Monday, October 20, 2008
Even Berkshire's own equity portfolio is no model of diversity. About 42 percent was tied up as of June 30 in just four stocks: American Express Co (AXP.N: Quote, Profile, Research, Stock Buzz), Coca-Cola Co (KO.N: Quote, Profile, Research, Stock Buzz), Procter & Gamble Co (PG.N: Quote, Profile, Research, Stock Buzz) and Wells Fargo & Co (WFC.N: Quote, Profile, Research, Stock Buzz).
In the last month, Berkshire invested a total of $8 billion in General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) and Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) preferred stock, all with a 10 percent dividend, and got warrants to buy an equal amount of common stock at a discount. Given the attractive terms, some saw these as opportunistic investments rather than a signal of a market bottom.
Sunday, October 19, 2008
Vladimir Putin's Deputy Vows 'Russia Will Not Attack Neighbors'
Sunday, October 19, 2008
In an attempt to calm fears of a new cold war, one of Moscow’s most powerful figures has said that Russia will not attack any of its neighbors and has no claim over any of the states it lost after the collapse of the Soviet Union.
Sergei Ivanov, deputy to Vladimir Putin, the prime minister, promised that Russia’s intentions were entirely peaceful despite its invasion of Georgia. Moscow officials insist that its military operations in August were provoked by Georgian aggression.
“We are not aggressive,” Ivanov said in an interview. “We have recognized the territorial integrity of all former Soviet republics. That was in 1991. Russia, of course, has no territorial ambitions regarding any former Soviet countries.
“We are not going to start a war or attack any country. Right now, in fact, Russia isn’t fighting any war at all. If you analyze how many wars the United States and Britain are fighting, it’s quite different.”
Relations between Russia and the West froze during the summer after Georgian troops attacked the pro-Russian enclave of South Ossetia. Moscow immediately launched a counter-offensive, sending its tanks into Georgia.
gee, this is reassuring. after georgia. and after the broken cease fire agreements. out of my ass, isn't russia still in violation of the ceasefire by stationing extra troops in ossetia and abkhazia? and of course they footdragged on withdrawing troops from georgia - repeatedly breaking their word. yeah, this really reassures me alright.
Saturday, October 18, 2008
Rebuffed by China, Pakistan May Seek I.M.F. Aid
ISLAMABAD, Pakistan — President Asif Ali Zardari returned from China late Friday without a commitment for cash needed to shore up Pakistan’s crumbling economy, leaving him with the politically unpopular prospect of having to ask the International Monetary Fund for help.
Pakistan was seeking the aid from China, an important ally, as it faces the possibility of defaulting on its current account payments.
With the United States and other nations preoccupied by a financial crisis, and Saudi Arabia, another traditional ally, refusing to offer concessions on oil, China was seen as the last port of call before the I.M.F.
Accepting a rescue package from the fund would be seen as humiliating for Mr. Zardari’s government, which took office this year.
An I.M.F.-backed plan would require Pakistan’s government to cut spending and raise taxes, among other measures, which could hurt the poor, officials said.
The Bush administration is concerned that Pakistan’s economic meltdown will provide an opportunity for Islamic militants to capitalize on rising poverty and frustration.
The Pakistanis have not been shy about exploiting the terrorist threat to try to win financial support, a senior official at the I.M.F. said.
But because of the dire global financial situation, and the reluctance of donor nations to provide money without strict economic reforms by Pakistan, the terrorist argument has not been fully persuasive, he said.
“A selling point to us even has been, if the economy really collapses this is going to mean civil strife, and strikes, and put the war on terror in jeopardy,” said the official, who declined to be identified because he was not authorized to speak to the news media.
“They are saying, ‘We are a strategic country, the world needs to come to our aid,’ ” he said.
Pakistani officials said they had received promises from the Chinese to help build two nuclear power plants, and pledges for business investment in the coming year.
But Pakistan had also hoped China would deposit $1.5 billion to $3 billion in its central bank, according to senior officials at the I.M.F. and Western donor countries.
The infusion of cash would have helped with payments for oil and food as currency reserves dwindle, officials said.
Shaukat Tareen, the new Pakistani financial adviser who accompanied Mr. Zardari to China, began to prepare the public for an I.M.F. program on Saturday, saying for the first time at a news conference that if Pakistan could not stabilize its economy within 30 days, it “can go to the I.M.F. as a backup.”
“We may have to go to Plan B,” he said.
Economic hardship has been mounting across Pakistan for several months. Electricity shortages have become so dire that even middle-class families in big cities have to ration supply, with power cuts for 12 of every 24 hours, with one hour on, and one hour off.
Food prices have soared, making some basics, even flour, too expensive for the poorest to afford. No large-scale riots have occurred, but concern is mounting that such protests are not far off.
The new government has reduced subsidies on fuel and food, and the central bank moved on Friday to ease an intrabank liquidity crisis.
In addition, new rules were imposed several weeks ago on the Karachi stock exchange to stop sell-offs.
But none of those steps have stanched the crisis in confidence.
The central bank’s currency reserves have dipped to $4 billion, enough to cover payments for oil and other imports for about two months. As it became clear over the past two days that the Chinese were not going to provide a cushion for Pakistan, the rupee slumped to a record low.
The thin results from the China trip were of little surprise to Western donors.
Asked about the likelihood of Pakistan winning the direct cash infusion it was seeking, a senior Chinese diplomat was reported by Western officials to have said, “We have done our due diligence, and it isn’t happening.”
“What we needed is $3-to-$4 billion,” said Sakib Sherani, a member of the government’s economic advisory panel and chief economist at ABN Amro Bank in Pakistan. That amount was necessary “to build confidence,” he said.
The central bank governor, Shamshad Akhtar, said in a telephone interview on Saturday, “We are very open to all kinds of financial support.” She added, “We’ve taken a lot of corrective actions, and we plan to take more.”
But Zubair Khan, a former commerce minister and a critic of the government’s economic management, said confidence would improve once Pakistan arranged an I.M.F. rescue package. Mr. Khan said that the alternative would be the imposition of controls on imports and capital flows that could do long-term harm to the economy.
Meanwhile, the American financial crisis is also expected to hurt ordinary Pakistanis.
Remittances from Pakistanis living abroad to their relatives in Pakistan were expected to be about $7 billion this year, about $3 billion of that from Pakistanis living in the United States. But those remittances are likely to dwindle, affecting real estate values in Pakistani cities and families who live in poorer rural areas.
Mr. Zardari had approached the China trip with considerable fanfare, saying he was looking forward to visiting a country that had enjoyed a warm relationship with Pakistan, particularly during the rule of his father-in-law, Zulfikar Ali Bhutto.
His visit to Beijing followed a trip there by the chief of the army, Gen. Parvez Kayani, and came at a time when the relationship between Washington and Pakistan was strained over how to deal with the escalating threat from the Taliban and Al Qaeda.
Javed Burki, a former Pakistani finance minister, said China had provided $500 million in balance-of-payments support in 1996, when Pakistan was on the brink of default. He had flown to Beijing to ask for the money and his request was fulfilled.
But those days are over, he said, because China is no longer inclined to grant cash outright without structural reforms from the receiving government, he said.
ARE PUTIN AND MEDVEDEV AT ODDS OVER THE GEORGIAN CAMPAIGN?
...However, after President Medvedev’s announcement of a halt to the military campaign, which followed his talks with French President Sarkozy, some observers speculated that there was a split between Putin and Medvedev over the course of the war and that Medvedev had gained the upper hand. According to Yezhednevny zhurnal columnist Aleksandr Ryklin, something must have intervened to prevent the Russian government from seeing the military operation to its “logical end,” meaning the removal of the Saakashvili government. “Let us confess that even on the morning of August 12 a further escalation of the conflict with Georgia looked inevitable,” he wrote. “The continued bombardment of the territory of this still independent republic; the appearance of our [military] units at the approaches to Poti [the Georgian port city]; the naming of General [Vladimir] Shamanov [the hard-line former commander of Russian forces in Chechnya] as Gauleiter of Abkhazia (with the obvious prospect of him becoming the governor-general of all of Georgia); the unprecedented, aggressive rhetoric of officials, including representatives of the diplomatic corps--all of this pointed to the determination of the Russian leadership to see the affair to its ‘logical end,’ that is, the removal of Mikhail Saakashvili’s regime. And suddenly, [there was] Dmitry Medvedev’s sensational announcement.”
Ryklin quoted a source “close to the current presidential administration” as saying: “Today one can … speak of serious disagreements between the president and the premier over the further development of events in the Caucasus. The president from the start did not plan to go beyond the bounds of the peacekeeping mission [in South Ossetia], and at a certain point they began to talk to him about ‘the logic of war’ and the unexpected appearance of the possibility to resolve ‘important geopolitical tasks.’ He, in turn, pointed to the lack of preparedness of the military operation, the large losses and the severe foreign policy consequences. Today one can note with satisfaction that the president’s point of view prevailed and he was able to insist on a positive solution.”
It is worth noting that Ryklin doubted the veracity of this version of events, writing that it was more likely that the military operation was ended by something more “down to earth,” for example, “someone somewhere showed someone” a list of “well-known” names with their corresponding foreign bank accounts, or perhaps just one name with that person’s foreign bank accounts, and threatened to expose it (www.ej.ru, August 13).
Time will tell whether this version of Putin-the-hawk and Medvedev-the-dove turns out to be true—and if true, whether it matters.
