The Billion Dollar Spy

Title:                      The Billion Dollar Spy

Author:                 David E. Hoffman

Hoffman, David E. (2015). The Billion Dollar Spy: A True Story of Cold War Espionage and Betrayal. New York: Doubleday

LCCN:    2015003370

E840.8.T65 H63 2015

Scope and content

  • “While getting into his car on the evening of February 16, 1978, the chief of the CIA’s Moscow station was handed an envelope by an unknown Russian. Its contents stunned the Americans: details of top-secret Soviet research and development in military technology that was totally unknown to the United States. From 1979 to 1985, Adolf Tolkachev, an engineer at a military research center, cracked open the secret Soviet military research establishment, using his access to hand over tens of thousands of pages of material about the latest advances in aviation technology, alerting the Americans to possible developments years in the future. He was one of the most productive and valuable spies ever to work for the United States in the four decades of global confrontation with the Soviet Union. Tolkachev took enormous personal risks, but so did his CIA handlers. Moscow station was a dangerous posting to the KGB’s backyard. The CIA had long struggled to recruit and run agents in Moscow, and Tolkachev became a singular breakthrough. With hidden cameras and secret codes, and in face-to-face meetings with CIA case officers in parks and on street corners, Tolkachev and the CIA worked to elude the feared KGB. Drawing on previously secret documents obtained from the CIA, as well as interviews with participants, Hoffman reveals how the depredations of the Soviet state motivated one man to master the craft of spying against his own nation until he was betrayed to the KGB by a disgruntled former CIA trainee. No one has ever told this story before in such detail, and Hoffman’s deep knowledge of spycraft, the Cold War, and military technology makes him uniquely qualified to bring readers this real-life espionage thriller”–Provided by publisher.


  • Map — Prologue — Out of the Wilderness — Moscow Station — A Man Called Sphere — “Finally I have reached you” — “A dissident at heart” — Six Figures — Spy Camera — Windfalls and Hazards — The Billion Dollar Spy — Flight of Utopia — Going Black — Devices and Desires — Tormented by the Past — “Everything is dangerous” — Not Caught Alive — Seeds of Betrayal — Vanquish — Selling Out — Without Warning — On the Run — “For freedom” — Epilogue — A Note on the Intelligence.


Date Updated:  March 29, 2017

Reviewed by Joseph C. Goulden.[1]

A question frequently asked by hard-core critics of the American intelligence community is, “What are we getting for our money? Does the product of our spies warrant what we spend?”

In a nutshell, Yes: Such is the conclusion of David Hoffman’s account of perhaps the most productive spy in CIA history, Adolph Tolkachev, a Soviet aeronautical engineer. Over six years, from 1978 to 1985, he gave. CIA officers thousands of pages of top-secret documents. The key revelations dealt with two key Soviet weapons systems: ground radars that defended against attacks, and radars on warplanes that provided the capacity to attack others.

Gus Hathaway, .one of the CIA officers who handled Tolkachev, asked the Air Force how much Tolkachev’s intelligence saved the US on research and development costs. The answer was “somewhere in the neighborhood of $2 billion.”

Further, the intelligence revealed just how far the Soviets lagged behind the US in weapons development—permitting President Ronald Reagan to enter into arms agreements knowing that American national security would not be endangered. What the military learned also potentially saved the lives of American pilots who might have faced the Soviets in the event of war.

Hoffmann, a Pulitzer Prize-winning journalist, benefitted from access to 994 CIA cables on the Tolkachev operation—material from the clandestine service seldom seen by outsiders. He also gained access to the principal officers. The result is a rare inside look at one of the more important CIA operations ever, even the tradecraft that made Tolkachev’s spying possible. (Studies in Intelliqence, an in-house CIA journal, published an unclassified account in 2003.[2])

A key part of the book is how a handful of talented CIA officers broke down decades-old barriers that had made Moscow an intelligence backwater. Hoffman’s opening declaration might surprise many Americans. “In the early years of the Cold War … ,” he writes, “the Central Intelligence Agency harbored an uncomfortable secret … The CIA had never really gained an espionage foothold on the streets of Moscow.”

There were several reasons. The closed society of the USSR, policed by the ever-watchful KGB, made contacts perilous. Several Soviets who volunteered or were recruited abroad continued to report information when they returned home. But, as Hoffman writes,” … for the most part, the CIA did not have to lure agents into spying in the heart of darkness.”

