous. He
said he had been in the apartment with Galya but denied having
sex with her, claiming he went to the apartment because the
former embassy cook was pressuring him to cooperate with the
KGB. He wanted to tell her he would have no further contact
with her. Mecke did not believe a word of it. Why would anyone
visit someone to say he would not see her?

    The next day Mecke told Hartman about it, saying of Bracy:
"He is very vulnerable. It's in our best interests to get him
out of the country immediately." Hartman agreed. On orders from
Mecke, Duchateau fired Galya.

    That night Corporal Robert J. Williams went to see Bracy in
his room at the Marine House. Williams later informed the Naval
Investigative Service that Bracy told him he had fallen in love
with Galya and had given the Soviets classified documents in
exchange for thousands of dollars. Williams subsequently
recanted, saying the NIS coerced him. Bracy also denies making
the comments.

    Yet others have said Williams told them essentially the same
thing. His former girlfriend, Taina Laurivuori, a Finnish
citizen who worked as a nanny to a U.S. embassy employee, said
she accompanied Bracy and Williams to the airport four days
after Duchateau reported the incident in his apartment.
Laurivuori said Bracy looked sad, and she asked Williams what
was wrong with him. Williams said a Soviet girl had set Bracy
up.

    Later, after Bracy was arrested, Williams called Laurivuori
from Vienna, where he was then based. Recalling the ride to the
airport with Bracy, Williams said to her, "Don't tell anybody,
but the day before we went to the airport, Arnold told me he
was doing that spy stuff."

    Lance Corporal Philip J. Sink, a Marine security guard
stationed in Vienna, also said Williams told him that Bracy had
confessed to him. Sink quoted Williams as saying, "Bracy came to
me one night and was crying and telling me he was in over his
head. He had done things he shouldn't have done, and he didn't
know what to do." Williams said something about a $1,000
payment.

    Bracy was demoted to corporal and sent to the Air Ground
Combat Center at Twentynine Palms, Calif.

    "WE'VE GOT ANOTHER SPY!"

    On Dec. 22, 1986, after Lonetree's confession in Vienna, the
NIS began an investigation of security breaches at Moscow
station. The NIS would interview 487 Marines and 1,285 other
people and administer polygraph tests to 260 people.

    As espionage cases go, it should have been easy. Lonetree
had already confessed to taking $3,500 from the Soviets in
return for classified information. He was still talking. It
remained for the NIS to warn Lonetree of his rights, take his
confession and tie up a few loose ends.

    But the NIS proved to be as good at investigating espionage
as the State Department was at protecting security. In
fairness, the FBI normally handles espionage investigations.
Only when the target of the investigation is a military man and
no civilians are involved do the military services have
exclusive jurisdiction.

    NIS agents took Lonetree to a suite in the Strudlhof hotel
near the Vienna embassy. After waiving his right to a lawyer, he
held forth about his escapades with Violetta and Sasha. He
almost seemed to be enjoying the attention. At one point,
Lonetree told the openmouthed agents that he knew Yefimov liked
him because of the way he smiled at him.

    The next morning, the agents flew Lonetree to London, into
the Holiday Inn near Heathrow airport. After 2 1/2 days of
interviews, Thomas E. Brannon, an NIS polygraph agent, talked
with Lonetree for six hours. The following day he began
administering polygraph tests. After Lonetree signed a second
statement based on what he told Brannon, he began registering
deceptive responses on the machine. Brannon thought the Marine
was holding something back.

    Brannon decided Lonetree must have taken documents from the
embassy in Vienna and began pressing him. Lonetree continued to
deny taking any documents. As Brannon increased the pressure,
Lonetree finally said, "Do you want me to lie to you?" "Yes,"
Brannon replied.

    Lonetree said he stole three top-secret documents from the
embassy's fourth-floor CPU and 200 secret documents he was
supposed to burn at the embassy. Then he began hyperventilating
and went into the bathroom to splash cold water on his face.
When he returned, he said he wanted a lawyer.

    Slow as he was, Lonetree saw no point in talking to someone
who told him to lie. Within 48 hours the NIS established that he
had in fact lied: the secret documents never existed, nor had he
been on watch when he said he took them. But the damage had been
done. By pressing Lonetree too hard and losing his confidence,
the NIS had lost the cooperation that is so vital in an
espionage case.

    By March 1987 the NIS had interviewed 200 Marines, CIA
officers, diplomats and military attaches who might have known
anything about Lonetree. Still the NIS had not interviewed
Bracy. He was thought to be a 5.0 Marine -- the perfect
performance score -- and was low on the interview list.

