July 9, 1990

THE FULL-EMPLOYMENT ACT FOR SPIES

Peace breaking out around the globe encourages spies.

By CHIP JACOBS

Staff Reporter

In the six years since Richard Miller waddled into espionage fame by trading FBI secrets for a trench coat, $65,000 and the sexual favors of a KGB agent, U.S.-Soviet relations got downright friendly.

But not friendly enough to put spying out of business, even in Los Angeles where the world of espionage mingles oddly with smog, traffic, and glitz. Experts say it is a golden irony of glasnost that as the Cold War is swept away in Europe, spying has heated up -- especially in the Southland where liberal Hollywood producers have portrayed communism as a romantic alternative to the capitalism.

"It's not a question if the KGB is in Southern California, it's a question of how many are there," asserted former CIA officer George Carver. It doesn't take a Kremlinologist to figure out why.

For decades, the Pentagon has directed billions of dollars in defense contracts to the likes of Lockheed, Northrop, Rockwell and Hughes, all based in Los Angeles. The result, in the words of Los Angeles FBI Chief Lawrence Lawler, is that "Southern California is the most target-rich area in terms of technology in the U.S. The Soviets know that well."

Indeed, much of America's military arsenal was designed or built in Los Angeles -- from nuclear-tipped missiles and eavesdropping satellites, to battle-ready jets and Star Wars gear. Encircling that sprawling weapons assembly line are a host of military bases like the Long Beach Naval Shipyard, Riverside's March Air Force Base and the Air Force's Special Project's Office in El Segundo. Even the Rand Corp., the think tank that has honed some of America's greatest defense minds, sits unobtrusively under the palm trees in Santa Monica.

That has made Southern California a juicy target for Soviet espionage, even more so today as the funds for Moscow's military arsenal shrink under perostroika.

"There are a lot of Russians who have come over here since things have gotten better [between the two countries]," said Zola Zlobinski, an emigre from Kiev who has been in America since 1976. "Most of them just want a better life, but some of them look suspicious and ask a lot of questions like the KGB does."

Zlobinski has reason to be dubious. Her father gave convicted KGB agent Svetlana Ogorodnikov $10,000 to deliver to his brother in Russia before the spy case erupted. But Ogorodnikov, the woman who seduced Miller, never carried out her end of the bargain. "My mother almost got into a fight with her because of that," Zola said.

The Miller spy scandal proved typical East-West hubs of espionage -- Moscow, Washington, Berlin and Vienna -- don't have a monopoly on spies. And Hollywood's idea that KGB and CIA agents only snoop around in the cold with trench coats on, like the $675 Burberry number Svetlana gave her FBI lover, was laughable.

So was the Miller case, to a point.

Likened to an overweight Inspector Clouseau of `Pink Panther" fame, Miller became the first FBI agent ever charged with espionage, though he claimed he was only trying to revive his sagging career by infiltrating the KGB. His first trial ended in a mistrial in 1985, but he was convicted during the second trial for giving Ogorodnikov a secret FBI manual on U.S. espionage goals.

Miller, now 52, appealed his conviction and begins a third trial next month.

The first two trials shocked Angelenos, more accustomed to hearing about movie-star gossip or the newest kind of frozen yogurt than stories fit for a John Le Carre thriller. Revelations about secret dinners in Mischa's Russian restaurant and meetings between KGB agents and undercover FBI agents from Los Angeles International Airport to Marina del Rey titillated the city.

But, intelligence experts, say, the Miller case was sensationalized by the press, and cloaked a more sophisticated KGB penetration of Los Angeles.

The Soviets, say the FBI, launch West Coast espionage operations from two primary spots: their consulate in San Francisco and their embassy in Mexico City. The KGB has been buoyed by its success in California's high-tech haven, Silicon Valley, which Carver says the KGB wants to make into "an extension of the "Soviet industrial base."

Fifteen years ago Andrew Daulton Lee and his friend Christopher Boyce, an employee at TRW's El Segundo facility, were convicted of selling a top-secret satellite manual to the Soviets, enabling Moscow to learn of U.S. intelligence gathering and missile-tracking methods. That case later became the inspiration for the movie "The Falcon and the Snowman."

Hughes Aircraft Co. also had a run-in with espionage in 1981. Hughes employee William Holden Bell was recruited by a Polish intelligence officer, acting as a proxy for the KGB, and traded data on secret radar systems, air-to-air missiles, and NATO defense secrets for the bargain-basement price of $110,000.

And Northrop, which probably fears congressional budget cutters as much as the KGB, had one of its employees caught in an FBI sting for trying to sell sensitive stealth technology.

(Even John Walker Jr., who gave the KGB a wealth of material on cruise missiles, U.S. war plans and even the codes for launching nuclear missiles, was stationed for a time in San Diego.)

