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November 2, 1986
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Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 ARTICLE MWAM ON PAGE 11 STAT STAT WHO GOTAWAY NEW YORK TIMES MAGAZINE 2 November 1986 THE SPY Edward Lee Howard was a efha'ts wed, Now C.I.A. reendt bouid for It his been Named that Moscow. DNnrseed, he andher ex-C.I.k agent e1 tied the F.B.1.9 defected was aware of the bet ayal. and left U.S. WAINInoe By David Wise N THE SILENCE JUST BEFORE TWI- light in the desert near Santa Fe, the sky changes colors, shading to pinks and reds, and the sunset casts an orange glow on the golden snakeweed, the prickly pear cactuses and the juniper trees. The Sangre de Cristo mountains turn purple, then swiftly black. Suddenly, the first stars appear and the night belongs to the coyotes, the chirping toads and the owls. On just such a night a little more than a year ago, with the clouds racing past a quar- ter-moon, Edward Lee Howard, a 33-year- old former officer of the Central Intelligence Agen- cy, slipped away from agents of the Federal Bu- reau of Investigation and vanished. On Aug. 7 of this year, he surfaced in Moscow, granted political asylum by the Russians. Accord- ing to intelligence officials, Howard betrayed the methods used by the C.I.A. to contact its spies - "assets" in intelligence jargon - in the Soviet Union, leading directly to the arrest of one such C.I.A. asset, Soviet defense researcher Adolf G. Tolkachev, whose execution was announced a week and a half ago by Tass, the Soviet news agency. Howard's information also may have led to the ex- pulsion from Moscow of several American intelli- gence agents and the detention of other Soviet citi- zens who were working for the C.I.A. Howard is the first known C.I.A. man to have de- fected to the Soviet Union in the 3)9-year history of the agency. His defection was, perhaps, the great- est embarrassment ever suffered by the C.I.A. But a second former C.I.A. man, whose identity and role have been a tightly guarded secret, is also a key figure in the case. The second man is William G. Bosch. F.B.I. agents tracked Bosch down on South Padre Island, at the southernmost tip of Texas, near the Mexican border. For four days, they inter- rogated him, even as other agents maintained a 24- hour surveillance on Howard in Santa Fe, N.M. Ac- cording to intelligence sources, Bosch finally told the F.B.I. that on a visit to the island, Howard con- fided to him that he had sold secrets to the K.G.B. in Europe and sought to enlist him in further espio- nage plans. The officials said Bosch also told the F.B.I. that the two men discussed taking a trip to the Soviet Embassy in Mexico. But in a day of high drama, at the very moment that F.B.I. agents were questioning Bosch, Howard was planning his successful escape from his home in the New Mexico desert. Edward Lee Howard has been charged with con- spiring to violate the espionage laws by his visit to South Padre Island. Bosch, who, like Howard, left the C.I.A. under a cloud, has not been charged. But his statements provided the key evidence that ena- bled the Department of Justice to file a criminal complaint against Howard. Bosch, who lives in the Los Angeles area, has declined to comment. Former Director of Central Intelligence Stan- field Turner has said that United States intelli- gence was "very badly hurt" by Howard, who had "very critical information about operations inside the Soviet Union." Another intelligence official put it more bluntly: "He wiped out Moscow station." To understand the Howard case, one must step through the looking glass into the murky world of counterintelligence, where nothing is quite what it seems and not every question has an answer. One thing is clear, however. The Howard case vastly embarrassed the C.I.A. and the F.B.I. Be- hind the scenes, there has been a good deal of fin- ger-pointing between the two agencies - each blaming the other. The existence of a second man in the case is only one of many startling aspects that surround the af- fair. While many facets of the case remain unclear, an in-depth investigation, including dozens of inter- views with Howard's family, friends, associates, neighbors and Government officials, among them a number of persons in the intelligence agencies, has revealed other surprising information, much of which has not previously been disclosed: ^ Edward Howard and his wife, Mary, were both employed by the C.I.A.'s Directorate of Operations, the agency's clandestine arm. They were trained by the agency to operate in Moscow as a husband- and-wife spy team. ^ Only one F.B.I. agent was watching the Howards' house on Sept. 21, 1985, as Mary Howard helped her husband escape by driving home with a dummy in the front seat, a dummy made of clothes shaped in a human form and topped with a wig stand for its head. In the darkness, the agent apparently mis- took the dummy for Howard - a ruse that gave the ex-spy a 24-hour head start. ?Mary Howard further aided her husband's escape by playing a tape recording of his voice over their telephone that fooled F.B.I. agents, who were wire- tapping the phone, into believing he was still at home. sMary Howard was with her husband at an Aus- trian ski resort near the Swiss border on Sept. 20, 1984, during a trip when the F.B.I. believes he met with KG.B. agents. But she insists he was only gone from their hotel room for a short time and maintains she never had any knowledge of his al- leged spying for the Russians. For a year after her husband vanished, Mary Howard declined to talk Continued Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 