Duping the Soviets

The Farewell Dossier

Gus W. Weiss

We communists have to string substantive topics. The Soviets along with the capitalists for a viewed detente as “peaceful coexist- while. We need their credits, ence” and as an avenue to improve their agriculture, and their tech- their inefficient, if not beleaguered nolagy. But we are going to economy using improved political continue massive milita y pro- relations to obtain grain, foreign grams and by the mid&e 1980s credits, and technology. ’ In pure sci- we will be in a position to return ence, the Soviets deserved their to a much more aggressive for- impressive reputation, and their eign policy designed to gain the space program demonstrated original- upper band in our relationship ity and accomplishment in rocket cc engineering-but they lacked pro- with the West. The Soviets viewed d&ente duction know-how necessary for long-term competition with the as “peaceful coexistence” Leonid Brezhnev. Remarks in United States. Soviet managers had 1971 to the Politburo at the and as an avenue to difficulty in translating laboratory beginning of detente. improve their inefficient, if results to products, quality control was poor, and plants were badly During the Cold War, and especially not beleaguered economy organized. Cost accounting, even in in the 1970s Soviet intelligence car- the defense sector, was hopelessly using improved political ried out a substantial and successful inadequate. In computers and micro- clandestine effort to obtain technical relations to obtain grain, electronics, the Soviets trailed and scientific knowledge from the Western standards by more than a foreign credits, and West. This effort was suspected by a decade. technology. few US Government officials but not documented until 198 1, when French intelligence obtained the ser- vices of Col. Vladimir I. Vetrov, Soviet S&T Espionage “Farewell,” who photographed and supplied 4,000 KGB documents on The leadership recognized these the program. In the summer of shortcomings. To address the lag in 198 1, President Mitterrand told Pres- technology, Soviet authorities in ident Reagan of the source, and, 1970 reconstituted and invigorated when the material was supplied, it the USSR’s intelligence collection for led to a potent counterintelligence science and technology. The Council response by CIA and the NATO of Ministers and the Central Com- intelligence services. mittee established a new unit, Directorate T of the KGB’s First President Nixon and Secretary of Chief Directorate, to plumb the State Kissinger conceived of detente R&D programs of Western econo- as the search for ways of easing mies. The State Committee on chronic strains in US-Soviet rela- Science and Technology and the Gus W. Weiss has served as a Spe- tions. They sought to engage the Military-Industrial Commission cial Assistant to the Secremry of USSR in arrangements that would were to provide Directorate T and Defense and as Director of Interna- move the superpowers from confron- its operating arm, called Line X, with tional Economics for the National tation to negotiation. Arms control, collection requirements. Military Security Council. trade, and investment were the main Intelligence (GRU), the Soviet