Another obstacle was within the CIA itself: James J. Angleton, head of counterintelligence from 1954 to 1974, who feared that Soviet “walk-ins” were provocateurs. Many officers accused Angleton of “poisonous distrust and second-guessing.” Eventually, Director William Colby forced him out.[3] Then came another problem: Admiral Stansfield Turner as director. Fearful that the Moscow station had been penetrated, Turner ordered “a total stand-down” on operations in Moscow. The station “was told not to run any agents, not to carry out any operational acts.’” Potentially valuable sources were turned away.

One person who seethed at the stricture was Robert Fulton, station chief in 1977. A furtive Soviet several times thrust notes at him; one offered information on a radar development. Air Force analysts said the material was valuable. But Director Admiral Stansfield Turner, fearing entrapment, forbade any follow-up. “Do nothing,” Turner ruled.

Meanwhile, Burton Gerber, a brainy operations officer who had dealt with Soviets in Eastern Europe, doubted the wisdom of a blanket rejection of walk-ins.

As Hoffman writes, “With a small staff, and acting entirely on his own hunch, Gerber began a systematic study, pulling the files of every person who had volunteered information in Moscow, going back a decade and a half. ..” He concluded that Angleton’s blanket suspicions were wrong, that “the CIA had been routinely turning away genuine volunteers, throwing away what might be valuable intelligence.” Then-Director Richard Helms endorsed Gerber’s findings, and Moscow station’s years in the shadows ended.

Fortunately for CIA, the man later identified as Tolkachev kept making approaches. (He spotted CIA officers because of their license plate numbers.) Eventually he passed Gus Hathaway enough material to establish his bona fides. Case officer John Guilsher—son of Russian-born parents—made the first in-person contact. In a brief telephone talk, Guilsher arranged to hide a construction worker’s glove containing further contact information behind a trash can. And the operation was underway—more than a year after the first approach.

Guilsher soon learned to spot KGB surveillance vehicles. The large Soviet-made Volga sedans had a V-8 engine with a distinctive grill. Smaller KGB cars often displayed a telltale triangle of dirt on the grille, “apparently where the brushes at the KGB’s car wash didn’t reach.”

But there was much more tradecraft not dependent upon such KGB glitches. And here is where Hoff man’s book will interest intelligence devotees, professional and otherwise. The Moscow station employed a number of ruses to elude KGB surveillance. One tactic of immense importance was a device dubbed “jack in the box.” This consisted of a one-dimensional pop-up concealed in a box in the front seat of an officer’s car, alongside a passenger. (In early tests, CIA used a blow-up female form purchased in a Washington sex shop. It leaked, and was discarded in favor of a simple wooden outline, since a surveillant would see it only in one dimension.)

The driver would make a fast turn, darting out of sight of the KGB surveillance car for a few seconds. The passenger would hop out of the car, triggering the pop-up, and scurry out of sight. By the time the KGB renewed surveillance of the car, the watchers would see the silhouette of the pop-up, and the person who vacated the car would be free to meet with Tolkachev.

At first, Tolkachev bravely smuggled documents from his office; then, CIA supplied him with sophisticated mini-cameras which enabled him to provide thousands of pages. At one early meeting, Tolkachev handed Guilsher five cassettes of exposed eighty-frame film, fifty-six pages of handwritten material, and four sketches.

The take was a case officer’s dream. As Hoffman relates, Tolkachev’s material “included a detailed description of the sensitive world in which he was involved, as well as exact formulas, diagrams, drawings, and specifications of weapons and electronic systems. He copied, by hand, top secret documents authorizing the construction of new types of aircraft not yet known in the West, such as the Sukhoi Su-27 advanced fighters …. Every document was neatly recorded, every word legible.”

By carefully studying security procedures at his agency, Tolkachev managed to check out documents and keep them for hours—permitting him to take them home for an hour or so for copying. He later was given a miniature camera that enabled him to copy documents in his own office. And during one meeting he handed over an incredible 179 rolls of film.

One constant fear in Moscow station was that Tolkachev would over-reach and attract fatal attention to himself Burton Gerber, by now chief of station, counseled against giving him “open end requests” for documents that might encourage him to act recklessly. He wrote, “We believe it is of major importance to ensure that [Tolkachev] does nothing to harm his security.”

He knew he was endangering his life. At one point he asked for a cyanide pill so that he could commit suicide in case he was discovered. After much internal debate, headquarters authorized giving him an “L-pill.” (The “L” stood for “lethal,” In the end, Tolkachev chose not to use it. )

From the start, CIA officers wondered about Tolkachev’s motivation. It proved to be fundamental, a failed communist system that made life in the USSR miserable. He accepted money, but such was not his primary interest: he did argue that he should receive an amount that would tacitly knowledge his value. Moscow station eventually recommended a package of $3.2 million—a vast sum, to be sure, but a fraction of the value of his material.

