NATION, Page 26The Moscow Bug HuntAfter a two-year investigation, U.S. security experts areconvinced that Marine guards did not let Soviet spies put tapsin the embassyBy Jay Peterzell
Caspar Weinberger called it "the worst spy case of the
century." As Secretary of Defense in the spring of 1987, he was
confronted with evidence that Marine guards at the U.S. embassy in
Moscow had not only "fraternized" with Soviet women but also
allowed KGB agents to break into the inner sanctum of the embassy
-- the code room, from which sensitive messages are sent to
Washington.
There on Weinberger's desk was a confession by Corporal Arnold
Bracy, a 21-year-old Marine who had been stationed in Moscow the
previous year. Bracy's statement convinced virtually the entire
Government that there had been a nightmarish security breach. By
planting bugs in the embassy's communications equipment, the
Kremlin may have compromised CIA operations and gained advance
knowledge of U.S. negotiating positions. The scandal led to
paralysis, paranoia and recrimination. Electronic communication to
and from the Moscow embassy stopped dead. Tons of equipment were
torn out of the building and returned to the U.S. for analysis.
After a distinguished career, Arthur Hartman, who was U.S.
Ambassador to Moscow at the time of the suspected penetration, left
the Foreign Service under a cloud. Hundreds of Marines who had
served as embassy guards in East bloc countries were grilled b-y
agents of the Naval Investigative Service; dozens confessed to
fraternizing, black-marketeering or other security violations.
But then one case after another fell apart. The Great Marine
Spy Scandal had started in December 1986, when another Moscow
embassy guard, Sergeant Clayton Lonetree, told a CIA officer that
he had given low-grade classified information to the Soviets. And
that is where it ended: Lonetree was the only Marine to be
prosecuted for espionage. Whatever the reasons for Bracy's
confession -- in which he claimed he had helped Lonetree let the
KGB into the embassy -- it was later disclosed that he had recanted
just minutes after signing it. And Government investigators
eventually realized that key parts of Bracy's statement were
demonstrably false. All charges against him were dropped for lack
of evidence. By late 1987 security officials began to concede, a
little sheepishly, that no bugs had yet been found in the equipment
removed from the Post Communications Center, or PCC, as the code
room is known. (The room is sometimes referred to as the CPU.)
Four months ago, however, the Moscow embassy scsy scandal was
back in the headlines: the thrust of the story was that there had
been a cover-up within the U.S. Government. That allegation is at
the heart of Moscow Station, a book by Ronald Kessler, a former
Washington Post reporter. It was excerpted in TIME and is the basis
for a television mini-series expected to air next year.
According to Kessler, the National Security Agency did indeed
find Soviet bugs in the code room in August 1987. The KGB had
replaced key circuit boards in the printers; it had also replaced
the power line to the communications center. The reprogrammed
circuit boards sent an uncoded copy of the text of all State
Department and CIA message traffic to the new power line, which
could carry it out of the embassy and into the hands of the KGB.
How did the Soviets get into the communications vault? The
Marine guard posted down the hall controlled the only alarm system
for the code room, Kessler explained. Since the system did not
record the time the alarm went off, the Marine could give the KGB
undetected access to the PCC for hours at a time, then lie about
what time the system was triggered and claim it was a false alarm.
The damage from this "intelligence debacle" was topped off by
a further scandal, said Kessler: the NSA and CIA had concealed
their findings from the State Department. And to this day, Kessler
contends, they have continued to suppress evidence of the most
serious U.S. intelligence breach of the past 25 years.
This dramatic account added one more layer of controversy to
a case that has troubled the intelligence community for two years.
But as with Bracy's confession, Government investigators have
nothing to substantiate it. In yet another twist to the
controversy, a highly classified intelligence-community assessment
that circulated in the Government several months ago concluded that
there is no credible evidence that the Moscow code room was
penetrated. Perhaps only the KGB will ever know for sure. But on
the basis of more than 60 interviews with diplomatic, intelligence
and military officials, including many of those involved in the
inquiry, TIME has reconstructed the U.S. intelligence community's
own investigation of the Moscow embassy case.
