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Episode 5: The Doomsday Machine Transcript
Episode 5: The Doomsday Machine
By the fall of 1981, James Harper was in dire straits.
He was still taking classified missile documents to Mexico to sell to the Soviet Bloc. But he was increasingly worried about getting caught.
And he needed a way out. James Harper: And then about that time, I'm starting to think I'm gonna put this deal together with Bill Dougherty on…
(00.30)
…coming up with immunity from prosecution.
Bill Dougherty was Harper’s Hail Mary. He was an ex-marine fighter pilot, a Republican good ol’ boy with connections in the U.S. military and intelligence world.
And most importantly, Dougherty was a prominent lawyer. Who had experience defending American turncoats.
A few years prior, he had gained fame as the counsel for a former CIA contractor who was busted passing highly…
(01.00)
…classified information to the KGB.
Harper was impressed by Dougherty’s defense of his client–who was, nevertheless, sentenced to decades in prison. But I guess he thought it was his best–maybe only?– option.
James Harper: Finally, I got to a point, <laugh> I guess I got a little nervous about what the hell I was doing.
Harper’s downplaying things a bit here. He was in way over his head, and he
(01.30)
…knew it. So Harper got in touch with Dougherty, but he had to conceal his identity. He was committing espionage after all.
Over the phone, Harper introduced himself as “Jay.” Not the best pseudonym for a man named “James.”
Harper and Dougherty met soon after, at a dingy bar called “The Fling” in Southern California. Over a bloody mary, Harper gave him the highlight…
(02.00)
…reel.
Harper used aliases for everyone involved in his scheme. He called Pszchodzian, his Polish spy handler, “The Minister.” And Hugle, his espionage mentor in Silicon Valley… “The Big Man.”
At the bar, Harper said he wanted to switch sides… again. He had a proposition for the CIA: let him work as a double agent for U.S. intelligence against the Soviet Bloc.
(02.30)
Sure, he’d made hundreds of thousands of dollars passing classified nuclear secrets to the Poles, but now he wanted to wipe the slate clean.
It might have been a delusional gambit. But Dougherty agreed to represent Harper–known only to him as “Jay”–and to get word back to the CIA.
James Harper: And I started working with Dougherty.
ZD: Mm.
James Harper: Then, the whole thing gets real complicated.
Harper and Dougherty began…
(03.00)
…meeting regularly. Sometimes Harper would even give Dougherty audiotapes describing his exploits. Dougherty would listen to “Jay’s” tapes, take notes, then immediately destroy the audio.
Dougherty would then relay “Jay’s” tale of Soviet Bloc espionage to the CIA.
When the agency got Dougherty’s info, alarm bells went off.
A potential Eastern Bloc nuclear spy in California? That’s a big deal…
(03.30)
…Such a big deal that a turf war broke out over who would lead the probe.
George Aradi: The CIA wanted to keep the case and eventually the FBI wrestled the case from them.
That’s George Aradi… who was an FBI counterintelligence agent in San Francisco at the time. The FBI has priority on domestic spy cases like this, and the San Francisco office took it over.
The Bureau codenamed the case of this mysterious spy, “Tinsel Tyrant.” George Aradi: So, he sought… (04.00) …assistance from that attorney. And he gave him like a long audio tape of things he had done, but in a very veiled way, not enough to determine who the person that's narrating this thing was … That’s why they call it “Tinsel Tyrant,” you know, tinsel, meaning, you know, the cellulose tape. So these have reel-to-reel. So that's where the code name comes from. (04.30) But this unknown spy, “Jay,” had some pretty grandiose demands. George Aradi: Yes, he wanted to cut a deal … He wanted like a half a million dollars. He wanted some money, I think. Harper, having made a small fortune spying for the Soviet Bloc, now wanted the U.S. government to pay him another fortune to become a double agent for the CIA. It was his most audacious scheme yet. (05.00) I’m Zach Dorfman.
From Project Brazen and PRX … This is Spy Valley. Episode 5: The Doomsday Machine Ronald Reagan: Since the dawn of the atomic age, we've sought to reduce the risk of war by maintaining a strong deterrent and by seeking genuine arms control. We maintain the peace through our strength; weakness only invites aggression.
1983 was a hair-trigger year in U.S.-Soviet relations…
(05.30)
…And Moscow’s missiles were on President Ronald Reagan’s mind. That year, he delivered what became widely known as his “Star Wars” speech.
Reagan proposed the U.S. develop a laser system that could shoot down ballistic missiles en masse.
He believed that, if the U.S. could protect itself from Soviet nuclear assault, it would no longer be haunted by the specter of “mutually assured destruction.”
Reagan: I am directing a…
(06.00)
…comprehensive and intensive effort to define a long-term research and development program to begin to achieve our ultimate goal of eliminating the threat posed by strategic nuclear missiles.
The Soviets saw things differently, of course. They believed that Reagan’s proposal was designed to launch a preemptive strike on Moscow. And that belief, even if faulty, put the world in unprecedented danger…
(06.30)
…This was one of the hottest periods of the cold war.