Thursday, October 16, 2008
|5y Avg Return:||4.97%|
|Rank in Category (ytd):||810|
|% Rank in Category (ytd):||37.96%|
|Morningstar Risk Rating:||Average|
A Cold War Conundrum: The 1983 Soviet War Scare
By Benjamin B. Fischer
...Such fears were exaggerated. Even at this time of heightened tension, nowhere in the world were the superpowers squared off in a crisis likely to escalate into full-scale nuclear war.
...The post-detente "second Cold War" was essentially a war of words--strong and at times inflammatory words.
...Moscow repeatedly accused President Reagan of fanning the flames of war and compared him to Hitler--an image even more menacing than that of Andropov as the evil empire's Darth Vader. Such hyperbole was more a consequence than a cause of tension, but it masked real fears.
Some observers dismissed the alert and the war scare as Soviet disinformation and scare tactics, while others viewed them as reflecting genuine fears. The latter view seems to have been closer to the truth. The KGB in the early 1980s saw the international situation--in Soviet terminology, the "correlation of world forces"--as turning against the USSR and increasing its vulnerability. These developments, along with the new US administration's tough stance toward the USSR, prompted Soviet officials and much of the populace to voice concern over the prospect of a US nuclear attack.
New information suggests that Moscow also was reacting to US-led naval and air operations, including psychological warfare missions conducted close to the Soviet Union. These operations employed sophisticated concealment and deception measures to thwart Soviet early warning systems and to offset the Soviets' ability--greatly bolstered by US spy John Walker--to read US naval communications.
In addition, this study shows how:
- The war scare affected Soviet responses to the Reagan administration's Strategic Defense Initiative (SDI), the administration's condemnation of the Soviet Union following the 1983 shootdown of a South Korean airliner, and a NATO nuclear-release exercise late that same year.
- British Prime Minister Margaret Thatcher sought to use the Soviet alert/war scare to influence President Reagan's thinking about the USSR.
- Moscow's threat perceptions and Operation RYAN were influenced by memories of Hitler's 1941 surprise attack on the USSR (Operation BARBAROSSA).
- The Kremlin exploited the war scare for domestic political purposes, aggravating fears among the Soviet people.
- The KGB abandoned caution and eschewed proper tradecraft in collecting indications-and-warning intelligence and relied heavily on East German foreign and military intelligence to meet RYAN requirements.
Never, perhaps, in the postwar decades was the situation in the world as explosive and hence, more difficult and unfavorable, as in the first half of the 1980s.
--Mikhail Gorbachev, February 1986
US-Soviet relations had come full circle by 1983--from confrontation in the early postwar decades, to detente in the late 1960s and 1970s, and back to confrontation in the early 1980s. Europeans were declaring the outbreak of "Cold War II." French President Francois Mitterrand compared the situation that year to the 1962 Cuban missile crisis and the 1948 face-off over Berlin. On this side of the Atlantic, the doyen of Soviet-watchers, George Kennan, exclaimed that the new superpower imbroglio had the "familiar characteristics, the unfailing characteristics, of a march toward war--that and nothing else."1
Such fears were exaggerated. Even at this time of heightened tension, nowhere in the world were the superpowers squared off in a crisis likely to escalate into full-scale nuclear war. But a modern-day Rip van Winkle waking up in 1983 would have noted little if any improvement in the international political climate; he would not have realized that a substantial period of detente had come and gone while he slept.2
The post-detente "second Cold War" was essentially a war of words--strong and at times inflammatory words. In March 1983, President Reagan denounced the Soviet Union as the "focus of evil in the world" and as an "evil empire."3 Soviet General Secretary Yuri Andropov responded by calling the US President insane and a liar.4 Then things got nasty.5
Following Andropov's lead--and presumably his orders--the Soviet propaganda machine let loose a barrage of harsh verbal assaults on the United States reminiscent of the early days of the Cold War.6 Moscow repeatedly accused President Reagan of fanning the flames of war and compared him to Hitler--an image even more menacing than that of Andropov as the evil empire's Darth Vader. Such hyperbole was more a consequence than a cause of tension, but it masked real fears.
In early 1981 the KGB's foreign intelligence directorate, using a computer program developed several years earlier, prepared an estimate of world trends that concluded the USSR in effect was losing--and the US was winning--the Cold War.7 Expressed in Soviet terms, the "correlation of world forces" between the US and the USSR was seen as turning inexorably against the latter.8
This assessment was profoundly different from that of 10 years earlier, when Foreign Minister Andrei Gromyko had asserted that: "Today there is no question of any significance that can be decided without the Soviet Union or in opposition to it."9 The Soviet ambassador to France, for example, had proclaimed that the USSR "would not permit another Chile," implying that Moscow was prepared to counter the Monroe Doctrine in Latin America and the Carter Doctrine in the Persian Gulf with the Brezhnev Doctrine, which the Soviets invoked to justify the use of military power to keep pro-Soviet regimes in power and "repel... the threat of counterrevolution or foreign intervention."10 Such rhetoric reflected Marxist theoreticians' conviction in the 1970s that the correlation of forces was scientifically based and historically ordained and would endure.
But the Politburo faced a new set of realities in the early 1980s. The United States, late in the Carter administration and continuing in the first years of the Reagan administration, had started playing catch-up. To many observers it began to seem that Marxist gains in the 1970s in such places as Indochina, Angola, Afghanistan, Ethiopia, and Nicaragua had owed more to US divisions, diversions, and defeats than to Soviet power and influence.11 Now it appeared that Moscow had not really gained very much from its foreign adventures. For example:
- In Afghanistan, the Soviet Army was caught in its own version of America's Vietnam quagmire.
- Cuba, Moscow's foothold in the Western Hemisphere, was foundering economically and draining Soviet funds.
- The pro-Soviet regime in Angola was struggling to contain a potent, sometimes US-backed insurgency.
- Nicaragua's Marxist government faced a growing challenge from US-supported opposition forces.
These trends for the most part began under President Carter and accelerated under President Reagan. The Carter administration, moreover, began revitalizing CIA covert action against the USSR. President Reagan, in addition to accelerating the US military buildup, expanded programs launched under his predecessor to support human rights activists in the USSR and Poland and the mujahedin in Afghanistan.12 In Western Europe, where the Kremlin had spent a decade trying to win friends and influence people--especially on the left--with its peace-and-detente policies, Chancellor Helmut Schmidt of West Germany favored installing new US missiles to counter Soviet SS-20s aimed at his country and other NATO allies.
In sum, the wheel of history appeared to have stopped in its tracks in the 1980s and seemed to be turning in the opposite direction--in the West's favor. What a difference a decade makes!
The 1981 KGB assessment was more of a long-range forecast than a storm warning, but the Politburo issued what amounted to a full-scale hurricane alert. Andropov and Soviet leader Leonid Brezhnev made a joint appearance in May 1981 before a closed session of KGB officers.1314 Its purpose: to monitor indications and provide early warning of US war preparations.
Brezhnev took the podium first and briefed the assembled intelligence officers on his concerns about US policy under the new administration in Washington. Andropov then asserted bluntly that the United States was making preparations for a surprise nuclear attack on the USSR. The KGB and the GRU, he declared, would join forces to mount a new intelligence collection effort codenamed RYAN.
According to later revelations by ex-KGB officer Oleg Gordievsky, KGB rezidenturas (field stations) in the United States, Western Europe, Japan, and selected Third World countries received the first set of RYAN requirements in November 1981. (GRU rezidenturas presumably received theirs simultaneously.) The KGB Center (headquarters in Moscow) transmitted additional guidance in January 1982, directing those rezidenturas that were on alert to place a high priority on RYAN in their annual work plans. In March 1982, the senior KGB officer in charge of coordinating requirements at the Center was assigned to Washington to oversee collection of indications-and-warning intelligence.
In discussing the heightened emphasis on RYAN, Yuri Shvets, a former KGB officer in the Washington rezidentura, observed in his 1994 book that information cabled to Moscow from the RYAN collection program was used in daily briefing books for the Politburo. He also noted that the program required an inordinate amount of time.15
RYAN Tasking for Warsaw Pact Military Intelligence ServicesOperation RYAN was the main topic on the agenda of the 1983 annual conference of Warsaw Pact military intelligence chiefs. A top secret protocol stated that "in view of the increasing danger of war unleashed by the US and NATO," the chiefs of services would assign the highest priority to collecting information on:
- Key US/NATO political and strategic decisions vis-a-vis the Warsaw Pact.
- Early warning of US/NATO preparations for launching a surprise nuclear attack.
