In the fall of 1989, during the Cold War’s wan and washed-out final months, the Berlin Wall was crumbling—and so was San Francisco. The powerful Loma Prieta earthquake, the most destructive to hit the region in more than 80 years, felled entire apartment buildings. Freeway overpasses shuddered and collapsed, swallowing cars like a sandpit. Sixty-three people were killed and thousands injured. And local Soviet spies, just like many other denizens of the Bay Area, applied for their share of the nearly $3.5 billion in relief funds allocated by President George H.W. Bush.
FBI counterintelligence saw an opening, recalled Rick Smith, who worked on the Bureau’s San Francisco-based Soviet squad from 1972 to 1992. When they discovered that a known Soviet spy, operating under diplomatic cover, had filed a claim, Smith and several other bureau officials posed as federal employees disbursing relief funds to meet with the spy. The goal was to compromise him with repeated payments, then to turn him. “We can offer your full claim,” Smith told the man. “Come meet us again.” He agreed.