    That changed on March 16, 1987, when veteran NIS agent David
Moyer was in Vienna to discuss Lonetree's case with the CIA
station chief. Now Moyer learned something startling from the
chief: Lonetree had mentioned that Bracy told him in Moscow he
was secretly seeing the Soviet cook, Galya, and that she wanted
to introduce him to her uncle. Recognizing that the KGB might
have recruited yet another spy, Moyer cabled NIS headquarters
and said Bracy should be interviewed immediately in California.

    The last thing to do at this point was to interview Bracy.
In any investigation, all the facts must be assembled before the
target is confronted. Had the NIS gone about its job properly,
it would have done a thorough background investigation into
Bracy's history and character. But NIS special agent R. Michael
Embry in Twentynine Palms was ordered to interview Bracy
immediately. He began doing so on March 18, 1987.

    Embry felt Bracy was lying when he said he had not had sex
with Galya. But he did not think Bracy had committed espionage.
The next day, two NIS polygraph agents took Bracy to a motel
near Twentynine Palms for lie-detector tests. When the
operators told him he was registering deceptive reactions, Bracy
began changing his story about his meeting with Galya in the
Duchateaus' apartment. In a statement he signed after the test,
he said, "She moved closer to me and initiated the sexual
contact, and we began making out. After a short time she
suggested we go to the bedroom, where we had sex. After having
sexual intercourse, she told me that they had been putting
pressure on her family so she would arrange for me to meet
`Uncle Sasha.' She implied that he really was not her uncle but
that was what she was supposed to tell me." She said her uncle
would be interested in learning "who was leaving the embassy and
who was going to replace them, and the names of the people
working for the CIA."

    The following day, Bracy signed another statement, one that
would rock the intelligence community. According to that
statement, Bracy ran into Lonetree one night in the kitchen of
the Marine House in January 1986. Lonetree "was very drunk,"
Bracy said. "He was obviously pretty worked up and mad at the
system and how the Marine detachment was run. He remarked that
he was paying them back in his own way. I asked him what he
meant, and he said, `I've been letting people in the embassy.' I
knew he was talking about Russians. He said he had done it many
times."

    About two weeks later, Bracy said, he saw Lonetree escorting
a Soviet man into the courtyard one night and on another night
saw him escorting someone through the embassy itself. "I felt
sort of sorry for him, so I decided not to report what he had
told me," Bracy said. "He told me at that time that this had
been going on all the time. I had been standing duty with him,
and if I did not cooperate, I would be just as guilty as he
was."

    Beginning in February, Bracy said, he agreed to turn off the
alarms while Lonetree brought Soviets into secure areas. He also
warned him if the sergeant-of-the-guard was coming. He said he
helped let Soviets into the CPU three times for an hour each
time. Bracy said Lonetree gave him $1,000 for helping him.

    Bracy signed this final incriminating statement on Friday,
March 20, 1987. At that point, he overheard the agents talking
outside the room. One of them said, "We've got ourselves another
spy!"

    As soon as he heard the comment, Bracy told the agents he
wanted to retract his statement. They told him he could be
charged with perjury for swearing falsely under oath. He said he
would rather go to jail for perjury than espionage. The next
day, Bracy said he wanted a lawyer. He never talked to the NIS
again. The NIS then compounded its blunders by arresting Bracy
on the spot. After he retracted his statement, the NIS had no
evidence to hold him on.

    IGNITING A FIRE STORM

    When I interviewed Bracy at the coffee shop outside the
Quantico Marine base, he said that the NIS agents got him to
implicate himself by telling him that the statements would only
help in their investigation of Lonetree. According to Bracy, the
agents came up with the scenario that Lonetree and Bracy let the
Soviets into the embassy. He said they asked him hypothetical
questions, then wrote the answers as fact.

    But it was one thing to implicate others in crime and
another to confess to espionage himself. Unless he had been
tortured, it was difficult to see why Bracy would confess --
unless he was in fact guilty. What made me decide he was
telling the truth when he confessed to letting the KGB into the
embassy was the fact that his subsequent accounts clashed
repeatedly with the accounts of other witnesses I interviewed.
Indeed they even clashed with Bracy's own version of the events.
I was to find that every time he opened his mouth, Bracy told
a different version of what took place between him and Galya.

    Also persuasive was Bracy's detailed knowledge of how easily
the guard at Post 3 could let the KGB into the CPU at night. As
Bracy told me, the Marine at Post 1 guarding the main entrance
left at 11:30 p.m. At that point, the Marine at Post 3 on the
ninth floor controlled access to the entire embassy through
video cameras and intercoms. That Marine could not only let the
KGB through the front door; he could also let the KGB into the
secure areas and provide combinations to the CPU vault.