Nuclear competition between the superpowers was as high-stakes as things got. And that’s the world in which Harper decided to spy for Moscow’s allies. So when FBI spy hunters in San Francisco heard about this “Jay” selling nuclear secrets to the Soviet Bloc… it was their top priority. FBI agents fanned out to identify this mysterious spy. (07.00) George Aradi: There must have been like 40 to 60 suspects that were under consideration as could be Tinsel Tyrant. Top officials in Washington had already decided there was no chance that they’d make a deal with this anonymous turncoat. Nuclear espionage was simply too grave a crime. Hell, people had been executed for it. FBI agents were incredulous that this mystery spy would even make such a proposition. (07.30) Don Ulrich, who worked closely on the FBI’s Tinsel Tyrant case, remembers his shock. Zach: You know apparently the gambit was … immunize me and I’ll be a double agent for you, and … Don Ulrich: That was not gonna work … Zach: I’ve been giving missile secrets for years and years … Don Ulrich: Now I want to help. . . after I have sold out my country . . . to one of the most sensitive national defense secrets … on earth. . . . . how to survive a first… (08.00) …strike. I mean, geez! Although they were firmly against striking a deal, officials needed to keep “Jay” talking. So they asked Dougherty about his client’s activities, fishing for details. By prolonging their quote unquote “negotiations” with this unknown spy, the FBI and DOJ, were giving Jay all the rope he needed to hang himself. And, man, did he talk… (08.30) …Over half a dozen in-person rendezvouses, and 50-plus phone calls, Jay kept feeding Dougherty more precise details of his espionage for the Soviet Bloc. About his visits to Geneva and Vienna, where he sold purloined missile documents to “The Minister.” He told them that… the initial meetings were facilitated by ”The Big Man,” a kingpin of illegal technology transfer to the Soviet Bloc. And that… he, Jay… (09.00) …still had upwards of one hundred pounds of missile-related documents, ready to sell. He even mentioned those waterlogged missile documents he gave to Moscow’s proxies in Warsaw. Eventually, U.S. investigators hit paydirt. Because “Jay” gave up the “Big Man’s” name: Bill Hugle. Kinane: The case on Hugle… Farmer: Hugle, a slimy person … Kinane: Drugs, multiple… (09.30) …women… Ulrich: … what we were looking at through the grand jury was Bill Hugle. Kinane: … He was such a lowlife … he probably, he’s probably a spy. Ulrich: His name had come up. Uh, Harper had identified him in his notes to Dougherty. In truth, Hugle was already a suspect. For years, the FBI had been investigating Hugle's business with the Soviet Bloc. Here’s the FBI’s Bill Kinane: Bill Kinane: But Hugle was the guy that we looked at first… (10.00) …And somehow, we got off—I don’t know how it happened—but we got off on the wrong guy, but the wrong guy had been in contact with Harper. For the Bureau, “Jay’s” explicit mention of Hugle cemented their connection. And the FBI began tapping Hugle’s phone. FBI agents also knew of Hugle’s past dealings with the Poles. And they knew that “Jay” had also identified Hugle as a Polish intelligence asset. But the Bureau… (10.30) …wasn’t having much luck with its eavesdropping of Hugle. You see … it’s easy to forget, amid all this espionage, that both Hugle and Harper were Silicon Valley entrepreneurs, trying to score big with new hi-tech innovations. This was, after all, the 80s tech boom: a time of great greed, with great fortunes being made. Don Ulrich: It was the Wild West then. They were cowboys. They were on the edge. They were… (11.00) …out to make MILLIONS of dollars. It was a burgeoning industry. That’s Don Ulrich again. Through its phone tap, Bureau agents listened in as Hugle wheeled and dealed. At the time, he was trying to raise funds for some type of new semiconductor technology start-up. Don Ulrich: Hugle's tech was full of get rich schemes. Hugle was on, on the phone, all day long, hustling. And he talked ad infinutum… (11.30) …with everybody in Silicon Valley at that time about, about, you know, getting venture capital. But the urbane Hugle wasn’t about to talk about spying over the phone. And connecting Harper and Hugle also wasn’t easy. Don Ulrich: They were estranged. They were not talking to each other, I’m sure by then. Harper stiffed him. He never paid Bill Hugle a penny. That is, Harper never paid Hugle… (12.00) …for their shared spying. Don Ulrich: Harper said he was really pissed <laugh>. As Harper became increasingly desperate to cut a deal, he kept revealing more to Dougherty about his Soviet Bloc espionage. He wanted to impress the officials speaking with his lawyer. But in reality, he was just providing U.S. spy hunters more clues about his true identity. Don Ulrich: You know he gave way too much information about himself in those communications… (12.30) …with Dougherty. It was inevitable that, uh, sooner or later we would find out who he was. It was so naive thinking that he could <laugh> he could talk his way out of espionage by coming to the good guys and <laugh> and telling us all he knew. At any rate, that was… It was fortunate for us. And there was another, critical, aspect of the… (13.00) …FBI’s investigation that Dougherty and Harper didn’t know about. The CIA’s secret mole within the Polish intelligence services, codenamed, “Caribou.” Remember Caribou, from episode 1? He was the CIA’s source who kicked off the FBI’s whole investigation into an unknown Soviet Bloc agent in Silicon Valley. Kinane: And I knew—I personally knew the source. The source was recruited in… (13.30) …Chicago. Bureau officials immediately put two and two together. Before Dougherty ever approached the CIA about a deal for his mysterious client “Jay,” FBI spy hunters in San Francisco were already at work trying to chase down those leads from Caribou. From Caribou, the Bureau had already been told that this California-based spy was “being run” by a senior Polish intelligence officer named Pszychodzian… (14.00) …Caribou also knew about Pszychodzian’s connections to a Silicon Valley businessman named Bill Hugle… And from Caribou, the Bureau had already learned about this unnamed American spy’s trips to Warsaw, and the waterlogged missile documents he’d provided to the Poles. Don Ulrich: The documents had arrived in poor wet condition, they had to call in Soviet technicians. Zach: 20 guys came overnight, from Moscow to Warsaw. Ulrich: … to take care… (14.30) …of it. The “Tinsel Tyrant” case and the intelligence from Caribou were on an inevitable collision course. “Jay” had to be the mysterious American spy Caribou described. Don Ulrich: And they dovetailed. And it was obvious they were talking about the same guy. But what was his name? Both sources of intelligence were just ambiguous enough to frustrate FBI investigators. (15.00) Bureau agents interviewed Hugle’s known associates, and chased down whatever leads they could glean. And then one day, with a little luck, they struck gold. George Aradi: Cause Tinsel Tyrant, he talked about a lot … a lot of crap going down in Silicon Valley … with a lot of different countries. You see, in his bid for immunity, “Jay” kept divulging information to Dougherty about Silicon Valley-related crimes—and not just his own. Jay had a contact, an engineer… (15.30) …in the Valley, who was allegedly interested in some sort of illicit deal. They lived in the same area, and one Sunday morning, Jay ran into the engineer on the street. They talked business. But here was Jay’s fatal error. In conversation with his lawyer, he named this engineer buddy. Now FBI officials had another name. And maybe this person could lead them to “Jay.” But FBI agents didn’t know… (16.00) …what this engineer knew, or his relationship with the mysterious “Jay.” Hell, this man could be Jay himself. So they had to be careful. Bureau agents couldn’t afford to tip their hand. It might cause the whole case to collapse. In March 1983, two FBI agents followed this lead from “Jay” about the engineer. George Aradi: They went and interviewed this, this guy very like, obliquely. And just at some point they asked him…
(16.30) …“Do you, do you ever remember, a colleague down in Silicon valley, and all of a sudden you stopped and had a conversation with him on a Sunday morning?” And the guy said, “Yeah. This guy, James Harper.” George Aradi: That's, that's how it happened. George Aradi: That was the Eureka moment for the two interviewers. They never heard that name before. James. Harper. We’ll be back after the break. – We’re back. (17.00) FBI spyhunters immediately revved up an investigation into this new suspect: James Harper. But something didn’t add up. Harper didn’t currently have a security clearance; didn’t work with classified documents; and didn’t work on nuclear missile defense. But soon, Bureau agents figured it out: Harper’s girlfriend-turned-wife, Schuler, had access to a bonanza of nuclear missile secrets. George Aradi: They determined that… (17.30) …he's the paramour of Schuler. And then she had a top secret clearance. Bureau agents didn’t have a “smoking gun” to prove that Harper was “Jay.” Nor could they prove that he was the same nuclear spy described by the CIA’s Polish agent, “Caribou.” But they did have enough evidence against Harper to have wiretaps placed on his phone, and to begin round-the-clock surveillance on him. One day, the Bureau had an important breakthrough.
