KGB NORTH AMERICAN SPY NETWORK STAGED FROM MONTREAL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000604920015-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: May 4, 2012
• Sequence Number: 15
• Publication Date: April 27, 1987
• Content Type: OPEN SOURCE

STAT __a
Declassified in Part -Sanitized Copy Approved for Release 2012/05/04 :CIA-RDP90-009658000604920015-8
UIV t'Alit a -.~ 27 Apri 1 1987
KGB North American spy networK
stages from Montreal
~e /~By Warren Perley
`~ UNI7ED-PRESS INTERNATIONAL,
The Soviets' sensitivity about
their Canadian operation was never
so clear as on a wintry day this year
when they let their consulate burn
rather than admit Montreal fire-
fighters.
The result was a gutted three-
storybuilding and a very public sug-
gestionthat there was more going on
inside than arranging tourist visas.
When the minor electrical fire ig-
nited Jan. 14, consulate officials
barred firemen for 15 minutes while
they removed documents. When
firemen were finally allowed onto
the grounds; they attempted to break
out some third-floor windows to
make way for their hoses -only to
find them bricked up from the in-
side.
When the firefighters were ad-
mitted to the structure, they still
were refused access to certain
rooms.
Afterward, Soviet Embassy offi-
cial Igor Lobanov blunted questions ,
about spying: "I won't say anything
about that."
And the bricked up windows?
"Redecoration:'
And the documents that were
more precious than the building?
Shrugged Mr. Lobanov, "You
know, Western embassies in Moscow
don't keep copies of Playboy mag-
azine in their files."
What the West had was a tacit ad-
n-ission of what it has known for
years -that the KGB was running
a ve"ry active operation out of Mont-
real.
Canadian security sources said
the third floor of the consulate con-
tained amicrowave communications
center that maintained contact with .
agents in the Washington-New York-
Bostonareas. Arooftop satellite dish
concealed in a wooden shed
monitored phone calls to and from
the U S. and British consulates and
U.S. defense contractors, in Mont-
real.
The bricks in. the third-floor win-
doves were probably to block the la- ?
ser microphones of Canadian agents
trying to record Soviets' conversa-
tions; a Canadian counterintelli-
gence specialist said. ,
Jean-Louis Gagnon, a spokesman
for the Canadian Security Intelli-
gence Service - Canada's
equivalent of 'the FBI - ac-
knowledges that Montreal is."an im-
portantarea" for foreign espionage.
Montreal area companies do re-
search and build weapons systems
for NATO and the U.S. Defense De-
partment.
Of the $145.9 billion in defense
contracts signed by the Pentagon in
fiscal 1986, $644.6 million went to
Canadian companies.
"Those are classified materials
that would logically be of interest to
those people [the Russians]," Mr.
Gagnon said. "Montreal is an impor-
tantarea for our counterintelligence
operations."
Western security agents say
Canada, especially Montreal, is rife
with KGB agents.
"The Soviets feel more secure in
Canada than in the United States;' a
contract operator for several West-
ern intelligence services said. "This
is where a lot of KGB agents come
to get groomed before moving on to
more sophisticated espionage and
subversive operations in the United
States."
The operator, who said he had
done numerous jobs worldwide for
the CIA in the last 20 years, asked not
to be identified.
He described Montreal as "a ma-
jor center for clandestine KGB ac-
tivities involving espionage, subver-
sion, terrorist training and
communications with enemy
agents:'
The KGB's primary target is al-
ways the United States, he said.
"They like Montreal because they
can communicate easily with their
U S.-based agents from here. It's
very easy for them to cross the bor-
derover I-87using ptionyidentities:'
KGB veteran Vitaly Yurche
who defected on ~. , only to
return to the Soviet Union three
months later, was said to have
headed KGB operations in North
America between April and July
.1985.
The CIA released a statement on
Nov 8, 1985, in which it said Mr Yur-
chenkosupervised the KGB staffs in
I/Iontreal and Ottawa and was re-
sponsible for recruiting double
agents in U.S. intelligence services.
The CIA told a Senate intelligence
committee that Mr. Yurchenko had
been a genuine defector who had
second thoughts, partly because his
mistress- the wife of a Soviet diplo-
mat in Canada -had refused to de-
fect with him.
Another recent spy case involving?
Canada and the United States was
. k, that of Larry. Wu-'Psi Chin,.a former
CIA employee convicted Feb. 7,
1986, of spying for China.
The FBI said Chin, 63, made four
trips to 'Ibronto between 1976 and
1982 to deliver secret documents.
He committed suicide before being
sentenced.
The 1977 defection of KGB Coi.
Rudi Herrmann who became an
~rican dot}bledot}ble agent after the
KGB tried to recruit his son, is an-
other prominent case involving the
United States and Canada.
