American Kompromat

by Craig Unger

  The report noted that Hanssen’s supervisor characterized him as a deeply religious social misanthrope who was technically proficient and analytical but was also repressed, aggrieved, and intent on showing that he was smarter than his colleagues.18 He first began to spy for the GRU between 1979 and 1981, when he transferred to New York to do Soviet counterintelligence work, which was his specialty for most of his FBI career. According to the inspector general’s report, “Hanssen quickly began exploiting weaknesses in the FBI’s internal information security” and before long had “gained access to the FBI’s most sensitive human assets and technical operations against the Soviet Union.” Eventually that included information specifying American strategies in the event of a nuclear war, new weapons technologies, and the identities of active US assets in the Soviet Union.19

  Hanssen, like Ames, was later captured, tried, convicted, and sentenced to life imprisonment without possibility of parole. But in 1985, he had just been transferred back to the FBI’s New York office, where he had served four years earlier. According to the New York Times, his job was to supervise “hundreds of agents in his division who were consumed by what they saw as all-out war against hostile targets, primarily the Soviet Union.”20

  “The notion that he’d sell out his country as a citizen, as an F.B.I. agent and as a fighter in the cold war—knowing what he knew, and the circumstances of what he was doing—is unbelievable,” James K. Kallstrom, who knew Hanssen in the mid-eighties when his division supported counterintelligence squads, told the New York Times.21 “He was a lieutenant in that war, and the war was being fought in the streets of New York.”

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  Kallstrom, who ended up running the FBI’s New York office in the mid-nineties and oversaw successful investigations into both the Italian Mafia and later the Russian Mafia, had developed friendships with two key players in the Trump-Russia saga. He worked closely with then US attorney for the Southern District of New York Rudy Giuliani in the investigation of the Cosa Nostra network that led to the famed Mafia Commission Trial of 1985–1986, which convicted the heads of the so-called Five Families.

  Going even further back, Kallstrom had also been friends with Donald Trump since around 1973, when Kallstrom was putting together a parade in New York to honor Vietnam veterans, and Trump came along to fund most of it. “We just got to be friends,” said Kallstrom in a 2020 interview as the Trump reelection campaign was just gearing up. (The interview was done for a 2020 documentary about Trump and the FBI called An American Affair: Donald Trump and the FBI.)22 “I went to a few dinners with him, we talked quite often. He was very, very supportive of the bureau. We lose an agent, or somebody gets shot up, he was always there to pay for the food or whatever it took.”

  According to the New York Times, Kallstrom had founded the Marine Corps–Law Enforcement Foundation, a nonprofit that got more than $1.3 million from Trump, an unusually generous offering from the usually parsimonious real estate developer.23

  Their relationship was such that Kallstrom said things about Trump that were diametrically opposed to the way most Americans saw him. “I would say we were associates who liked each other,” Kallstrom added, in the film. “He [Trump] would call me periodically and try to boost my morale, and then I’d call him when he was in the news and try to boost his morale. But he’s basically a very, very good person and with a big heart that does a lot of things, ninety percent of which nobody knows about. I mean, we stay in touch even today.”

  But Trump being Trump, loyalty and generosity came with strings attached. “He [Trump] cultivated FBI people,” investigative reporter Jeff Stein, editor of SpyTalk, says in An American Affair. “And that’s well-known behavior by people who swim in dangerous waters. They want to have a get-out-of-jail card, and that get-out-of-jail is having friendships or being a good source for the FBI.”

  Kallstrom insisted that Trump was not an FBI informant, but another agent told Stein that Trump was known within the bureau as a “hip pocket” source—that is, someone who was not officially a source and therefore not in the FBI files, but who had curried enough favor to be known as a “friend.”

  On the one hand, Trump had millions coming in from Russian mobsters like David Bogatin buying luxury condos to launder money. He also had at least a sporadic connection with Kislin, who came to Trump’s aid after his massive bankruptcies in Atlantic City in the nineties by issuing mortgages for condos in Trump World Tower, the seventy-two-story luxury high-rise near the United Nations. According to an investigation by Bloomberg Businessweek, one-third of the units on the tower’s priciest floors had been snatched up by individual buyers or limited-liability companies tied to Russia or the former Soviet Union.24 (Kislin attorney Jeffrey Dannenberg said the report was untrue.)