(18.00)
Here’s the FBI’s Bill Kinane, who closely reviewed the Harper wiretaps. Bill Kinane: What broke the case is that he got a phone call from what we would call a “cutout.” So there was some lady in Europe, called, speaking English and said, uh, “How are you doing? You know, we missed you the last couple of months.” In other words he’s supposed to go to see them. The woman was connected to Polish intelligence… (18.30) …She was checking in on Harper. The Poles wanted to re-ignite their relationship with their Silicon Valley spy. Bill Kinane: She called them, it was at nighttime and he was plastered. She must have recognized that. She gave him a number to call back tomorrow morning, and he got the number wrong. Harper, sloshed, wrote down the wrong… (19.00) …number. Bureau agents listened to him dial it the next day—and couldn’t do anything about it. If only Kinane and his FBI colleagues had been able to slip Harper the right number. Then, they might have recorded damning evidence—who knows what he might have said? Bill Kinane: I’m kinda wetting my pants there. You know, “God, What are we gonna do now? How do we get em, the number, you know?” But that was that's, what broke the case. (19.30) Zach: How’d that break the case? Kinane: Because now we knew it was him. The Bureau now definitely had their man. But knowing that Harper was “Jay,” and being able to prove it in court, were two different things entirely. So FBI agents sat and watched Harper’s every move, in the hopes that he would slip up. And that took them on some wild rides.
At some point…
(20.00)
…Bureau agents learned that Harper and Schuler were taking a little vacation to Petrolia, California.
A five hour drive north of the city, Petrolia is a dot of a town in Humboldt County. It’s an area of Northern California home to vast clover-speckled redwood groves and mountains that tumble into the ocean.
And Petrolia would be an excellent place to hide … if you were planning some kind of escape plot.
(20.30)
FBI agents knew Harper and Schuler were traveling to Petrolia, but they didn’t know exactly where they were staying. And the Bureau needed to find out. What if they tried to make a dash for the Soviet Bloc? Or stow away all those secret documents in the redwoods?
FBI Agent Pierre Fournier was on the case: Pierre Fournier: They were concerned, number one, that they might have stashed some of the documents up there. And number two, they were also concerned if he got wind… (21.00) …of the investigation, that he might try to flee to Canada. So Fournier and his wife Janet – who was also an FBI employee – dressed up like tourists and drove north. Pierre Fournier: So we take off and we're gonna try to beat them up there. Well, we actually did. And that allowed them to get the lay of the land. The Fourniers arrived in Petrolia and stopped at a gas station—and you know, those used to have phone booths. (21.30) Pierre Fournier: Janet's sitting on the bench and I'm in the phone booth with my back to her, on the phone talking to San Francisco. And, I just get the feeling, I hear a car come up … Fournier: …and I have a feeling that it, for some reason, I just felt I got this tingling that it must be Harper. The Fourniers were supposed to surveil Harper and Schuler from a distance. But now, they were right in front… (22.00) …of them. Pierre Fournier: Sure enough it's Harper, and Harper asked Janet, cuz she's sitting there. He said, “How's the weather been?” She says, “I don't know. We're just passing through.” So they go inside. I guess he's getting gas. Fournier and his wife Janet quickly hopped in their car and drove out toward a hamlet where they could better see where Harper and Schuler were headed. They parked in front of a random house. But Harper, turning out of the gas station… (22.30) …started driving the same way, directly toward them. Pierre Fournier: And Harper comes out and they come up to this road and they look over there and see our car. And so they start to turn towards us. And so I've got a map out … like we're lost, and they see that and they do a U-turn and they take off this way. Fournier worried that Harper—if he hadn’t already—now suspected he was being followed. (23.00)
So Fournier decided to change tack: he drove up to Eureka, where the nearest FBI satellite office was located. It was time to pull out all the stops in the search for the nuclear spy. Fournier needed an FBI pilot to take him up in a surveillance plane, so he could better look for Harper’s car in Petrolia. Pierre Fournier: We fly down the next day to see if we can spot the car ... from the air… (23.30) …Well, unfortunately I'm in the backseat with, with binoculars that are not stabilized. Mm. And I am getting green, so we have, we have to break off … But I thought that I saw the car. So I said, I'm not going up in that plane again. Fournier and his wife continued the search for Harper’s car the next day. And when they discovered where it was sitting, they were gobsmacked. Pierre Fournier: So we drive down along the coast at five in the morning. The car… (24.00) …is parked right in front of the house that we were parked at. ZD: What?! Fournier: …The day before. A few days prior, Fournier had unknowingly parked in front of the very house the FBI was searching for. Pierre Fournier: And that's why he turned towards the car. ZD: So he got spooked! Pierre Fournier: But then when he realized that we were probably lost . . . that we were trying to find out looking at the map, then he took off and went, I guess… (24.30)