The FBI and CIA, which maintains a "field office" in West Los Angeles, is now concerned that the thousands of unemployed defense workers will give the Soviets more than maps of the city's freeway system. It's a quandary: The same global changes that have accelerated prospects for world peace have spurred espionage opportunities between former adversaries.

"The biggest problem is all the openness that comes from peace breaking out," the FBI's Lawler said. "One might say `We are all friends and don't worry about spying,' when in fact additional information allows them to spy even more. Added to that are the defense layoffs here. The Soviets could try to get to a disgruntled employee or somebody that needs money. Rosey the Riveter won't give away defense secrets, but an unemployed corporate vice president could."

That prospect has defense contractors on their toes.

"In Southern California, we have seen the Soviets use three espionage methods," explained the FBI's Lawler. "They collect information from trade shows and conventions and peruse annual reports and brochures. Sometimes they'll wait for a greedy American to contact them, like the did with Boyce and Bell, or they'll study organization charts and look for people with weakenesses or financial troubles. They also try to establish contact in Russian communities, like the kind we have here."

Southland aerospace contractors, who helped create Southern California's economic boom of the 1980s thanks to its favorite son, Ronald Reagan, are on the defensive.

At Hughes Aircraft Co., where radars for the F-18 and F-14 were built and the Maverick and Phoenix conventional missiles are made, security is being stepped up. A special video tells workers how the KGB and other "hostile intelligence agencies" work, even now.

"The whole defense industry is of a common mindset: intelligence activity has not decreased, it's increased," exclaimed Hughes Vice President of Security George Best, a former FBI agent. "They [the Soviets] still want NATO defense plans but they are also after western industrial technology that might allow them to leapfrog others -- commercial satellites, fiber optics, advanced computers. We go to great lengths to thwart the KGB because it's become so much easier for them to move from East to West."

While the KGB no doubt knows Los Angeles as well as many native Southlanders, many are concerned that America's allies are the spies of the future.

Japan, whose aggressive businessmen have bought up large chunks of prime Los Angeles real estate, may soon compete with the Soviets, Germans and British for the industrial parts and economic secrets that some hope will make Los Angeles the gateway to the Pacific.

Just two weeks ago, U.S. Customs Agents arrested a Los Angeles engineer for trying to sell four Japanese companies Star Wars computer software.

Is Atlantic Richfield or Pacific Enterprises or MGM/UA the next target instead of Northrop's B-2 plant in Pico Rivera. Some say yes.

"In the future you'll see more industrial spying between the United States and its allies as we move move away from the Cold War," said USC assistant professor of international relations Alex Hybel. "That's not to say the KGB isn't still working in Los Angeles. Even a friend, like the Soviets now seem to be now, can always turn out to be a bad enemy again."

copyright Los Angeles Business Journal

Money Train, published in Los Angeles City Beat. Why would U.S. Congressman Ernest Istook from Oklahoma come to Los Angeles to raise money? Perhaps because he holds the purse strings to critical federal transportation dollars.
March 10, 2005

MOVING DOWN THE ROAD, Pasadena Weekly
http://chipjacobs.com/a_movingdown.html
Moving Down the Road, published in the Pasadena Weekly. The Caltrans 700,000 square-foot tower owes its existence to the 1994 Northridge earthquake, union muscle, and a tincture of politics.
July 10, 2003

TUNNEL VISIONS, Pasadena Weekly, Caltrans Tenants Association
http://www.caltranstenants.com/tunnel.html
Tunnel Visions, published in Pasadena Weekly. Caltrans may dig deep to find a way out of its 710 Freeway debacle.
(Part III of Corridor of Shame series)
May 22, 2003

THE UNTOUCHABLES, Pasadena Weekly, Caltrans Tenants Association
http://www.caltranstenants.com/slumlord.html
The Untouchables, published in Pasadena Weekly. Slumlord Caltrans uses legal immunity to hold tenants and the cities of Los Angeles, Pasadena, and South Pasadena at bay, as long-needed repairs to homes the agency owns along the proposed 710 Freeway route fester. (Part II of Corridor of Shame series)
May 15, 2003

NO EXIT, Pasadena Weekly
http://chipjacobs.com/a_noexit.html
No Exit, published in Pasadena Weekly. Once stately properties that Caltrans bought 30 years ago to complete the still unfinished Long Beach 710 Freeway stand as a testament of neglect by one of the most powerful agencies in California. (Part I of Corridor of Shame series)
May 8, 2003

SOME MTA DRIVERS GET PHYSICAL, Daily News of Los Angeles
http://chipjacobs.com/a_mtadriversphys.html
Some MTA Drivers Get Physical, published in Daily News Los Angeles. Attacks on Metropolitan Transportation Agency riders not always punished and nearly 20 cases remain unsolved or lost due to poor record keeping.
June 24, 1996

