Operation Scorpion

From the memoirs of legendary Soviet intelligence officer Maj. Gen. Yuri Ivanovich Drozdov comes the incredible story of a false-flag recruitment operation by the KGB’s Directorate S (Illegals) against West Germany’s own intelligence service, the Bundesnachrichtendienst (BND) during the height of the Cold War. The following 1995 article from German Focus magazine tells the tale:

Former KGB General Yuri Drozdov admits: “Our valued agent in the German Federal Intelligence Service (BND) has still not been uncovered.” 

Firm handshakes, pats on the shoulder – the old guard in its narrow circle.

The men, in a predominant majority over 70 years old, are dressed strictly according to protocol. On this hot summer day they’re wearing austere coats and shirts with ties. Guests are received by Yuri Drozdov, general of the KGB, the former Soviet secret service, who just a short time later, over a glass of vodka, would allow himself to loosen his tie.

In an official building on Bolshaya Polyanka St., a few minute’s ride by automobile from the Kremlin, a conspiratorial fellowship had gathered. Drozdov, age 69, invited veterans of the KGB’s foreign intelligence [First Chief Directorate] over to his office. Some of them leaf through the pages of a book written by Drozdov, and which is dedicated to his colleagues in the struggle as well as the current generation of Russian intelligence officers.

In its content, the pamphlet for internal use, innocuously titled Necessary Work, is very groundbreaking.

Reproducing Drozdov’s memoirs on his intelligence work in Austria, China, Afghanistan, and the United States, the book describes certain details of a well-planned intelligence operation that will cause alarm in the German intelligence services engaged in security matters.

Focus magazine’s detailed investigation yielded the following results:

In all probability the KGB had a value high-level agent, who still hasn’t been uncovered, within the Federal Intelligence Service (BND). Last week Focus magazine’s corresponding request caused disarray among the leadership at BND headquarters in Pullach, outside Munich, which has already initiated a search for Moscow’s supposed spy.

And such excitation was wholly understandable: the unit headed by Drozdov [Directorate S], according to the investigation conducted by Focus, apparently in 1972 recruited a man who could expose the BND’s risky operations it was running in Eastern Bloc countries. And not only that; this KGB agent, under the pseudonym of “D-104,” apparently was active in the heart of the BND, had close contacts with representatives of friendly Western intelligence services, and possibly also informed the Kremlin on the operations of American, British, and French agents against the Warsaw Pact.

One expert from German counterintelligence commented on the affair to Focus magazine in the following fashion:

This would be an absolute fiasco, an unprecedentedly critical case of treachery for Germany and all of NATO. In comparison the Gunther Guillame case is a trifle.

Drozdov, whom Focus interviewed last year regarding his activity as the director of Illegal Intelligence (Focus, No. 27/1994), comported himself more reservedly during the new meeting. Acquainted with the analysis of his book and the results of the Focus investigation according to the book’s materials, the KGB general said:

Yes, D-104 was our valued source in the BND. His communications were even reported to Andropov.

To whether this valuable agent within the BND’s central apparatus was discovered, Drozdov answered reluctantly:

“D-104 up to this time hasn’t been exposed.” And then, with a certain measure of concern: “So why write about this one now? Leave him in peace.”

What might that be? Pangs of conscience from a senior intelligence officer, who in his own kind of memoirs – meant for internal use in the KGB – casually subjected a prized intelligence source to danger?

Or does Drozdov, in the past an experienced agent handler feared by Western intelligence services, want to consciously mislead them with the publication of his book?

Entrance to BND headquarters in Pullach, Germany. Photo: Stephan Jansen/dpa.
Entrance to BND headquarters in Pullach, Germany. Photo: Stephan Jansen/dpa.

One former Eastern-Bloc expert from the US CIA, who knew Drozdov during the Cold War as a tough opponent, makes the following supposition:

This may be an act of retribution by the KGB old guard in relation to the BND – an attempt to rub salt into old wounds. Or they deliberately want to liquidate a certain person in the BND. In any case, it’s a very powerful stroke. And indeed, the very fact they recruited the assumed valued source already could serve as the basis of a cool spy thriller.

The first step in this chess game was made at the end of the 1960s. At that time the KGB was urgently seeking a replacement for its exposed valued agent Heinz Felfe, who over the length of a number of years supplied Moscow with essential information from Pullach. Drozdov’s operational calculus was founded on the stability of old corporate ties.

