Chapter 10: "Give Me Your Badge"
Once he had been interrogated by the FBI, Peter Karlow knew his career in the CIA was finished.
What he did not know was that Sheffield Edwards, the CIA's director of security, had been out to get him, evidence or no evidence. The fact that there was none did not deter Edwards in the least. In January 1963, three weeks before the FBI interrogation, the CIA security chief called in the bureau's representatives to discuss Karlow, who was still regarded as the "principal suspect" in the mole hunt.
"Individuals present at the conference," Edwards wrote in the wonderfully stilted language of officialdom, "recognized the distinct possibility that a definite case cannot be made against [Karlow] since there is a possibility that [Karlow] is not identical to [Sasha]. The Director of Security indicated that this Agency desired that the other areas of a personnel and /or security nature in the ... case be fully developed during the interview with [Karlow] since it is the opinion of the Office of Security ... that [Karlow] whether or not he is identical to [Sasha] should be terminated from Agency employment." 
Nothing could be clearer. If the CIA could not prove Karlow a mole, it would find some other reason to fire him. Karlow's continental manner and educated airs obviously annoyed Edwards, a former Army colonel, a slender man of military bearing who kept his gray hair close-cropped. His dislike for Karlow was transparent and permeates the secret memos he wrote at the time, many of them heavy with sarcasm. At the meeting, Edwards fretted that Karlow might not agree to the FBI interview. "However, the general opinion of individuals at the conference," the security chief concluded, "was that [Karlow], who appears to have a very high regard of his own intellect, will, whether he is [Sasha] or not, go ahead with the FBI interview." 
On February 19, the week after the FBI interrogation, Karlow called on Edwards. It was a nasty confrontation.
"You're a traitor!" Edwards barked. "It's just a question of whether we fire you or let you resign."
"And you are a fool," Karlow rejoined.
After a further exchange of pleasantries, the CIA security chief informed Karlow that a decision would be made in a week on whether he would be permitted to resign without prejudice.
Karlow protested that he was innocent. It was obvious, he added, that Edwards did not believe him. "He was not disabused of this fact," Edwards wrote. 
Two days later, Karlow sent a memo to Richard Helms, as the deputy director for plans had requested. "I wish to help the FBI in any way that I can," he wrote, "both to resolve the case and to clear my name. I have nothing to confess and nothing to conceal. I realize that, through an incredible error ... I have come so deeply under suspicion of treason that my career in CIA is ended." Karlow added: "I intend to fight any suspicions or allegations of disloyalty or indiscretion in any way that I can, inside and outside CIA and the government, until any personal implication or blemish on my record is removed."  He attached a statement explaining the conflict over his father's birthplace in the forms he had filled out over the years, an inconsistency that the Office of Security had now seized upon, along with minor security violations by Karlow -- he had once left classified waste in a coffee can, for example -- as the club to drive him from the CIA.
The next day, Karlow once more called on Helms, whom he regarded as his friend. This time, he told Helms he was planning to resign. Helms, the quintessential bureaucrat, and a man of icy composure, smoothly noted that the case was now out of his hands and under the jurisdiction of the FBI. But Karlow, Helms thought, ought to try to correct "certain discrepancies" that had been found in his personal records.
Karlow did not realize that mole suspects have no friends. In his own memorandum to the files, Helms wrote that he had urged Karlow to clear up any contradictions in the FBI records, or "he was running the risk of having his children live under a cloud as far as any type of government employment was concerned, including a commission in the armed services." Helms added: "I went down this track, because it seems to me that the only leverage one has on Karlow to get any possible admissions from him is to make him concerned not so much as to his own future, but that of his children and other members of his family." Helms concluded: "I gave him no solace. ..." 
At this point Karlow was not trying to save his job. All he could do was to keep battling to clear his name. "When I was finally accused on the fifth day of the FBI interrogation," Karlow said, "I felt relief. There was no way they could prove I was a Russian spy. The accusation was so preposterous. But I didn't want to leave with a cloud over my head."
Karlow kept pressing his accusers for specifics. If he was a Soviet spy, which he knew he was not, what was he supposed to have done, when, and where? He pushed Lawrence Houston, the agency's general counsel, for details of his supposed crimes.
"Finally, they came up with two dates. On January 6, 1950, and August 24, 1951, I was supposed to have been in East Berlin being briefed by my [KGB] case officer," the mysterious "Lydia." But Karlow was able to find records demonstrating that he was elsewhere on both dates. As it happened, Karlow had a book inscribed, "To my dear friend Peter Karlow, Rouen, the 6th January, 1950" -- the very day Karlow was accused of being in East Berlin -- which had been given to him by one of France's World War II heroes, Captain Jean L'Herminier. "He was captain of a submarine, the Casabianca, that landed one hundred and four French Moroccan commandos on Corsica the night before the island's liberation in 1943." Karlow had something in common with the French hero; the captain had lost both legs in the war.
Karlow had met L 'Herminier at the Philadelphia Naval Hospital, where both men had been sent for treatment and to be fitted with artificial limbs. A member of the hospital staff asked Karlow if he spoke French, because there was another patient who spoke no English. Karlow went to the room. "I saw a photo of the sub on the side of the bed and immediately knew in whose presence I was," Karlow remembered. The two men became good friends.