- New US/NATO weapons systems intended for use in a surprise nuclear attack.16
Several former KGB officers, among them Oleg Gordievsky, Oleg Kalugin, and Yuri Shvets, have confirmed the existence of the Soviet intelligence alert, but its origins are unclear. Gordievsky disclaims any firsthand knowledge of what prompted the Politburo to implement Operation RYAN. His own view is that it was both a reaction to "Reaganite rhetoric" and a reflection of "Soviet paranoia." Andropov and Defense Minister Dmitri Ustinov, both of whom harbored more alarmist views on US intentions than other Politburo members, may have urged the alert on Brezhnev, although Gordievsky has not documented this. Former Soviet Ambassador to the United States Anatoly Dobrynin mentions RYAN in his memoirs but adds little to Gordievsky's account.17
In short, something is missing in this picture. Exactly what precipitated the alert and Operation RYAN? The decision to order an intelligence alert was highly unusual. Moreover, in terms of its mission, scope, and consumption of operational resources--not to mention cooperation between Soviet civilian and military services--RYAN was unprecedented.18 The threat perception on which it was based was new as well; as Dobrynin notes in his memoirs, Andropov was the first Soviet top leader since Stalin who seemed to believe that the United States might launch a surprise attack on the USSR.19
RYAN must be viewed in its temporal context. It began just a few months into the Reagan administration--that is, well before the new US administration's policies had been fully formulated, much less implemented--and almost two years before the Soviet war scare erupted publicly in late 1983. As of early 1981, the Politburo was cautiously optimistic that President Reagan's rhetoric was more a campaign plank than a policy framework. The Soviet leadership was hoping that, as in the past, a more "realistic" attitude would take hold in Washington once diplomacy got down to business.20 Nonetheless, in international relations as in other spheres of human activity, actions generally speak louder than words, and the well-known proverb about sticks and stones applies as much to diplomacy as to the playground. Clearly, the Politburo was responding to something more than verbal taunts. Was it reacting to taunts of another kind?
RYAN may have been a response to the first in a series of US psychological warfare operations (PSYOPs in military jargon) initiated in the early months of the Reagan administration.21 These operations consisted mainly of air and naval probes near Soviet borders. The activity was virtually invisible except to a small circle of White House and Pentagon officials--and, of course, to the Kremlin. "'It was very sensitive,' recalls former undersecretary of defense Fred Ikle. 'Nothing was written down about it, so there would be no paper trail.'"22
The purpose of this program was not so much to signal US intentions to the Soviets as to keep them guessing what might come next. The program also probed for gaps and vulnerabilities in the USSR's early warning intelligence system:
"Sometimes we would send bombers over the North Pole and their radars would click on," recalls Gen. Jack Chain, [a] former Strategic Air Command commander. "Other times fighter-bombers would probe their Asian or European periphery." During peak times, the operation would include several maneuvers in a week. They would come at irregular intervals to make the effect all the more unsettling. Then, as quickly as the unannounced flights began, they would stop, only to begin again a few weeks later.23
Another former US official with access to the PSYOP program offered this assessment:
"It really got to them," recalls Dr. William Schneider, [former] undersecretary of state for military assistance and technology, who saw classified "after-action reports" that indicated U.S. flight activity. "They didn't know what it all meant. A squadron would fly straight at Soviet airspace, and other radars would light up and units would go on alert. Then at the last minute the squadron would peel off and return home."24
Naval Muscle-Flexing. According to published accounts, the US Navy played a key role in the PSYOP program after President Reagan authorized it in March 1981 to operate and exercise near maritime approaches to the USSR, in places where US warships had never gone before.25 Fleet exercises conducted in 1981 and 1983 near the far northern and far eastern regions of the Soviet Union demonstrated US ability to deploy aircraft-carrier battle groups close to sensitive military and industrial sites, apparently without being detected or challenged early on.26 These exercises reportedly included secret operations that simulated surprise naval air attacks on Soviet targets.
In the August-September 1981 exercise, an armada of 83 US, British, Canadian, and Norwegian ships led by the carrier Eisenhower managed to transit the Greenland-Iceland-United Kingdom (GIUK) Gap undetected, using a variety of carefully crafted and previously rehearsed concealment and deception measures.27 A combination of passive measures (maintaining radio silence and operating under emissions control conditions) and active measures (radar-jamming and transmission of false radar signals) turned the allied force into something resembling a stealth fleet, which even managed to elude a Soviet low-orbit, active-radar satellite launched to locate it.28 As the warships came within operating areas of Soviet long-range reconnaissance planes, the Soviets were initially able to identify but not track them. Meanwhile, Navy fighters conducted an unprecedented simulated attack on the Soviet planes as they refueled in-flight, flying at low levels to avoid detection by Soviet shore-based radar sites.29
In the second phase of this exercise, a cruiser and three other ships left the carrier battle group and sailed north through the Norwegian Sea and then east around Norway's Cape North and into the Barents Sea. They then sailed near the militarily important Kola Peninsula and remained there for nine days before rejoining the main group.
In April-May 1983, the US Pacific Fleet held its largest exercises to date in the northwest Pacific.30 Forty ships, including three aircraft carrier battle groups, participated along with AWACS-equipped B-52s. At one point the fleet sailed within 720 kilometers (450 miles) of the Kamchatka Peninsula and Petropavlovsk, the only Soviet naval base with direct access to open seas. US attack submarines and antisubmarine aircraft conducted operations in protected areas ("bastions") where the Soviet Navy had stationed a large number of its nuclear-powered ballistic missile submarines (SSBNs). US Navy aircraft from the carriers Midway and Enterprise carried out a simulated bombing run over a military installation on the small Soviet-occupied island of Zelenny in the Kuril Island chain.31
In addition to these exercises, according to published accounts, the Navy applied a full-court press against the Soviets in various forward areas. Warships began operating in the Baltic and Black Seas and routinely sailed past Cape North and into the Barents Sea. Intelligence ships were positioned off the Crimean coast. Aircraft carriers with submarine escorts were anchored in Norwegian fjords. US attack submarines practiced assaults on Soviet SSBNs stationed beneath the polar ice cap.
These US demonstrations of military might were aimed at deterring the Soviets from provocative actions and at displaying US determination to respond in kind to Soviet regional and global exercises that had become larger, more sophisticated, and more menacing in preceding years. The projection of naval and naval air power exposed gaping holes in Soviet ocean surveillance and early warning systems. For example, in a Congressional briefing on the 1983 Pacific exercise, the chief of naval operations noted that the Soviets "are as naked as a jaybird there [on the Kamchatka Peninsula], and they know it."32 His comment applied equally to the far northern maritime area and the Kola Peninsula. In short, the Navy had demonstrated that it could:
- Elude the USSR's large and complex ocean surveillance systems.33
- Defeat Soviet tactical warning systems.
- Penetrate air defense systems.
RYAN and PSYOP--A Link? Was there a connection between PSYOP and RYAN? There clearly was a temporal correlation. The first PSYOP probes began in mid-February 1981; in May, Andropov directed the KGB to work with the GRU to launch the RYAN program (see earlier section entitled "The Soviet Intelligence Alert and Operation RYAN"), and the KGB Center informed rezidenturas about the program's existence.
When Reagan administration officials first learned of RYAN, they reportedly drew a connection between the US-led military probes and the Soviet alert, noting that the Soviets were increasingly frightened.34 While Moscow presumably took account of the tit-for-tat nature of the US military operations and did not draw hard-and-fast conclusions as to what these operations might portend about US intentions, it could not ignore either their implications for a surprise attack scenario or the gaps they exposed in the USSR's technical early warning systems.
In addition, the ability of Soviet intelligence to monitor US naval operations by reading encrypted communications had been reduced, if not neutralized. Moscow did not know what the US would do. Even so, it had learned a disturbing lesson about what Washington could do in a wartime situation or other crisis. RYAN, it appears, was designed to test a worst case interpretation of US actions and to compensate for technical deficiencies in Soviet strategic and tactical warning capabilities by augmenting them with human intelligence operations.
While a narrow circle of US officials may have gained an appreciation of the PSYOP-RYAN cause-and-effect relationship suggested above, this apparently was not true of the US Intelligence Community as a whole. A declassified 1984 Special National Intelligence Estimate (SNIE), commissioned to assess indications of an "abnormal Soviet fear of conflict with the United States," was a case in point.35
The SNIE did not refer specifically to RYAN, although allusions to war-scare statements suggest some knowledge of the alert. In the absence of other information, the SNIE attributed Soviet statements to US foreign and defense policy "challenges"; it attributed recent Soviet military exercises to force development and training requirements. The SNIE played down the significance of Soviet assertions about US preparations for a surprise nuclear attack, arguing that the "absence of forcewide combat readiness and other war preparations in the USSR" apparently meant that the Kremlin did not believe war was imminent or inevitable.36 The "war scare" was more propaganda than threat perception, according to this assessment.37
Nonetheless, the SNIE drafters evidently sensed that there might be more to the story and raised the possibility that "recent US/NATO military exercises and reconnaissance operations" might have been factors in Soviet behavior. The main clue was the difference between past and present Soviet characterizations of such exercises and operations. In the past, Moscow had routinely criticized such activities as indications of Western hostile intentions, but now it was going considerably further by charging that they were preparations for a surprise nuclear attack. In the final analysis, however, the SNIE's authors were unable to make a specific connection between the Soviet alert and Western military moves, noting that a "detailed examination of simultaneous 'red' and 'blue' actions had not been accomplished."38
While the US probes caught the Kremlin by surprise, they were not unprecedented; there was a Cold War antecedent. During the 1950s and 1960s, the US Strategic Air Command and the Navy had conducted similar operations--intelligence-gathering missions, including "ferret" operations aimed at detecting locations of, reactions by, and gaps in Soviet radar and air defense installations--along the USSR's Eurasian periphery in preparation for possible nuclear war.39
40 Rezidents (station chiefs) received new orders marked "strictly personal," instructing them to organize a "continual watch" using their entire operational staff.41 They also were ordered to redirect existing agents who might have had access to RYAN-related information; to recruit new agents; and to have operations officers put selected targets under surveillance.