Tolkachev asked for a few personal perks: a variety of rock-and-roll recording for his teenage son, a Sony Walkman, and a box of drawing pencils.

Moscow station’s handling of Tolkachev was letter-perfect. For years, its officers outwitted the KGB at every turn. Tolkachev’s sole fault (if it can be called that) was over-enthusiasm. His handlers feared that his take was so large eventually he would be detected.

Such was not to be. In the end, he was betrayed by a turncoat CIA trainee named Edward Lee Howard, who had been trained for assignment to Moscow station. Security questions arose about Howard’s honesty, and he was sacked. He made contact with the Soviets, which came to FBI attention. The FBI put him under what proved to be sloppy surveillance at his New Mexico home. With the aid of his wife, he used a variant of the “jack in the box” device to tumble out of his car and escape behind the Iron Curtain. Years later, he fell in his Russian dacha and broke his neck.[4]

The lobby of the CIA’s Old Headquarters Building displays a portrait of Tolkachev clutching a 35mm camera, photographing a secret document. “One of the bravest ever,” concludes a retired case officer who worked with him.

Does the CIA earn its keep? The Tolkachev affair should silence critics who argue otherwise.

Review by Nicholas Dujmovic[5]

The title of David Hoffman’s excellent new book, The Billion Dollar Spy, unintentionally (I think) evokes a famous item from Studies in Intelligence many years ago, “The Million Dollar Photograph.”[6] According to the late Dino Brugioni, CIA director Allen Dulles was impressed by the ability of the U-2 spy plane to dispel the Eisenhower administration’s fear that the Soviet bomber force was large enough to pose an existential threat to the United States—the so-called “bomber gap” of the mid-1950s. The key photograph, in Brugioni’s telling, was a U-2 shot of the Saratov-Engels airfield, which showed fewer bombers than had been estimated. The “bomber gap” disappeared. Dulles was said to have asked Frank Wisner, his chief of espionage and covert operations, “How much would you have paid for the information in this photography?” After a moment, Wisner answered, “About a million dollars.”

Whether or not the Dulles-Wisner exchange took place,[7] the greater point is valid—that intelligence activities, though difficult and often expensive, can be extremely valuable for the national security and even, in a cost-benefit sense, a profitable economic investment. President Eisenhower in his memoir praised the U-2 program for depriving the Soviets of the capability to use “international blackmail,” and intelligence historian Christopher Andrew has claimed that the U-2 “saved the American taxpayers tens of billions of dollars and spared the world a major escalation in the arms race.”[8]

Hoffman’s narrative concerns the Cold War espionage case of Adolf Tolkachev, a Soviet electronics engineer who wanted to inflict the greatest possible harm on the Soviet Union by giving the United States highly classified information on sensitive military projects. Tolkachev worked as a valuable CIA asset for seven years, from 1978 to 1985. Just how valuable was he The US Air Force estimated that Tolkachev’s intelligence saved roughly $2 billion in research and development p. 121)—and this was in mid-1980, just two years into Tolkachev’s run of espionage. Moreover, as Hoffman makes clear later in the book, the overall benefit to the United States went far beyond this dollar figure.

As is the style of histories published these days, The Billion Dollar Spy opens not at the beginning of the story but with a dramatic event briefly recounted—in this case, a CIA officer’s attempt in December 1982 to recontact Tolkachev, who had not been able to communicate for several months. This anachronistic approach works—the vignette is gripping and very effectively draws the reader into the stressful, high-stakes business of clandestine intelligence operations.

There is much to like about this book. Almost every chapter is a gem. Hoffman begins the narrative proper with a superb summary of the Cold War espionage context, including the challenges CIA faced in trying to gather intelligence from the Soviet Union. Some of those challenges came not from the powerful efficiency of Soviet counterintelligence but from the US government itself. Former Director of Central Intelligence (DCI) Richard Helms recalls that the pressure from US policymakers “ranged from repeated instructions to do ‘something’ to exasperated demands to try ‘anything’.” (p. 7) Even so, for many years CIA operations against the Soviet Union were hamstrung by excessive caution.

That began to change in the late 1960s and early 1970s, when a younger generation of operations officers, chafing under the prevailing institutional caution, developed new operational methods they argued would enable them to operate in the so-called “denied areas.” In chapter two, Hoffman introduces the Tolkachev operation as a turning point for Moscow Station, as one prize case ends (that of TRIGON, Aleksander Ogorodnik, a valuable CIA asset who was caught and committed suicide) and an uncertain one begins, as Tolkachev makes the first of several attempts to contact CIA. Chapter three details Moscow Station’s frustration at having to maintain an operational “stand-down” by a CIA leadership (DCI Stansfield Turner) that discounted the value of human spies and that wanted no “flaps.”