…somewhere else. Since they had located the house, Fournier and his wife Janet could now surveil Harper and Schuler. But they had to be extra careful, since Harper had already spotted them. The Fourniers kept an eye on the two suspected spies until they returned home. Back in Silicon Valley, the FBI blanketed Harper and Schuler with surveillance. A team of agents kept watch on their home. Others eavesdropped on their phones… (25.00) …Bureau investigators had to sit, listen, and wait. And what they saw and heard wasn’t always easy to stomach… By mid-1983, Louise Schuler was deeply unwell. She was a severe alcoholic who had been drinking since she was eight years old. Now, she was stricken with cirrhosis of the liver. As she neared death, she began to unravel… (25.30) …Regret appeared to seep into her conversations with friends. Over their wiretap… FBI agents like George Aradi heard firsthand. Schuler was on her deathbed, confiding to her best friend about her relationship with Harper. But she still had to keep his secrets. George Aradi: And this girlfriend said, “How in the world and why in the world would you get involved in, you know, an unsavory character, as Harper.” Again, she didn't know anything about… (26.00) …espionage. All she just knows that he's a scumbag. And she pauses and says, “There's only one reason, and I never told anybody, and I can't tell you.” Meanwhile, FBI agents watched Harper keep himself busy. Fournier would take photos of Harper’s movements from an unmarked van across the street from his apartment. Pierre Fournier: On my surveillance photography, we'd catch him coming out. He was a little overweight at that point. He'd go out for a jog. (26.30) But Harper’s “jogs” were actually visits to a nearby mistress, Penny Cook. Harper was sneaking off to Cook’s house while his wife wasted away. George Aradi: So, Schuler’s dying, and then he goes, ostensibly, jogging. And he goes, poking fun at her, if you know what I mean. Gets in the shower, comes home. He's all sweaty as if you had jogged for, you know, 10 miles… (27.00) …So to show you what a scumbag he was. On June 22, 1983, Louise Schuler died of cirrhosis of the liver at 39 years old. She was so addicted to alcohol that she apparently snuck in a bottle to her sickbed. For someone so central to this story, Schuler remains something of a mystery. She never had the chance to really explain herself–to her friends… (27.30) …family ... or the law. Why she did what she did. What drove her to become… a spy. And why she latched herself, so closely, to James Harper. When I asked Harper, many years after her death, to describe Schuler, he paused. It was the only time I’d heard him express something like… (28.00) …regret. James Harper: Well, that's a long story. She was a complicated person. Really good looking and fun to be with. Oh God, she, she. “Give her the bizarre.” That's what meant most to her than anything. “Give her the bizarre.” Whatever else Louise Schuler wanted out of life, she got that. (28.30) Harper, too, seemed drawn to the strange, and perhaps grotesque. To FBI agents like Larry Terbush–who helped monitor the tapped phone–Harper’s reaction to Schuler’s death was odd, at best. Larry Terbush: And then he’s talking to friends after she died, talking about how she died. Zach: I mean what was his tone about her dying? Was it…? Larry Terbush: it was macabre… (29.00) …And he talked about her coughing up blood, huge mouthfuls of blood… And just a few months after Schuler died, Bureau agents discovered that Harper decided to elope with his girlfriend Penny Cook in Nevada. But was this a ruse? Were Harper and Cook planning on lamming it? Larry Terbush: We knew on the phone, from the phones that he was going, they were going to go to Nevada to get married. The dates, planes. And then all the connections. And I said, well, that's what they're… (29.30) …gonna do. But then they said, what if he doesn't? What if he goes someplace else? Terbush was told to trail Harper and Cook to Reno, to make sure they were really getting married. He even followed them to the chapel. Harper seemed blissfully unaware of the intensive surveillance he was under. So he returned to Silicon Valley with his new bride. But this honeymoon period wouldn’t last long. Harper’s phone tap clearly revealed a man who was up… (30.00) …to no good. He talked to his brother about the wisdom of stashing money in the Cayman Islands. He spoke to his first wife Colleen about how he’d “never have to work another day.” He told his daughter that he felt “great about not paying any taxes.” Overall, though, Harper’s tapped line didn’t provide any smoking gun. But it certainly exposed him, over many months of recorded conversations, as a man obsessed with his finances.
(30.30) George Aradi again. George Aradi: Prior to his arrest, I mean he was just like trying to eke out a living being an engineer. My recollection was that he wasn’t wheeling and dealing anymore. He's like, wheeling and dealing to save his ass. Harper was like a broker of information. He was a sociopath. Money, money, money. FBI spy hunters were closing in on Harper. But they didn’t have any evidence of Harper discussing his nuclear espionage… (31.00) …Nor did they know where the classified documents he had were hidden away. They needed more if they wanted to arrest Harper… And there was one last source of information that could help put him away for good. But obtaining it? That would be as risky as it got. That’s next, on the final episode of Spy Valley. – Spy Valley is…
(31.30)
…a production of Project Brazen in partnership with PRX.
It's hosted, written and reported by me, Zach Dorfman.
Bradley Hope and Tom Wright, are the Executive Producers. The show is produced by Goat Rodeo. To find more of Goat Rodeo’s work go to goatrodeodc.com The lead producer is Jay Venables. Story editing from Siddhartha Mahanta, Jay Venables and Max Johnston Executive Producers at Goat Rodeo are Megan Nadolski and Ian Enright. Creative Producers at Goat Rodeo are Max Johnston, Rebecca Seidel and Ian Enright. At Project Brazen, Lucy Woods is the Producer. Georgia Gee is Lead Researcher. Mariangel Gonzales is our Project Manager and Megan Dean is Programming Manager. Ryan Ho is the Creative Director. Cover art designed by Julien Pradier. Mixing and engineering by Rebecca Seidel. Music from Goat Rodeo and Blue Dot Sessions. Editorial and Production assistance at Goat Rodeo from Isabelle Kerby-McGowan, Cara Shillenn, Jay Venables and Megan Nadolski. Polish Translation and narration by Hanna Kozlowska. Narration recorded at Outpost Studios in San Francisco. Continue to Follow the show wherever you get your podcasts to stay up to date on new episodes. And subscribe to Brazen Plus on Apple Podcasts for exclusive reporting and bonus material. ##
By the fall of 1981, James Harper was in dire straits.
