Cassidy's Run: The Secret Spy War over Nerve Gas

^{CHAPTER: 6} THE DECEPTION

Joe Cassidy was a plainspoken man, not by nature guileful. But the FBI agents who originally recruited him had unexpected good fortune; the modest master sergeant possessed the one quality that would carry him through. Joe Cassidy was a natural actor.

And that quality was precisely what the FBI was counting on as the bureau and intelligence officials in the Defense Department began planning the deception late in 1965.

In intelligence operations, deception material is also known as disinformation. Ironically, the very word disinformation, although adopted by U.S. counterintelligence, appears to have originated with the Russian word dezinformatsiya.[1]

In 1959, the KGB created a disinformation department known as Department D, part of the First Chief Directorate (FCD), headed by General Ivan I. Agayants. Its duties included fabricating documents and planting false intelligence to confuse and mislead foreign governments.

In the Pentagon, an elaborate machinery existed to create and approve disinformation. False information was controlled by a whole series of secret boards under J-3, the operations umbrella of the Joint Chiefs. The FBI’s requests for deception material dealing with nerve gas were referred to one arm of J-3, the United States Evaluation Board (USEB), a little-known interagency intelligence committee. Its members were the heads of the intelligence organizations of the military services, along with representatives from the FBI and the CIA.

The USEB was the first panel to rule on any deception operation that involved the military. After the USEB, the proposal moved over to another unit under J-3, the Special Assistant for Clandestine and Special Activity (SACSA). After SACSA approved the plan, since SHOCKER was an army project, it was sent to the army’s deputy chief of staff for operations (DCSOPS, pronounced “dess-ops”). Finally, after DCSOPS signed off on the proposal, it moved to the army’s Office of the Chief of Research and Development (OCRD), which prepared the feed for the FBI.[2]

At FBI headquarters, the deception operation was supervised by Eugene C. Peterson, a veteran counterintelligence agent in the Soviet section. A big, burly, professional counterspy, Peterson had the face of a boxer—a broad pug nose with a horizontal scar between intent blue eyes, a face with a lot of miles on it. In the course of his twenty-eight-year career with the FBI, he worked on most of the major Soviet cases of the cold war.

Despite his tough-looking exterior, Peterson was an affable, pleasant man from Aberdeen, South Dakota, where his father drove a laundry truck and his mother worked as the firm’s bookkeeper. Peterson enlisted in the army air corps out of high school, then graduated from Northern State Teachers College in Aberdeen in 1951 and joined the FBI. He began his counterintelligence career in Puerto Rico in 1960. Four years later, Peterson was transferred to headquarters to work against Soviet spies. He rose to chief of the Soviet section in 1976.

Although an elaborate structure of Pentagon boards and committees had approved SHOCKER, the actual control of the operation rested in the hands of a small number of people—Peterson at FBI headquarters, successive case agents at the Washington field office, and across the Potomac in the Pentagon, Taro Yoshihashi, the army’s top counterespionage expert. A quiet, self-effacing man who worked deep in the intelligence bureaucracy, Yoshihashi was a double-agent specialist and thus the FBI’s point of contact inside the Defense Department.

Born in Hollywood, California, to a Japanese-American family, Yoshihashi earned a degree in psychology from the University of California at Los Angeles and joined the army in 1942, not long before the rest of his family was evacuated to a relocation camp in Cody, Wyoming. Assigned to General Douglas MacArthur’s headquarters in Brisbane, Australia, Yoshihashi maintained files on all Japanese Army units with the help of MAGIC, the decrypted messages obtained after the United States broke the Japanese code.

After the war, the army sent him to investigate the biologicalwarfare experiments conducted by the Japanese against civilians in Manchuria. He was assigned to the Pentagon in 1968. As a double-agent specialist, Yoshihashi was also the army’s representative on the staff of USEB.

As in the case of many obscure government panels, USEB’s staff really ran it. “In the five years I was there,” Yoshihashi recalled, “the principals at USEB only met once, in January of 1972. The meeting was in the basement of the Pentagon in one of the J-3 offices.” James J. Angleton, the CIA’s controversial chief of counterintelligence, showed up for the rare meeting. Angleton, who trusted no one, had nearly destroyed the CIA trying to unearth moles who he was convinced were burrowing away inside the agency.

At the meeting, he was true to form. “Angleton was the agency representative. At one point he said, ‘I have a lot of interesting information I could give you, but I’m not sure about your security here.’ I thought, what a lot of b.s.”

Although the CIA, through its membership on USEB, was aware of the nerve-gas deception, it exercised no operational control. In the jargon of the intelligence world, Cassidy was the FBI’s “asset,” not the CIA’s, nor the army’s.

“The army’s role was merely providing support,” Yoshihashi noted. “It was a bureau operation. I would get requests from Gene Peterson.

