‘Ronald Reagan knew of and approved a great deal of what went on with both the Iranian initiative and private efforts on behalf of the contras and he received regular, detailed briefings on both… I have no doubt that he was told about the use of residuals for the Contras, and that he approved it. Enthusiastically.’
As had happened a dozen years earlier in the aftermath of the Watergate scandal and the publicity attached to the release of the incriminating ‘family jewels’, throughout the rest of President Reagan’s time of office the CIA underwent a period of retrenchment in an attempt to restore its battered image. Highly respected former FBI director Judge William H. Webster became DCI, and brought Richard F. Stoltz out of retirement to act as head of covert operations, replacing Clair E. George, who had been forced to resign after the Iran-Contra details became public. All the while, Aldrich Ames was passing information to the KGB from the CIA, while Robert Hanssen was doing similar from the FBI.
The CIA was heavily involved with the resistance to the Soviet occupation of Afghanistan, which was justifying the pessimistic description of it as Russia’s Vietnam. The Agency was operating covertly out of Pakistan’s capital city Islamabad, mandated by President Reagan in 1985, to assist the Afghan resistance to push the Soviets back into Uzbekistan, using the new Stinger missiles. By the following year, even some of the Politburo in Moscow were starting to query the Soviet involvement, particularly after the resistance scored a stunning success, destroying an ammunition dump at Kharga, just outside Kabul, on 26 August 1986, using CIA-provided technical equipment, and then followed it up with an attack on three helicopters at Jalalabad the following month. At a meeting in November, Mikhail Gorbachev made it clear that Soviet troops should be out within two years, and leave behind a regime friendly to Moscow — without letting the Americans enter. Negotiations began in Geneva, while the CIA agents on the ground continued to assist the resistance to maintain pressure on the Soviets.
Following the losses in The Year of the Spy caused (although they didn’t know it at the time) by Ames and Hanssen, the CIA was keen to gain new assets on the other side of the Iron Curtain. In May 1987, KGB officer Aleksandr Zhomov, code-named Prologue by the Agency, approached CIA case officer Jack Downing on the Red Arrow express — the overnight train between Moscow and Leningrad — and appeared to be offering access to a new counter-intelligence campaign by the KGB designed to disrupt the CIA’s operations in Moscow. He also provided a list of CIA agents who had been arrested and executed since 1985, and revealed the names of double agents who were going to falsely offer their services to the Agency.
Conventional wisdom held that the KGB didn’t use their officers in this way (an operation known as ‘dangling’), but in fact Prologue really was too good to be true. When it finally became time to exfiltrate him from the Soviet Union in July 1990, it became clear that Zhomov’s loyalty had been to Moscow Centre the entire time. After the fall of the Soviet Union, Zhomov became head of the American Division of the FSB, the Russian continuation of the KGB, and according to CIA veteran Milt Bearden, he became obsessed with finding out who betrayed Aldrich Ames and Robert Hanssen to the Americans.
Hanssen was responsible for foiling plans to capture another double agent in 1989. State Department diplomat Felix Bloch had become a person of interest after he received a telephone call in April from Reino Gikman, a KGB illegal in Vienna, by the CIA. Bloch had already come under suspicion because he had a taste for expensive sadomasochistic sex with prostitutes, which he would not be able to afford on his salary. Because Bloch was working in America, the CIA passed the case to the FBI. When Bloch flew to Paris in May, French counterintelligence placed him under surveillance at the request of the Bureau, and photographed Bloch and Gikman (who Bloch would later claim he knew as Pierre Bart) meeting and passing over a bag. Eight days later, Hanssen informed the KGB that Bart/Gikman and Bloch were under investigation.