He was still taking classified missile documents to Mexico to sell to the Soviet Bloc. But he was increasingly worried about getting caught.
And he needed a way out. James Harper: And then about that time, I'm starting to think I'm gonna put this deal together with Bill Dougherty on…
(00.30)
…coming up with immunity from prosecution.
Bill Dougherty was Harper’s Hail Mary. He was an ex-marine fighter pilot, a Republican good ol’ boy with connections in the U.S. military and intelligence world.
And most importantly, Dougherty was a prominent lawyer. Who had experience defending American turncoats.
A few years prior, he had gained fame as the counsel for a former CIA contractor who was busted passing highly…
(01.00)
…classified information to the KGB.
Harper was impressed by Dougherty’s defense of his client–who was, nevertheless, sentenced to decades in prison. But I guess he thought it was his best–maybe only?– option.
James Harper: Finally, I got to a point, <laugh> I guess I got a little nervous about what the hell I was doing.
Harper’s downplaying things a bit here. He was in way over his head, and he
(01.30)
…knew it. So Harper got in touch with Dougherty, but he had to conceal his identity. He was committing espionage after all.
Over the phone, Harper introduced himself as “Jay.” Not the best pseudonym for a man named “James.”
Harper and Dougherty met soon after, at a dingy bar called “The Fling” in Southern California. Over a bloody mary, Harper gave him the highlight…
(02.00)
…reel.
Harper used aliases for everyone involved in his scheme. He called Pszchodzian, his Polish spy handler, “The Minister.” And Hugle, his espionage mentor in Silicon Valley… “The Big Man.”
At the bar, Harper said he wanted to switch sides… again. He had a proposition for the CIA: let him work as a double agent for U.S. intelligence against the Soviet Bloc.
(02.30)
Sure, he’d made hundreds of thousands of dollars passing classified nuclear secrets to the Poles, but now he wanted to wipe the slate clean.
It might have been a delusional gambit. But Dougherty agreed to represent Harper–known only to him as “Jay”–and to get word back to the CIA.
James Harper: And I started working with Dougherty.
ZD: Mm.
James Harper: Then, the whole thing gets real complicated.
Harper and Dougherty began…
(03.00)
…meeting regularly. Sometimes Harper would even give Dougherty audiotapes describing his exploits. Dougherty would listen to “Jay’s” tapes, take notes, then immediately destroy the audio.
Dougherty would then relay “Jay’s” tale of Soviet Bloc espionage to the CIA.
When the agency got Dougherty’s info, alarm bells went off.
A potential Eastern Bloc nuclear spy in California? That’s a big deal…
(03.30)
…Such a big deal that a turf war broke out over who would lead the probe.
George Aradi: The CIA wanted to keep the case and eventually the FBI wrestled the case from them.
That’s George Aradi… who was an FBI counterintelligence agent in San Francisco at the time. The FBI has priority on domestic spy cases like this, and the San Francisco office took it over.
The Bureau codenamed the case of this mysterious spy, “Tinsel Tyrant.” George Aradi: So, he sought… (04.00) …assistance from that attorney. And he gave him like a long audio tape of things he had done, but in a very veiled way, not enough to determine who the person that's narrating this thing was … That’s why they call it “Tinsel Tyrant,” you know, tinsel, meaning, you know, the cellulose tape. So these have reel-to-reel. So that's where the code name comes from. (04.30) But this unknown spy, “Jay,” had some pretty grandiose demands. George Aradi: Yes, he wanted to cut a deal … He wanted like a half a million dollars. He wanted some money, I think. Harper, having made a small fortune spying for the Soviet Bloc, now wanted the U.S. government to pay him another fortune to become a double agent for the CIA. It was his most audacious scheme yet. (05.00) I’m Zach Dorfman.
From Project Brazen and PRX … This is Spy Valley. Episode 5: The Doomsday Machine Ronald Reagan: Since the dawn of the atomic age, we've sought to reduce the risk of war by maintaining a strong deterrent and by seeking genuine arms control. We maintain the peace through our strength; weakness only invites aggression.
1983 was a hair-trigger year in U.S.-Soviet relations…
(05.30)
…And Moscow’s missiles were on President Ronald Reagan’s mind. That year, he delivered what became widely known as his “Star Wars” speech.
Reagan proposed the U.S. develop a laser system that could shoot down ballistic missiles en masse.
He believed that, if the U.S. could protect itself from Soviet nuclear assault, it would no longer be haunted by the specter of “mutually assured destruction.”
Reagan: I am directing a…
(06.00)
…comprehensive and intensive effort to define a long-term research and development program to begin to achieve our ultimate goal of eliminating the threat posed by strategic nuclear missiles.
The Soviets saw things differently, of course. They believed that Reagan’s proposal was designed to launch a preemptive strike on Moscow. And that belief, even if faulty, put the world in unprecedented danger…
(06.30)
…This was one of the hottest periods of the cold war.