Hoffman relates Tolkachev’s persistence in trying to make contact, the unwillingness of Headquarters to pursue a potential KGB set-up that would result in the expulsion of CIA officers, and Moscow Station chief Gus Hathaway’s arguments to Headquarters that the potential intelligence was worth the risk. Tipping the balance in early 1978 was a timely Pentagon request to CIA for any intelligence about Soviet avionics and weapons systems—precisely the information Tolkachev was offering. Contact was approved.

In describing Moscow Station’s first approaches to Tolkachev, Hoffman emphasizes the care taken with every espionage case: “Running a spy was undertaken with the concentration and attention to detail of a moon shot”—nothing was left to chance. “Photographs and maps were prepared of each site; surveillance detection runs plotted; scenarios scripted and rehearsed; and the question was asked again and again: What could go wrong?” (p. 69)

Hoffman has an insider’s feel for how the spying business is conducted. His description of dialogues between the field and Headquarters (pp. 59-63) illustrates the inherent and eternal tension in that relationship. Chapter 11 (“Going Black”) is the best primer on the hows and whys of SDRs—surveillance detection routines or routes—I have seen anywhere, and it is must-reading for any would-be case officer. “On a surveillance detection run, the case officer had to be as agile as a ballet dancer, as confounding as a magician, and as attentive as an air traffic controller.” (p. 140) Hoffman covers innovation in operational technology with a passage on the Discus agent communications system—CIA essentially invented text messaging in the late 1970s—and relates the operational pros and cons of using it. (pp. 111-14)

At the same time, Hoffman is very good about the personal side of espionage. Chapters 12 and 13 delve into Tolkachev’s background and motivations for betraying the Soviet system and also highlight the importance for CIA of treating a spy as a human being with personal considerations, not just “a robot with a Pentax [camera].” Likewise, Hoffman’s portrayals of the CIA officers handling Tolkachev are sensitive and personal. When Tolkachev is finally caught—as a result of the treason of former CIA officer Edward Lee Howard (a well-told sub-story)—Hoffman’s straightforward and unsentimental descriptions of Tolkachev’s arrest (pp. 235-39) and sentencing, along with that of his last meeting with his son (pp. 246-47) are nonetheless almost heartbreaking.

Was running such a spy worth the risk? In addition to the $2 billion estimate by the US Air Force in 1982, Hoffman points to the one-sided scorecard of its fighter jets against Iraq’s Soviet MiGs in 1991—39 to zero—and when aerial engagements in the Balkans are counted, the score becomes US Air Force 48, Soviet built fighters zero. (p. 254) All this, Hoffman persuasively argues, was the result of many factors, but one of them was the intelligence provided by a brave electronics engineer who wanted to help the West.

Others have written about the Tolkachev case in shorter, more focused accounts, including former CIA officers Barry Royden, Bob Wallace, and Milt Bearden.[9] Royden emphasized the operational tradecraft used, while Wallace’s narrative is mostly about the technical means to facilitate Tolkachev’s espionage. Bearden’s treatment is episodic and after-the-fact, focusing on the counterintelligence aspects of this case among many other cases compromised in 1985 during the “Year of the Spy.” All these have value; indeed, Hoffman is aware of these sources and cites them all. Hoffman’s achievement is to integrate these threads into an impressive tapestry that includes much new information from his access to newly declassified CIA documents (remarkably including declassified cables between CIA Headquarters and Moscow Station) as well as from his contacts with Tolkachev family members and from extensive interviews with CIA participants in the operation.[10] It helps that Hoffman previously served (1995-2001) as Moscow bureau chief for The Washington Post; The Billion Dollar Spy benefits both from his knowledge of the city and from his ability to tell a compelling story that brings out the human factor in espionage operations.[11]

After 10 years of reading and reviewing intelligence books as a CIA historian, I’ve seen the gamut. A few are poisonous—Legacy of Ashes[12] comes to mind—but most are at least satisfactory, with good points as well as flaws. Very few are nearly flawless, demonstrating the author’s mastery of the subject: factual accuracy; insight into the atmospherics of the business, i.e., what it is like; and a fair assessment of what it all means. I would put Hoffman’s Billion Dollar Spy into this category of the best intelligence books available.[13] Every intelligence officer should read it.

