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MOLEHUNT |
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Chapter 20: Triumph Peter Karlow never gave up hope. Although forced out of the CIA at the age of forty-two, his intelligence career destroyed by the mole hunt, he continued to try to clear his name. It was a slow and frustrating process, and he received no encouragement from Langley. In the 1970s, Karlow had several conversations with James Angleton after the counterintelligence chief had been fired. Karlow believed that James Angleton held the key; if he could somehow get Angleton to open up, some of the mists might clear away. Twice he had been able to speak with Angleton when they were both still in the agency. It was in Angleton's office that the counterintelligence chief had warned Karlow not to discuss his case with anyone. In a later encounter in the hall, Karlow tried again. "I said, 'I've been asking more and more questions about this and there is nothing that ties what this defector said to me.' Angleton reacted strongly and said, 'Don't talk to anybody about this -- it's too secret.' I said, 'I'm keeping my own bigot list of who I have talked to, and you're welcome to see it.' He said okay. But he never asked for it." Soon after Angleton was dismissed in 1974, Karlow encountered him at a Georgetown cocktail party. The two men chatted about the past. "At the party, he said I was the prime suspect." Karlow saw Angleton again at a reception at the embassy of South Africa. Karlow suggested lunch, and somewhat to his surprise, Angleton agreed. They met at L 'Escargot, a small, out-of the-way French restaurant on upper Connecticut Avenue that was one of Angleton's favorites. "He said to me again, 'You were the prime suspect.' I said, 'How is it possible for a Soviet defector to knock out a staff officer of the CIA? Why don't we do something like that to the KGB? With a simple rumor.' I assumed Golitsin was running down and came up with me. Something to keep interest alive in him." To Karlow, Angleton appeared to have a guilty conscience, but he admitted nothing. "Angleton never expressed any regret. He took the position it wasn't his doing. He said he never recommended my being fired. It was not something he had control over. He explained it was better from a CI viewpoint not to fire a suspect, but to keep him in place. He said the problem was I had become a security case." This was pure double-talk, since the counterintelligence chief and the Office of Security worked hand in glove. OS had seized upon trivial security violations to make a case against Karlow because Angleton suspected he was a Soviet agent. If the CIA could not prove Karlow a spy, they would push him out the door on lesser grounds. He would be hung for a sheep. [l] Karlow's meetings with Angleton were extraordinary, mole hunter and quarry, both fired by the CIA, sparring over the pate maison. But this was no Stockholm syndrome at work; Karlow had known Angleton for years, and had tried to help him develop ways of detecting Soviet bugging devices. One night in the late 1950s, Angleton had come to Karlow's house for dinner to discuss espionage equipment. Karlow's wife, Libby, gave up at midnight and retired, but Karlow and Angleton kept at it until four in the morning, when the counterintelligence chief finally went home. By questioning Angleton, Karlow was trying to gather evidence to help his case; perhaps somehow he could still clear his name. At a second lunch at a restaurant in Alexandria, Virginia, "we went further into the same thing. We were talking like two ships that cross in the night. I was interested in getting a handle on this thing for my purposes and Jim was providing me with nothing that I felt I could use." Angleton confirmed the business about letter K. He told me it was logical that I was the person -- I was in Germany, my name began with K, I'd been in East Berlin, I had access to just about everything." But there was one key fact that Angleton neglected to disclose. Karlow did not know that he had also come under suspicion of leaking to the Soviets the CIA's efforts to copy the bug found in the seal in the American embassy in Moscow. Nor did he know that Angleton had been informed by Peter Wright, of MI5, that the source of that leak was George Blake. The information from MI5 would have exonerated Karlow of this allegation, but Angleton never disclosed it, at the lunch or any other time. [2] Karlow pressed the former CI chief. How could it all have happened? How could so many officers have fallen under false suspicion? "He said, 'There was literally panic when Golitsin said there was a mole. We were under so much pressure after Burgess and Maclean.'" [3] At the time of these encounters with Angleton, Karlow was back in Washington as international affairs director for Monsanto. At first, after he was fired by the CIA, it