Col. Herrmann, a Czech by birth,
was trained in Moscow after World
War II and sent into West Germany.
He emigrated in the 1950s to
Canada, where he worked until 1968
as a film technician for investigative
journalists.
His job gave him a perfect cover
for frequent trips to the United
States, France, Germany and aii over
Canada. He even acted as a sound-
man for a documentary on White
House security.
Coi. Herrmann was, promoted to
top KGB man in Canada before be-
ing transferred in 1968 to the United
States, where he continued working
for the KGB.
When he defected in 1977, he
named Hu hHu h Ha eco-
nomics pro essor at Laval Univer-
sity in Quebec City, as a longtime
KGB ,agent who had passed NATO
secrets when he worked for'the alit-
ance in Paris in the mid-1950s.
As in all good spy .stories, Col.
Herrmann vanished in November
1979.
Intelligence sources say he, his
wife and children were given new
identities by. the FBI and are now
living in Arlington, Va. .
Declassified in Part -Sanitized Copy Approved for Release 2012/05/04 :CIA-RDP90-009658000604920015-8
 Declassified in Part -Sanitized Copy Approved for Release 2012/05/04 :CIA-RDP90-009658000604920015-8
One reason the KGB might feel _
more secure operating -out of
Canada is CSIS' modest 1985-86 bud-
- get of $82 million and its small num-
ber of employees -.1,800. It is not
known how many of those are actual
.counterintelligence agents.
Jeffrey Richelson, an assistant
professor of government at the
American University in Washington
who has written?two books on U.S.
and Soviet intelligence operations,
says both nations have large num-
bers inthe field, but few are actually
involved in day-to-day spying.
Mr. Richelson said the United
States employs more than 150,000
people ~ in intelligence activities,
100,000 of whom work for military
intelligence units.
Some 20,000 work for the CIA,
most in administrative and technical
work in Washington. Another 10,000
are split among the National Recon-
naissance Office, which oversees
U.S. spy satellites, and various minor
civilian intelligence agencies.
The National Security Agency,
however, is by far the largest, most
secret and most costly of the U.S.
intelligence agencies. Although lit=
tle is publicly known about the NSA,
it may have up to 50,000 employees,
including many in the military. It has
access to nuclear submarines;: spy
planes, spy satellites and bags of ex- .
otic equipment:
' "The number of people in the field-
actually involved in spying or coun-
terintelligence is small - .the low
thousands, maybe 2,000;' Mr. Ri,chel-
son said.
The Soviets have about 700,000 .
people employed in intelligence and
. security .work worldwide, Mr.
Richelson said. Most are part of the
internal security police within the
Soviet Union.
Up to 400,000 work as border
guards within the Soviet Union, and
100,000 are involved in internal po-
lice operations.
The KGB's foreign intelligence
branch employs 15;000 people, he
said. Of the 15,000, about 4,000
would be involved in field operations
abroad.
Between 35 and 40 percent of So-
viet foreign diplomats work directly
in spying, he said.
A Canadian External Affairs de-
partment official said there are 33
Soviet diplomats in Canada - in
Montreal and Ottawa -with about
another 30 support staff.
Some diplomats believe Canada is
a staging area for KGB operations
throughout North America.
Four years ago, defector Arkady
Shevchenko, former Soviet ambas-
sador and undersecretary to the
United Nations, said in an interview
that "Canada has never been taken
~ as a minor.power [by the Sovietsl. It
_ is seen as one of the most important
countries of the West.... If they can
divide Canada and the United States,
it would be considered a great
achievement"
Before he came to power two
years ago, Prime Minister Brian
Mulroney said Soviet spies were so
"This is where a lot
of KGB agents come
to get groomed before
moving on to more
sophisticated ...
operations in the
United States."
thick in Canada that "you and I both
stumble into KGB agents in Ottawa
every day of the week"
.Since 1978, 21 Soviet diplomats '
have-been expelled for alleged in-
volvement in intelligence activities.
When he was Canadian solicitor-
general responsible for counterin-
telligence between 1980 and 1984,
Robert Kaplan was aware of "a lot"
of Soviet activity in Canada.
"Soviet espionage has. moved
from the traditional targeting of do-
mestic government policy secrets
and plans into the whole military-
industrial and high-tech fields;' he
said. "The targets are very often
American products and technology
in Canada. Cuba runs almost its
whole American operation out of
Canada:'
He also acknowledged that the ;
CIA has traditionally been allowed to
spy on the spies in Canada with the a
permission of the Canadian govern-
ment.
Declassified in Part -Sanitized Copy Approved for Release 2012/05/04 :CIA-RDP90-009658000604920015-8