STAT Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587ROO0201160025-7 to the press. She broke her silence and agreed to be interviewed for the first time by this reporter. ^ Both the C.I.A. and the F.B.I. were sharply criti- cized by the President's Foreign Intelligence Advi- sory Board for their handling of the Howard case, and both agencies have officially reprimanded a number of employees involved. The Howard case did more than compromise on- going clandestine operations. To the C.I.A., it re- mains a skein that, if unraveled, could expose flaws in both the conduct of the agency's secret opera- tions and its bureaucratic procedures. Inevitably, the defection of Edward Howard has raised larger concerns about C.I.A. security, recruitment and personnel policies, and about the overall United States counterintelligence effort. This case also brings up a number of intriguing and unanswered questions which, presumably, of- ficials of the C.I.A. and F.B.I. are asking them- selves. Why did Edward Howard feel secure in going to William Bosch to tell him he was betraying his country? Why didn't Bosch come forward and inform the authorities when he was first ap- proached by Howard? And does this case indicate the existence of larger cracks in the armor of American intelligence? ON THE MORNING OF AUG. 1, 1985, VITALY Yurchenko, deputy chief of the K.G.B.'s First De- partment, which is responsible for operations in the United States and Canada, told colleagues at the Soviet Embassy in Rome that he was going to take a walk and visit the Vatican Museum. Yurchenko, then 49, had arrived in Rome a week earlier. When he did not return by dinner time, embassy officials were frantic. Not until the next day did they file a missing persons report with the Italian police. But the K.G.B. resident in Rome must al- ready have suspected the worst: Vitaly Yurchenko, a trusted "general-designate" in the K.G.B. with 25 years of service in the Soviet intelligence agency, had defected. Yurchenko, a big catch for the C.I.A., was whisked to a safe house near Fredericksburg, Va., for questioning. Before he escaped his C.I.A. han- dlers and redefected to Moscow three months later, leaving a trail of recrimination and confusion within the intelligence community, he provided vital information. The first order of business when a defector is interrogated is to learn whether he knows of any penetrations of United States intelli. gence. Yurchenko said he knew of two. He provided details that led the F.B.I. to Ronald W. Pelton, a for- mer employee of the National Security Agency, who was convicted of espionage in June 1986. Yurchenko said the other mole had worked for the C.I.A. and was known to him only by the code name "Robert." Yurchenko had never met Robert and could provide no physical description. But he had two crucial clues to his identity:, Robert had met with senior K.G.B. agents in Austria in the fall of 1984 and sold them C.I.A. secrets. Moreover, Robert had been prepared for posting to Moscow and was familiar with the complex techniques used by the C.I.A. for contacting its agents there, per- haps even their code names or identities. The news horrified Yurchenko's C.I.A. interroga- tors. If true, it meant there had been a mole in their inner sanctum, the most sensitive part of the agen- cy, the Soviet European division. There had al- ready been disturbing intimations that something was wrong in Moscow; at least one major operation had been blown, and the C.I.A.'s Soviet contact, Adolf Tolkachev, arrested. If Robert had talked to the K.G.B., the C.I.A.'s entire Soviet network might be in danger. It did not take C.I.A. officials long to zero in on the man who fit Yurchenko's profile. In the spring of 1983, he had been getting ready for assignment to the C.I.A.'s Moscow station, his first overseas post, when at the last moment some troubling polygraph results and a security investigation disclosed drug use and petty theft, C.I.A. officials have said. In- stead of sending the officer to Moscow, the agency took the unusual step of firing him. His name was Edward Lee Howard. E HAD APPLIED TO THE C.I.A. in 1980. At the time, he was 28, married and working as manager Hof the Chicago regional office of a firm called Ecology and Environ- ment Inc. It occurred to Ed How- ard that there might be something more challenging in life than look- ing for toxic waste dumps. "He just mentioned one day that he had ap- plied for a job in the agency," Mary Howard said. "I think that's what he wanted to do for a long time." Mary Cedarleaf Howard, a quiet, intelligent woman of 36, with brown hair and blue eyes, now lives in seclusion with her young son and her par- ents near St. Paul, Minn. In a series of conversa- tions, Mary Howard said nothing critical about Ed- ward Howard, except to confirm that he had a drinking problem that was the cause of arguments between them. At the same time, she appeared to be loyal to her former employer, the C.I.A. She said she was still fond of her husband, although she has refused his request that she and their son join him in Moscow. To the C.I.A., Howard had apparently looked like an ideal recruit. He had a graduate degree, work experience, and both he and his wife were accus- tomed to living overseas. Howard was fluent in Spanish and German, a smooth, well-spoken man who collected guns and knew how to use them. Al- though born in New Mexico, he had grown up in Eu- rope; his father, Kenneth Howard, had been an Air Force electronics specialist who worked on guided missiles and had been stationed at bases in Germa- ny, Texas and England. "He played Little League and everything," Ken- neth