Sherlock Holmes once solved a mystery by noticing that a
certain dog had not barked at night. In Moscow the role of the dog
that did not bark was played by a series of secret sensors that
were hidden inside the embassy -- a crucial fact unknown to the
Marine guards. Additional systems protected other sensitive areas.
"There was a whole panoply of things around the embassy, none of
which showed any evidence of penetration," says a senior security
official. "The Soviets might be able to avoid some devices, but not
all of them. Nobody is that good." Other key points established by
TIME's investigation:
The CIA had a secret device to monitor the time of alarms. If
a Marine let someone into the PCC and lied about the time of the
CIA alarm, several sources say, this recording device would have
exposed the lie.
There was no correlation between the dates of "false alarms"
involving the PCC and times when Bracy, Lonetree or any other
suspect was on night duty. This was a key reason the prosecution
of Bracy was dropped.
Exhaustive analysis of equipment from the Moscow code room
found no evidence of bugs. Authoritative officials at the NSA, CIA
and State Department -- including sources who saw daily reports of
the joint three-agency investigation -- are unanimous on this
point.
No unauthorized replacement of the power line to the PCC was
found. Moreover, even if the power line had been replaced, the new
wire could not carry electronic signals out of the embassy, sources
say. Reason: the power line to the PCC is filtered to eliminate all
such signals, and monitored to detect any possible radio
transmission.
In an unusual, on-the-record statement, the CIA has said that
"the intelligence community in its investigation could not
substantiate any unauthorized penetration" of the code room. The
National Security Agency endorsed that conclusion in a letter to
TIME. "No information was, or is being, withheld" from the State
Department, the NSA said.
The U.S. had spent two years and tens of millions of dollars
investigating the scenario in Bracy's confession -- and come up
with nothing. The Government had been right to take the case
seriously. Bracy had been sent home from Moscow after reporting
that he had become entangled with a Soviet woman who was trying to
recruit him as a KGB spy. Perhaps things had gone further than
anyone suspected. A number of people involved in the investigation
are still tormented by Bracy's 1987 confession: No one, they say,
would admit to espionage if he was not guilty.
There are, however, other possible explanations for Bracy's
statement. Bracy may have had a guilty conscience: he had left
Moscow under a cloud. Some intelligence experts believe he may have
gone so far as to meet a KGB officer or provide some information
before his abrupt departure from the Soviet Union. Another
possibility: Navy investigators leaned hard on Bracy to provide any
evidence he had against Lonetree. Says Bracy: "If it was going to
relieve the pressure, get me away from those guys, that's what I
was going to do." Indeed, the statement Bracy signed declares that
he merely helped his fellow Marine let the KGB into the embassy.
Recalls a security officer: "Bracy thought he was a hero that day.
It was all helping prosecute this Marine (Lonetree) who had turned
bad." Since there is no way to look into Bracy's heart, his
statement will remain an imponderable loose end in the Moscow
embassy case.
One thing is clear, though: the intensity, scope and expense
of the Government's reaction to Bracy's March 1987 statement would
have been far different if the stage had not been set by a series
of interagency disputes about security in Moscow.
The most acrimonious of these had begun in the early 1980s with
a push by the FBI to reduce the number of Soviet diplomats in the
U.S. The State Department had resisted the bureau's initiative on
the ground that the Soviets would retaliate by cutting the number
of local Soviet employees allowed at the U.S. embassy in Moscow.
That led to bitter disputes about the espionage threat posed by
these local employees and about other security issues. By 1985
low-level warfare had broken out between Ambassador Hartman and
security officials in Washington. "There was bad blood; there's no
question about that," recalls a diplomat who served at the embassy.
The 1987 Marine spy scandal appeared to vindicate the security
experts' warnings. What's more, several other espionage cases
involving the CIA and the military had made the U.S. Government
painfully aware of its vulnerability on this score.