had not been easy for Karlow, who had a wife and two children to support. Often it is difficult for officers in the Clandestine Services to make the transition to the private sector. Since their work has been secret, there is the delicate problem of what to put down on their resume. "After scratching around for a year, I got a job with Monsanto," Karlow said. "The job paid better than the government, there were stock options, promotion after six months." Karlow worked for Monsanto in St. Louis for several years, and in 1970 the company sent him to Washington. As an executive of a Fortune 500 company, Karlow prospered. But the improvement in his bank account hardly erased the painful memory of his departure from the CIA. His wife, Libby, had died in 1976, not knowing how the story would end. Karlow retired from Monsanto but stayed on in Washington as an international business consultant. Determined to clear his name, he began talking to lawyers, including an old friend from the OSS, Edwin J. "Ned" Putzell, Jr. "I had to get at the root of what happened," Karlow said. "Who had it in for me, what had really gone on." In September 1980, Karlow applied for his entire CIA file under both the Privacy Act and the Freedom of Information Act. When the Mole Relief Act passed in October, Karlow got wind of it. Two months later, on December 18, Putzell wrote to Admiral Turner formally filing a claim under the new law. And Karlow and his attorney met with CIA officials to press his case. But, as it happened, the one-year window that opened in October 1980 for claimants under the Mole Relief Act spanned two administrations. In January 1981, with the inauguration of President Reagan, a new team took over the CIA. Karlow's case ended up on the desk of William J. Casey. The new CIA director asked his general counsel, Stanley Sporkin, to check into the matter. Secretly, a special three- man panel was convened, including Sporkin, to review the case. In a memorandum to Casey, Sporkin concluded that the facts placed Karlow's case "on a different footing" from those of Kovich and Garbler, who had been granted compensation. [4] The Sporkin memo went on to review what supposedly had occurred. In December 1961, the memo said, a KGB defector -- Golisin -- had reported that the Soviets had penetrated the CIA. "The defector was not able to provide a positive identification of this 'mole,' but the descriptive data provided by the defector fit Mr. Karlow to such an extent that he came under serious suspicion and an extensive investigation of Mr. Karlow followed. The investigation did not result in the conclusion that Mr. Karlow was the mole ..." Then came the bombshell in the secret memo. Since Karlow had not been proved to be the mole, Sporkin wrote, it might appear he was entitled to compensation. "However, information developed during the course of the investigation of Mr. Karlow led to the decision that he must be dismissed on security grounds quite apart from the fact that he had been accused ... of being the mole." [5] The panel, Sporkin added, had concluded that Karlow's claim should be denied. The agency had trotted out the same old shopworn goods -- Karlow had been unclear about his father's birthplace, he had been vague about where he had traveled on certain dates, he had left his safe open, and so on. But official records often fail to give a complete picture. For Sporkin and the other CIA officers reviewing the files almost two decades later, it may have been difficult to grasp the truth -- that once Karlow was tarred as a mole suspect, the agency had been determined to get rid of him come what may. If it could not prove he was a traitor, then other grounds would do. A senior CIA officer who knew what had happened in 1963 declared, "They used the security material to frame Karlow with this chickenshit stuff." Karlow as yet knew nothing of the Sporkin memo. In October 1981, after the one-year window had slammed shut, Casey wrote to Karlow explaining why his claim had been turned down. Karlow remarried that year -- his new wife, Carolyn, was a respected college administrator -- and he engaged Stanley Gaines, who had successfully represented Richard Kovich, to carry on the fight. Gaines tried to convince the Senate Intelligence Committee that justice had miscarried in Karlow's case, but he was too late; the agency had persuaded the committee's staff that there were sound, albeit murky and elusive, reasons for rejecting his client's claim. Karlow, normally a temperate man, now let his frustration boil over. "There is a deliberate concealment or frame-up here," he told Gaines. The agency, Karlow added, was "making me a scapegoat for something." [6] In October 1986, Karlow got his first break. By now, he and Carolyn had moved to northern California, where he continued to work as an international business consultant. Back in Washington to attend an