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Academy of Sciences, and the State States to visit firms and laboratories higher grain prices for consumers, and Committee for External Relations associated with their commissions. taxpayers provided for a 25percent-a completed the list of participants. Line X, ever alert, populated these bushel export subsidy. Those of us The bulk of collection was to be delegations with its own people: in observing these arabesques began to done by the KGB and the GRU, an agricultural delegation of 100 question the USSR’s total commit- with extensive support from the East about one-third were known or sus- ment to the spirit of detente. European intelligence services. A for- pected intelligence officers. On a midable apparatus was set up for visit to Boeing, a Soviet guest scientific espionage; the scale of this applied adhesive to his shoes to US Computer Export Policy structure testified to its importance. obtain metal samples. In another epi- The coming of detente provided sode, the ranking scientists and In late 1973, President Nixon asked access for Line X and opened new managers of the Soviet computer and his Council on International Eco- avenues for exploitation. Soviet intel- electronics industry obtained a visa nomic Policy to determine which ligence took full advantage. for the specific purpose of visiting computers and associated production the Uranus Liquid Crystal Watch technology might be prudently sold In the early 1970s the Nixon admin- Company of Mineola, Long Island to Communist countries. This study istration had no comprehensive (a firm not among the Fortune 500). was necessary because detente policy for economic relations with Three days before the delegation’s implied the expansion of commercial the USSR. The sale of strategic arrival, they requested an expansion opportunities with Eastern Europe goods to Communist countries was of the itinerary to include nearly all and the USSR, a new and more lib- governed by the Coordinating Com- US computer and semiconductor eral set of COCOM rules was mittee of NATO (COCOM), which firms. This maneuver was done to required to fit these prospects, how- administered an Alliance-agreed list observe (that is, collect) the latest ever illusory they may have been. of products and data embargoed for technology, and it was executed at Data processing was the most impor- sale. Nixon’s policy worked within the last minute so that the Defense tant product requiring review. I was this system, and, for the export of Department would not have time to put in charge of the project, and I products exceeding the approved list, object. It was legal-Line X had stud- was also made responsible for the special exceptions were necessary. ied our regulations and turned them broader problem of technology trans- And, in a new set of commercial and to its advantage. fer. The computer study was the first scientific arrangements, the United review of technology policy within States and the USSR set up joint To acquire the latest aircraft technol- detente; it sought to assess the eco- technical commissions to assess pros- ogy, the Soviets in 1973 proposed nomic gain to the United States pects for cooperation. Topics purchasing 50 Lockheed transports if from computer sales set against the included agriculture, nuclear energy, the firm, then in financial difficulty, national security risk from those sales. computers, and the environment. would build and equip a modern “air- As Kissinger noted: craft city” in the USSR. A similar proposition was put to Boeing (it Not surprisingly, the study concluded that the USSR was short of comput- Over time, trade and investment besieges the imagination to ponder Brezhnev appearing from the cabin of ers and the means to pay for may Leaven the autarkic tenden- an Aeroflot 747). Line X practiced the substantial computer imports. Our cies of the Soviet system, invite venerable capitalist technique of play- analysis presumed that the Soviets gradual association of the Soviet ing off competitors, and, from this intended to use their foreign exchange economy with the world econ- bidding, the Soviets sought to gain to best advantage by purchasing the omy, and foster a degree of technical data for use at home. On most powerful computers, those that interdependence that adds an ele- a less lofty technical plane, in 1972 also held the most national security ment of stability to the political the Soviets surreptitiously bought risk (large computers were used for relationship. 2 25 percent of the US grain harvest, nuclear weapons calculations and using phone intercepts of the grain cryptography). The report concluded Beginning in 1972, delegations of dealers’ network to listen to both sides that the export potential for American Soviet specialists came to the United of the market. The purchase led to data processing to the USSR was