For other reasons, the twelve intelligence experts who rushed
to Moscow in the wake of Bracy's confession were also predisposed
to believe the Soviets had got into the code room. In late 1983
French intelligence had told the NSA that a Soviet bug had been
found in a coding machine at the French embassy in Moscow. The
French warned that the Soviets might also have bugged
communications at the U.S. embassy.
The NSA seized on this tip as a chance to expand its
responsibility for the security of uncoded communications at U.S.
embassies, a traditional CIA and State Department domain.
"Basically, NSA did an end run around (director of Central
Intelligence William) Casey," says a senior security official. The
NSA went straight to the White House, and persuaded President
Reagan to let it replace all U.S. communications equipment in
Moscow. In the spring of 1984 Operation Gunman discovered Soviet
bugs in 17 embassy typewriters. "NSA's stock rose tremendously
after that," recalls a former senior technical security expert.
One NSA official involved in GUNMAN concluded that since some
of the typewriter bugs were battery powered, the Soviets must have
had a way of getting into secure areas of the embassy to replace
these batteries. Remaining in Moscow to figure out how this might
be done, this official wrote a report warning that a Soviet
Spider-Man was scaling the embassy wall at night, squeezing through
a tiny window and making his way to the code room. He also warned
that the Soviets had enlarged the flues built into the embassy
walls, and that KGB technicians were using them to climb up to the
secure floors. The report declared -- categorically -- that the KGB
was penetrating the PCC. Returning to Washington, the NSA
superspook eventually briefed President Reagan. The President was
"very concerned," says a former official who attended the briefing.
The superspook's colleagues were more concerned about his
judgment. A joint CIA-State Department team dispatched to Moscow
in response to his report found that the problems he had identified
did not exist. The suspect window had been nailed shut, and 20
years of Russian bird droppings had accumulated on it. An
examination of the walls quickly showed that the flues had not been
enlarged. Still, the White House would not forget this early, grim
warning that the KGB had burrowed into the heart of the Moscow
embassy.
Meanwhile, U.S. counterspies thought they could checkmate the
bugging system the Soviets appeared to be installing in the new
U.S. embassy being built in Moscow. Instead, the U.S. had fallen
far behind. Construction had stopped in mid-1985, when American
security experts admitted they might not be able to find all the
Soviet bugs. The sophistication of the overall system made the
Americans realize they had underrated the Soviets; they weren't
even sure how the various electronic parts they had found worked
together. The Bracy confession landed in this explosive environment
like a lighted match in a munitions dump. "There was a hysteria
about it," says a recently retired official. "There had been a
series of underestimations of what the Soviets could do. So when
someone comes in and dramatically overestimates, anyone who
criticizes that is put in the same category as those who
underestimated it in the past."
And yet it was the technical investigation that eventually
convinced officials that there was no evidence of a devastating
communications breach in Moscow. In the wake of Bracy's statement,
an interagency team led by the CIA began shipping suspect equipment
back to Washington. Machinery was returned to the U.S., taken apart
and painstakingly studied under a program code-named Operation
Merit. Most of the equipment went to a CIA facility in Virginia;
communications gear was sent first to NSA headquarters at Fort
Meade, Md., then joined the rest of the freight at the CIA
warehouse.
In the early months of the investigation, a number of smoking
guns were found in this equipment. But one by one they turned out
to be innocuous. The first was a circuit board that had been
replaced but not sprayed with a special plastic that "tagged" it
as an authorized repair. American officials were afraid the KGB had
installed this circuit board to reroute uncoded U.S. message
traffic. But the device was tested by NSA experts, who found that
it did nothing improper. Security officials later discovered that
some State Department technicians had never been told about the
secret tagging program and had not used the spray.
Another smoking gun was found attached to the machine that
decoded incoming State Department messages; a suspicious-looking
wire led through the shielded side of the box that enclosed the
equipment to prevent signals from escaping. "When they found it,
the NSA technicians thought they had something really exciting,"
says a senior expert with a chuckle. It turned out that a
communications officer had installed the device; it was a buzzer
that alerted him whenever cables came in for processing. The rig
was thoroughly tested by the NSA and found harmless.