Howard said of his son. "He was in the Boy Scouts, up to Explorer." Ed Howard graduated from high school in Branden, England, then en- rolled at the University of Texas, where he be- longed to the karate club and graduated cum laude in 1972, the same year his father retired from the Air Force. Ed Howard and Mary Cedarleaf met in the Peace Corps in 1973, both in their early 20's and fresh out of college. Mary had grown up in St. Paul, the daughter of an insurance executive and a phy- sician. In the Peace Corps, "we started out in the same town in Colombia, called Bucaramanga," she said. They were married three years later, at a Lu- theran church in St. Paul. That same year, Ed Howard earned a master's degree in business administration from the Amer- ican University in Washington, and joined the Agency for International Development. In Febru- ary 1977, the Howards left for two years in Lima, Peru, where he worked on loan projects for A.I.D. Although the C.I.A. sometimes uses A.I.D. as diplo- matic cover, there is no evidence to suggest that Howard was anything but a loan officer. After OL Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587ROO0201160025-7 Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 Peru, the Howards returned to the united states, and he landed the environmental job in Chicago. In January 1981, the C.I.A. hired Edward Howard as a career trainee in the Directorate of Opera- tions, also known as the D.D.O. (in reference to the Deputy Director for Operations) and as the Clan- destine Services. Mary stayed at their home in Barrington, a Chicago suburb, while Ed reported to C.I.A. headquarters at Langley, Va. He was sent for several months to the Farm, a secret C.I.A. in- stallation at Camp Peary, Va., near Williamsburg. There, Howard learned the "tradecraft" of intelli- gence, practicing the recruitment of agents and the use of "dead drops" to pass messages. He was given five aliases. He also learned from F.B.I. agents at the Farm how to detect and evade sur- veillance. In the spring. Mary came east to join him. They purchased a house on Scotch Haven Drive in Coun- try Creek, a development of single-family town houses in suburban Vienna, Va. When Robert Magee, the C.I.A.'s director of per- sonnel, later reviewed the Howard case, he discov- ered that there had been one blip on the security screen even at the start. Every candidate for the C.I.A. who passes the two initial screenings is given a polygraph test - "fluttered" in C.I.A. jargon. Patti Volz, a C.I.A. spokesman, said Howard's ini- tial polygraph indicated "some drug use." But C.I.A. applicants who admit to using drugs are not automatically disqualified, if they agree to end the practice when hired. Patti Volz said nothing about Howard's alcohol problem. The agency was ently unaware of it. appar- STAT In Country Creek, the young couple kept to them- selves. Howard told the neighbors that he worked for the State Department He jogged regularly on the path behind his house and was seen walking his dog, a German shepherd that he had bought as a pup in Lima. Howard named the dog Whisky. In the fall of 1981, Mary joined the C.I.A. as a regular, full-time employee and, like her husband, was assigned to the agency's clandestine arm. "I wasn't a case officer like Ed," she said. "I was more a secretary. I worked for the D.D.O." The C.I.A. is a closed society, and it is not unusual to find married couples working for the agency. The agency's covert operators also tend to choose their friends among colleagues in the D.D.O. It was there that Howard met William G. Bosch, a 6-foot, 3-inch, blond, balding C.I.A. veteran who had served in the agency's administrative side, then switched to the D.D.O. shortly before Howard joined the C.I.A. They shared a common background. Howard had worked in Lima; Bill Bosch, who was three years older, had served the agency in Bolivia, and like Howard, spoke Spanish. The two became good friends. Howard's career was progressing well He was chosen for a singular honor, servi a in the Soviet European division (S.E.), which covers the Soviet Union and Eastern Europe. "S.E. is the holiest of holies," one veteran case officer explained. "They're a closed, cliquish, incestuous bunch of people. Nobody looks over their shoulder. S.E. screens their own and thumbs their nose at any- body else." By late 1982, Howard had been selected for the most prestigious duty in the D.D.O., assignment to the Moscow station for a two-year term. His cover diplomat in the American Embassy. Why did the C.I.A. choose to send to its most sensitive post a newcomer with no previous experi- ence working as an intelligence officer overseas? William J. Casey, Director of Central Intelligence, and other C.L.A. officials have declined, for the most part, to comment publicly on the Howard case. But Casey has defended privately the deci- sion to send a rookie to Moscow as a common agency practice. The chief of the S.E. division, in a rare appear- ance before a secret session of the Senate Select Committee on Intelligence, gave the agency's standard explanation of what has emerged as a major question in the Howard case. In order to make it more difficult for the KG.B. to identify C.I.A. officers assigned to the Moscow station, the S.E. chief said, the agency chooses junior officers who are not known. Howard, he added, was the first one who had gone bad. Howard was given special training for his Mos- cow assignment. He received careful instruction in the arcane techniques of maintaining the delicate and difficult contact with the C.I.A.'s assets. Mary Howard, too, received training from the C.I.A. to work with