KGB Center Pushes Operation RYAN, February 1983 (excerpt from KGB cable translated by Oleg Gordievsky)
Copy No 1
[A. V. Guk]
Assignment to Uncover NATO
Preparations for a Nuclear Missile
Attack on the USSR
In view of the growing urgency of the task of discovering promptly any preparations by the adversary for a nuclear missile attack (RYAN) on the USSR, we are sending you a permanently operative assignment (POA) and briefing on this question.
The objective of the assignment is to see that the residentura works systematically to uncover any plans in preparation by the main adversary [the United States] for RYAN and to organize a continual watch to be kept for indications of a decision being taken to use nuclear weapons against the USSR or immediate preparations being made for a nuclear missile attack.
The new orders assumed that a preliminary US decision to launch a nuclear missile attack, even if made in secret, would require a variety of consultations and implementing actions that could be detected through a combination of overt and clandestine scrutiny. According to the KGB Center:
One of the chief directions for the activity of the KGB's foreign service is to organize detection and assessment of signs of preparation for RYAN in all possible areas, i.e., political, economic and military sectors, civil defense and the activity of the special services.
Our military neighbors [the GRU] are actively engaged in similar work in relation to the activity of the adversary's armed forces.42
Three categories of targets were identified for priority collection. The first included US and NATO government, military, intelligence, and civil-defense installations that could be penetrated by agents or visually observed by Soviet intelligence officers. Service and technical personnel at such installations were assigned a high priority for recruitment. The second target category consisted of bilateral and multilateral consultations among the US and other NATO members. The third included US and NATO civilian and military "communications networks and systems."
Rezidenturas were instructed to focus on changes in the operations of US/NATO communications networks and in staffing levels. They also were ordered to obtain information on "the organization, location, and functioning mechanism of all forms of communications which are allocated by the adversary for controlling the process of preparing and waging a nuclear war"--that is, information on command-and-control networks.43
Moscow's new sense of urgency was explicitly linked to the impending deployment of US Pershing II intermediate-range ballistic missiles (IRBMs) in West Germany. The Soviets as well as some Western military experts saw the Pershings as a new destabilizing element in the nuclear balance for two reasons. First, these highly accurate IRBMs were capable of destroying Soviet hard targets, including command -and-control bunkers and missile silos.44 Second, their flight time from Germany to European Russia was calculated to be only four to six minutes, giving the missiles a "super-sudden first strike" capability.45 In a crisis, the Soviets could be attacked with little or no warning, and therefore would have to consider striking at the Pershing launchsites before being struck by the US missiles.46
The new instructions from Moscow also indicated, without being specific, that the alert was linked to revisions in Soviet military planning, noting that RYAN "now lies at the core of [Soviet] military strategy."47 The alert was designed to give Moscow a "period of anticipation essential... to take retaliatory measures. Otherwise, reprisal time would be extremely limited."48
But the repeated emphasis on providing warning of a US attack "at a very early stage" and "without delay" suggests that the Soviets were planning to preempt, not retaliate. If they acquired what they considered to be reliable information about an impending US attack, it would not have made sense for them to wait for the attack to begin before responding; it would have made sense to try to destroy the US missiles before they were launched. Hence the reference to military strategy probably meant that the Soviet high command intended to target the Pershings for preemptive destruction if RYAN indicated plans for a US attack.49
RYAN: Retaliatory or Preemptive Strike? February 1983 (excerpt from KGB cable translated by Oleg Gordievsky)
No 373/PR/52 Top Secret
Copy No 1
Attachment 2 The Problem of Discovering
Preparation for a Nuclear
Missile Attack on the USSR
Uncovering the process of preparation by the adversary to take the decision for a nuclear attack and the subsequent measures to prepare the country for a nuclear war would enable us to increase the so-called period of anticipation essential for the Soviet Union to take retaliatory measures. Otherwise, reprisal time would be extremely limited. For instance, noting the launching of strategic missiles from the continental part of the USA and taking into account the time required for determining the direction of their flight in fact leaves roughly 20 minutes' reaction time. This period will be considerably curtailed after deployment of the 'Pershing-2' missile in the FRG, for which the flying time to reach long-range targets in the Soviet Union is calculated at 4-6 minutes.
The KGB viewed West Germany as its "door to the West" and to NATO, and the HVA had the key to that door.51 As a result, the KGB rezidentura in East Berlin was the largest in the world and produced as much intelligence as a single directorate at the KGB Center in Moscow.52 Indeed, German counterintelligence officials believe that the HVA by itself may have obtained up to 80 percent of all Warsaw Pact intelligence on NATO.53
The demise of East Germany, the survival of some HVA files, and Wolf's recently published autobiography have all contributed in some measure to documenting the Soviet war scare and how it affected Soviet bloc intelligence operations. Wolf gives some insight into the war scare's origins in a revealing conversation he had with Yuri Andropov in February 1980, when Andropov was still head of the KGB:
We began discussing the East-West conflict. I had never before seen Andropov so somber and dejected. He described a gloomy scenario in which a nuclear war might be a real threat. His sober analysis came to the conclusion that the US government was striving with all means available to establish nuclear superiority over the Soviet Union. He cited statements of President Carter, his adviser Zbigniew Brzezinski, and of Pentagon spokesmen, all of which included the assertion that under certain circumstances a nuclear first-strike against the Soviet Union and its allies would be justified....
Carter's presidency had created great concern in the Kremlin, because he had presented a defense budget of more than $157 billion, which he invested in the MX and Trident missiles and nuclear submarines. One of the top Soviet nuclear strategists confided to me that the resources of our alliance were not sufficient to match this.54 [emphasis added]
By the early 1980s, Wolf goes on to say, "our Soviet partners had become obsessed with the danger of a nuclear missile attack."55 He claims: "Like most intelligent people, I found these war games a burdensome waste of time, but these orders were no more open to discussion than other orders from above."56 Wolf created a special staff and built a round-the-clock situation center with a "special communications link" to Moscow dedicated to monitoring a "catalogue" of political and military indicators of an impending US attack. The East German leadership even ordered construction of dispersed command bunkers for top political, military, and intelligence officials. Wolf put his extensive West German agent network at Moscow's disposal. Priority number one was surveillance of Pershing II and cruise missile sites, which HVA sources had already located and reported to Moscow.57 The HVA ordered agents in West German ministries, agencies, and defense firms to be on the lookout for technical breakthroughs in weapons research.58 These agents were instructed to report any new information immediately, without waiting for regularly scheduled meetings with their couriers from East Berlin.59 The most important requirement was for sensitive data on the Pershing ballistic missile and the Tomahawk cruise missile. This data eluded the East Germans, but they were able to obtain information on the construction, transportation, assembly, and stationing of these missiles.60
The control room of an underground bunker built for the East German foreign intelligence service (HVA). This was one of five dispersed command centers constructed by the East Germans in 1983 in response to the Soviet war scare.
The HVA and the VA (the military intelligence service) launched an agent-recruiting drive linked to Operation RYAN. According to one news report, the HVA went after "dozens" of US servicemen, businessmen, and students in West Germany and West Berlin.61 The West German armed services were also a top-priority target for recruitment; German counterintelligence authorities documented at least 1,500 attempted recruitments of West German officers and NCOs by East German intelligence between 1983 and 1989. Most of those pitched were asked to report on weapons developments, troop strengths, mobilization plans, and/or alert procedures.62
RYAN and HVAThe war scare had a major impact on East German intelligence and the way it conducted business. At Soviet insistence, State Security Minister Erich Mielke made RYAN the overriding operational mission of the Ministry for State Security (MfS), the HVA's parent organization, issuing a ministerial order that outlined the entire Soviet collection program.63 The East Germans also followed--or were ordered to follow--the Soviet example of merging civilian and military intelligence operations. Mielke signed a memorandum of agreement with his counterpart in the Ministry of National Defense and the chief of military intelligence (Verwaltung Aufklärung or VA) that called for across-the-board cooperation in running joint operations, sharing tradecraft, and developing agent communications equipment.64 During the early 1980s the chief of military intelligence became such a frequent visitor of Mielke's (and Wolf's) that he was given his own entry permit to MfS headquarters.65
66 But that patience wore thin in 1983.
The overt phase of the war scare erupted barely a month into the second phase of RYAN. On 23 March 1983, President Reagan announced the Strategic Defense Initiative (SDI), quickly dubbed "Star Wars" by the media. SDI was a plan for a ground- and space-based, laser-armed antiballistic missile system that, if deployed, would create a shield for US land-based missiles. Four days after the President's announcement--and in direct response--Andropov lashed out. He accused the United States of preparing a first-strike attack on the Soviet Union and asserted that President Reagan was "inventing new plans on how to unleash a nuclear war in the best way, with the hope of winning it."67
Andropov's remarks were unprecedented.68 He violated a longstanding taboo by citing numbers and capabilities of US nuclear weapons in the mass media. He also referred to Soviet weapons with highly unusual specificity. And for the first time since 1953, the top Soviet leader was telling his nation that the world was on the verge of a nuclear holocaust. If candor is a sign of sincerity, then Moscow was worried.
