Deception

⁶ Spies Like Us

Gathered in the same room, Richard and Cynthia Murphy, Donald Heathfield and Anne Foley, Juan Lazaro, Vicky Peláez, Michael Zottoli and Patricia Mills, Mikhail Semenko and Anna Chapman would have seemed like a bunch of unremarkable Americans. They spoke English fluently, with varying accents; they had jobs ranging from the humdrum to the glamorous. Their neighbours and work colleagues noticed nothing extraordinary about them. But when they did meet for the first time, it was in a courtroom, shortly before their deportation to Russia. The ten were at the centre of the FBI’s most spectacular and successful counter-intelligence operation for decades: Operation Ghost Stories. According to the American authorities’ criminal complaints, they and persons unknown

It stated that the FBI’s investigation has revealed that

Richard and Cynthia Murphy lived in the New York suburb of Montclair.² She had two undergraduate degrees from New York University and an MBA from Columbia Business School, and she worked in a financial services firm in New York. Her stocky, bearded husband had studied economics at the New School in New York, where his heavy accent and gloomy manner aroused only mild curiosity. Nina Khrushcheva, his Soviet-born supervisor, was puzzled by his claim to be of Irish extraction; to her well-tuned ear he sounded ‘instantly Russian’.³ But America is built on the idea that people can reinvent themselves, shedding identities from the old world and adopting new ones. Murphy was no different. Nothing else he did seemed to arouse any interest at all. As far as any outsider could see his main job was caring for the couple’s young daughters Katie and Lisa, aged eleven and seven in June 2010. That was when their parents – real names Vladimir and Lidiya Guryev – were arrested.

Murphy’s mission in America was unexciting, ferrying cash to other illegals. His wife had a more glamorous life at Morea Financial Services, a specialist tax firm dealing with the rich and famous. That was a perfect cover for her clandestine mission, to befriend wealthy Americans with political connections – including Alan Patricof, a close friend of Hillary Clinton. According to the criminal complaint issued by the Department of Justice, Mrs Murphy’s bosses in Moscow described Mr Patricof as:

Two more of the illegals were equally unremarkable. Michael Zottoli and Patricia Mills (real names Mikhail Kutsik and Natalya Pereverzeva) studied and worked in Seattle before moving to Arlington, Virginia. Their task, as reported by the FBI, was also little more than to ferry sums of money around between other agents. The supposedly Uruguayan-born Juan Lazaro (Mikhail Vasenkov) was a ‘bag man’ too, bringing money from an unnamed South American country to America, apparently in collaboration with his wife, a radical Peruvian journalist called Vicky Peláez. His illegal mission had started in 1976.⁵ It clearly included some spying, as this bugged exchange from 2003, involving his wife’s trip to an unnamed South American country, indicates.

It is easy to mock the pointlessness of these people, apparently the least serious of the illegals, sent at vast trouble and expense to a foreign country in order to carry out tasks that most people manage with a mouse click. But it is not a laughing matter.⁷

By far the most serious of the spies in terms of intellectual firepower and access to decision-makers in America and elsewhere was Andrei Bezrukov, who lived in Cambridge, Massachusetts under the alias of Donald Howard Heathfield, with his wife Yelena Vavilova (Tracey Lee Ann Foley). The elder of their two sons, Tim, was a student at Georgetown University in Washington, DC. Ms Foley was a real-estate broker. Her website carried convincing if fictional pabulum, describing her as:

Her husband’s cover story was similar: bland and at least superficially convincing. Months after his deportation, his website www.futuremap.com was still promoting his consultancy firm’s expertise:

Behind this waffle was a serious mission. Heathfield, in the view of American officials close to the case, was by far the most important of the spies they had under surveillance. His cover story gave him an entry into the highest levels of American business, academia and government, and a convincing reason for seeking the innermost thoughts of the people at the top of any organisation. For Heathfield’s career was only partly phoney. Although he used the stolen birth certificate of a Canadian baby who died in 1963, his qualifications were genuine. He had indeed studied international economics at York University in Toronto,¹⁰ earned a master’s degree in public administration from Harvard’s John F. Kennedy School and worked as a management consultant.