her husband in Moscow as a spy. "They like to give some training to wives, short courses," she said. Asked whether it might have included countersurveillance - such as sit- ting in a car and acting as a lookout while her hus- band met with an agent - she replied: "It could have been something like that." Early in 1983, Ed Howard told neighbors he was studying Russian; the State Department was send- ing him to the Soviet Union. The Howards bought a new car and prepared to ship it to Moscow. To build his cover, the C.I.A. gave Howard a cer- tificate identifying him as a Foreign Service offi- cer and appointing him "a Consular Officer and a Secretary" in the diplomatic service. It was dated March 11, 1983, and signed by Ronald Reagan and George P. Shultz. Eight days later, the Howards' son, Lee, was born. Spring was on the way, and the future looked bright. Then the bottom fell out of Ed Howard's life. A second lie-detector test suggested that some of Howard's answers were deceptive. The second polygraph "picked up drugs and petty theft," the C.I.A.'s Patti Volz said. (Howard's family insists that, although he drank, he did not use drugs.) An investigation was launched. Two years later, when Howard fell under suspi- cion of spying for the Soviets, the C.I.A. ordered an internal report by its then-Deputy Inspector Gen- eral, Carroll Hauver. Those who have read the se- cret report say that Howard, when confronted after the polygraph test, admitted using drugs, stealing from vending machines and taking money from a woman's purse aboard an airliner. The C.I.A. decided it could not send Howard to Moscow. In fact, it decided it did not want him in the agency at all. Howard was fired. By June 1983, he was out of a job. He was now walking around with detailed knowledge of the agency's most sensitive operations in Moscow in his head. He was also furious at the C.I.A. Continued 3 Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 Sanitized Copy Approved for Release O CURTIS R. PORTER, STAFF director of the finance committee of the New Mexico state legisla- ture, the young professional who showed up in his office unan- nounced to answer an advertise- ment in The Albuquerque Journal seemed an ideal prospect. The Legislative Finance Committee was looking for an economic ana- lyst, and Edward Howard had the right credentials. Moreover, he was a native of New Mexico. On his resume, he had put down "U.S. Department of State January 1981-June 1983." He was hired. By August, the Howards had sold their house in Virginia and bought a home in El Dorado, a devel- opment 12 miles out in the desert southeast of Santa Fe. With their new baby, they settled down to life in the Sun Belt. Howard's job was to estimate state revenues. Late in October, he flew to Washington for an eco- nomics conference. Apparently still seething at the agency, he spent several hours near the Soviet Em- bassy, trying to decide whether to go inside and re- veal classified information. Meanwhile, Howard's drinking was getting worse. On Feb. 26, 1984, a Sunday night, he was in- volved in a shooting incident with three young men. Ac- cording to the police report, Howard said he had met the men "at a bar and had fol- lowed them home as they had promised him a girlfriend for the night and a good time." But Peter Hughes, then 24, said that he, a friend and their two female companions were never inside the bar, but were in their Jeep, backing out of a motel parking lot, when Howard stared at one of the women, then followed in his own Jeep. Hughes and his friend, joined by a third man, were waiting as Howard walked into the courtyard of Hughes's apartment building. "Suddenly from his back, he pulls out this cannon," Hughes said. "I mean a silver chrome.44 Magnum. An awe- some gun. He says to me,'Get back in the Jeep.- To To Hughes, Howard seemed to have been drink- ing; his speech was slurred. "I'm inside the Jeep and he's pointing the gun at me. His eyes get this blazing look and he starts walking toward me with the gun, pointing it at my head. I think, He's about to pull the trigger. He's going to shoot. The barrel of the gun is coming in the window. So I duck. I grabbed for the gun and it fired, putting a hole in the roof." With Howard disarmed, the youths beat him up; one threw a rock, hitting him on 2010/07/13: CIA-RDP91-00587R000201160025-7 the head. They forced him back to his own Jeep, kicking Mary Howard said they the door several times for first visited friends in Switz- good measure. Then they erland. "We visited Zurich called the police, who found and Lucerne and then de. Howard, bloodied, a block cided to go to Austria and away. He was placed under then Milan.'. But she insisted arrest for aggravated assault with a deadly weapon. For Santa Fe District At- torney Eloy F. Martinez, the case was a problem. On the one side was Peter Hughes, whose family was well known in the city - his father, who had been a prisoner of war in Vietnam, had run, albeit un- successfully, for the Republi- can nomination for Governor a decade earlier. On the other side was Howard, who produced letters of support from powerful state legisla- tors and officials in Washing- ton. Martinez said that he briefly considered prosecut- ing Howard for attempted murder. But Howard hired Santa Fe attorney Morton S. Simon, who, by working out a plea bargain, managed to keep the case almost entirely out of the papers. On April 23, Howard pleaded guilty to charges of aggravated as- sault before Judge Bruce E. Kaufman, who sentenced him to five years probation and ordered that he pay $7,500 to Hughes. Both Martinez and Kaufman denied published reports that the