Next, investigators looked into whether the Soviets had been
able to penetrate the PCC electronically without setting foot
inside, either by drilling a hole or by placing a device on the
outside wall of the code room. "If they could touch it, they could
penetrate it," says former official. "At least, that's what our
guys say we can do. Our best offensive and defensive guys spent a
lot of time looking at this. They concluded it was not a problem."
The last possibility was that KGB agents had entered the code
room and installed some kind of device. One of the Marines posted
just down the hall could have let the Soviets into the embassy. He
might also have been able to help the KGB learn the combination to
the vaultlike front door of the PCC. But once inside, Soviet
operatives would have been faced with several locked doors, one of
which led to the CIA's area: that would have been the target.
Inside that room was a subvault that housed the CIA's printers,
communications and coding machines.
U.S. investigators determined that it would take KGB
safecrackers one to four hours to crack each lock inside the code
room. Opening the CIA vault would trigger another set of sensors
that would ring at the Marine post. It would also be recorded by
a device that counted the number of times the door was opened and
closed. This counter was displayed inside a tamperproof box: if a
KGB spy tried to open it and change the number, he would destroy
certain indicators inside the device. Having destroyed them, he
would not be able to examine them in order to duplicate and replace
them. Sources say the CIA had also installed an "event recorder"
in its area that recorded the time when the main CIA alarm went
off. Finally, there were covert "traps" on both the CIA and State
Department communications equipment designed to indicate any
tampering.
It was easy enough to determine that those devices reflected
no evidence of penetration. The alarms for the main State
Department vault and the CIA area had never gone off on the same
night -- as would be expected if someone had entered the PCC,
walked through the main room and entered the CIA subvault. Although
there were some anomalies in the records for various monitors (for
example, the door counter sometimes registered twice if the door
was slammed hard), these never matched up with one another in any
meaningful way.
Under normal circumstances, investigators might have stopped
there and at least re-examined Bracy's confession. When they did
so later, they discovered that Bracy was wrong about how some
alarms worked. In the spring of 1987, however, investigators were
convinced that Bracy's confession was authentic. They saw the
Moscow case much the way a detective might see a locked-room
mystery in which the only occupant of a sealed chamber has been
murdered. "We assumed it had happened," recalls one leader of the
embassy investigation. "So there must have been a way."
It is an elemental assumption in the intelligence game that no
security system is foolproof. U.S. investigators reasoned that if
the KGB's best technical experts had access to the PCC repeatedly
for several hours at a time, they might be able to devise ways to
spoof or bypass one device after another. Eventually, they might
make it all the way to the equipment inside the State Department
and CIA communications vaults without being detected. But, says an
official directly involved in this analysis, "I never saw a
scenario that was credible." Declares another source: "If there had
been a penetration, it would have been detected."
But it was Clayton Lonetree, the Marine who started the whole
fuss, who inadvertently laid the PCC-penetration theory to rest.
In August 1987 Lonetree was sentenced to 30 years in prison on
espionage charges. In exchange for a five-year reduction in his
sentence, he agreed to talk. His debriefing began in October 1987
and continued for four months. He took repeated polygraph tests.
A dozen military and intelligence officers watched him through a
one-way window. By the time the interrogation was over, everyone
involved was convinced that Lonetree had been telling the truth
when, contrary to Bracy's confession, he said he had never let
Soviets into the embassy or involved Bracy in any espionage
activities. More important, investigators concluded, even if Bracy
had been a spy, without Lonetree's cooperation he could not have
given the Soviets enough access to the code room to allow them to
bug it and leave no trace.
"I'm sure the Soviets have enjoyed watching us do this to
ourselves," muses a security officer involved with the case. In
fact, the greatest benefit to the KGB from the whole affair may
have been the spectacle of the U.S. Government tearing itself apart