Nuclear competition between the superpowers was as high-stakes as things got. And that’s the world in which Harper decided to spy for Moscow’s allies. So when FBI spy hunters in San Francisco heard about this “Jay” selling nuclear secrets to the Soviet Bloc… it was their top priority. FBI agents fanned out to identify this mysterious spy. (07.00) George Aradi: There must have been like 40 to 60 suspects that were under consideration as could be Tinsel Tyrant. Top officials in Washington had already decided there was no chance that they’d make a deal with this anonymous turncoat. Nuclear espionage was simply too grave a crime. Hell, people had been executed for it. FBI agents were incredulous that this mystery spy would even make such a proposition. (07.30) Don Ulrich, who worked closely on the FBI’s Tinsel Tyrant case, remembers his shock. Zach: You know apparently the gambit was … immunize me and I’ll be a double agent for you, and … Don Ulrich: That was not gonna work … Zach: I’ve been giving missile secrets for years and years … Don Ulrich: Now I want to help. . . after I have sold out my country . . . to one of the most sensitive national defense secrets … on earth. . . . . how to survive a first… (08.00) …strike. I mean, geez! Although they were firmly against striking a deal, officials needed to keep “Jay” talking. So they asked Dougherty about his client’s activities, fishing for details. By prolonging their quote unquote “negotiations” with this unknown spy, the FBI and DOJ, were giving Jay all the rope he needed to hang himself. And, man, did he talk… (08.30) …Over half a dozen in-person rendezvouses, and 50-plus phone calls, Jay kept feeding Dougherty more precise details of his espionage for the Soviet Bloc. About his visits to Geneva and Vienna, where he sold purloined missile documents to “The Minister.” He told them that… the initial meetings were facilitated by ”The Big Man,” a kingpin of illegal technology transfer to the Soviet Bloc. And that… he, Jay… (09.00) …still had upwards of one hundred pounds of missile-related documents, ready to sell. He even mentioned those waterlogged missile documents he gave to Moscow’s proxies in Warsaw. Eventually, U.S. investigators hit paydirt. Because “Jay” gave up the “Big Man’s” name: Bill Hugle. Kinane: The case on Hugle… Farmer: Hugle, a slimy person … Kinane: Drugs, multiple… (09.30) …women… Ulrich: … what we were looking at through the grand jury was Bill Hugle. Kinane: … He was such a lowlife … he probably, he’s probably a spy. Ulrich: His name had come up. Uh, Harper had identified him in his notes to Dougherty. In truth, Hugle was already a suspect. For years, the FBI had been investigating Hugle's business with the Soviet Bloc. Here’s the FBI’s Bill Kinane: Bill Kinane: But Hugle was the guy that we looked at first… (10.00) …And somehow, we got off—I don’t know how it happened—but we got off on the wrong guy, but the wrong guy had been in contact with Harper. For the Bureau, “Jay’s” explicit mention of Hugle cemented their connection. And the FBI began tapping Hugle’s phone. FBI agents also knew of Hugle’s past dealings with the Poles. And they knew that “Jay” had also identified Hugle as a Polish intelligence asset. But the Bureau… (10.30) …wasn’t having much luck with its eavesdropping of Hugle. You see … it’s easy to forget, amid all this espionage, that both Hugle and Harper were Silicon Valley entrepreneurs, trying to score big with new hi-tech innovations. This was, after all, the 80s tech boom: a time of great greed, with great fortunes being made. Don Ulrich: It was the Wild West then. They were cowboys. They were on the edge. They were… (11.00) …out to make MILLIONS of dollars. It was a burgeoning industry. That’s Don Ulrich again. Through its phone tap, Bureau agents listened in as Hugle wheeled and dealed. At the time, he was trying to raise funds for some type of new semiconductor technology start-up. Don Ulrich: Hugle's tech was full of get rich schemes. Hugle was on, on the phone, all day long, hustling. And he talked ad infinutum… (11.30) …with everybody in Silicon Valley at that time about, about, you know, getting venture capital. But the urbane Hugle wasn’t about to talk about spying over the phone. And connecting Harper and Hugle also wasn’t easy. Don Ulrich: They were estranged. They were not talking to each other, I’m sure by then. Harper stiffed him. He never paid Bill Hugle a penny. That is, Harper never paid Hugle… (12.00) …for their shared spying. Don Ulrich: Harper said he was really pissed <laugh>. As Harper became increasingly desperate to cut a deal, he kept revealing more to Dougherty about his Soviet Bloc espionage. He wanted to impress the officials speaking with his lawyer. But in reality, he was just providing U.S. spy hunters more clues about his true identity. Don Ulrich: You know he gave way too much information about himself in those communications… (12.30) …with Dougherty. It was inevitable that, uh, sooner or later we would find out who he was. It was so naive thinking that he could <laugh> he could talk his way out of espionage by coming to the good guys and <laugh> and telling us all he knew. At any rate, that was… It was fortunate for us. And there was another, critical, aspect of the… (13.00) …FBI’s investigation that Dougherty and Harper didn’t know about. The CIA’s secret mole within the Polish intelligence services, codenamed, “Caribou.” Remember Caribou, from episode 1? He was the CIA’s source who kicked off the FBI’s whole investigation into an unknown Soviet Bloc agent in Silicon Valley. Kinane: And I knew—I personally knew the source. The source was recruited in… (13.30) …Chicago. Bureau officials immediately put two and two together. Before Dougherty ever approached the CIA about a deal for his mysterious client “Jay,” FBI spy hunters in San Francisco were already at work trying to chase down those leads from Caribou. From Caribou, the Bureau had already been told that this California-based spy was “being run” by a senior Polish intelligence officer named Pszychodzian… (14.00) …Caribou also knew about Pszychodzian’s connections to a Silicon Valley businessman named Bill Hugle… And from Caribou, the Bureau had already learned about this unnamed American spy’s trips to Warsaw, and the waterlogged missile documents he’d provided to the Poles. Don Ulrich: The documents had arrived in poor wet condition, they had to call in Soviet technicians. Zach: 20 guys came overnight, from Moscow to Warsaw. Ulrich: … to take care… (14.30) …of it. The “Tinsel Tyrant” case and the intelligence from Caribou were on an inevitable collision course. “Jay” had to be the mysterious American spy Caribou described. Don Ulrich: And they dovetailed. And it was obvious they were talking about the same guy. But what was his name? Both sources of intelligence were just ambiguous enough to frustrate FBI investigators. (15.00) Bureau agents interviewed Hugle’s known associates, and chased down whatever leads they could glean. And then one day, with a little luck, they struck gold. George Aradi: Cause Tinsel Tyrant, he talked about a lot … a lot of crap going down in Silicon Valley … with a lot of different countries. You see, in his bid for immunity, “Jay” kept divulging information to Dougherty about Silicon Valley-related crimes—and not just his own. Jay had a contact, an engineer… (15.30) …in the Valley, who was allegedly interested in some sort of illicit deal. They lived in the same area, and one Sunday morning, Jay ran into the engineer on the street. They talked business. But here was Jay’s fatal error. In conversation with his lawyer, he named this engineer buddy. Now FBI officials had another name. And maybe this person could lead them to “Jay.” But FBI agents didn’t know… (16.00) …what this engineer knew, or his relationship with the mysterious “Jay.” Hell, this man could be Jay himself. So they had to be careful. Bureau agents couldn’t afford to tip their hand. It might cause the whole case to collapse. In March 1983, two FBI agents followed this lead from “Jay” about the engineer. George Aradi: They went and interviewed this, this guy very like, obliquely. And just at some point they asked him…
(16.30) …“Do you, do you ever remember, a colleague down in Silicon valley, and all of a sudden you stopped and had a conversation with him on a Sunday morning?” And the guy said, “Yeah. This guy, James Harper.” George Aradi: That's, that's how it happened. George Aradi: That was the Eureka moment for the two interviewers. They never heard that name before. James. Harper. We’ll be back after the break. – We’re back. (17.00) FBI spyhunters immediately revved up an investigation into this new suspect: James Harper. But something didn’t add up. Harper didn’t currently have a security clearance; didn’t work with classified documents; and didn’t work on nuclear missile defense. But soon, Bureau agents figured it out: Harper’s girlfriend-turned-wife, Schuler, had access to a bonanza of nuclear missile secrets. George Aradi: They determined that… (17.30) …he's the paramour of Schuler. And then she had a top secret clearance. Bureau agents didn’t have a “smoking gun” to prove that Harper was “Jay.” Nor could they prove that he was the same nuclear spy described by the CIA’s Polish agent, “Caribou.” But they did have enough evidence against Harper to have wiretaps placed on his phone, and to begin round-the-clock surveillance on him. One day, the Bureau had an important breakthrough.