C.I.A. con- tacted them or tried to influ- ence the case on Howard's behalf. Howard had voluntarily en- tered a counseling program for state employees, where Neil Berman, a clinical social worker, treated him for alco- holism for the next year and a half. Psychologist Elliot J. Rapoport conducted a court- ordered psychological evalu- ation; his report found that Howard had been through a period of unusual stress and "problem drinking," but was "not otherwise criminally ori- ented." He recommended that Howard remain in the state counseling program. On Sept. 18, the Howards left for a one-week trip to Eu- rope. According to Vitaly Yurchenko, it was in the fall of 1984 that "Robert" met the K.G.B. in Austria and sold C.I.A. secrets. The F.B.I. es- tablished that the Howards were in St. Anton, Austria, on Sept. 20, 1984, although the bureau has not said whether it believes that was the date Howard met with the K.G.B. that they chose St. Anton at random. "We were just driv- ing around, and it was getting toward dusk and it looked like a pretty little town," she said. "I'm not aware of any goings- on in St. Anton." "We had a disagreement," she said. "Our fights were usually over his drinking. He took off in the car. I could see him drive away from the win- dow. He drove around in the car." Could Howard have met the Russians then? "He was only gone a short time," she replied, "perhaps 10 or 15 minutes." She added that they did not stay overnight anywhere else in Austria. The Howards were back in the United States on Sept. 24, for on that date, Howard met with two current C.I.A. em- Ployees - perhaps at C.I.A. headquarters - and told them how he had lingered outside the Soviet Embassy almost a year earlier, in Oc- tober 1983, but did not enter. Now Howard, a former C.I.A. officer with knowledge of top-secret data, had admit- ted that he had contemplated betraying his country. The C.I.A. insists that the two em- ployees reported Howard's story to the proper agency of- ficials. But for almost a year, y those officials sat on that ex- plosive information and failed to pass it on to the F.B.I. The C.I.A. will not say whether disciplinary action was taken against the offi- cials. Howard may have con- fessed the embassy incident as part of a plea to the C.I.A. to pay for psychiatric treat- ment. Howard did see a pri- vate psychiatrist in Santa Fe for a period of time and the C.I.A. Paid for his visits. Howard was still acting like a man under a great deal of stress. On a business trip to Boston the next month, Curtis Porter of the finance commit. tee found Howard in his hotel room with a bandaged head; he claimed he had walked into a glass door and been given pain killers at the hos- pital. Later, Howard abruptly left a banquet and Porter found him packing and on the phone trying to make plane I Continued Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 reservations to Austria. Re- called Porter. "He said, 'Sorry, I got crazy with the pain killers and booze. Don't worry, Mary knows every time I get drunk I try to go to Vienna.' " But Howard did not go; he realized he had no passport with him. Kate and Bob Gallegos worked in Howard's office and lived in El Dorado; the two couples were friends. Bob Gallegos said that How- ard once showed him a stack of Krugerrands worth per- haps $2,400. Gallegos also claimed that Howard "was having several affairs" with women in the office. Other friends say they were un- aware of Howard's alleged womanizing, although one said he knew of a single "spo- radic" affair. In the spring of 1985, friends say, the Howards vis- ited Europe again. Dennis Hazlett, a co-worker, said Howard came back with a Rolex watch and intimated he had been to Vienna. O N JUNE 14, 1985, Tass, the Soviet news agency, announced that Paul M. Stombaugh, a "second secretary" at the United States Embassy in Moscow, was being expelled as a spy. Three months later the Russians disclosed that they had also arrested Toika- chev, the Soviet researcher, as he attempted to pass se- cret documents to Stom- baugh. American intelligence offi- cials later confirmed that Tolkachev was an expert on "stealth" technology to con- ceal aircraft and missiles from radar, and had been one of the C.I.A.'s most valuable assets in Moscow. They also claimed that Tolkachev had been betrayed by Edward Lee Howard. In July, Howard went to South Padre Island, to visit Bill Bosch. Bosch, too, had gotten into trouble with the C.I.A. after questions had been raised about alleged currency transactions in South America, according to intelligence officials. "He was dismissed by the C.I.A., or left before they could fire him," a senior intelligence source said. It was on this visit, Bosch was later to tell the F.B.I., that Howard confessed his spying for the Russians and discussed plans for future contacts with Soviet officials. According to intelligence offi- cials, the two' ex-C.I.A. offi- cers discussed taking a trip to the Soviet Embassy in Mexico City, a trip that Bosch said did not take place. Bosch now lives in Laguna Beach, Calif., a resort about one-and-a-half hours south of Los Angeles. Although an old and established town, Laguna Beach is also known as a home to young singles and transients - a place where people can come and go with relative ease and not attract attention. Bosch rents a small, inex- pensive room on the first floor of an old, two-story brown-shingle house that has been converted into apart- ments and is set back from the street, surrounded by trees, two blocks from the Pacific Ocean. According to a neighbor, Bosch is "a nice guy, a quiet guy," who drives a Porsche and is "here at night some- times, but