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In the early 1WOs, there were no US intelligence collection requirements for no evidence does not mean it is not small and the risk great if the more technology transfer and powerful computers were allowed for true. The system defied movement. sale. The study recommended raising scientific espionage, and moderately the power of machines few, if any, reporting A few alert colleagues were dispersed allowed for COCOM release, while at among the executive departments. In the same time restricting the sale of sources. one episode, the Department of technology. Export of the largest com- Commerce discovered a Line X puters was to be prohibited. In effort to obtain an embargoed com- National Security Decision Memoran- puter through a dummy corporation dum (NSDM) 247, 14 March 1974, set up for this one transaction; U. S. Policy on the Export of Computers dotal clues were at hand. In their officials intercepted the shipping to Communist Countries, President intelligence history, the Soviets could container and substituted sandbags. Nixon approved these recommenda- point to the success of the atom (A note was enclosed, but it would tions, and they became the new bomb spies, and they also had to not be politically correct to quote it.) export guidelines. As a result, the Sovi- their credit collection against indus- In 1975, the Apollo-Soyuz spacecraft ets were excluded from importing trial technology in Germany during docking was used to gain intelligence significantly powerful Western com- the 1920s. After World War II, the access to the US space program. This puters, detente notwithstanding. Soviets copied the American B-29 project was conceived by the Nixon and the Rolls-Royce Nene administration as part of detente, If the Soviets were to reach compara- jet engine (the copy powered the and President Ford had no choice bility with the United States in MiG-15). Two former members of but to continue the effort. To the computers, their engineers would on the Rosenberg network had set up consternation of NASA, a few weeks their own now have to create designs the modern Soviet microelectronics before the launch counterintelligence and produce equipment. Line X industry. Soviet intelligence was pro- suspected that one of the Cosmo- would have to use its espionage fessional at ferreting out science and nauts was a KGB officer who had resources to supplement what could technology and had the results to been collecting away over the course be developed at home. NSDM 247 prove it. The Soviets were adept at of the project. eliminated the West as an open copying foreign designs. In the style source available to the Soviets, but of Sherlock Holmes, the clues could Western intelligence was unaware of almost speak for themselves: the Presidential Interest the collection apparatus the Soviets USSR was behind in important tech- had deployed to obtain the nologies, their intelligence was President Carter was the first chief technology. accomplished at collection, and executive to take an interest in tech- dttente had opened a path. nology loss. During his administration, CIA had begun to Strong Suspicions and Skepticism Those suspicious of a Great Game in report the diversion of computers technology espionage found that the from the West into the Soviet defense In the early 197Os, there were no US US Government was not 221 B complex, and he wanted details. In intelligence collection requirements Baker Street-we could make little response, the Agency assigned staff to for technology transfer and scientific headway in persuading officials in this endeavor and produced a more espionage, and few, if any, reporting charge of intelligence requirements complete picture of technology loss sources. But, by observing the behav- that the United States was facing a than had been available since the start ior of Soviet delegations visiting US significant threat. We received dis- of Directorate T. Carter also ordered plants and by keeping in mind the couraging responses to our pleas for the first comprehensive study of tech- clever 1972 grain purchase, a few help: “No evidence” of a grand nology transfer, Presidential Review government officials began to sus- design; “not usual Soviet practice;” Memorandum 3 1, a document that pect that a master plan was in place “no requirements and no interest;” only distantly addressed the threat to obtain our know-how. Direct “no sources.” It seemed to have from clandestine collection. It was evidence was nonexistent-only anec- escaped these authorities that having largely a missed opportunity, but