(18.00)
Here’s the FBI’s Bill Kinane, who closely reviewed the Harper wiretaps. Bill Kinane: What broke the case is that he got a phone call from what we would call a “cutout.” So there was some lady in Europe, called, speaking English and said, uh, “How are you doing? You know, we missed you the last couple of months.” In other words he’s supposed to go to see them. The woman was connected to Polish intelligence… (18.30) …She was checking in on Harper. The Poles wanted to re-ignite their relationship with their Silicon Valley spy. Bill Kinane: She called them, it was at nighttime and he was plastered. She must have recognized that. She gave him a number to call back tomorrow morning, and he got the number wrong. Harper, sloshed, wrote down the wrong… (19.00) …number. Bureau agents listened to him dial it the next day—and couldn’t do anything about it. If only Kinane and his FBI colleagues had been able to slip Harper the right number. Then, they might have recorded damning evidence—who knows what he might have said? Bill Kinane: I’m kinda wetting my pants there. You know, “God, What are we gonna do now? How do we get em, the number, you know?” But that was that's, what broke the case. (19.30) Zach: How’d that break the case? Kinane: Because now we knew it was him. The Bureau now definitely had their man. But knowing that Harper was “Jay,” and being able to prove it in court, were two different things entirely. So FBI agents sat and watched Harper’s every move, in the hopes that he would slip up. And that took them on some wild rides.
At some point…
(20.00)
…Bureau agents learned that Harper and Schuler were taking a little vacation to Petrolia, California.
A five hour drive north of the city, Petrolia is a dot of a town in Humboldt County. It’s an area of Northern California home to vast clover-speckled redwood groves and mountains that tumble into the ocean.
And Petrolia would be an excellent place to hide … if you were planning some kind of escape plot.
(20.30)
FBI agents knew Harper and Schuler were traveling to Petrolia, but they didn’t know exactly where they were staying. And the Bureau needed to find out. What if they tried to make a dash for the Soviet Bloc? Or stow away all those secret documents in the redwoods?
FBI Agent Pierre Fournier was on the case: Pierre Fournier: They were concerned, number one, that they might have stashed some of the documents up there. And number two, they were also concerned if he got wind… (21.00) …of the investigation, that he might try to flee to Canada. So Fournier and his wife Janet – who was also an FBI employee – dressed up like tourists and drove north. Pierre Fournier: So we take off and we're gonna try to beat them up there. Well, we actually did. And that allowed them to get the lay of the land. The Fourniers arrived in Petrolia and stopped at a gas station—and you know, those used to have phone booths. (21.30) Pierre Fournier: Janet's sitting on the bench and I'm in the phone booth with my back to her, on the phone talking to San Francisco. And, I just get the feeling, I hear a car come up … Fournier: …and I have a feeling that it, for some reason, I just felt I got this tingling that it must be Harper. The Fourniers were supposed to surveil Harper and Schuler from a distance. But now, they were right in front… (22.00) …of them. Pierre Fournier: Sure enough it's Harper, and Harper asked Janet, cuz she's sitting there. He said, “How's the weather been?” She says, “I don't know. We're just passing through.” So they go inside. I guess he's getting gas. Fournier and his wife Janet quickly hopped in their car and drove out toward a hamlet where they could better see where Harper and Schuler were headed. They parked in front of a random house. But Harper, turning out of the gas station… (22.30) …started driving the same way, directly toward them. Pierre Fournier: And Harper comes out and they come up to this road and they look over there and see our car. And so they start to turn towards us. And so I've got a map out … like we're lost, and they see that and they do a U-turn and they take off this way. Fournier worried that Harper—if he hadn’t already—now suspected he was being followed. (23.00)
So Fournier decided to change tack: he drove up to Eureka, where the nearest FBI satellite office was located. It was time to pull out all the stops in the search for the nuclear spy. Fournier needed an FBI pilot to take him up in a surveillance plane, so he could better look for Harper’s car in Petrolia. Pierre Fournier: We fly down the next day to see if we can spot the car ... from the air… (23.30) …Well, unfortunately I'm in the backseat with, with binoculars that are not stabilized. Mm. And I am getting green, so we have, we have to break off … But I thought that I saw the car. So I said, I'm not going up in that plane again. Fournier and his wife continued the search for Harper’s car the next day. And when they discovered where it was sitting, they were gobsmacked. Pierre Fournier: So we drive down along the coast at five in the morning. The car… (24.00) …is parked right in front of the house that we were parked at. ZD: What?! Fournier: …The day before. A few days prior, Fournier had unknowingly parked in front of the very house the FBI was searching for. Pierre Fournier: And that's why he turned towards the car. ZD: So he got spooked! Pierre Fournier: But then when he realized that we were probably lost . . . that we were trying to find out looking at the map, then he took off and went, I guess… (24.30)