The SDI announcement came out of the blue for the Kremlin--and for most of the Reagan Cabinet.69 Andropov's advisers urged him not to overreact, but he ignored their advice, accusing President Reagan of "deliberately lying" about Soviet military power to justify SDI. He denounced the missile shield as a "bid to disarm the Soviet Union in the face of the US nuclear threat." Space-based defense, he added:
would open the floodgates of a runaway race of all types of strategic arms, both offensive and defensive. Such is the real significance, the seamy side, so to say, of Washington's "defensive conception." ...The Soviet Union will never be caught defenseless by any threat.... Engaging in this is not just irresponsible, it is insane.... Washington's actions are putting the entire world in jeopardy.70
SDI had touched a sensitive nerve. The Soviets treated it as an extremely serious development for two reasons. First, despite their boasting in the 1970s, Soviet leaders--and perhaps Andropov most of all--had great respect for US technological capabilities.71 Second, SDI had a profound psychological impact that reinforced the trend already anticipated in the new Soviet assessment of the "correlation of forces." In a remarkable tete-a-tete
with a US journalist and former arms control official, Marshal Nikolai Ogarkov, First Deputy Defense Minister and Chief of the General Staff, interpreted the real meaning of SDI:
We cannot equal the quality of U.S. arms for a generation or two. Modern military power is based on technology, and technology is based on computers. In the US, small children play with computers.... Here, we don't even have computers in every office of the Defense Ministry. And for reasons you know well, we cannot make computers widely available in our society. We will never be able to catch up with you in modern arms until we have an economic revolution. And the question is whether we can have an economic revolution without a political revolution.72
This private rumination was all the more remarkable because Ogarkov's public statements showed him to be a hawk's hawk who compared the United States to Nazi Germany and argued repeatedly for more resources to continue the arms competition. The dichotomy between his public statements and his confidential remarks to the US journalist was striking; it indicated that he understood better than most political and other military leaders the challenge posed by American military technology.
At 3:26 a.m. Tokyo time on 1 September 1983, a Soviet Su-15 interceptor fired two air-to-air missiles at a Korean Airlines Boeing 747 airliner, Flight 007, destroying the aircraft and killing all 269 crewmembers and passengers. Soviet air defense units had been tracking the aircraft for more than an hour while it entered and left Soviet airspace over the Kamchatka Peninsula. The order to shoot down the airliner was given as it was about to leave Soviet airspace for the second time after flying over Sakhalin Island. It was probably downed in international airspace.
From US and Japanese communications intercepts, the White House learned about the shootdown within a few hours, and, with Secretary Shultz taking the lead, denounced the Soviet act as deliberate mass murder. President Reagan called it "an act of barbarism, born of a society which wantonly disregards individual rights and the value of human life and seeks constantly to expand and dominate other nations."73
Air Force intelligence dissented from the rush to judgment at the time, and eventually US intelligence reached a consensus that the Soviets probably did not know they were attacking a civilian airliner.74 The charge probably should have been something akin to criminally negligent manslaughter, not premeditated murder. But the official US position never deviated from the initial assessment. The incident was used to start a vociferous campaign in the United Nations and to spur worldwide efforts to punish the USSR through commercial boycotts, lawsuits, and denial of landing rights for Aeroflot. These efforts focused on indicting the Soviet system and the top leadership as being ultimately responsible.75
Moscow did not even acknowledge the incident until September 6, and it delayed an official explanation for three more days. On 9 September, Marshal Ogarkov held a live press conference that ran for two hours.76 The five-star spin doctor's goal was to prove that--269 innocent victims notwithstanding--the Soviet Union had acted rationally. Ogarkov asserted that the regional air defense unit had identified the aircraft as a US intelligence platform, an RC-135 of the type that routinely performed intelligence operations along a similar fight path. In any event, regardless of whether it was an RC-135 or a 747, he argued, the plane was unquestionably on a US or joint US-Japanese intelligence mission, and the local air defense commander had made the correct decision. The real blame for the tragedy, he insisted, lay with the United States, not the USSR.77
A classified memorandum submitted to the Politburo by the Defense Ministry and the KGB shows that the Soviet leadership held much the same view in private. Released in 1992, the memorandum concluded:
We are dealing with a major, dual-purpose political provocation carefully organized by the US special services. The first purpose was to use the incursion of the intruder aircraft into Soviet airspace to create a favorable situation for the gathering of defense data on our air defense system in the Far East, involving the most diverse systems including the Ferret satellite. Second, they envisaged, if this flight were terminated by us, [the US would use] that fact to mount a global anti-Soviet campaign to discredit the Soviet Union.78
Soviet angst was reflected in the harsh propaganda reaction that followed. Once again Andropov took the lead in bashing the United States. Asserting that an "outrageous military psychosis" had overtaken the US, he declared that "the Reagan administration, in its imperial ambitions, goes so far that one begins to doubt whether Washington has any brakes at all preventing it from crossing the point at which any sober-minded person must stop."79
Yuri Andropov on KAL-007
The sophisticated provocation, organized by the US special services and using a South Korean airplane, is an example of extreme adventurism in policy. We have given the factual aspect of this action a detailed and authentic elucidation. The guilt of its organizers--no matter how they twist and turn or how many false stories they put out--have been proved.
The Soviet leadership has expressed regret in connection with the loss of human lives that was the result of this unprecedented act of criminal sabotage. It is on the conscience of those who would like to arrogate to themselves the right to disregard the sovereignty of states and the inviolability of their borders, who conceived of and carried out this provocation, who literally the next day hurried to push through Congress colossal military appropriations and now are rubbing their hands in satisfaction.
As reported in
Pravda and Izvestiya,
29 September 1983
The local Soviet air defense commander appears to have made a serious but honest mistake. The situation in the region was not normal; his forces had been on high alert and in a state of anxiety following incursions by US aircraft during the spring 1983 Pacific Fleet exercise recounted above. A Soviet demarche contended that US planes had flown some 32 kilometers (20 miles) into Soviet airspace and remained there for up to 20 minutes during several overflights.80 As a result, the Soviet air defense command was put on alert for the rest of the spring and summer--and possibly longer--and some senior officers were transferred, reprimanded, or dismissed.81
The KAL 007 incident was not only a tragedy; it also touched off a dangerous episode in US-Soviet relations, which already had been exacerbated by the war scare. As Dobrynin put it, both sides "went slightly crazy." For Washington, the incident seemed to express all that was wrong with the Soviet system and to vindicate the administration's critique of the Soviet system. For Moscow, the episode seemed to encapsulate and reinforce the Soviets' worst case assumptions about US policy for several reasons:
- President Reagan was quick to seize on the shootdown to broadly indict the Soviet system and its leaders. Andropov, notwithstanding whatever he actually may have believed about Soviet responsibility, was forced onto the defensive and evidently felt compelled to justify the USSR's actions at all costs.
- The US follow-on campaign at the UN and in other channels to embarrass and isolate the USSR in the international community undoubtedly contributed to Moscow's penchant to see an anti-Soviet plot.82 In the Soviet view, a campaign of this scope and magnitude that just happened to dovetail with the Reagan administration's moral critique of the USSR must have been more than simply a chance opportunity seized by Washington in the heat of the moment.83
- President Reagan's decision to use the KAL 007 shootdown to persuade Congress to support his requests for increased defense spending and the new MX missile pointed in the same direction, in Moscow's view. Given the Soviets' predilection for conspiracy theorizing, it was not farfetched that they would see a US design behind the combination of circumstances.
The Soviet leadership deems it necessary to inform the Soviet people, other peoples, and all who are responsible for determining the policy of states, of its assessment of the course pursued in international affairs by the current US administration. In brief, it is a militarist course that represents a serious threat to peace.... If anyone had any illusion about the possibility of an evolution for the better in the policy of the present American administration, recent events have dispelled them completely.84 [emphasis added]
Dobrynin says the last phrase was the key one; the word "completely" was carefully chosen to express the Politburo's consensus that the USSR could not reach any agreement with the Reagan administration.85 In sum, the aftermath of the downing of KAL 007 heightened Soviet anxiety. Within weeks Soviet intelligence and the Soviet military, almost certainly with the KAL 007 episode in mind, would overreact to a US/NATO military exercise.
Another notable incident in 1983 occurred during an annual NATO command post exercise codenamed ABLE ARCHER 83. The Soviets were familiar with this exercise from previous years, but the 1983 version included two important changes:
- In the original scenario (which was later modified), the 1983 exercise was to involve high-level officials, including the Secretary of Defense and the Chairman of the Joint Chiefs of Staff in major roles, with cameo appearances by the President and the Vice President. Such high-level participation would have meant greater publicity and visibility than was the case during past runnings of this exercise.
- ABLE ARCHER 83 included a practice drill that took NATO forces through a full-scale simulated release of nuclear weapons.
