The Spy Who Sold Out

STUDENT SPIES AT ""THE Farm''--Camp Peary, the CIA's 9,275-acre training ground near Williamsburg, Va.--are taught to make ""surveillance detection runs,'' better known in spook parlance as ""dry cleaning.'' They learn how to tell if they are being followed by looking at the reflections off shop windows, by retracing their steps, by entering and quickly exiting subway terminals. The students under the tutelage of Harold J. Nicholson, a CIA veteran who taught at the Farm in 1994 and 1995, should wonder about the quality of their instruction. Last June, Nicholson slipped out of the Garden Wing of the Shangri-La Hotel in Singapore on a dry-cleaning run that took him past department-store windows, up and down bustling streets, in and out of a subway station. Satisfied that he wasn't being followed, he climbed into the back of a limousine with Russian diplomatic license plates. The FBI was watching the whole thing.

Arrested last week, Nicholson is the highest-ranking CIA official ever to be charged with espionage. According to the Feds, Russian intelligence paid him $120,000 to finger agents he had trained, blowing their covers overseas and probably ruining their careers. Nicholson downloaded sensitive information from Langley's computers--notably a secret agency analysis of the uprising in Chechnya--and surreptitiously photographed other key documents. He sold out American executives who do business in Russia and cooperate with the CIA, putting them at risk, and he briefed the Russians on U.S. attempts to steal their military secrets. Nicholson was not as lethal as Aldrich Ames, whose perfidy led to the executions of 10 CIA agents in the Soviet Union. But the Nicholson case illustrates the high cost of low morale in the beleaguered spy agency.

On the surface, the story looks to be a cold-war rerun, but it is better seen as a Yuppie trash thriller. The press played Nicholson as a high flier, a supersleuth who made station chief (the CIA's equivalent of ambassador) after only 10 years of service. Actually, agency insiders say, he was at best a mediocre spy. Nicholson, who is pleading not guilty, is more accurately described as a clever careerist, a common breed at Langley since the 1980s.

During the Reagan administration, Director William Casey, a hawkish OSS veteran, filled the CIA's ranks with new case officers, the people who recruit foreigners to spy on their own countries. When the cold war suddenly ended, too many case officers were motivated not by patriotism but by more mundane goals, such as winning cushy posts overseas. Lacking a meaningful enemy, they used their manipulative skills on their own bureaucracy, claiming recruiting triumphs that somehow never produced much useful information.

Nicholson's reward for playing the spy game in Tokyo, Manila and Bangkok was chief of station in Bucharest--a hot post in the cold war, but a bleak billet when Nicholson got there in 1990. Two years later, he took a step down in rank but up in lifestyle when he became deputy chief of station in Kuala Lumpur, where an American with an expense account can live very well on $70,000 a year. The spy trade is notoriously hard on marriages: case officers spend many hours waiting around in bars, and they can't tell their wives much about it. By 1994, Nicholson's marriage was on the rocks. He was facing alimony payments and college tuitions for his three teenage children, and he had an expensive Thai girlfriend to entertain. That spring, he allegedly sold out to the Russians--only two months after the CIA and the FBI caught Ames and vowed to crack down on moles.

Cynical or stupid--or both--Nicholson, who was by then posted at the Farm, started a cycle that ended with his arrest. Twice a year he would take an overseas vacation and come back with stacks of cash--the result, prosecutors now say, of Nicholson's meetings with his Russian handlers, swapping secrets for money. After these drops, he would pay off large bills (like an $8,300 American Express tab), buy lavish gifts (he gave his son a car) and take expensive holidays (he treated his girlfriend to $300 nights at the Shangri-La and at Hawaii's posh Hanalei Bay Resort). Meanwhile, he flunked three lie-detector tests. The questions? ""Are you hiding involvement with a foreign intelligence service?'' and ""Have you had unauthorized contact with a foreign intelligence service?'' Still, Nicholson kept on spying while the FBI and the CIA bugged his home, videotaped his office and downloaded his computer--he had left copies of stolen files on his hard drive. He was arrested on his way to Zurich to rendezvous with his Russian handlers. ""The snow should be fine,'' he had cheerfully written them on a coded postcard.

The CIA and the FBI declared victory. The real story, insisted CIA Director John Deutch, was not that a Company man had spied on his country but that he had been caught. More cynical old hands drew a different conclusion: just as Ames was not the first CIA mole--only the first to be caught--Nicholson's case is almost surely not the last.