  Among those who reportedly got Kislin-issued mortgages for Trump condos was Vasily Salygin, who later became an official of Ukraine’s pro-Putin Party of Regions, for which Paul Manafort, later Trump’s campaign manager, worked. And finally, Kislin partner Tamir Sapir, who lived in Trump Tower until his death in 2014, also helped bail out Trump by funding the ill-fated Trump SoHo development.

  Hence, Kallstrom’s friendship with Trump set up a curious calculus. Bogatin, Kislin, Sapir, and mobster Vyacheslav Ivankov, one of the most brutal gangsters in the history of the Russian Mafia, who owned a Trump Tower condo in the nineties, all allegedly had ties to the Russian Mafia and/or the KGB. All of them were on the FBI’s radar screen, and on Trump’s. Who knows what information Trump and Kallstrom exchanged about them?

  And Kallstrom wasn’t the only person in the FBI who played for both sides. Indeed, as the New York Post25 and New York Times26 reported respectively, FBI special agent Joel Bartow investigated both Kislin and Chernoy and later asserted that neither had ties with the Russian Mafia, that they were both clean.

  But as the New York Post reported in 1999, Bartow, who left the FBI in 1997,27 had been hired by Kislin and was also on retainer with Kislin’s law firm, Rosenman & Colin. And as the Times reported in 2001, Bartow had begun working for Mikhail Chernoy as well in 2000. And, not surprisingly, now that Bartow had left the FBI behind and was actually on the payroll of the very people he had been investigating, the FBI was not terribly supportive of his conclusions. “He doesn’t speak for the FBI,” a spokesman for the Bureau told the Times.28

  Similarly, Donald Trump was on both sides of the law. That’s the way he liked it. He could afford to be generous with Kallstrom, but he expected something in return. And when it came to his ties to the Soviets, Trump was also being paid back—and quite handsomely. Far from being a unique transaction for Trump, the all-cash sale of condos to David Bogatin became the paradigm. It was an extremely safe and efficient way to launder vast amounts of money. And, as was documented by a 2018 BuzzFeed News investigation, more than 1,300 Trump-branded condos in the United States were sold “in secretive, all-cash transactions that enable buyers to avoid legal scrutiny by shielding their finances and identities.”29

  It may be impossible to calculate the exact amount of money Trump reaped from such transactions, but given that the average price of the condos was $1.2 million, the total amount of flight capital being parked in Trump condos was likely more than $1.5 billion, a significant but unknown part of which came from Russians. And that involves the sale of condos only in the United States, and does not include Trump properties in Turkey, Canada, Panama, the Philippines, India, Azerbaijan, or elsewhere.

  Later, long after he took up residence in the White House, people asked again and again what the Russians had on Trump. And in a way, it’s really quite simple: They owned him.

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  Meanwhile, throughout the mid-eighties, New York was a hotbed of spies. There was the Russian Mafia in Brighton Beach. The Joy-Lud electronics store. Donald Trump. As yet unidentified moles—Aldrich Ames and Robert Hanssen—were wreaking havoc. And the Soviet M
ission to the United Nations was said to be harboring a huge nest of operatives.30

  When it came to taking on the Soviets, the FBI’s New York office was home base. As the FBI’s largest office, situated in same city as the UN, its agents were supposed to lead the way in investigating the Soviets. And among them was Hanssen, the worst turncoat in FBI history.

  No battlefield was more central than the United Nations. That was because the Soviet Union’s Permanent Mission to the United Nations had long been an enormous spy nest in which the vast majority of its 114 staffers reported to the KGB’s New York rezidentura. The UN was a paradise for spies, a true oasis, because diplomatic cover gave the KGB free run of the place, thanks to UN rules that banned CIA and FBI personnel from the premises. In 1979, former UN undersecretary Arkady N. Shevchenko, a high-ranking Soviet diplomat who defected to the West, confirmed that as many as three hundred KGB officers were stationed in New York. According to The Spy Next Door, by Elaine Shannon, the FBI estimated that a third to a half of the Soviet diplomats assigned to the Soviet Mission to the UN were trained KGB or GRU officers.