Gordievsky described the reaction in stark terms:
In the tense atmosphere generated by the crises and rhetoric of the past few months, the KGB concluded that American forces had been placed on alert--and might even have begun the countdown to war.... The world did not quite reach the edge of the nuclear abyss during Operation RYAN. But during ABLE ARCHER 83 it had, without realizing it, come frighteningly close--certainly closer than at any time since the Cuban missile crisis of 1962.86 [emphasis added]
The ABLE ARCHER story has been told and retold by journalists with inside contacts in the White House and Whitehall.87 Three themes run though the various versions: The US and USSR came close to war as a result of Soviet overreaction; only Gordievsky's timely warning to the West kept things from getting out of hand; and Gordievsky's information was an epiphany for President Reagan, convincing him that the Kremlin indeed was fearful of a US surprise nuclear attack:
Within a few weeks after ...ABLE ARCHER 83, the London CIA station reported, presumably on the basis of information obtained by the British from Gordievsky, that the Soviets had been alarmed about the real possibility that the United States was preparing a nuclear attack against them. [National Security Adviser Robert] McFarlane, who received the reports at the White House, initially discounted them as Soviet scare tactics rather than evidence of real concern about American intentions, and told Reagan of his view in presenting them to the President. But a more extensive survey of Soviet attitudes sent to the White House early in 1984 by CIA director William Casey, based in part on reports from the double agent Gordievsky, had a more sobering effect. Reagan seemed uncharacteristically grave after reading the report and asked McFarlane, "Do you suppose they really believe that? ...I don't see how they could believe that--but it's something to think about." ...In a meeting the same day, Reagan spoke about the biblical prophecy of Armageddon, a final world-ending battle between good and evil, a topic that fascinated the President. McFarlane thought it was not accidental that Armageddon was on Reagan's mind.88
Is Gordievsky's stark description credible? According to a US foreign affairs correspondent, the "volume and urgency" of Warsaw Pact communications increased during the exercise.89 In addition, US sources reported that Soviet fighter aircraft with nuclear weapons at bases in East Germany and Poland were placed on alert.90 But a US expert who queried a number of senior Soviet political and military officials reports that none had heard of ABLE ARCHER, and all denied that it had come to the attention of the Politburo or even the upper levels of the Defense Ministry.91Moreover, Dobrynin, who argues that the top leadership took the war threat seriously and devotes several pages in his memoirs to the KAL 007 tragedy, makes no mention of ABLE ARCHER.
An important piece of evidence--the Center's flash message referred to above--is missing from the RYAN cables that Gordievsky published in 1991. ABLE ARCHER 83, it seems, made more of an impression in the White House than in the Kremlin.92 In any event, it was not comparable to the Cuban crisis, when the superpowers were on a collision course, US nuclear forces were on full alert, and--as recently revealed--the USSR had deployed nuclear weapons in Cuba.
Prime Minister Thatcher herself apparently delivered the chilling message to President Reagan, hoping to convince him to moderate his rhetoric and actions. She evidently believed that US policy toward the USSR had become risky and counterproductive by threatening to undermine NATO's consensus on deployment of US intermediate-range missiles. Thatcher also was mindful of the growing strength of the peace movement in Europe and especially in West Germany.
Thatcher publicly urged a shift in policy on 29 September in an address at the annual dinner for the Churchill Foundation Award in Washington, where she knew her remarks would attract media--and White House--attention. Her theme--"we live on the same planet and must go [on] sharing it"--was a plea for a more accommodating Alliance policy that she spelled out in subsequent speeches. She did not, according to a chronicler of the Thatcher-Reagan partnership, pick up the phone or approach Reagan directly, because:
The essence of the partnership at this stage was that the two governments were basing their decisions on much the same evidence and on shared assessments at professional level. In particular, both governments would have had the same intelligence. A critical contribution in this field was made over a period of years by Oleg Gordievsky....94
A US journalist who interviewed British intelligence sources believes Gordievsky's reporting had a significant impact on the White House.95 He adds an interesting twist to the story. The British claimed the KGB was exploiting, and perhaps manipulating, "bluster in Washington" to hype the US threat to Soviet leaders for the KGB's own bureaucratic purposes and interests. London's message to Washington was: stop helping the hawks and start supporting the doves. Whether the British were acting as analysts or spin doctors is open to question. President Reagan says in his memoirs--without reference to British intelligence reports or ABLE ARCHER--that in late 1983 he was surprised to learn that "many people at the top of the Soviet hierarchy were genuinely afraid of America and Americans," and "many Soviet officials feared us not only as adversaries but as potential aggressors who might hurl nuclear weapons at them in a first strike."96
In the broad scheme of things, election-year politics and polls showing that the President's anti-Soviet rhetoric was his highest "negative" with US public opinion probably played the main role in the more conciliatory tone he adopted in early 1984. But the President himself said the war scare was "something to think about." The British intelligence reports appear to have influenced President Reagan--as they were no doubt intended to do--more than they influenced senior White House policy aides, who remained skeptical of the Soviet war scare during 1981-83 and even after Gordievsky had defected and publicly surfaced in 1985.97
In the months following the September 1983 KAL incident, a full-scale war scare unfolded in the USSR. Soviet authorities clearly instigated this through a variety of agitprop activities. Even so, the scare took on a life of its own and threatened to get out of hand before the Kremlin took steps in early 1984 to calm public fears.98
Soviet attacks on President Reagan reached a fever pitch. Moscow compared him to Hitler and alleged that he had ties to the Mafia. The Soviet media hammered home that the danger of nuclear war was higher than at any time since World War II.
Radio Liberty interviews with Soviet citizens traveling abroad suggested that much of the Soviet public was genuinely alarmed. A series of officially sponsored activities at home fed the frenzy. Moscow organized mass "peace" rallies; sponsored "peace" classes in schools and universities; arranged closed briefings on the "war danger" for party activists and military personnel; designated a "civil defense" month; broadcast excerpts from Stalin's famous 1941 speech to troops parading through Red Square on their way to defend Moscow from the approaching German army; and televised a heavyhanded Defense Ministry film that depicted a warmongering America bent on world domination. The Politburo also considered, but rejected, proposals to shift to a six-day industrial workweek and to create a special "defense fund" to raise money for the military.
What were the Soviet leadership's motives? Some observers who have studied the war scare have written it off as political theater--as an elaborate orchestration to release tensions over KAL 007 at home and promote the ongoing Soviet "peace offensive" abroad.99 But it clearly was more than that. The leadership would not have invoked the memory of World War II--which is emotionally charged and had an almost sacred significance for the Soviet people--solely for propaganda purposes. It would not have fueled popular fears about nuclear extinction just to boost morale and influence public opinion abroad.
We have been hearing a lot of rumors about the possibility of war in the near future. At political information meetings they are saying that the United States is getting ready to attack the Soviet Union, and that we should be prepared for an attack at any moment. From what I could see, those who believed these warnings significantly outnumbered those who didn't. The simple people are very frightened of war.
Soviet citizen interviewed by
Radio Liberty (Munich)
The regime appears to have aggravated popular fears of war for a specific purpose: to prepare the population for the possibility that repeated promises to raise living standards might have to be abandoned in order to increase defense spending in the face of a growing danger of a US military strike on the USSR.100 The Kremlin, it seems, had decided that the only way to make new sacrifices palatable was to play to the public's fears.101 The ploy was a risky one, not only because the Soviet people had come to expect improvements in their living standards, but also because developments in Poland at that time were underscoring how popular unrest could develop into revolt against a Communist regime.
With the improvement in US-Soviet relations after Mikhail Gorbachev came to power in 1985, the domestic war scare subsided as quickly as it had emerged. Before it did, however, the leadership apparently felt compelled to allay the public's fears with assurances that the USSR was in a position to deter war and, if necessary, to defend itself. This was further evidence that the war scare was genuinely felt among the populace.
102 It should have been anticipated and could have been countered by the Soviets but was not, mainly because of a failure to interpret indications and warnings accurately.
The connection between ignored warnings and surprise attack has never been forgotten in Moscow. For decades after the war, Soviet leaders seemed obsessed with the lessons of 1941, which were as much visceral as intellectual in Soviet thinking about war and peace.103
The 1941 analogy clearly had an impact on the way RYAN requirements were formulated and implemented. The historical example of Operation BARBAROSSA, moreover, may explain the sense of urgency that KGB officers such as Gordievsky and Shvets attributed to the Kremlin even while these officers themselves discounted the threat. The gap in perceptions may have reflected a gap in generations. Members of the Brezhnev-Andropov generation had experienced the German war firsthand as the formative experience of their political lives. But for the younger generation born just before, during, or after the war, BARBAROSSA was history rather than living memory.
The Soviets' intelligence "failure" of 1941 was a failure of analysis, not collection.104 Stalin received multiple, detailed, and timely warnings of the impending invasion from a variety of open and clandestine sources. But he chose to interpret intelligence data with a best case or not-so-bad-case hypothesis, assuming--incorrectly--that Hitler would not attack without issuing an ultimatum or fight a two-front war. Stalin erred in part because he deceived himself and in part because German counterintelligence misled him with an elaborate deception plan.105 Possibly because of this precedent, Stalin's heirs may have decided that it was better to look through a glass darkly than through rose-colored lenses. This, it appears, is why Operation RYAN used an explicit worst case methodology to search for indications and warning of a US surprise attack.
RYAN also seems to have incorporated--or in some instances misapplied--other lessons from 1941. Despite the prowess of his intelligence services, Stalin distrusted clandestinely acquired intelligence, including agent reporting and even communications and signals intercepts.106 He did so because he was convinced that such sources could be controlled by the enemy and corrupted by disinformation--a belief that led him to reject accurate as well as inaccurate information. He insisted that Soviet intelligence look instead for indirect indicators of war planning that could not be concealed or manipulated. He went along, for example, with a proposal by his chief of military intelligence for surveying mutton prices in Nazi-occupied Europe; the intelligence official thought the Germans would need sheepskin coats for winter military campaigning in Russia and, by buying up existing livestock supplies, would flood the market with cheap mutton.107 This deceptively simple indicator turned out to be simply deceptive; Hitler, believing he could defeat the Red Army by the fall of 1941, did not prepare for wintertime operations.