…somewhere else. Since they had located the house, Fournier and his wife Janet could now surveil Harper and Schuler. But they had to be extra careful, since Harper had already spotted them. The Fourniers kept an eye on the two suspected spies until they returned home. Back in Silicon Valley, the FBI blanketed Harper and Schuler with surveillance. A team of agents kept watch on their home. Others eavesdropped on their phones… (25.00) …Bureau investigators had to sit, listen, and wait. And what they saw and heard wasn’t always easy to stomach… By mid-1983, Louise Schuler was deeply unwell. She was a severe alcoholic who had been drinking since she was eight years old. Now, she was stricken with cirrhosis of the liver. As she neared death, she began to unravel… (25.30) …Regret appeared to seep into her conversations with friends. Over their wiretap… FBI agents like George Aradi heard firsthand. Schuler was on her deathbed, confiding to her best friend about her relationship with Harper. But she still had to keep his secrets. George Aradi: And this girlfriend said, “How in the world and why in the world would you get involved in, you know, an unsavory character, as Harper.” Again, she didn't know anything about… (26.00) …espionage. All she just knows that he's a scumbag. And she pauses and says, “There's only one reason, and I never told anybody, and I can't tell you.” Meanwhile, FBI agents watched Harper keep himself busy. Fournier would take photos of Harper’s movements from an unmarked van across the street from his apartment. Pierre Fournier: On my surveillance photography, we'd catch him coming out. He was a little overweight at that point. He'd go out for a jog. (26.30) But Harper’s “jogs” were actually visits to a nearby mistress, Penny Cook. Harper was sneaking off to Cook’s house while his wife wasted away. George Aradi: So, Schuler’s dying, and then he goes, ostensibly, jogging. And he goes, poking fun at her, if you know what I mean. Gets in the shower, comes home. He's all sweaty as if you had jogged for, you know, 10 miles… (27.00) …So to show you what a scumbag he was. On June 22, 1983, Louise Schuler died of cirrhosis of the liver at 39 years old. She was so addicted to alcohol that she apparently snuck in a bottle to her sickbed. For someone so central to this story, Schuler remains something of a mystery. She never had the chance to really explain herself–to her friends… (27.30) …family ... or the law. Why she did what she did. What drove her to become… a spy. And why she latched herself, so closely, to James Harper. When I asked Harper, many years after her death, to describe Schuler, he paused. It was the only time I’d heard him express something like… (28.00) …regret. James Harper: Well, that's a long story. She was a complicated person. Really good looking and fun to be with. Oh God, she, she. “Give her the bizarre.” That's what meant most to her than anything. “Give her the bizarre.” Whatever else Louise Schuler wanted out of life, she got that. (28.30) Harper, too, seemed drawn to the strange, and perhaps grotesque. To FBI agents like Larry Terbush–who helped monitor the tapped phone–Harper’s reaction to Schuler’s death was odd, at best. Larry Terbush: And then he’s talking to friends after she died, talking about how she died. Zach: I mean what was his tone about her dying? Was it…? Larry Terbush: it was macabre… (29.00) …And he talked about her coughing up blood, huge mouthfuls of blood… And just a few months after Schuler died, Bureau agents discovered that Harper decided to elope with his girlfriend Penny Cook in Nevada. But was this a ruse? Were Harper and Cook planning on lamming it? Larry Terbush: We knew on the phone, from the phones that he was going, they were going to go to Nevada to get married. The dates, planes. And then all the connections. And I said, well, that's what they're… (29.30) …gonna do. But then they said, what if he doesn't? What if he goes someplace else? Terbush was told to trail Harper and Cook to Reno, to make sure they were really getting married. He even followed them to the chapel. Harper seemed blissfully unaware of the intensive surveillance he was under. So he returned to Silicon Valley with his new bride. But this honeymoon period wouldn’t last long. Harper’s phone tap clearly revealed a man who was up… (30.00) …to no good. He talked to his brother about the wisdom of stashing money in the Cayman Islands. He spoke to his first wife Colleen about how he’d “never have to work another day.” He told his daughter that he felt “great about not paying any taxes.” Overall, though, Harper’s tapped line didn’t provide any smoking gun. But it certainly exposed him, over many months of recorded conversations, as a man obsessed with his finances.
(30.30) George Aradi again. George Aradi: Prior to his arrest, I mean he was just like trying to eke out a living being an engineer. My recollection was that he wasn’t wheeling and dealing anymore. He's like, wheeling and dealing to save his ass. Harper was like a broker of information. He was a sociopath. Money, money, money. FBI spy hunters were closing in on Harper. But they didn’t have any evidence of Harper discussing his nuclear espionage… (31.00) …Nor did they know where the classified documents he had were hidden away. They needed more if they wanted to arrest Harper… And there was one last source of information that could help put him away for good. But obtaining it? That would be as risky as it got. That’s next, on the final episode of Spy Valley. – Spy Valley is…
(31.30)
…a production of Project Brazen in partnership with PRX.
It's hosted, written and reported by me, Zach Dorfman.
Bradley Hope and Tom Wright, are the Executive Producers. The show is produced by Goat Rodeo. To find more of Goat Rodeo’s work go to goatrodeodc.com The lead producer is Jay Venables. Story editing from Siddhartha Mahanta, Jay Venables and Max Johnston Executive Producers at Goat Rodeo are Megan Nadolski and Ian Enright. Creative Producers at Goat Rodeo are Max Johnston, Rebecca Seidel and Ian Enright. At Project Brazen, Lucy Woods is the Producer. Georgia Gee is Lead Researcher. Mariangel Gonzales is our Project Manager and Megan Dean is Programming Manager. Ryan Ho is the Creative Director. Cover art designed by Julien Pradier. Mixing and engineering by Rebecca Seidel. Music from Goat Rodeo and Blue Dot Sessions. Editorial and Production assistance at Goat Rodeo from Isabelle Kerby-McGowan, Cara Shillenn, Jay Venables and Megan Nadolski. Polish Translation and narration by Hanna Kozlowska. Narration recorded at Outpost Studios in San Francisco. Continue to Follow the show wherever you get your podcasts to stay up to date on new episodes. And subscribe to Brazen Plus on Apple Podcasts for exclusive reporting and bonus material. ##