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Carter responded to the Soviet inva- ideological reasons. He supplied a nology, and with the list American sion of Afghanistan by instituting list of Soviet organizations in scien- intelligence might be able to control sanctions, canceling several computer tific collection and summary reports for its purposes at least part of Line sales, and stopping equipment des- from Directorate T on the goals, X’s collection, that is, turn the tables tined for the Kama River truck plant. achievements, and unfilled objectives on the KGB and conduct economic of the program. Farewell revealed the warfare of our own. President Reagan came to office names of more than 200 Line X intent on reversing what he saw as officers stationed in 10 KGB rezi- I met with Director of Central the “window of vulnerability” favor- dents in the West, along with Intelligence William Casey on an ing the Soviets in strategic weapons. more than 100 leads to Line X afternoon in January 1982. I pro- 3 He also believed that the USSR’s recruitments. posed using the Farewell material to economy did not work and that the feed or play back the products Soviet system was on the way to col- Upon receipt of the documents (the sought by Line X, but these would lapse. His intuition led him to Farewell Dossier, as labeled by come from our own sources and believe the Cold War could be won. French Intelligence) CIA arranged would have been “improved,” that Joining Reagan’s NSC staff were for my access. Reading the material is, designed so that on arrival in the those of us who thought similarly caused my worst nightmares to come Soviet Union they would appear and entertained the idea that eco- true. Since 1970, Line X had genuine but would later fail. US nomic pressure would have some obtained thousands of documents intelligence would match Line X effect. The NSC staff sought to fash- and sample products, in such quan- requirements supplied through ion policies to take advantage of the tity that it appeared that the Soviet Vetrov with our version of those USSR’s low productivity, its lag in military and civil sectors were in items, ones that would hardly meet technology, oppressive defense bur- large measure running their research the expectations of that vast Soviet den, and inefficient economic on that of the West, particularly the apparatus deployed to collect them. structure. Reagan was the first presi- United States. Our science was sup- dent for whom this line of thought porting their national defense. Losses If some double agent told the KGB would have been even remotely were in radar, computers, machine the Americans were alert to Line X acceptable. tools, and semiconductors. Line X and were interfering with their collec- had fulfilled two-thirds to three- tion by subverting, if not sabotaging, fourths of its collection require- the effort, I believed the United A Defector in Place ments-an impressive performance. States still could not lose. The Sovi- ets, being a suspicious lot, would be Into the receptive climate of the likely to question and reject every- Reagan administration came Presi- Interest in Technology Transfer thing Line X collected. If so, this dent Mitterrand, bearing news of would be a rarity in the world of espi- onage, an operation that would Farewell-that is, Colonel Vetrov. In Overnight, technology transfer succeed even if compromised. Casey a private meeting associated with the became a top priority, rising from liked the proposal. July 1981 Ottawa economic summit, the basement of Intelligence Com- he told Reagan of the source and munity interest. CIA set up a offered the intelligence to the United Technology Transfer Intelligence States. It was passed through Vice Center, and the Pentagon created A Deception Operation President Bush and then to CIA. groups to assess damage and find The door had opened into Line X. ways to tighten technology controls. As was later reported in Aviation But careful study of Farewell’s mate- Week and Space Technology, CIA and Vetrov was a 5%year-old engineer rial suggested that more than just a the Defense Department, in assigned to evaluate the intelligence few committees could come out of partnership with the FBI, set up a collected by Directorate T, an ideal this wealth of intelligence. With the program to do just what we had position for a defector in place. He Farewell reporting, CIA had the Line discussed: modified products were had volunteered his services for X shopping list for still-needed tech- devised and “made available” to Line