    To be sure, the combinations were encased in plastic
pouches. After sealing them, a CPU communicator wrapped them in
tape that he signed. If a pouch were opened, it could not be
resealed. The next morning, a communicator checked to make sure
it was intact. But it would have been relatively easy for the
KGB to substitute a pouch complete with tape and forged
signatures.

    The one defense against a surreptitious entry -- the CPU
alarm system -- was useless. When the CPU alarms were
triggered, a buzzer sounded, and a red light went on at Post 3.
By flipping a switch, the Marine could silence the buzzer and
turn off the red light. A yellow light then went on to show that
the alarm had gone off. Only a communicator from the CPU could
turn off the yellow light by resetting the alarms. But the
system did not show when the alarms had been triggered. The
Marine on Post 3 could easily let the KGB into the CPU at 2 a.m.
Then at 6 a.m. he could tell the CPU communicators the alarms
had just gone off.

    In the end, the answer to the puzzle lay in Bracy's six-page
confession. Most Marines did not realize, as Bracy did, that
they could silence the alarms in the CPU and lie about when the
alarms had gone off. When CIA officers read his statement, they
felt it was authentic.

    On the other hand, there was an air of unreality to Bracy's
description of Lonetree's involvement. The two were not close.
It was unlikely the reclusive Lonetree, even if drunk, would
tell Bracy he was letting the Soviets into the embassy.

    Ultimately, it became clear even to the NIS that Bracy had
made up the story that Lonetree let the KGB into the embassy.
Bracy had claimed he helped Lonetree let the Soviets into the
CPU in February 1986. But the two stood posts together at night
only twice -- in October 1985 and in November 1985. Lonetree
passed lie-detector tests on his statement that he had not
conspired with Bracy.

    Bracy's confession was like a picture of a human face drawn
by a schizophrenic. One side was real, the other -- relating to
Lonetree's actions -- was not. But what if Lonetree were taken
out of the picture? What if Bracy let the Soviets in by
himself? Then the face became whole.

    According to this version, Bracy first began having sex with
Galya in January 1986, as he confessed. Galya then introduced
him to her "uncle." Afraid that he would be found out, Bracy
began letting the Soviets into the CPU in February. The report
of seeing Galya in the park in June 1986 was a ruse to throw off
suspicion.

    When the NIS confronted him, Bracy realized that the agents
were after Lonetree, not him. To clear himself, he made up the
story of Lonetree's involvement, thinking he would shift the
blame. He may not have realized that a co-conspirator is just as
culpable under the law as the perpetrator.

    Most compelling is that this version of events conforms with
Yefimov's demands of Lonetree. The KGB officer asked Lonetree
to place bugs in the offices of the CIA station chief, the
ambassador and the regional security officer. He did not ask him
to place bugs in the CPU, which should have been the KGB's first
target -- unless the KGB had already penetrated it.

    By this scenario, the KGB was not trying to recruit Bracy to
replace Lonetree. It was the other way around. By the time
Yefimov began meeting with Lonetree in early February 1986, the
KGB had already recruited Bracy, according to Bracy's statement.

    The NIS, wedded to the idea that two or even three Marine
guards were needed to let the KGB into the embassy, never came
to this conclusion. Recognizing that Lonetree had not conspired
with Bracy, the NIS spent countless hours trying to fit other
Marine suspects into the conspiracy.

    Unlike the NIS, the FBI concluded that only the guard
standing Post 3 was needed to let the KGB into the CPU. In
fact, the FBI decided that security was so lax that the KGB
could have got into the CPU by simply distracting the Marine at
Post 3, possibly with a girl.

    Ultimately, this was the most scandalous fact of all: that
the security of Moscow station and the protection of many of
America's most important global secrets depended on the
integrity of a single young Marine stationed on the KGB's home
turf.

    "I didn't let anybody in the building," Bracy told me. "If I
did anything, I'd be in the brig like Lonetree. I'm out of the
brig, so it didn't happen."

    Bracy's confession ignited a fire storm in Washington. Now
it seemed there was no question that the KGB had got into the
jewels at Moscow station. There was only one problem: Bracy had
recanted. Nor was there any corroboration for his story.

    The Marines announced Bracy's arrest on March 24, 1987,
saying he was suspected of espionage. Two days later, the
Marines announced that additional charges had been filed
against Lonetree. According to the new charges, Lonetree let the
Soviets into the CPU and other sensitive areas of the embassy
while Bracy acted as lookout. The new charges were based solely
on Bracy's confession. Suddenly the Marine security-guard
scandal was front-page news.