not here often." Other neighbors in his build- ing and adjacent houses said they did not know him. At- tempts to contact Bosch in person proved unavailing; reached by telephone, he de- clined to be interviewed. "I have no comment," he said, "either on or off the record." O N JULY 27, 1985, the Gallegoses went to the Howards' home for dinner. Howard and his son Lee modeled two fur hats, Bob Gallegos said. "They were in a box with Russian writing. He said he had asked a friend in the State Depart- ment to send them to him." Gallegos said he has an indel- ible memory of Howard standing izEide the house "wearing gym shorts and a fur hat, smoking a cigar and drinking a St. Pauli Girl." Five days later, Vitaly Yur- chenko vanished in Rome. The C.I.A. called in the F.B.I. T HE CASE COULD Bence was not enough. "yur- not have come at a chenko never saw him," Geer worse time for James said. "He didn't know him by H. Geer. On Aug. 5, 1985, his name. It was a circumstan- first day as assistant director tial case. You have to have of the F.B.I. in charge of the much more than one man's intelligence division, the word. Yurchenko did not even Howard case landed on his have a physical description." desk at bureau headquarters Parker, now retired, was in Washington. It was Geer's ; equally emphatic that the job to catch foreign agents. Geer, then 45 and a 21-year veteran of the F.B.I., was con- fronted with a major and potentially explosive counter. intelligence case. Geer called in Phillip A. Parker, the division's deputy director for operations. Park- er, 49, had worked on foreign counterintelligence cases for most of his 20 years in the F.B.I., and he had been the No. 2 man in the division for three years. Parker notified William D. Branon, who had just taken over the F.B.I.'s Albuquerque office. F.B.I. agents from sev- eral other cities were brought in to assist him. Within a few days, a small army of F.B.I. agents was deployed in Albu- querque and in Santa Fe, 60 miles to the north. The F.B.I. began watching Howard, but there were prob- lems. The Howards lived at 108 Verano Loop, a circular road of widely spaced, mock- adobe houses, where strang- ers are quickly spotted. Ironi- cally, Thomas (Bill) Gilles- pie, one of the four resident F.B.I. agents in Santa Fe, lived two houses away from the Howards, at 112 Verano Loop. It was a perfect loca- tion for surveillance. But Gil- lespie had just sold his house, and the new owners had moved in on Aug. 4, the day before the F.B.I. got the case. So the house was not avail- able. The F.B.I. did not, in fact, use any house as an ob- servation post. Whether it employed "special coverage" - agents posing as a street repair crew, telephone line- men or the like - is not known. What is known is that the Howard residence was placed under surveillance. The legal problem was even more formidable. "We had no probable cause to ar- rest Howard," Geer ex- plained. Yurchenko's evi- F.B.I. had no immediate basis for arresting Howard. The F.B.I. needed more evi- dence. The bureau applied for and got a wiretap warrant from a special seven-mem- ber court established in 1978 by the Foreign Intelligence Surveillance Act. By the beginning of Sep- tember, wiretaps were in place on the Howards' home telephone. The results were disappointing. Howard said nothing incriminating. By Thursday, Sept. 19, the F.B.I. had made the decision to confront Howard directly. Still lacking probable cause to arrest the ex-C.I.A. man, the bureau hoped that How- ard himself might provide the necessary evidence. The decision to approach Howard was made by Parker. There was a risk, he knew, that Howard might run, although it seemed minimal, given the round-the-clock surveillance then in place. The interview technique had worked in the past, and was used to convict Ronald Pelton, the other man named by Yurchenko. That morning, an F.B.I. agent telephoned Howard at his office and asked to inter- view him. Within the hour, Howard met with the agent at the Hilton Inn, but he refused to say anything of substance. The F.B.I. now switched to what it calls a "nondiscreet" surveillance. The agents fol- lowing Howard no longer tried to blend in with the crowd. On Friday, Sept. 20, Howard walked up to one of the now-obvious agents on the street and asked to see the agent who had tried to inter- view him the day before. An- other brief meeting took place, and Howard sounded more cooperative. He told the agent that he wanted time to get a lawyer and would meet with the F.B.I. the following week. Word was sent back to F.B.I. headquarters - that Howard might be getting ready to talk. Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 Sanitized Copy Approved for Release 2010/07/13 : That tr riday morning, rant in Santa Fe where they Philip M. Baca was getting would be. In a few moments, nervous. Baca, the new direc- the sitter heard the car pull tor of the Legislative Finance out of the garage. Committee, had been visited What happened next is baf- the day before by two F.B.I. fling, either a mix-up in com- agents, who asked for munication. or human error. records on Howard. The 8:30 Only one F.B.I. surveillance A.M. staff briefing of the agent was on duty, several committee, to prepare the hundred feet from the How- lawmakers for a 9 A.M. pub- and house. Although it was lic hearing, was about to be- about 4:30 P.M., and broad gin and Ed Howard was un- daylight, the Howards drove characteristically late. He fi- away in their dark red 1979 nally arrived at the office at Oldsmobile undetected. 