OSS symposium, Karlow gave a speech to his wartime colleagues. So did Casey, who had served in the OSS in London. Afterward, the two men had a chance to chat. "Casey came up to me and we talked," Karlow remembered, "and he said, 'What the hell is going on with your case?'" Volatile, quick-tempered, and mercurial, Casey was nevertheless an approachable man, and for all of his flaws, he did not have a closed mind. Within days of his conversation with Karlow, Casey personally ordered the case reopened. He telephoned Karlow in California and asked him to work with the agency's new general counsel, David Doherty, to prepare new recommendations to compensate Karlow. At the same time, the floodgates opened; more than 150 documents dealing with his case were suddenly declassified and released to Karlow. But there was one crucial fact that the CIA had never disclosed to Karlow, and it dared not reveal it now. In 1963, Peter Karlow had been cleared by the FBI. The former FBI agent in charge of the investigation confirmed this. "The agents who questioned Karlow," said Courtland J. Jones, "felt he was not the person described by Golitsin. Both FBI men who questioned him were top- notch." Maurice "Gook" Taylor and Aubrey "Pete" Brent had been tough and unrelenting in their five-day interrogation. But they came away convinced of Karlow's innocence. Jones was sure of it because he remembered Taylor's reaction. "I recalled Gook saying how good he felt that he had cleared a man who had been painted guilty." Jones added: "Our inquiry cleared Karlow." [7] According to Jones, a report would normally have been sent by the Washington Field Office of the FBI, which conducted the interview, to headquarters, and from there to the CIA. And was that done in the Karlow case? "Of course," Jones replied. No such document was ever released to Karlow by either agency. Under the Freedom of Information Act, Karlow did finally obtain Sporkin's memo, which shocked him when he was finally able to read it. It was the first he had learned of the CIA's spurious claim that he had been forced out for any reason other than the mole charges. The 1963 memo written by Lawrence R. Houston, the CIA's lawyer, when Karlow was pushed out, said just the opposite -- that although Karlow had not been shown to be the mole, his usefulness was over because of that accusation. To Karlow's dismay, the CIA initially could not even find Houston's memo. It was lost in a sea of paper. At the request of the general counsel, Karlow wrote a detailed rebuttal of the Sporkin memo and the old charges. As the CIA lawyers went over the case once more, they quickly perceived that the minor "security" matters that had been developed during the course of the mole investigation were not, in fact, the real reason that Karlow had been asked to resign. The agency had made a mistake, it now realized, in rejecting Karlow's claim under the Mole Relief Act. But there was a problem: the one-year law had expired five years earlier. The CIA had no legal authority to compensate Karlow. Moreover, Karlow's case was soon swept aside by the tidal wave of Iran-Contra. In the very month that Casey had ordered the Karlow case reopened, the arms-for-hostages scandal was coming down around his ears. By November, the incredible facts had emerged: Ronald Reagan, staunch opponent of Iran and the Ayatollah Khomeini, had secretly provided arms to that country in the hope of gaining the release of American hostages, and millions in profits from the arms sales had been illegally diverted to support the Contras in Nicaragua. White House aide Oliver North, the Marine lieutenant colonel at the center of the scandal, became a household name. For the Reagan administration, Casey, and the CIA, it was a disaster. Casey was in his office on December 15 preparing for another appearance on Iran-Contra before the Senate Intelligence Committee when he suffered a seizure. He was operated on for a malignant brain tumor and never returned to work. He died on May 6, 1987, five days before the death of James Angleton. Robert M. Gates, the deputy director of the CIA, had become acting CIA director when Casey underwent surgery, and on February 2, Reagan nominated him to be director. But Gates, who had also played a role in the arms-for- hostages scandal -- and had helped to keep Congress in the dark about it -- faced a bruising confirmation fight in the Senate. In March, Gates withdrew and Reagan nominated FBI director William H. Webster as the new CIA chief. [8] For Karlow, the chain of events touched off soon after his promising encounter with Casey at the OSS meeting in October must have had a why-do-these-things-happen-to-me? impact. The timing of Iran-Contra was a cruel joke. "They were going to make a settlement with me," Karlow said. "After Casey died, Gates didn't want to pick it up. Webster stalled." But after Webster, a former federal