His striking quality was blandness: not one of the dozen or so associates I have quizzed can remember a distinctive quirk, foible or habit that made him stand out. He was bilingual in French and English (although with a faint accent in both). He joined professional bodies on his own merits, and networked assiduously with alumni, colleagues and other business associates. For Heathfield did not just pretend to be a management expert: he actually became one. He is probably the only spy in history to write an academic paper as part of his cover story. It appears as a chapter in Scenarios for Success,¹¹ a collection of papers originally presented at a ‘Future Studies’ meeting in Oxford in 2005. One of the editors of the volume, Bill Sharpe, recalls a colleague ‘deeply involved in the subject’ and a friendly and collaborative editing process¹² that mainly involved the ‘debranding’ of Heathfield’s work – in other words removing the frequent references to his trademarked ‘FutureMap’ decision-mapping software. Piquantly, Heathfield seems to have become rather fond of his assumed identity. ‘I know it was his cover but it bled through the surface and got into his soul,’ says a former associate.¹³ Since his return to Russia, he has tried to reknit the shreds of his reputation. His profile on LinkedIn, a business-networking site, has been updated with his new job, as an adviser to the chief executive of Rosneft, an oil company with close ties to the Kremlin.¹⁴ But it also gives a fragment of his real life: five years studying history at the Tomsk State University, from 1978 to 1983 (though what he did between graduating and appearing in Canada in 1992 remains a mystery).[33]

Aficionados of ‘Future Studies’ believe that it offers organisations useful tools for analysing the future. Critics dismiss it as ‘bullshitology’ – a caricature of management expertise, laden with buzzwords, clichés and impenetrable jargon, both sententious and unfalsifiable. But in a country like America where management expertise is a kind of lay priesthood, its practice gave Heathfield access to the secrets of the confessional. When Bill Sharpe heard of Heathfield’s arrest, he realised what ‘jolly good cover’ his contributor’s role would have been:

Another business associate says Heathfield’s sales pitch, always to people at the top, was, in effect, ‘I have created a black box that helps you mitigate risk and plan for the future.’ They merely had to tell him their secrets and fears. Heathfield’s software product was professionally designed by a reputable company at substantial cost. But was it any good? Like much other expensive material bought by business executives, the data produced by Heathfield’s software may have been less a real tool for decision-making than ammunition for boardroom battles. Among the experts he showed it to was Yaneer Bar-Yam, a physicist and the founding president of the New England Complex Systems Institute, who politely describes it as a ‘working prototype’ rather than a breakthrough:

Stripped of its jargon, the software pictured priorities and approaches inside an organisation, with the aim of getting people with different viewpoints to work together. Heathfield’s intern, who used the software for a university project, remembers it less than fondly:

Despite its flaws, the software may have been designed to provide its promoter, not its users, with insights. Jerome Glenn of the Millennium Project, a UN-linked outfit that ponders the future with help from forty ‘nodes’ around the world, recalls meeting Heathfield exhibiting his software at a conference in 2007. Keen to see his product used at the prestigious project, Heathfield offered it free of charge. Mr Glenn also found it unsatisfactory and did not want to spend time learning to use it. Heathfield was indefatigable, returning every two or three weeks to press his case and ultimately offering to provide an intern, whom he paid $500 a month in order to promote the software inside the project. Even that was not enough to clinch the deal.

But his consulting work provided a good vantage point. ‘It’s a smart strategy to monitor the think tanks that monitor global change,’ says Mr Glenn. Had he known that Heathfield was a Russian he would have taken immediate steps to have the software checked, he says.¹⁸ The advantages for a spy of having a proprietory programme installed on important people’s computers in places ranging from Iran (where the Millennium Project has a ‘node’) to Beijing barely need stating. Even if the software is initially innocuous, an ‘update’ can deliver a piece of malware (malign code) that could copy emails, search a computer or a network for key-words, upload files to a remote server, or steal passwords. Leaving electronic espionage aside, Heathfield’s work also provided a laissez-passer to business, academia and government. A case study cited in his published chapter involved:

It is easy to see how useful such access would be. Students involved in such a project would be prime recruitment targets: the sort of people likely to move onwards and upwards in America’s defence, security and foreign policy establishment. Faculty members at Georgetown would also be well worth getting to know, in order to tap their past government experience – or their future roles. Mr Fuerth is a well-connected figure in Washington, DC. His version of events is as follows:

Mr Fuerth may well have had little time for Heathfield. But the Russian spy’s bosses were clearly interested in Mr Fuerth. He appears to be the person named as ‘Cat’ in encrypted communications to Heathfield from the Moscow headquarters of Russia’s Foreign Intelligence Service. They encouraged him to continue cultivating the source.²¹ However in this case the main role played by Mr Fuerth and the George Washington University may have been in bolstering Heathfield’s credentials, rather than in active intelligence gathering. His long-term mission may have been to move closer to the national-security world – always the prime target in Russian eyes. Professor William Halal of Techcast, a forecasting outfit, used to see Heathfield regularly during his frequent trips to Washington, DC. ‘He tried to meet anyone who was doing anything of consequence,’ he recalls.²² Heathfield also discussed with him a planned move to the American capital, with every sign of seriousness. That would have given him better access to companies that sell defence- and intelligence-related products and services. But the most tempting target could have been the think-tank world: the soft under-belly of the American security and intelligence community, where retired officials, those hoping for jobs, and those taking a break from government mix and mingle with outsiders.

Heathfield’s efforts were not just in America. His intern recalls, ‘He was always travelling – I had no idea how he was funded – back and forth between Singapore, Boston and Canada.’ His website also suggests partners in China, including with the Chinese Academy of Social Sciences, an influential government think tank, with the Beijing Academy of Soft Technologies²³ and an outfit called Chinagreenfuture.²⁴ Emails to these organisations asking for details of Heathfield’s involvement in their activities went unanswered but the connection was strong: his elder son interned in China in 2008.

Clearly part of Mr Heathfield’s image was simple invention. He cites in the ‘resources’ section of his myfuturemap.com website a reputable firm of business coaches called Coachinc.com. Asked to confirm Mr Heathfield’s claimed connection, the CEO, Sandy Vilas, replied immediately: ‘Never heard of him.’²⁵ But chasing down other leads presents a more complex picture. In a lengthy presentation about Futuremap’s virtues at an event in Singapore sponsored by the local French Chamber of Commerce, Heathfield’s local partner Fabrizio Battaglia used a slide giving the logo of nine well-known international companies, including ABB, Alstom, AT&T and T-Mobile.²⁶ Heathfield’s own website says that he has worked with big companies such as ‘General Electric, AREVA, Boston Scientific, Ericsson, Motorola, Microsoft, Michelin, Philips, STMicroelectronics, SAP, T-Mobile, and United Technologies.’²⁷

Most of these companies replied that they could not trace any connection with Mr Heathfield. (Mr Battaglia did not respond to repeated requests for comment.) Among the exceptions was ST Microelectronics, which confirmed that its ‘internal educational organisation’, ST University, ‘occasionally collaborated’ with Global Partners (a reputable Boston-based firm where Heathfield used to work) for sales and marketing courses involving him as an ‘external consultant’. It insists that it never bought his software or hired him directly, ‘nor was the relationship… of any significance in duration or value’.²⁸ The France-based international utilities firm Veolia was the only firm to acknowledge a serious connection. It hired Heathfield to design strategy and speak at management training events. Benoit Bardon, who worked with him closely for six years, recalls a ‘smart guy’ with ‘brilliant methodology’ who showed no interest in intelligence-related matters. Gerard Bridi, an American-based consultant who worked closely with Heathfield (and endorsed him on his LinkedIn profile) says that he typically charged his clients $3,000 a day.

A bit of puffery is not unusual in the self-promoting world of consultancy. It is also understandable that huge companies, with operations in dozens of countries, find it hard to say whether a particular consultant has or has not been hired at any point over the past fifteen years. But two points stand out. One is how easy it is for a plausible and well-educated person to disguise phoney origins and appear to be a genuine expert. The other is how much damage can be done by allowing such a person access to the inner workings of companies that are involved in defence contracting, energy security, communications and the like. The most likely modus operandi for someone like Heathfield is to recruit sources as unwitting collaborators with Russian intelligence. His consultancy job allowed him to ask well-placed sources to write occasional background reports for anonymous consulting ‘clients’, in exchange for a lucrative fee or well-padded per diem payments. He needed to make no mention that the result was going to a foreign government, let alone to Russia.

It may help the reader to picture three possible examples of such an approach. Imagine yourself to be an influential American – perhaps a senior partner in a professional-services firm with a client list that includes government agencies and big companies. How suspicious would you be of an intelligent and attractive woman assigned to help with your taxes, who shows a flattering interest in your political connections? Or of a brainy, jargon-spouting consultant wanting to future-proof your business? Or of a plausible-seeming fellow-alumnus who networks assiduously at events that you attend? Most likely, they are all just what they seem. But any of those three could be an illegal, working for Russia, China or some other country, trying to make you a witting or unwitting ally in their attempt to steal secrets and exert influence.