8:25 A.M. "He did a beautiful Ed and Mary Howard left briefing on the 18-month eco- El Dorado and swung onto In- nomic outlook," Baca said. terstate Highway 25, heading "He had graphs. During the northwest for Santa Fe. hearing, some questions Other F.B.I. agents were came up o i the price of oil. I spread out in cars a few miles He an.;wered them and was completely calm." On the morning of Satur- day, Sept. 21, Howard went into his office at the capitol. F.B.I. agents followed him. What they did not yet know was that he would write two letters in his office that day. "We did a lot of talking that weekend," Mary Howard re- called. Howard had told her of the approach by the F.B.I. It was, she said, the first she knew he was in trouble. "It away, awaiting word by radio to move out and follow the Howards. The signal never came. Around 6 P.M., Gina Jack- son walked a block to the Carisons with Lee. She watched while Lee and the two young Carlson boys, Zac and Jonathan, played with water in the bathtub. An hour later, around 7 P.M., the Howards drove from the restaurant where they had dined. In the dark- was like a nightmare," she ness, somewhere in the down- said. "It's very traumatic town area, Ed Howard " " ' still. But, she added, I don t have any knowledge he spied." At 3 P.M., Rosa Carlson got a telephone call from her neighbor, Mary Howard. As they had the same baby sitter that afternoon, would it be all right if the sitter walked over with Lee to the Carlsons and combined the job? Mrs. Carl- son said that would be fine. At 4 P.M., 16-year-old Gina Jackson arrived at the How- ards'. Mary Howard did not stop to chat with her in her usual friendly manner. In- stead, she led Gina and Lee directly out back to the patio. "As I went through the house," Gina Jackson said, "I thought I heard two people talking. Out of the corner of my eye I saw a completely bald-headed person standing in the entranceway between the den and living room." Later, Gina said, "the F.B.I. told me it wasn't two men talking, it was Ed Howard with a tape recorder and a dummy." On the patio, Mary Howard seemed distracted. She did not provide the sitter with a phone number but told her the name of a Spanish restau- jumped from the slowly mov- ing car into a "blind spot," as he had been trained to do at the Farm. It was the last time Mary saw him. When Mary Howard ar- rived back home around 7:20 P.M., there was a dummy in the passenger seat in place of her husband. It was made of clothes shaped into a human form, topped with a faceless wig stand. Atop the wig stand was some sort of headgear. (Mary Howard said pub- lished reports that she had used an inflatable dummy were "not true.") The surveillance agent on duty was surprised to see the Howards returning, since he had not seen them leave - surprised but relieved, since they were together. Ed How- ard seemed to be wearing a hat, but in the dark, the F.B.I. man could not be sure. The automatic garage door opened, and Mary Howard drove inside. She drove out a few minutes later, alone. She arrived at the Carisons' house at 7:30 P.M. to pick up Lee, then drove back to their house and into the garage. The surveillance agent duti- fully logged them in. That night, Mary Howard carried out another ruse that her husband had planned with her. The ex-C.I.A. man had recorded his voice on the tape recorder. Following his instructions, Mary dialed a business office where the Howards knew she would reach an answering machine. At the beep, Mary held the tape recorder next to the tele- phone and pressed the "play" button. F.B.I. agents listening in "live" heard Howard con- firm an upcoming appoint- ment and were reassured; their target was still at home and staying in town. BACK IN WASHINGTON that Saturday evening, F.B.I. agents in the intelligence division were excited; it ap- peared they might finally be getting the evidence they needed to seek a warrant for Howard's arrest. The F.B.I. had tracked down William Bosch on South Padre Island. The bureau had discovered that Howard had been in touch with Bosch, lo- cated him with the help of long-distance toll-call records, and learned of his background from the C.I.A. F.B.I. agents had moved in and begun qu=.stioning him intensively in midweek. Gradually, Bosch's story was unfolding. According to intelligence officials, Bosch said that Howard had made more than one trip to South Padre Is- land to see him; in July, How- ard had come to the island and told Bosch he had sold C.I.A. data to the Russians, and the two men had had the discussion of Howard's plan to visit the Soviet Embassy in Mexico City. There was no secure phone line on South Padre Island, so the electrifying reports of Bosch's interrogation had to be driven 300 miles to the F.B.I. office in San Antonio, then teletyped to the intelli- gence division on the fourth floor of F.B.I. headquarters. James Geer said it was midnight in Washington, two hours later than in Santa Fe, before the F.B.I. decided it now had probable cause to seek a warrant for the arrest of Edward Howard. It could not be obtained at that hour, on a weekend, but there was no reason to worry. The lights had gone out at 108 Verano Loop. The surveillance was still in place in the desert, and the Howards were safely tucked away for the night. L ATE ON SUNDAY AF- ternoon, Phil Baca went into the office unexpectedly. On his desk, he found an envelope, and, inside it, a letter of resignation from Ed Howard, along with the keys to the office and a smaller envelope addressed to Mary, which Baca did not open. He called the F.B.I. "I told them Ed Howard had re- signed," Baca said. The F.B.I. was stunned. Agents rang the doorbell at Howard's house and learned from Mary that Howard was gone. Mary Howard turned her husband's