RYAN requirements reveal the same kind of unorthodox thinking. For example, the KGB residency in London was instructed to monitor prices paid for blood at urban donor banks.108 The KGB Center assumed that prices would rise on the eve of war as blood banks scurried to stockpile supplies. But there was a problem with this assumption: British donor banks do not pay for blood--contributions are voluntary. In another such example of RYAN requirements, the KGB residency in London was told to visit meatpacking plants, looking for signs of "mass slaughter of cattle and putting of meat into long cold storage."109 The parallel with Soviet intelligence requirements of 1939-41 is close enough to suggest that the KGB was digging them out of old NKVD (the KGB's predecessor) and GRU files.
Finally, there was another plausible--although unprovable--link between 1941 and 1981. The 1941 disaster was Stalin's fault, but he blamed Soviet intelligence. This left an indelible stain on the Soviet services, and the subject was so sensitive that it could not be discussed openly until the advent of glasnost.110 One motive behind Andropov's decision to launch Operation RYAN in 1981 may have been a determination not to let history repeat itself. Soviet intelligence certainly had a vested interest in promoting a dire threat assessment of US intentions, but professional pride and a wish to avoid being a scapegoat may have been involved as well.
The fears that prompted Operation RYAN seemed genuine, even if exaggerated. Ex-Ambassador Dobrynin implied as much to a skeptical US television interviewer in 1995. When the interviewer asked whether Andropov "had really believed" that the Reagan administration might order a first strike, Dobrynin replied: "Make your conclusions from what he [Andropov] said in telegrams to his rezidents."111
The alert was a crash program to create a strategic warning system in response to new challenges the Soviets saw looming on the horizon. That response was panicky but not paranoid. One historian, rejecting the paranoia thesis that has often been used to explain Russian reaction to technologically superior 112 Western military power, captured the point when he wrote: "At various times Russian strategists were acutely fearful. But those fears, although at times extreme, were scarcely insane."113
More Than Just a Scare Tactic
The following remarks were made by former Soviet Foreign Ministry official Sergei Tarasenko at a 1993 conference of former US and Soviet officials:
Around this time [late 1983], [First Deputy Foreign Minister Georgi] Kornienko summoned me and showed me a top-secret KGB paper. It was under Andropov. Kornienko said to me, "You haven't seen this paper. Forget about it." ...In the paper the KGB reported that they had information that the United States had prepared everything for a first strike; that they might resort to a surgical strike against command centers in the Soviet Union; and that they had the capability to destroy the system by incapacitating the command center. We were given the task of preparing a paper for the Politburo and putting forward some suggestions on how to counter this threat not physically but politically. So we prepared a paper [suggesting] that we should leak some information that we know about these capabilities and contingency plans, and that we are not afraid of these plans because we have taken the necessary measures.112
Tarasenko was a senior adviser to Kornienko. He was one of the few officials outside the Soviet intelligence community who had seen the above mentioned KGB paper. His remarks confirm that the Soviet leadership genuinely believed the risk of a US attack had risen appreciably.
Dobrynin has noted that post-Stalin leaders believed the "existing political and social structure of the United States was the best guarantee against an unprovoked first strike against us."114 He claims, however, that in the early 1980s some Soviet leaders, including Andropov, changed their minds. Why? Dobrynin's reply, quoting Andropov, was that President Reagan was "unpredictable." That answer seems too simplistic--and too "un-Soviet" in that it attaches so much weight to personalities--although it is vintage Dobrynin, who seems to view the Cold War largely as an interpersonal interplay among Soviet and American leaders he knew.
To reduce the war scare to Andropovian paranoia and Reaganite rhetoric is too facile. Otherwise RYAN would not have outlasted both leaders, the KGB, and the changes in US-Soviet relations that led to the end of the Cold War.115 The Kremlin's thinking was shaped by adverse trends, not just adversarial personalities--that is, by its pessimistic assessment of the "correlation of forces" and the ever-widening gap in the USSR's technological lag behind the West. Soviet leaders knew that their nation was no longer even running in place on the treadmill of history; it was beginning to fall back. In this atmosphere, Soviet officials and much of the populace felt vulnerable to the prospect of a US attack.
Many Western observers dismissed the intelligence alert and the subsequent war scare because they considered its worst case scenario--surprise nuclear attack--as out of touch with reality or just plain irrational. They based their view more on their certainty that there was no objective threat of a US attack--Reagan was not Hitler, and America does not do Pearl Harbors--than on their uncertain understanding about how the Soviets saw things. While Western observers were half-right in questioning whether the Soviet war scare was "objective" or "rational," they were half-wrong in writing it off as scare tactics. Even fear based on a false threat can create real dangers.
Paradoxically, viewing the Soviet war scare as nothing more than a scare tactic may have led the West to underestimate another threat--a Soviet preemptive strike, either as a result of miscalculation or by design to reverse the adverse "correlation of forces." Was this really a possibility? Some observers think so.116 For example, Gyula Horn, Hungary's last Communist foreign minister (and current prime minister), claims that Soviet marshals, fortified with a little vodka, openly advocated an attack on the West "before the imperialists gain superiority in every sphere."117 The evidence is anecdotal but plausible. Whether this threat was real is likely to remain one of the Cold War's conundrums until or unless still classified documents someday provide an answer.
118 It was still regarded by Soviet leaders and other observers as an important arm of Soviet foreign policy.
Before being posted to London in June 1982, Gordievsky received a briefing on Operation RYAN from a KGB expert on NATO.119 The briefer paid lipservice to the need to recruit "well-placed agents," but he emphasized that the principal method to be employed in RYAN was visual observation of "tell-tale indicators" such as lights burning in government offices and military installations late at night, VIP movements, and high-level committee meetings.
The message was clear, even if implicit: the much-vaunted KGB had become largely unable to recruit well-placed agents. Having KGB staff officers serving under official cover do their own spying, rather than recruiting agents to do it, violated basic rules of tradecraft. Lurking around well-guarded official installations during the night seemed almost certain to attract the attention of host-country security services.120 The KGB's willingness to risk exposure of its officers in this way reflected the urgency of its search for ways to implement Operation RYAN.
Gordievsky and another ex-KGB officer, Yuri Shvets, note that the KGB in the 1980s was having particular difficulty acquiring agents in the United Kingdom and the United States.121 The spy organization's halcyon days of recruiting ideologically motivated agents worldwide were long gone.122 In the meantime, Western services were recruiting sizable numbers of KGB officers and receiving defectors who in turn identified other KGB officers and operations.123 Western and some Third World countries were expelling KGB officers in record numbers; the peak year was 1983, when 147 intelligence officers, including 41 in France alone, were ousted for spying.124
Some observers argue that the increased expulsions resulted from the high risks the KGB was taking to collect RYAN-related information. There may be something to this, but most of the expulsions in the early 1980s were part of a coordinated crackdown on Soviet intelligence operations designed to collect strategically important Western scientific information and technology.
Inability to recruit well-placed agents compelled the KGB to try to exploit its remaining advantages, such as the relative openness of Western nations and the still-large KGB staffs stationed in many of those countries. Operation RYAN was launched on the assumption that, if the United States did decide to attack the USSR, it would reveal that decision more or less openly--that is, through a variety of actions it could not conceal. The troubles enumerated above also prompted the KGB to look at another advantage it still possessed: it could draw heavily on East Germany's formidable intelligence capabilities for help in implementing RYAN.
Veteran KGB officer Oleg Gordievsky began spying for British intelligence in 1974 while stationed in Denmark. He was the primary--and for a long time the only--source of Western intelligence on RYAN. Two of his fellow ex-KGB officers, Oleg Kalugin and Yuri Shvets, later provided corroborating information.
Gordievsky went to London in June 1982 as deputy rezident. In early 1985 he was appointed rezident. Soon thereafter, based on information from American spy Aldrich Ames, Soviet counterintelligence recalled Gordievsky to Moscow on a pretext, put him under surveillance, and began interrogating him. In late July 1985, using a prearranged signal to British intelligence, he triggered a plan to exfiltrate himself from the USSR. He returned to London in September 1985. By this time he was the highest ranking Western penetration of Soviet intelligence.
The British soon acknowledged publicly that Gordievsky had been working for them, and he came under their protection. He became an informal adviser to Prime Minister Thatcher and President Reagan and played an important role in persuading them to take Mikhail Gorbachev seriously as a reform-oriented leader.
Despite Gordievsky's efforts to convince the West that the Soviet war scare and Gorbachev were both for real, some skeptics, who believed that he was peddling KGB disinformation aimed at influencing Western policy, question his trustworthiness. In addition, neither Gordievsky nor the British have ever offered a convincing explanation of his motives for betraying the KGB or the circumstances of his recruitment, and this too has prompted some observers to suspect his credibility and even his bona fides.125 These two issues--bona fides and credibility--are related but not identical. There were cases during the Cold War when a Soviet intelligence defector proved bona fide (that is, he was who he claimed to be and had access to the information he gave to Western intelligence), but also lied, fabricated, and exaggerated to please benefactors, ingratiate himself, inflate his value, protect himself, or protect his family if he had left one behind as Gordievsky did.
Many US analysts (including the author of this monograph) do not doubt Gordievsky's bona fides, and for the most part his credibility appears solid as well (see exceptions noted below). British intelligence debriefed him 150 times over a period of several months, taking 6,000 pages of notes that were reviewed by analysts.126 Everything checked out, and no significant inaccuracies or inconsistencies were uncovered. Gordievsky's information before and after he defected led to the identification and expulsion of KGB officers, including 31 who were expelled from the United Kingdom after he was exfiltrated from Moscow.127 In various books, articles, and interviews, moreover, he did inestimable damage to the KGB by revealing its officers, secrets, and operations and by damaging its reputation.