  In addition to the Soviet Mission, the KGB planted hundreds of additional intelligence officers inside the United Nations Secretariat, the executive arm of the UN, which sets the agenda for its various decision-making bodies. According to Shvets, it was relatively high-paying and a highly sought-after job for many a Soviet diplomat. “Working in the UN Secretariat was the wildest dream for any Soviet diplomat or spy,” says Shvets. “The salaries they were making there were way higher than any Soviet diplomat in any other embassy in the world.”

  Typically, specific jobs in the Secretariat were doled out by Soviet representatives who ensured that they went to KGB operatives. Among those jobs, according to a May 1985 report by the US Senate Select Intelligence Committee, Soviet Presence in the U.N. Secretariat,31 working at the UN’s Dag Hammarskjöld Library was essentially a cover for KGB operatives, who used it to disseminate Soviet disinformation and implement covert operations.32 “The Soviets usually begin their efforts to secure slots through the formal UN personnel systems, but they also use a variety of other tactics to gain their ends,” the report says.33 “If the Soviets are particularly interested in a specific position, they will present a well-credentialed, outstanding candidate for the post. This method was used in securing the directorship of the Dag Hammerskjold Library at UN headquarters in New York. When a qualified person is not available, a resume is falsified.”

  All of which Yuri Shvets saw up close: “I know this firsthand because my colleague worked in this position until back in ’82.”

  In the late seventies and early eighties, he explained, the position in the library allocated to the Soviet Union was held by Lieutenant Colonel Alexander Yelagin of the First Department (North America) of the KGB First Chief Directorate, who worked with Yuri for more than two years. His nickname, Yuri says, was “Old Chap.”

  When Yelagin returned to Moscow in 1982, Yuri says, he produced a paper titled “Using the UN Library for Collection of Intelligence Information.”

  But it was one of Yelagin’s successors who would prove to play such a key role in cultivating Donald Trump. According to Shvets, from 1985 to 1986 that job was held by Natalia Dubinina, the daughter of Yuri Dubinin, who took over as the USSR’s ambassador to the United Nations in early 1986 at the same time his daughter held a vital position in the KGB’s First Chief Directorate. Shvets’s assertion that Dubinina worked at that post is corroborated by an April 28, 2003, profile of her on the Russian website AIF Express.34

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  Revelations about spies made the headlines day after day in the mid-eighties, and while Yuri Shvets was not in the news, he was very much on the playing field. After college, he went on to two years of postgraduate studies at what is now called the Academy of Foreign Intelligence (then the Yuri Andropov Red Banner Institute), where, as the Russian-language site Gordon reported, he was a “more talented” scholar than classmate Vladimir Putin and learned the secrets of the espionage trade—how to outwit surveillance, how to load and unload drops, how to execute prearranged clandestine “brush” exchanges.35 He was taught by the Soviet Union’s exalted Cold War heroes, the legendary spies, most of whom were unknown to Americans, who had stolen US atomic secrets and who had handled Julius and Ethel Rosenberg and British spies Kim Philby, Guy Burgess, and Donald Maclean. Shvets had been trained to follow in their footsteps.36

  As a result, by the time he was twenty-eight, Shvets had become a major in the KGB, within which he worked for the First Chief Directorate, the most prestigious of the five chief directorates in the entire agency. Within the FCD, which was responsible for foreign operations and intelligence, there were sixteen geographical departments, and Yuri had been assigned to the First Department (a.k.a. the North American Department), comprising the United States and Canada.

  Finally, within the North American Department, he was stationed at the Washington rezidentura, the capital of the “Main Adversary.” Within the KGB, there was a certain rivalry between Washington station and its sister rezidentura in New York. The former, of course, was in the nation’s capital, but the latter had a rich and colorful history as well that involved the Rosenberg case, the theft of atomic secrets, and massive expulsions of Soviet spies from the UN.

