By Walter Pincus
Washington Post Staff Writer
Saturday, July 3, 2010; A01
The Russian spy case that exploded into public view this week was preceded by nearly a decade of cat-and-mouse activities with the FBI, according to court documents and an interview with a senior U.S. official familiar with the case.
None of the suspects, who allegedly served as undercover agents for Moscow's foreign intelligence service, was arrested until Sunday. But a close examination of court documents indicates that by mid-2006 investigators had already searched the homes of four of the couples, planted microphones in at least three of their residences, regularly reviewed their encrypted computer messages, and videotaped meetings where money and equipment were exchanged.
So why hadn't any of the alleged spies been arrested earlier?
"There is always something else to be learned," said a senior law enforcement official.
Indeed, the investigation into the 11 alleged foreign agents appears to have been a case study in counterintelligence. As a matter of technique, the FBI and the CIA generally weigh the opportunity of gaining valuable counterintelligence against the danger of allowing subjects of interest to continue operating, lest they obtain U.S. intelligence or manage to flee.
In the Russian spy case, the counterintelligence gains could have included the names of Russian couriers and spy handlers, the names of Americans whom the Russians had sought to recruit, or knowledge of Russian espionage techniques and practices that could be employed in counterintelligence activities elsewhere in the world.
Already, the FBI has revealed enough information about the suspects to indicate that it may have gained valuable counterintelligence about Moscow's spy operations. According to a Justice Department letter filed in U.S. District Court in New York, for example, the FBI has acquired and decrypted more than 100 messages exchanged between one couple, Richard and Cynthia Murphy, and the SVR, the Russian spy agency. Only about 10 of those messages were described in the criminal complaint against the Murphys, who reside in New Jersey.
Separately, the Yonkers, N.Y., apartment of Vicky Peleaz, a columnist for New York's El Diario La Prensa, and Juan Jose Lazaro, a political science professor, was bugged in February 2002. Yet in court papers the Justice Department described only five conversations recorded inside the apartment over the intervening years.
The case against the suspects appears to have been built gradually over the years. One or another of the initial two couples that the FBI tracked led agents to the others, either when they met to transfer money or had exchanges to set up meetings. The search of one couple's home in 2005, for instance, led to the discovery on a computer of passwords permitting access to a Russian encryption software program involving "steganography," by which messages are concealed in otherwise unremarkable images. A year later, that discovery allowed investigators to reconstruct deleted steganography messages on the computers of two other couples.
It is not clear what initially sparked the FBI probe. One of the earliest signs of the bureau's interest dates to January 2001, when investigators obtained a court order to search a safe-deposit box belonging to Donald Howard Heathfield and Tracey Lee Ann Foley at a bank in Cambridge, Mass. The couple lived in a Boston-area townhouse.
In the safe-deposit box, the FBI investigators found a Canadian birth certificate in Heathfield's name -- he had claimed to have been born in Canada -- but they also turned up photographs of Foley as a child. One of the negatives bore the name TACMA, a Soviet film company.
By 2004, the FBI had installed microphones in the couple's townhouse. Foley was later overheard in a call with Heathfield discussing how to send secret encrypted messages, according to the court papers.
The alleged spies are not thought to have had direct access to highly sensitive government information. In that sense, their cases are different from that of Aldrich H. Ames, the onetime CIA officer whose disclosures led to the deaths of 10 Soviets working as agents for the United States, or that of Robert P. Hanssen, the former FBI counterterrorism specialist who passed highly secret materials to the Russians in return for $600,000.
The suspects in this case were referred to as "illegals," the term used for deep-cover agents who do not have diplomatic cover. Their job, the FBI said in its affidavit in the case, was to become "sufficiently 'Americanized' such that they could gather information about the United States for Russia and can successfully recruit sources who are in, or are able to infiltrate, United States policy-making circles."
As a 2009 message from "Moscow Center" put it, the agents were "expected to start striking up usefull acquaintances, broadening circle of your well placed connections, gaining information and eventually recruiting sources."
Since the arrests were announced, many observers have expressed puzzlement as to why spies would live, say, in Yonkers or work in real estate. But counterintelligence experts say the suspects' chief role probably was as "spotters," as they are known in the intelligence world. A spotter would select individuals who could be recruited to work for Russia, either through persuasion or entrapment.
They were in "a good position for spotting possible recruitment targets for Russian intelligence," Peter Earnest, a former CIA officer and now executive director of the International Spy Museum, said in a recent Washington Post online chat.
In a 2004 message, court papers say, Heathfield sent an encrypted message in which he spoke of making contact with a U.S. government employee who worked at a research facility and dealt with planning related to nuclear weapons development. A year after the search of Heathfield's house, the FBI was able to intercept an SVR message to him reporting Moscow's response to his presentation of potential sources.
"Agree with your proposal to use 'Farmer' to start building a network of students in D.C.," the SVR wrote him, according to the court papers.
The SVR went on: "Your relationship with 'Parrot' looks very promising as a valid source of info from US power circles. To start working on him professionally we need all available details on his background, current position, habits, contacts, opportunities, etc."
The personal information about "Parrot" would, in the normal course of the counterintelligence trade, be turned over to a trained recruiter in Russia who would "work on him professionally" -- using Moscow Center's terms.
Any such recruitment planning by Moscow would have been brought to a sudden halt this week. The entire espionage operation would have been brought to an end with the arrest of the four couples (the fourth was Michael Zottoli and Patricia Mills of Arlington County), plus two other people, Anna Chapman and Mikhail Semenko. One suspect, Christopher Metsos, was arrested in Cyprus but disappeared after being released on bail.
The U.S. law enforcement official said investigators had no choice but to move on the suspects.
"Something happened that was going to affect them all," the official said, without elaborating. He added that the arrests were ordered "to protect the cases."