SUBWAY TUNNEL WALLS AT RISK, REPORT WARNS, Daily News of Los Angeles
http://chipjacobs.com/pdfs/subwaytunnelwallsatrsk1.pdf
Subway Tunnel Walls at Risk, Report Warns, published in Daily News Los Angeles. Just three years after the first segment of the Metro Red Line was opened at a cost of $1.45 billion, the Army Corps of Engineers says the subway’s concrete walls are at risk of being eaten away by chemical-laced ground water.  MTA officials say water-damage threat small. 
April 11, 1996

MTA SPENT BIG TO SUGARCOAT TUNNELING, Daily News of Los Angeles
http://chipjacobs.com/pdfs/mtaspentbig1.pdf
MTA Spent Big to Sugarcoat Tunneling, published in Daily News Los Angeles. During the 1994 holiday season, the Metropolitan Transportation Agency spent about $400,000 in public funds to bring a Yule-tide bonanza to Hollywood boulevard. Opponents say humbug to mitigation efforts, labeling it as pork barrel or misguided.
September 24, 1995

HOMES OWNED BY CALTRANS NOT KEPT UP, RECORDS SHOW, The Los Angeles Times
http://chipjacobs.com/a_homesowned.html
Homes Owned by CalTrans Not Kept Up, Records Show, published in The Los Angeles Times. Dozens of homes the state acquired along the un-built Long Beach (710) Freeway pathway sit in such disrepair they either can’t be leased or whip up renters’ complaints about slumlord practices. Twenty-seven homes still part of the holdings are not even needed to construct the long-delayed project. Caltrans defends maintenance.
April 26, 1995

CALTRANS MISSED SAFETY DEADLINE, San Gabriel Valley Tribune
http://chipjacobs.com/pdfs/caltransmissed1.pdf
CalTrans Missed Safety Deadline, published in  the San Gabriel Valley Tribune. Despite a legally etched state deadline, Caltrans missed a key deadline to strengthen more than 1000 freeway bridges, including most of the structures crippled in the Northridge earthquake. Bridge contracts overdue.
February 4, 1994

PROBLEMS PILE UP ALONG METRO LINE, San Gabriel Valley Tribune
http://chipjacobs.com/pdfs/problemspileupmetro1.pdf
Problems Pile up Along Metro Line, published in San Gabriel Valley Tribune. First came the charges of shoddy construction. Then the claims of massive cost overruns.  Now more troubles are brewing for Los Angeles’ new subway:  wage violations against workers actually building the Metro Red Line.
October 16, 1993

FREEWAY WORK: A PERILOUS PAYCHECK, San Gabriel Valley Tribune
http://chipjacobs.com/pdfs/freewayworkperilouspaycheck1.pdf
Freeway Work: A Perilous Paycheck, published in San Gabriel Valley Tribune. Caltrans workers face death everyday and Caltrans needs to further protect its exposed maintenance crew.
Sept. 4, 1993

TRANSIT COMMISSION AUDITORS CAST EAGLE EYE ON TUTOR’S COSTS, Los Angeles Business Journal
http://chipjacobs.com/a_transit.html
Transit commission Auditors Cast Eagle Eye on Tutor’s Costs, published in Los Angeles Business Journal. Los Angeles County Transportation Commission auditors are questioning tens of thousands of dollars in overhead expenses that powerhouse Metro Rail contractor Tutor-Saliba Corp. submitted two years ago, according to a preliminary audit obtained by the Business Journal.
September 28, 1992

METRO RAIL COST-OVERRUN TAB ADDS TO CITY HALL FISCAL WOES, Los Angeles Business Journal
http://chipjacobs.com/a_metrorail.htm
Metro Rail Cost-Overrun Tab adds to the City Hall Fiscal Woes, published in Los Angeles Business Journal. The City of Los Angeles is on the hook to pay $100 million in Metro Rail Red Line construction overruns under a little-known cost-sharing deal with the Los Angeles County Transportation Commission.
March 16, 1992

Title: The man
URL: http://www.chipjacobs.com/wd_theman.html

Almost broke, living on handouts with his mom in a shabby apartment outside post-war Los Angeles, Gordon Zahler, a paralyzed kid in his mid-twenties got an idea. He'd re-sell the music of a dead man -- the music his father, Lee Zahler, composed during his workhorse career in early Hollywood. Within a few years, mother and son would be working for MGM on a Doris-Day romp and for Hollywood's most beloved hack, Ed Wood Jr., on Plan Nine from Outer Space. A decade later they had a house above the Sunset Strip in a comeback story too farfetched for any screenplay.