[1] Goulden, Joseph C., “The Latest Intelligence Books,” The Intelligencer: Journal of U. S. Intelligence Studies (21, 2, Spring/Summer 2015, pp. 105-107). Joseph C, Goulden’s 1982 book, Goulden, Joseph C. (1982). Korea: The Untold Story of The War. New York: Times Books. [LCCN: 81021262], was published in a Chinese-language edition in 2014 by Beijing Xiron Books. He is author of 18 nonfiction books. Goulden is a long-time reviewer of espionage and spy books for The Washington Times, for AFIO’s Intelligencer, for law journals, and other publications. Some of the reviews above appeared in prior editions of The Washington Times or The Washington Lawyer (DC Bar Association) and are reprinted here by permission of the author. Joe Goulden’s most recent book is Goulden, Joseph C. (2012). The Dictionary of Espionage: Spyspeak into English. Mineola, NY: Dover Publications

[2] Royden, Barry G., “Tolkachev, A Worthy Successor to Penkovsky,” Studies in Intelligence (47, 3, 2003 Unclassified Edition).

[3] During research for a book on the Korean War, soon after Angleton was fired, I [Joseph C. Goulden] lunched with him several times, He shared his thoughts on how a Soviet spy in the British Embassy in Washington kept Moscow current on US planning. I found his conspiracy theory interesting but unconvincing. Angleton displayed an incredible capacity for spirits.

[4] The best account of the Howard case is found in Wise, David (1988). The Spy Who Got Away: The inside story of Edward Lee Howard, The CIA Agent Who Betrayed His Country’s Secrets And Escaped to Moscow. New York: Random House

[5] Nicholas Dujmovic in The Intelligencer (22, 2, Fall 2016, pp.  123-125).  Reprinted from Studies in Intelligence (60, 1). Nicholas Dujmovic recently retired from CIA, where he was a member of the History Staff for 11 years. He is the author and compiler of The Literary Spy, a quotation book on intelligence (Yale, 2004), and many articles and reviews on intelligence. Dr. Dujmovic is currently director of the intelligence studies program at the Catholic University of America in Washington, D.C.

[6] Dino Brugioni, “The Million Dollar Photograph,” Studies in Intelligence (23, 2, Summer 1979, pp. 32-33).

[7] The photograph in the Studies piece was taken by a British U-2 mission in late 1959, more than three years after U-2 Imagery had dispelled the “bomber gap” and during the period when CIA was trying to resolve the “missile gap”—alleged Soviet superiority in strategic nuclear-armed missiles.

[8] Dwight D. Eisenhower, The White House Years, Vol. 11, Waging Peace: 1956-1961 (Doubleday, 1965), p.547. Andrew, Christopher (1995). For the President’s Eyes Only: Secret Intelligence and the American Presidency from Washington to Bush. New York: HarperCollinsPublishers

[9] Barry Royden, “Tolkachev: A Worthy Successor to Penkovskiy,” Studies in Intelligence (47, 3, 2003, pp. 5-33). Wallace, Robert (2009), H. Keith Melton, Henry R. Schlesinger, and George J. Tenet. Spycraft: The Secret History of the CIA’s Spytechs, from Communism to Al-Qaeda. New York: Dutton, pp. 119-37. Milton Bearden (2003) and James Risen. The Main Enemy: The Inside Story of the CIA’s Final Showdown with the KGB. New York: Random House. passim

[10] Hoffman makes a few of the cables available on his website, All told, CIA declassified 944 pages of mostly operational material. Curiously, none of it is posted on CIA’s public website.

[11] A former CIA historian, Ben Fischer, has written a speculative article dismissing Tolkachev as a KGB deception operation; one of Fischer’s few factual statements is that Tolkachev’s workplace was too far from his home to photograph documents during the day as he claimed. Without citing Fischer or his theory, Hoffman nevertheless uses his knowledge of Moscow to demonstrate that Tolkachev could easily go home from work on his lunch break and photograph documents. Benjamin B. Fischer, “The Spy Who Came in for the Gold. A Skeptical View of the GTVANQUISH Case,” The Journal of Intelligence History (18, 1, Summer, 2008, pp. 29.54).

[12] Weiner, Tim (2007). Legacy of Ashes: The History of the CIA. New York: Anchor Books

[13] My only quibble—and it takes nothing away from what Hoffman has achieved with his book—is his recounting of the Soviet gas pipeline sabotage story. CIA allegedly modified pipeline technology bound for the Soviet Union, creating conditions in 1982 that resulted in a spectacular explosion and fire. Though at least one such gas pipeline disaster occurred in 1982, CIA apparently had nothing to do with it. Policy discussions about such covert action went on for years, into 1986, but no decisions were made or findings signed, in large part because of the ethical implications. Yet it remains a persistent myth.


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