  Regardless, in the world of Soviet intelligence, Shvets had arrived. And it was an adrenaline-filled realm full of mystery, adventure, and excitement. As he put it, Washington station was “the holy of the holies in the intelligence business.”

  That said, Shvets was not exactly a dyed-in-the-wool true believer in Soviet communism. Having mastered English, Spanish, and French, he had met people from all over the world, was far more cosmopolitan than the average Soviet citizen, and occupied the vast middle ground between devout adherents of Soviet communism and dissidents.

  He had joined the KGB for a very simple reason. “It was the best job a man could have in the Soviet Union,” he told me. The pay was good—by Soviet standards, at least. And the perks were fabulous. At a time when ordinary Soviet citizens lived with severe constraints behind the Iron Curtain, he could travel the world. In a country whose national discourse was a tightly controlled creation forged by propaganda and state censorship, Yuri had access to information that ordinary Soviet citizens couldn’t get—via the Washington Post, the New York Times, American TV, and the BBC. Not to mention the secrets men die for.

  Finally, he had a mission. When he had trained at the academy, he and his fellow cadets were constantly told that their country was in mortal danger and that they alone could save it. “In the Soviet Union—and now with Russia—to work for intelligence, you’re like a national hero,” Shvets told me.

  And as he explained in his memoir, they were treated as such. “You have an unprecedented opportunity to distinguish yourself,” General Dmitri Yakushkin, its celebrated department head, told him. “If there is still some room left for heroism, you can find it in my department.”37

  But after moving to Washington, Shvets gradually became disillusioned. Once he had spent time in the West and had access to media sources that weren’t available to ordinary Soviets, Yuri saw Soviet propaganda for what it was. Increasingly, he found himself confronting a rotten, decaying bureaucracy. “What we were trained in the academy had nothing to do with real life,” he told me. “And this is where the huge disappointment comes.”

  It was most notable at work. This was a period during which the most banal rendezvous imaginable could be hyped in reports to win favor with the powers that be in Moscow. All he had to do was take an American out to lunch, discuss the events of the day, and then link it to something he had read in the Washington Post that could be passed off as confidential. Again and again, Shvets told me, reports full of phony successes got positive feedback, so much so that another KGB agent explained it to him with a colorful Russian metaphor: “Where there are no birds, e
ven an asshole sounds like a nightingale.”38

  Petrified that if they recruited someone, he would turn out to be a double agent who actually worked for the FBI or CIA, his fellow officers took no risks, and churned out unnecessary paperwork instead. “It turned out that what we were doing, it was for the sake of under-the-carpet bureaucratic fighting of a couple of octogenarians in the Politburo,” he told me. “They were using us, and they finally elected to collapse the entire country. It was disgusting.”

  When KGB officers were not sipping martinis at second-rate bars in Washington, they were shopping for their dachas back in Russia. Years later, Shvets would find himself asking how on earth such a comically incompetent organization could have actually installed a Russian asset as president of the United States.

  CHAPTER FIVE

  THE EXPERT

  Throughout the mid-eighties, Yuri Shvets, just over two hundred miles away at the Washington rezidentura, was regularly in touch with his New York colleagues. Shvets says he is not certain who at the New York station would have been Trump’s regular contact, but they almost certainly would have been someone at the Soviet Mission to the United Nations, and would have reached out to Trump at a frequency of roughly once a month. “That was standard procedure,” he told me. “It was so standard it was like a cop asking you for your driver’s license and registration after stopping your car for a traffic violation.”

  However, following up on Trump did not necessarily mean that the KGB viewed him as a high-value target. The KGB was always hungry for new American assets, and Trump was just one of hundreds of people it had approached. At best, he was a rich and influential businessman. Perhaps he would become more powerful in years to come.

  And indeed Trump intended to do precisely that. At the time, the idea of engaging Trump in discussions about foreign policy and nuclear arms sounded downright silly, given his all-too-obvious lack of expertise, but it made sense for one simple reason: Suddenly, in the mid-eighties, for no discernible reason, Trump fancied himself one of the world’s leading experts on nuclear armaments. He knew everything about nuclear, or so he said.