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X collection channels. The CIA NationaI Security Directive exchange. And the discovery of Alas- project leader and his associates stud- kan North Shore oil contributed to ied the Farewell material, examined On 17 January 1983, to define his the 1986 fall in petroleum prices, cut- export license applications and other policy for political, military, and eco- ting the revenues not only of OPEC intelligence, and contrived to intro- nomic relations with the USSR, but also of the USSR. Coincident duce altered products into KGB Reagan approved National Security events and deliberate government collection. American industry helped Decision Directive (NSDD) 75, policy had the twin effects of adding in the preparation of items to be U. S. Relations with the USSR, a doc- to the burden on the Soviet system “marketed” to Line X. Contrived ument spelling out purposes, themes, and of shifting the superpower com- computer chips found their way into and strategy for competing in the petition to advanced technology, Soviet military equipment, flawed Cold War. It specified three policy where the United States held a clear turbines were installed on a gas pipe- elements: containment and reversal advantage. line, and defective plans disrupted of Soviet expansionism, promotion the output of chemical plants and a of change in the internal system to tractor factory. The Pentagon intro- reduce the power of the ruling elite, Good-by to Farewell duced misleading information and engagement in negotiations and pertinent to stealth aircraft, s ace agreements that would enhance US About the time I met with Casey, defense, and tactical aircraft. ! The interests. In economic policy, Vetrov fell into a tragic episode with Soviet Space Shuttle was a rejected NSDD 75 highlighted the need to a woman and a fellow KGB officer NASA design. 5 When Casey told control technology; Farewell’s in a Moscow park. In circumstances President Reagan of the undertaking, reports had moved those writing the that are not clear, he stabbed and the latter was enthusiastic. In time, Directive to put emphasis on prevent- killed the officer and then stabbed the project proved to be a model of ing technology loss, and the but did not kill the woman. He was interagency cooperation, with the President had agreed (so a KGB arrested, and, in the ensuing investi- FBI handling domestic requirements defector working for a foreign intelli- gation, his espionage activities were and CIA responsible for overseas gence service put his stamp on a part discovered; he was executed in 1983. operations. The program had great of presidential policy). Later in CIA had enough intelligence to insti- success, and it was never detected. 1983, Reagan proposed the SDI, tute protective countermeasures. which Gorbachev and the Soviet In a further use of the Farewell prod- military took far more seriously In 1985, the case took a bizarre turn uct, Casey sent the Deputy Director than American commentators. SD1 when information on the Farewell of Central Intelligence to Europe to would, if deployed, place unaccept- Dossier surfaced in France. Mitter- tell NATO governments and intelli- able economic and technical rand came to suspect that Vetrov had gence services of the Line X threat. all along been a CIA plant set up to These meetings led to the expulsion demands on the Soviet system. test him to see if the material would or compromise of about ZOO Soviet Even Reagan’s 1983 “evil empire” be handed over to the Americans or intelligence officers and their speech had its economic effect, for kept by the French. Acting on this sources, causing the collapse of Line immediately thereafter the Soviet mil- mistaken belief, Mitterrand fired the X operations in Europe. Although itary asked for a budget increase, this chief of the French service, Yves some military intelligence officers on top of already-bloated defense Bonnet. 6 avoided compromise, the heart of expenditures. Soviet technology collection crum- bled and would not recover. This Two events beyond presidential con- mortal blow came just at the begin- trol dovetailed with NSDD 75. The An Important Contribution ning of Reagan’s defense buildup, his Federal Reserve’s restrictive mone- Strategic Defense Initiative (SDI), tary policy of the early 1980s led to a In 1994, Gorbachev’s science and the introduction of stealth air- fall in gold and primary product adviser, Roald Sagdeev, wrote that in craft into US forces. prices, sources of Soviet foreign computers and microelectronics-

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As for Farewell, his contribution led to the collapse of a crucial the keys to modern civil and military collection program at just technology-the Soviets trailed West- ern standards by 15 years and that the time the Soviet military the most striking indication of their needed it, and it resulted in backwardness was the absence of a domestically made supercomputer. a forceful and effective The Soviets considered a supercom- NATO effort to protect its puter a “strategic attribute,” the lack technology. of which was inexcusable for a super- power. 7 Line X did not acquire designs for such a machine, nor could Soviet computer scientists build one on their own-and 4. Schweizer, Peter. Victory: The NSDM 247 had stopped Western Reagan Administration j Secret Strat- ea that Hastened the Collapse of the help. As for Farewell, his contribu- Soviet Union. New York: The tion led to the collapse of a crucial Atlantic Monthly Press, 1995, collection program at just the time pp. 187-90. the Soviet military needed it, and it resulted in a forceful and effective 5. Conversation with James Fletcher, NATO effort to protect its technol- Administrator, NASA. ogy. Along with the US defense 6. Porch, Douglas. The French Secret buildup and an already floundering Services. New York: Farrar, Straus Soviet economy, the USSR could no and Giroux, 1995, p. 448. longer compete, a conclusion reached by the Politburo in 1987. 7. Sagdeev, Roald Z. The Making of a Soviet Scientist. New York: Jolui Wiley & Sons, 1994, pp. 298-301. When historians sort out the reasons for the end of the Cold War, perhaps Farewell will receive a footnote. It would be deserved.

NOTES

1. Kissinger, Henry A. White House Years. Boston: Little, Brown and Company, 1979, pp. 1, 142.

2. Kissinger on detente. Thomas G. Paterson and Dennis Merrill (Ed.), Major Problems in American For- eign Relations, Volume II, 1995, p. 600.

3. For a primary source from a former KGB officer, see Oleg Gordievsky and Christopher Andrew, KGB: The Inside Story. New York, Harper Collins, 199 1.

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