Gordievsky's track record, although good, is not entirely unblemished. In 1984, he told British intelligence about an alleged spy working at a British signals intercept site on Cyprus.128 The authorities arrested eight British servicemen--five in the RAF and three in the army--and detained them for a year. Their four-month trial did not begin until after Gordievsky defected and arrived in London in 1985. The Crown's case then collapsed when Gordievsky's information proved wrong.
In several cases Gordievsky has displayed a tendency to shoot from the hip, making accusations about alleged Soviet agents that were later amended or retracted.129 In some instances these accusations served to help promote his publications. He became embroiled in a legal battle on the eve of the publication of his memoirs in 1995 when he erroneously charged that a UK Labour Party MP and a British publisher were Soviet agents. Because most of the people Gordievsky identified as Soviet agents were Labour Party leaders and/or leftists, he was accused of seeking to serve the interests of benefactors in the Conservative Party and conservative sympathizers in the intelligence and security services. Some Labour officials called for termination of his British pension.130
British intelligence has used Gordievsky to reinforce its reputation at home and abroad. Some observers have said the British spy scandals of the 1950s and 1960s did lasting damage to confidence among Western intelligence and security services in their British counterparts. Gordievsky was welcome as living, breathing proof that MI6 was not penetrated and could run a long-term agent safely and securely. A knowledgeable Conservative MP, Lord Bethell, has commented that the decision to exfiltrate Gordievsky from under the KGB's nose was motivated in part by a desire to demonstrate what British intelligence could do:
A successful operation would do wonders for MI6's credibility in the intelligence world and would leave Britain with a valuable "property," a storehouse of priceless information which even the CIA would find useful. It would impress the Americans, and this is something that British intelligence always likes to do.131
Despite the somewhat mixed picture of Gordievsky that emerges from all this, his information on RYAN and the war scare seems accurate and objective. His 1991 publication of RYAN cables with commentary underscored the credibility of the bulk of his debriefings. To date no one, either in the West or in the former Soviet Union, has challenged the authenticity of the cables and Gordievsky's account of Operation RYAN. Gordievsky may have exaggerated the gravity of the Soviet reaction to ABLE ARCHER 83 by comparing it to the Cuban missile crisis, but that was a matter of interpretation--intended no doubt to enhance the importance of his own role--rather than a question of fact.
Footnotes1 See George F. Kennan, "The State of U.S.-Soviet Relations (1983)," in At A Century's Ending: Reflections 1982-1995 (New York: W. W. Norton & Company, 1996), p. 82.
2Time magazine's "Man of the Year" issue for 1984 provides a good summary of the issues and atmospherics in US-Soviet relations during 1983. Time chose Ronald Reagan and Yuri Andropov as co-honorees. See "Men of the Year; Reagan and Andropov," Time, 2 January 1984, pp. 16-25.
3 The "evil empire" speech is often regarded as a major foreign policy address or even a defining moment in US-Soviet relations, although the venue in which it was delivered--an evangelical ministers' convention in Florida--suggests that it may not have been intended as such. The media seized on the speech primarily for its sound-bite quality and its tie-in with the popular film Star Wars, a futuristic morality play about Good versus Evil in outer space. Former Soviet ambassador to the US Anatoly Dobrynin has written that the speech "was not intended to be a history-making event in foreign policy, and according to [Secretary of State George] Shultz, no one outside the White House, including him, had a chance to review the text in advance, but the phrase quickly spread throughout the world." Dobrynin does not say how he portrayed the speech to Moscow. See Anatoly Dobrynin, In Confidence: Moscow's Ambassador to Six Cold War Presidents (New York: Times Books/Random House, 1995), p. 502.
4 This was the first personal attack by a top Soviet leader on a US president in many years. Andropov's allegation was in response to President Reagan's assertion that the USSR had violated a self-imposed moratorium on deployment of SS-20 intermediate-range missiles facing Western Europe. The President's statement was technically incorrect; the Soviet moratorium had been cleverly worded to give the impression that all deployments would cease immediately, but the fine print showed that the Soviets did not include SS-20 launchers under construction but not completed.
5In a private conversation in Moscow with Vice President Bush, Secretary of State Shultz, and US Ambassador Arthur Hartman in November 1982 after Leonid Brezhnev's funeral, Andropov said: "Periodically excesses of rhetoric will appear in our relationship, but it is best to pay attention to the business at hand." George Shultz, Turmoil and Triumph: My Years as Secretary of State (New York: Charles Scribner's Son, 1993), p. 126. Andropov did not heed his own advice and soften his own attacks on the United States even after President Reagan moderated his statements on the Soviet Union.
6As Harry Gelman put it: "The [Soviet] oligarchy deployed a degree and volume of propaganda vituperation not seen since the 1950s, and far surpassing Mr. Reagan in rhetorical extravagance." See The Rise and Fall of Detente: Causes and Consequences, Occasional Paper-OPS-002 (Santa Monica, CA: The RAND Corporation, 1985), p. 25.
7 William T. Lee, "The nuclear brink that wasn't - and the one that was," Washington Times, February 7, 1995, p. A19.
8 See Vernon V. Asparturian, "Soviet Global Power and the Correlation of Forces," Problems of Communism, vol. 29 (May-June 1990), pp. 1-18, for a discussion of the rise and fall of Soviet expectations of supplanting the United States as the primary international power. Asparturian (pp. 10-11) defines "correlation of forces" as follows: [The] Soviet concept of the "correlation of forces" differs fundamentally from the concept [of] "balance of power." While the balance of power can be the product of deliberate policy, the "correlation of forces" represents "balance determined by social and historical processes" in which policy of states is only a component. As developed by Soviet writers, the "correlation of forces" constitutes the basic substructures upon which the interstate system rests. Thus, the "correlation of forces" can be affected only marginally by state policy, but in general, state policies are shaped by the changing "correlation of forces." Even today, this Soviet concept is barely understood in the West, hence the muddle over "assessments" and "military balances."
9 As cited in Ibid., p. 1. In retrospect it is difficult to imagine that this was the Soviet perception of the international situation on the eve of Communism's collapse. But it was. Analysis of voluminous writings by Soviet experts on the West shows that: By the mid-1970s Soviet leaders were convinced that they were gaining the upper hand. During the brief period of detente, America was acknowledged to be the dominant force in the world, but its relative strength appeared to be in decline.... Richard Nixon's pursuit of detente was interpreted as evidence of a weakened America's need for peace, markets, and new sources of energy. When Nixon traveled to Moscow in 1972, Soviet specialists on American affairs enthusiastically proclaimed that the USSR was emerging as the victor in the global struggle that had begun a quarter of a century earlier. See Richard B. Day, Cold War Capitalism: The View from Moscow 1945-1975 (New York: M. E. Sharpe, 1995), pp. xi and xvi-xvii.
10 As cited in Asparturian, "Soviet Global Power and the Correlation of Forces," p. 17. Ambassador S. V. Chervonenko made this statement in an April 1980 speech. He was implicitly referring to the US effort to destabilize the Marxist regime of Salvador Allende in the early 1970s. The immediate purpose of the speech was to signal the United States that Moscow was determined to keep a Marxist regime in power in Afghanistan, but the speech was widely interpreted as meaning that the USSR was prepared to apply the Brezhnev Doctrine, formulated to justify the 1968 invasion of Czechoslovakia, outside the Soviet bloc and anywhere in the world.
11 "By the early 1970s it was widely believed that the USSR could profit from America's problems. Evidence of American decline, both at home and abroad, seemed overwhelming." Day, Cold War Capitalism, p. 260.
12 Robert M. Gates makes a major contribution by setting the record straight on this issue in From the Shadows: The Ultimate Insider's Story of Five Presidents and How They Won the Cold War (New York: Simon & Schuster, 1996), pp. 89-96, 135-169.
13 The briefing is recounted in Christopher Andrew and Oleg Gordievsky, KGB: The Inside Story of Its Foreign Operations from Lenin to Gorbachev (New York: Harper Collins Publishers, 1991), p. 583, and also in Christopher Andrew and Oleg Gordievsky, eds., Instructions from the Center: Top Secret Files on KGB Foreign Operations 1975-1985 (London: Stodder & Houghton, 1991), p. 67. Former KGB officer Oleg Kalugin, who was stationed in Leningrad at the time, notes that "in 1981, we received what I can only describe as a paranoid cable from Andropov warning of the growing threat of a nuclear apocalypse." See Oleg Kalugin with Fen Montaigne, The First Directorate: My 32 Years in Intelligence and Espionage Against the West (New York: St. Martin's Press, 1994), p. 302.
14 RYAN is the acronym for raketno-yadernoye napadenie, or nuclear-missile attack. Another ex-KGB officer who was involved with RYAN uses the term VRYAN; the additional letter stood for vnezapnoe or surprise. See Yuri B. Shvets, Washington Station: My Life as a KGB Spy in America (New York: Simon & Schuster, 1994), p. 74. Kalugin, in The First Directorate, p. 302, refers to a "brand-new program (the English-language acronym was RYAN)" that "was created to gather information on a potential American first nuclear strike."
15 Shvets, Washington Station, p. 75.16 German military authorities found this document in the files of the former East German army and gave it to the media. See Markus