At the end of December 1949, Karlow sailed on the Ile de France for Le Havre, en route to Germany to take up his new post in Karlsruhe, where he had been sent to set up the technical laboratory for Richard Helms. "We celebrated New Year's Eve on the Ile de France," Karlow remembered. From Le Havre, Karlow took the boat train to Paris, and then another train to Rouen, where he stayed overnight and visited L'Herminier. The Frenchman gave Karlow the book, which was entitled Casabianca, and written by the former captain to describe the exploits of his famed submarine during the war.
And, as it happened, Karlow was also able to reconstruct where he had been on the other date questioned by the CIA. On August 24, 1951, Karlow, his mother, and his future wife, Libby, were staying in Berchtesgaden at the Berchtesgadener Hof Hotel. "It was when I proposed to my wife. They found our names in the hotel registry."
Karlow was never told how the CIA came up with the two specific dates. But he was incredulous at the reaction of the agency's Office of Security when, after considerable time and effort, he produced the evidence indicating he was not in East Berlin on the dates in question. Karlow spoke with Robert L. Bannerman, the deputy director of the Office of Security, who was to succeed Sheffield Edwards as director. "Bannerman said, 'You must be a high-level spy because you're so well documented.'" When Karlow was not well documented, when the multitudinous application forms he had filled out over the years differed slightly, this was taken as evidence of his guilt. It was an impossible Catch-22.
On March 12, Karlow wrote another memo to Helms. A new CIA team was reviewing his case, but two of its members were from Edwards's staff. Since Edwards "believes me guilty," how could he get a fair hearing? "I am at home on admin leave," Karlow told Helms, "but my 'cover' vis-a-vis my friends in CIA is wearing thin. This case has dragged on far too long already."  Helms wrote back a terse note suggesting Karlow take up his problems with Houston. 
Three weeks later, however, on April 3, Karlow was able to get a telephone call through to Helms, who reported the conversation in a classified memorandum to the CIA's deputy director, Lieutenant General Marshall S. Carter. Karlow, Helms said, "felt a web had been woven around him based on circumstantial evidence and that he was finding it extremely difficult to untangle the web and come to grips with the exact nature of his alleged derelictions." 
By now, however, the web had completely enveloped Karlow. Two weeks later, General Carter brought down the ax. "I have come to the decision that we can no longer employ Mr. Karlow with the Central Intelligence Agency and that he should be authorized to resign," Carter wrote. 
But Karlow had already offered to resign. He knew he was powerless to stop the glacial movement of the bureaucracy. But he was able to win one concession. Houston wrote a memorandum for the record stating that the CIA and FBI investigation of Karlow's "security case" had not shown "that he was involved ... in any way." But the memorandum also noted that the case "remains open in the FBI." It was the best Karlow could do; he gave a copy for safekeeping to a former high CIA official as insurance that it would not be "lost" in the agency's files.
"My name was dragged into this through no action of mine," Karlow said. "Like a chimney pot falling off a rooftop. There was absolutely nothing I could do about it. So I resigned." At age forty-two, Karlow's career in the CIA had ended.
Years later, Karlow could still remember the anger, frustration, and despair he felt during those days in the spring and early summer of 1963. "It was a very dim cult period. It was demoralizing, trying to figure out what happened. I had to explain to my family that I wasn't a Russian spy. To my wife, my mother, and my sister."
On July 5, 1963, Karlow left the CIA headquarters building for the last time.
He met in Lawrence Houston's office on that day with Robert Bannerman, Edwards's deputy in the Office of Security.
"Bannerman said, 'Give me your badge.'"
Karlow wore his laminated plastic identification badge on a chain around his neck. He took it off and handed it to the OS man. "Bannerman escorted me out of the building." Karlow's white Packard convertible was waiting in the parking lot.
Karlow said he did not have any "sentimental thoughts" of the past as he walked out of Langley headquarters that day with Bannerman. "I never had any attachment to that building," he said. "I still believed in a small agency, confused, scattered around the city, hard to find. The headquarters building was Dulles's dream. Things changed after we moved there. It was impersonal after that. I didn't have any feeling about the building."
But as the two men walked through the vast lobby, Karlow pointed to the inscription on the marble wall: "And ye shall know the truth and the truth shall make you free. John VIII-XXXII."
He looked at Bannerman, and said, "I hope you read it sometime."
1. CIA Memorandum to File, January 25, 1963. The document was heavily censored by the CIA before its release, but the words that can, from the context, logically be assumed to be missing have been inserted by the author.
2. 1bid., p. 2.
3. Memorandum, Edwards to Hoover, February 19, 1963.
4. Memorandum, Karlow to Helms, February 21, 1963.
5. Richard Helms, Memorandum for the Record, February 25, 1963.
6. Memorandum, Karlow to Helms, March 12, 1963.
7. Memorandum, Helms to Karlow, March 12, 1963.
8. Memorandum, Helms to Carter, April 3, 1963.
9. Memorandum, Carter to Houston, April 18, 1963.