For specific targets of direct national-security importance, someone claiming to be an American citizen (or British, or from another NATO member) may find it marginally easier to gain trust speedily. But in other respects Heathfield’s elaborately acquired illegal identity – a Canadian citizen with a stellar professional career – was unnecessary, and even a hindrance. One of the appealing aspects of Western society is that employers and business associates tend to take the people they deal with on trust. If someone is charming, brainy and effective, those characteristics will matter far more than whether they hail from Tomsk or Toronto. Had Heathfield started his mission twenty years later, his bosses could have sent him to Canada quite legally on a student visa. From there he would have gone to the Kennedy School, and finally moved into consulting, without breaking any law or needing any clandestine connection, other than perhaps a wealthy ‘relative’ in Russia to pay the bills. He could even have changed his name, as many immigrants to North America do, from the hard-to-pronounce Bezrukov to something easier: Heathfield, perhaps. Much if not all of his assiduous networking and self-promotion would have followed an all but identical path. He might still be living in Cambridge, Massachusetts today, rather than working in Russia as a consultant to an oil company. Indeed in some respects his cover story may even have been positively harmful. Some of his former associates say that they would have been more forthcoming had they known he worked for the Russian government: they found his relentless commercialism rather off-putting. Professor Bar-Yam, for example, who had previously found Heathfield’s software commendable if flawed, says his reaction to the spy scandal was ‘very neutral’:

An illegal identity also has the great weakness of all complex plots: just one loose end can unravel the whole deception. A former student of Tomsk University, now living in America, remembers the couple clearly from the early 1980s: ‘Lena’ (who later became Heathfield’s wife ‘Ann Foley’) was a ballet-loving young woman, who had studied at the city’s prestigious German-language high school and toured Japan with a Soviet tourist group. That was a striking privilege at a time when travel to capitalist countries was restricted to the best-connected, and was especially rare for those living in strategically important ‘closed cities’ such as Tomsk – these were places quarantined by the KGB, where visits by foreigners where banned, and whose inhabitants were generally prohibited from visiting countries in the ‘capitalist camp’.

Bezrukov transferred to a university in Moscow – an unusual move up the Soviet academic ladder that indicated powerful sponsorship. When the communist world was almost hermetically sealed from the capitalist one, it was highly unlikely that any tendril of an illegal’s old life would appear to trip up the new one. The chance of Tomsk alumni meeting in Cambridge, Massachusetts was about as likely as an encounter on the moon. Yet the erstwhile fellow-student³⁰ could easily have bumped into Heathfield and his wife on the street. Denial would be risky, explanations even more so. It might force the controllers in Moscow to abort the whole mission, ending a decade or more of meticulous and costly work.

Technology and the internet create problems for old-style illegals too. Spycatchers in Britain used to wonder why Soviet block embassy staff showed such interest in cemeteries and country churchyards. Eventually the penny dropped: they were looking for the gravestones of dead children, in order to obtain their birth certificates and then apply for passports, driving licences etc. But the scope for this is shrinking. Biometric data are unique to each individual. Birth and death registries are increasingly computerised. Google makes tracing connections easier. In Heathfield’s case, a news announcement in the Canadian press in 2005 of the death of his ‘father’, Howard William Heathfield, also mentioned that the real infant Donald had predeceased him. Had the phoney ‘Donald’ already been under suspicion, the death notice could have given a dangerous clue to an alert spycatcher.

Fashioning a fake identity that fools a layman is one thing. Creating one that generates a real passport and other documents is harder. But providing an alias that will withstand determined scrutiny – for example of the kind carried out on an applicant for a security clearance – is now formidably difficult. The slightest anomaly or flaw becomes fatal. For this reason, the best penetration agents are not illegals but traitors: people like Kim Philby, a blue-blooded trueborn Englishman who decided at university to devote his life to the communist cause, and simply waited until SIS hired him.³¹ Herman Simm was at least in his own eyes in the same category. But traitors cannot be ordered up at will. Instead, Russia’s spymasters are turning to a new and more potent category of illegal. Unlike Heathfield and his colleagues, they do not rely on stolen identities. They use their own.