Gikman and Bloch met again in Brussels at the end of May, but then at the start of June, Gikman disappeared from Vienna, and on 22 June, Bloch received a phone call from someone he later identified as Bart/Gikman. He told Bloch that he was calling ‘in behalf of Pierre’ who could not see him in the near future because he was ‘sick’, adding that ‘A contagious disease is suspected.’ He rang off after telling Bloch, ‘I am worried about you. You have to take care of yourself.’ The FBI were bugging Bloch’s phone, and as far as they were concerned, this was a clear warning off. He was interrogated by the FBI, and placed under further surveillance — which was exacerbated when ABC News revealed the investigation in July, and the public took to referring to Bloch as ‘Mr Spy’. However, the surveillance proved fruitless: Bloch ceased any activities for the Soviets, and thus the FBI were deprived of gaining any clue as to who warned the KGB to tip him off. Bloch was dismissed from the State Department and eventually wound up as a bus driver.
Later that year, Hanssen betrayed another major secret to the Soviets — Project Monopoly, a tunnel that had been dug underneath their new embassy in Washington. Although many still doubt the existence of the tunnel, it does seem to have been constructed to allow the NSA and FBI access to the Soviet secrets. However, according to Hanssen’s biographer David Wise, since the buildings were only used by families during the eighties, little useful knowledge was gained. Because of a dispute over the bugs discovered in the American embassy in Moscow, the building in the capital wasn’t used for business purposes until 1994, which meant that, as at least one senior FBI official maintained, ‘There was no information of any kind’ emanating from the expensive equipment that had been installed.
By this point, events behind the Iron Curtain were developing their own momentum. The final Soviet troops withdrew from Afghanistan in February 1989. In May, Gorbachev suggested that force was no longer a viable way to keep the Warsaw Pact together; the same month, the Hungarians started to tear down parts of the iron curtain of barbed-wire along the Austro-Hungarian border that had been in place for forty-three years. In June, they acclaimed Imre Nagy, the leader of the 1956 uprising, as a national hero; Solidarity, the Polish non-governmental trade union, led by Lech Walesa, gained a majority in the Polish parliament at the same time. That September, a non-Communist government was approved by the Polish parliament. The Hungarian Communist party reformed as a Socialist Party in October, with legislation created later that month that led to the creation of the Republic of Hungary.
Across the summer of 1989, thousands of East Germans fled to Hungary to gain access to the West, before travel restrictions were imposed. Barred from Hungary, they then headed to Czechoslovakia where a huge encampment of defectors sprang up in the West German embassy compound in Prague. After the deposing of GDR chancellor Erich Honecker in October, the new leader Egon Krenz found that protests were increasing — and was informed that Moscow wouldn’t provide support to keep his regime in power. New rules regarding travel between East and West were meant to be announced by unofficial GDR spokesman Gunter Schabowski, noting that journeys via a third country could be permitted, but in a press conference on 9 November, the Politburo member made an historic error and stated that East Germans could travel
The Western intelligence agencies had to learn all about it from television news channel CNN. Markus Wolf’s Stasi had been very effective in locating and removing any potential assets that the Agency might accrue in the GDR, so diplomats in Washington, desperately trying to keep pace with events, were forced to turn to their televisions rather than their intelligence briefings.
Over the coming months the CIA would try to turn as many former East German operatives as they could — a procedure they would also try, with limited success, in the Soviet Union as that headed towards break-up. It wasn’t always successful: some former Communist officers felt that all they had left was their honour, and asked to be left alone. Others, like Markus Wolf himself, listened politely, but ultimately turned the Agency down. There were so many defectors in the end that the CIA eventually had to tell some to simply apply through normal channels for travel to the West.
However, the many new agents gained the CIA and other Western agencies access to materials they couldn’t have hoped for before, including the new SA-19 surface-to-air missile (SAM) that the Soviets had been developing. What they were not able to get — at that stage anyway — were the Stasi files, even though the East German security headquarters in East Berlin had been ransacked. Many of them had in fact been transferred to Moscow for safekeeping. Former enemies became allies, as the Czech agency, the StB, began cooperating with both the CIA and MI6.
There were those within the CIA who believed that the KGB was becoming toothless, as the power of the Communist state dwindled with the rise of independence movements in various Soviet republics during the start of
