Circle of Treason by Sandra V. Grimes Page A

Kulak operation. In an unprecedented move, the FBI agreed. McCoy selected Cynthia Hausmann, a senior division case officer and counterintelligence specialist, and Sandy as the members of the CIA team. Issued FBI non-escort visitor badges two and three, the women spent four months reviewing the Kulak material at FBI headquarters under the watchful eye of Larry McWilliams, a crusty outspoken special agent and supporter of Nolan’s theories of the case.
    Cynthia and Sandy were provided with summary statements of Kulak’s reporting, which included agent leads, KGB organization, and modus operandi. Repeated attempts to see meeting transcripts with verbatim source comments were met with a polite but forceful no. According to McWilliams, they would serve no useful purpose. The Bureau had accurately reflected Kulak’s remarks in the summaries. After several months McWilliams acceded to the request and gave them partial transcripts of discussions of selected sensitive counterintelligence issues. However, to their chagrin they learned that many meetings had not been taped and others had either not been transcribed or the tapes were no longer available. In sum, a complete record of Kulak’s reporting in his own words did not exist even at the FBI.
    Early congenial discussions among the three began to disintegrate into daily lectures from McWilliams that Kulak was bad because almost every operation he described was handled contrary to standard FBI procedure. “The FBI would not do it that way,” was his comment and appeared to be a large part of the FBI’s or at least McWilliams’ basis for concluding that Kulak was a controlled source. Despite numerous attempts to convince him that the KGB was not the FBI and had different rules and regulations for engagement, McWilliams refused to concede the point. The KGB had fooled the FBI for years, but no longer. That McCoy sent two women to review his and Nolan’s work only inflamed him more. As he often pointed out, the CIA could do what it wanted with respect to female professionals, but he was from the Hoover school and women did not belong in such ranks.
    Upon the ladies’ return to CIA headquarters, Cynthia drafted a report of their findings and conclusions regarding Kulak’s bona fides. Specifically,Kulak had been a legitimate penetration of the KGB from his walk-in in New York in 1962. Of equal importance, the FBI had failed to recognize Kulak’s value and importance as a source of positive intelligence, viewing him primarily from a narrow counterintelligence perspective. In early 1976 senior Agency management accepted the paper as the official CIA position on the bona fides of Kulak. The CIA and the FBI were still on opposite sides of the case.
    Spring of 1976 brought a major change in the operation. Kulak, now fifty-six, was departing New York and returning to Moscow. The FBI and CIA believed that he would not be assigned abroad again because he was approaching mandatory retirement. SE Division officers Ben Pepper and Gus Hathaway, the latter scheduled for assignment to Moscow as Chief of Station, decided to take a stab at convincing the FBI to turn Kulak over to the CIA for internal handling. The FBI denied their request, claiming that Kulak had refused contact with the Agency in Moscow. The SE officers persisted and finally convinced the FBI to let Hathaway meet with Kulak and attempt to persuade him to communicate inside the Soviet Union.
    Hathaway was successful. Kulak departed the United States in August 1976, trained in internal communication, equipped with a series of dead drop and signal sites, and ready to provide intelligence to the U.S. government.
    Having had no operational history with Kulak and only a handful of meetings with him before his return, it was impossible for the CIA to predict whether he would communicate as promised or simply decide to destroy his package. To everyone’s astonishment, on his first scheduled