    Unfortunately, interrogations that brought out allegations
of espionage tended to collapse as soon as the Marines left the
interrogation rooms. On April 19, 1987, Williams retracted his
statements against Bracy. The Marine Corps charged Williams with
making false statements. On May 10, 1987, Bracy formally
retracted his statements, saying they were coerced by the NIS.
Five days later, the Marine Corps dropped the charges against
Lonetree that had been based on Bracy's confession. Finally, on
June 12, the Marine Corps dropped espionage charges against
Bracy.

    In recommending dismissal of the charges, Bracy's
prosecutor, Major Charles A. Ryan, admitted there was no
corroboration for his confession but said he still believed
Bracy was guilty. Unless there was "significant coercion," he
wrote in a memo, "there is no conceivable reason why any Marine
would ever confess to a crime such as espionage unless he had
actually engaged in this conduct against his country. The
inescapable conclusion I am forced to draw is that Corporal
Bracy was involved in espionage." (Bracy, no longer a Marine,
nonetheless still lives on the Marine base at Quantico, Va.; he
married a woman in the service.)

    As for Lonetree, he was convicted by a military jury of 13
counts of espionage and sentenced to 30 years in prison. This
was later reduced to 25 years. He will be eligible for parole
after serving a third of his sentence. Even as he sat in the
brig at Quantico because of the trap Violetta Seina had laid
for him, Lonetree pined away for her. He asked his father to
find her and tell her he was O.K. Insisted Lonetree: "I believe
she loves me."

    A CHILLING DISCOVERY

    By the end of 1987, the State Department had begun leaking
stories that no evidence of a penetration of the embassy in
Moscow had been found. The stories overlooked the fact that the
KGB had penetrated the embassy by introducing bugged
typewriters into secure areas and obtaining secret information
about the embassy and its employees from Lonetree.

    What the State Department and the press did not know is that
evidence of a penetration had been found -- but the CIA and the
NSA covered it up. In the summer of 1987, the State Department
shipped the entire CPU and all the communications equipment from
both the Moscow and Leningrad missions -- 120 crates from Moscow
alone -- to Virginia. After the FBI took custody of the
material, some 20 NSA technicians began examining each part,
using X-ray, spectroscopic and infrared analysis.

    In August 1987 the NSA made a chilling discovery. The power
line to the CPU in Moscow had been replaced. That meant the KGB
could have diverted signals from cipher machines within the CPU
to the outside. Next the NSA found that 8-in. by 14-in. circuit
boards, along with chips the size of quarters, had been replaced
in the printers. The new components appeared to be diverting
uncoded signals from the "red side" of the communications
circuits to the power line. The NSA later found similarly
sinister devices in the CPU from Leningrad.

    The KGB had turned the CPU into a gigantic listening device.
Because the Soviets could compare the uncoded "red side" signals
with the encoded "black side," they most likely could replicate
the cipher keys -- the unique data that was needed to decipher
the messages -- used by other American embassies throughout the
world. That raised the possibility that the KGB had been
listening in on communications not only from Moscow and
Leningrad but also from Vienna, Helsinki and London. Since
equipment in the CPU had been replaced in 1984, the penetration
of the jewels to Moscow station could have gone back that far.

    Only a dozen people, including President Reagan, were told
of the findings. In deciding to keep the findings secret, the
CIA and the NSA could always claim that there were legitimate
national security reasons for doing so. But there was another
reason for the secrecy. "There's a cover-up to hide
embarrassment, to cover ass," said one intelligence official.

    According to these sources, the result of the communications
penetration was the decapitation of the CIA's operations in the
Soviet Union. Nearly a dozen CIA officers have been expelled,
and at least 25 Soviets have been executed in the Soviet Union
since 1983 on suspicion of collaborating with the CIA. At least
two of those executed were, in fact, Soviets working for the
CIA. The rest were innocent.

    While Edward Lee Howard, the former CIA officer who defected
to the Soviets, was responsible for several of the executions,
he knew CIA agents only by their code names. Intelligence
sources believe the majority of the damage to CIA operations was
caused by a penetration of Moscow station communications.

    The same ineptitude that led to the security breaches in the
first place now conspired to protect the perpetrators. Bracy,
who probably would not have been the first Marine to let the KGB
into the embassy, got off scot-free. As the scandal faded from
the newspapers, the cover-up became complete.

    It was the ultimate irony that Ronald Reagan, who came to
office with a mandate to strengthen the nation's defenses, wound
up presiding over the worst intelligence debacle since the CIA's
abortive 1961 invasion of Cuba at the Bay of Pigs.