judge, had settled into the CIA, he took another look. "Webster brought a group of aides from the FBI," Karlow said. "They went over my case and Webster agreed I'd been screwed." The agency's lawyers worked out an amount of damages that they felt Karlow was owed for having his career unjustly destroyed twenty-five years earlier. And they solved the problem of how to pay the money. They would quietly ask Congress to pass the Mole Relief Act all over again, just for Peter Karlow. On September 15, 1988, the House and Senate passed the Intelligence Authorization Act for fiscal 1989. Buried in its provisions was Section 501 (a), which contained language identical to that of the 1980 Mole Relief Act. Two weeks later, President Reagan signed the bill. [9] The Mole Relief Act of 1988 was now law. The press failed to notice the obscure provision or to uncover for whom the law had been passed. Since the CIA did not provide any public notice of the new law, or attempt to contact ex-employees who might have been affected, no other victim of the mole hunt came forward. William Webster approved the settlement. Early in 1989, Peter Karlow flew to Washington. At CIA headquarters, in the general counsel's office, he was handed a check for close to $500,000. Karlow declined to discuss numbers; all he would say was: "It was under a million." Karlow drove back to downtown Washington to try to find a bank where he could deposit the check. Ironically, perhaps, he found himself on K Street, the city's main business thoroughfare. "It was a funny feeling to stand on K Street at three P.M. with a check that size in your hand and what do you do with it?" Karlow found a bank. "Fortunately," he said, "it was open until four P.M." The bank was happy to take the money. The payment was nice, but, Karlow said, "There is no way to compensate for being called a traitor, and kept in that position for twenty years." He wanted something "to hang on the wall," some visible symbol of his vindication. Webster agreed. Karlow was invited to come back to Langley in the spring. The CIA wanted to give him a medal. _______________ Notes: 1. A former CIA officer familiar with the case speculated that Karlow had been dismissed on "security" grounds because the agency had feared embarrassment if it became known publicly that Karlow had been wiretapped without cause. "They had a tap on Karlow," he said, "and it was alleged he and his mother talked about classified matters. But this was stuff they didn't want to bring into a court of law. The legal department stonewalled and didn't want any of this aired. They never had anything against Peter except these minor indiscretions, the telephone chatter." 2. After Blake confessed, Sir Dick White, the head of MI6, came to Washington with a damage report on the Blake case that omitted the fact that Blake had told the Soviets about the work on the bug by the CIA and the British. But later Peter Wright tipped off Angleton that Blake had confessed to this. The CIA believed that the KGB requirements circular that Golitsin brought with him when he defected, and which revealed Soviet knowledge of the CIA research, was based on the information Blake gave to the KGB. A former CIA man who knew the story said, "Jim had knowledge it was Blake, not Karlow. He acquired this information from Peter Wright after Karlow had been fired and sat on the information and never revealed it. The horrific thing was, Jim knew that Karlow had been wrongly treated and suppressed that information and didn't do anything about it." 3. Interestingly, Angleton, in explaining the pressure, never mentioned Philby, who was far more important than Burgess or Maclean. It may have been too painful, since Philby had been Angleton's regular luncheon partner in Washington but was never detected as a Soviet agent by the CIA counterintelligence chief. 4. "Serge Peter Karlow -- Request for Relief Under Section 405 of Public Law 96-450 ('Mole Relief Act')," memorandum, Stanley Sporkin, CIA general counsel, to Director of Central Intelligence William J. Casey, August 21, 1981. 5. Ibid. 6. Letter, Peter Karlow to Stanley H. Gaines, September 23, 1982. 7. Not only was Karlow cleared by the FBI, he passed the polygraph test that the bureau had administered during his five days of interrogation. Alexander W. Neale, Jr., the case agent who handled the Karlow inquiry, said, "The results of the polygraph did not reveal any facts that would indicate the man's guilt." So the lie-detector test showed that Karlow was innocent? "You can take it a step farther," Neale replied, "and say he was innocent." 8. President Bush nominated Gates on May 14, 1991, to succeed Webster. The Senate, after lengthy hearings and renewed controversy over Gates, confirmed him on November 5. 9. Public Law 100-453, signed by the President on September 29, 1988.
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