letter over to the F.B.I. One cryptic line in the letter, not previously known, said. "National se- curity is like holding a royal Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7 flush in Santa Fe." The note also said, in part: "Well, I'm going and maybe I'll give them what they think I al- ready gave them," and instructed Mary to "sell the house, Jeep, etc., and move with one of our parents and be happy." Howard also told Mary to tell Lee that "I think of him and you each day until I die." By the time the F.B.I. realized that Howard had vanished, he had a 24- hour head start. Bureau officials be- lieve he flew from Albuquerque, to New York, to Helsinki, and then crossed the border into the Soviet Union. On Monday, Sept. 23, the F.B.I. fi- nally got its arrest warrant from a United States magistrate in Albu- querque. Howard called Mary once, the fol- lowing month, but did not say where he was. In the spring, he sent her a letter, postmarked Vienna. On Aug. 7, 1986, Howard surfaced in Moscow. for his psychiatric counseling after it was too late. Most astonishing of all, when Howard confessed to the agency that he had contemplated en- tering the Soviet Embassy in Wash- ington to sell secrets, the C.I.A. sat on that information for almost a year be- fore telling the F.B.I. Finally, after Howard was fired, the C.I.A. ne- glected to recover both his diplomatic passport and a false-name passport he had been issued by the Clandestine Services. Within the intelligence community, some of the heat in the Howard case has been taken by Clair E. George, the C.I.A.'s Deputy Director for Operations, and certainly the affair suggests that the agency's clandes- tine arm performed sloppily. But the case also appears to illustrate loop- holes in the agency's personnel and hiring policies and a lack of coordina- tion between its medical and security offices. It suggests that, in order to avoid embarrassment, the agency at- tempted to suppress at any cost what eventually turned into a major spy scandal. For its part, the F.B.I. was vastly embarrassed that Howard got away, a fact that F.B.I. director William H. Webster calls an "aberration." James Geer, the head of the F.B.I.'s intelligence division, while conceding a mistake "at our on-the-scene opera- tions," sees "no institutional weak- ness," and cites the F.B.I.'s success in rounding up several other spies in the same year that Howard escaped. Howard's motive remains unclear. He was angry at the C.I.A., but had no apparent ideological sympathy for the Soviet Union. Dennis Hazlett, his friend, said Howard seemed, if any- thing, conservative, patriotic, "a little Reaganite in his views." "I love my country," Howard said on Soviet television on Sept. 14 of this year. "I have never done anything that might harm my country." If Howard was paid large amounts of money for his information, the F.B.I. has been unable to trace it. "We just don't know where the money is, if he got it," one senior F.B.I. man said. Mary Howard said: "I never saw un- usual amounts of money," nor any Krugerrands. They lived on her hus- band's $33,012-a-year salary, she said. "If he did anything," Kenneth How- ard said, ,it was through revenge or anger at what the agency did to him." Edward Howard's father has even wondered whether the C.I.A. "might be playing some strange games," whether perhaps his son was still working for the agency. Others have also wondered if Howard was allowed to escape and is a double agent. But F.B.I. officials scoff at that idea. Edward Howard is a man caught between the superpowers. He faces a bleak future in an alien land, joining the dubious roll call of defectors who have taken refuge behind the Iron Curtain: Kim Philby, Guy Burgess, Donald Maclean, George Blake. None are ever fully trusted by the K.G.B. Or Howard can come home one day, if the Russians will let him, to face a possible sentence of life imprison- ment. The bottom line, however, is that he has escaped. The F.B.I. is bitter about that, although it takes a certain per- verse pride in Howard's skill at coun- tersurveillance, which he had learned at the Farm from the bureau's in- structors. "After all," one F.B.I. agent said, "we trained him." ^ E DWARD HOWARD HAS been charged with espionage. Intelligence officials say the damage he did to the C.I.A.'s Soviet operations was enormous. Some sources have suggested that the dam- age continued beyond Tolkachev, the C.I.A. agent executed by Moscow. On March 14 of this year, Tass an- nounced that Michael Sellers, Second Secretary of the United States Em- bassy in Moscow, was being expelled for espionage. On May 7, the Russians said, Erik Sites, listed as a civilian employee of the embassy's military attache office, strolled along Malaya Priogovskaya street to contact a Soviet C.I.A. asset when the K.G.B. closed in. Sites's wife, Ursula, was waiting nearby as a lookout, the Rus- sians said. Sites, too, was expelled. Certainly, the Howard case ex- posed major flaws inside the C.I.A. The agency hired a man who drank heavily and, according to the agency at least, used drugs. It ignored early warnings on his first polygraph test. It selected him for its most sensitive post, despite his lack of experience. Then, when it discovered he had seri- ous character defects and problems, it fired him instead of easing him into another job where he might have posed less of a security risk. It paid David Wise is the author of several nonfiction books about intelligence and of "The Samarkand Dimension," a novel of espionage to be published by Doubleday & Company in April. Sanitized Copy Approved for Release 2010/07/13: CIA-RDP91-00587R000201160025-7