“The bureau would bring in documents from Edgewood and say can we release these? Gene or the bureau’s liaison agent would bring the documents over to the Pentagon. Then I would go to DCSOPS for approval. In some cases, I would make a recommendation that material should not be released. Most of the documents that we approved, except for the deception, were true information.”

Yoshihashi and Peterson, while responsible along with a few other officials for managing the operation, did not deal directly with Cassidy. That was the job of the case agents in the field. And during the deception phase of SHOCKER, that meant Jimmy Morrissey.

In the fall of 1964, a major shift of positions had occurred in the FBI’s Washington field office. Ludwig Oberndorf, the counterintelligence chief, was assigned to headquarters. Special Agent William J. Lander took over S-3, the GRU squad. At the same time, Donald Gruentzel, who had been Cassidy’s case agent, was promoted to supervisor of S-2, the KGB squad. It thus fell to Jimmy Morrissey to run Cassidy during the most sensitive phase of the operation.

In its final form, the plan was, in a sense, a triple deception. “There were G-series gases up to letter H,” Yoshihashi said. “The deception was to say we now have GJ. It was fictitious.” Secondly, the claim of a new and powerful GJ nerve gas might lead Moscow to conclude, by implication, that the Edgewood scientists had also created a nerve gas labeled GI. The third aspect of the deception was that the bogus documents to be passed to Moscow by Cassidy were also to reveal that GJ existed in binary form.

The decision to tell the Soviet Union about a breakthrough nerve gas designated GJ had a grain of truth embedded within it, since the Edgewood scientists had in fact tried to do so and failed. The effort had taken place, but the results disclosed to the GRU were false.

Most former officials privy to the deception declined to discuss it. One ex-FBI agent familiar with Operation SHOCKER, however, agreed to talk about the deception, the most sensitive phase of the long-running case, on the condition that he not be named. “We had spent a lot of money, and we thought, hell, make them do it. It was hoped the operation would lead the Soviets in turn to spend time and resources on trying to develop the same weapons system, in binary form. It was a ‘we tried and couldn’t so let’s make them spend money on it’ attitude.”

The FBI’s files confirm this purpose. In December 1965, FBI headquarters informed the Washington field office that the deception operation had been authorized based on material developed by the army. The deception would involve a lethal chemical agent, many times more effective than any then available. For #8220;technical” reasons, it was said, the United States had decided not to deploy this weapon but would pass the information to the Soviet Union in a controlled manner. The objective was to cause the Soviets to conduct extensive research and to commit money, personnel, training, and material to replicate or defend against a chemical agent that the United States had not actually produced and therefore had no intention of using.

Another former FBI official, who also insisted on anonymity, was willing, cautiously, to describe the nerve gas that the Soviets were led to believe had been developed. “It was very unstable and could not be stored, so it could not be put in a weapon. It would not maintain its toxicity. And there was no antidote for it. So the idea was, we give it to the Soviets, they make it, and then discover it’s unstable and no antidote exists, so it can’t be used. Because how would they protect their own troops?”

Now the double-agent operation had escalated into a risky, highstakes gamble. For at its core, the deception over nerve gas was designed to mislead Moscow into believing that the United States was ahead in the chemical-warfare arms race.

Any deception operation carries with it a risk. The documents passed by Cassidy to Mikhail Danilin contained enough true information mixed in with the false to get the Russians to believe all of it. The risk was that Soviet scientists might find the true information valuable and use it to make breakthroughs that had eluded America’s scientists.

The Joint Chiefs, the army, and the FBI agents who actually ran the operation knew and weighed the danger. But they also knew that the Soviets were already engaged in full-scale research and production of nerve gases. The competition between the two countries to develop newer and more lethal nerve gases was already a reality. Because of that, the officials in Washington reasoned, it was worth the risk to try to lead the Soviets down an expensive false trail.

Another ex-FBI official said the scientists had reassured the bureau that the formula could safely be passed. “We were assured it wouldn’t work,” he said. “So it sounds great and looks great, but it will break down at the end. It was made in the lab but never put into production.” Had the bureau considered the risks? “Yes,” he replied, “they did, but since they were assured it wouldn’t work, they felt it would be OK.”

One of those who worried about where the operation might lead was Henry Anthony Strecker, who served in a senior post in army intelligence at the time.[3]

The whole business made Harry Strecker nervous. “I remember sitting in on a bureau briefing with Gene Peterson where they talked about an operation out of Edgewood,” he said. “We called it spiel material, which means ‘play’ material. I remember a nerve gas we didn’t make. Someone at the briefing expressed concern that if we drove the Soviets to looking into a bogus formula, is there a legitimate concern we might drive them to a breakthrough we don’t want them to have?”