The KGB knew, and not only from Felfe, of old officers of Hitler’s intelligence services – the Gestapo, the Sicherheitsdienst [Security Service – SD], and the Reichsicherheitshauptamt [Reich Central Security Office – RHSA], who had found refuge in the BND. At Pullach many still believed then in Grossdeutschland – a Greater Germany.

In 1970 Heidrun Hofer, an “affectionate” secretary from the BND, became acquainted with a very attractive man. He introduced himself as Hans Puschke, born in Koenigsberg. In actuality Puschke, one of Drozdov’s trusted men, would recruit the young woman under a false flag: in Puschke’s words, in South America he had joined a group of former Wehrmacht officers who intended to found a right-conservative organization in Germany. And for that, as the brand-new Romeo declared to the 30-year-old BND secretary, information from BND headquarters in Pullach would be very useful.

The daughter of a Wehrmacht captain, Heidrun Hofer supplied highly secret information from the BND regarding West Germany’s plans in crisis periods and missile positions, and she told of top-secret NATO plans. In 1967, not long before Christmas, she was arrested. During the interrogation at the Munich criminal police headquarters, she jumped out of a sixth-story window. In connection with the critical trauma, her criminal prosecution was never initiated, and in 1987 the case was ended over the lapse of time limits. The case and its materials on her development remain secret to this day.

At Pullach they’re glad that this case of grave treason hasn’t received wide publicity in Germany until this time. The BND assumed that Hofer’s operational direction was carried out by East Berlin’s Ministerium fur Staatssicherheit (MfS – Stasi).

However, at the present time this version has no foundation to it. The BND secretary, as Drozdov’s memoirs now attest, was only a pawn. “The net around Hofer had only one objective – she served to ensure the security of our real source,” the KGB general stated to Focus magazine.

In 1972, around two years after KGB agent Puschke’s first meeting with Hofer, Drozdov’s team reeled in a true big fish. The operation, which was underway during the Detente period between East and West, received the code name “Scorpion.”

By that time Moscow’s intelligence service had already long known from Heidrun Hofer who could be brought into the right-conservative cell. In his conversation with Focus, Drozdov spoke thus of an individual who was the object of Soviet intelligence’s operational aims:

This was a young man from a good home, who had received a strict upbringing. His father had been a senior officer in the Wehrmacht.

Yuri Ivanovich Drozdov, who fluently spoke German and had even studied in Max Reinhardt’s acting courses for his intelligence training, would play one of his favorite roles: from an intelligent KGB officer he’d transform into Wehrmacht officer Baron von Höhenstein, who had just returned to Germany from his South American exile.

The BND officer, who was about 35 years old, allowed himself to be entrapped in Innsbruck in 1972. He was accompanied by one of the phony members of the right-conservative officer club. This man called himself Walter – in actuality he was KGB officer Nikolai Stepanovich N., who also spoke German flawlessly.

Secret Operation Scorpion, as Drozdov evaluates it today, was running according to plan.

At the Innsbruck city train station, Baron von Höhenstein, a wiry man radiating power and authority, met the intelligence officer from Pullach. The candidate for recruitment, as Drozdov recalls today, was obviously proud that from that point he was part of a circle of conspirators. At a KGB safe house, Baron von Hoehenstein and the BND officer, who from that moment was to have the pseudonym D-104, discussed tradecraft and the system of secret communications for passing secret materials from Pullach to Moscow. At their farewell the Baron wished a hearty hello to the father of the new agent – let the old man remain henceforth loyal to his oath to Führer and Vaterland.

The leadership of KGB Directorate S in the 1970s: Yuri Drozdov is on the far left, directorate head Vadim Kirpichenko is center.
The leadership of KGB Directorate S in the 1970s: Yuri Drozdov is on the far left, directorate head Vadim Kirpichenko is center.

With the course of time, KGB source D-104, unexposed to this day, attained a nice position for himself. In this regard Drozdov says:

We knew totally precisely what information the BND possessed on our military and economic situation and what operations were being conducted against us.

Drozdov in no way wants to speak about in which department of the BND D-104 worked. In his discussion with Focus, he only quotes one passage from his book:

D-104 worked in a sub-department that was important to the BND and interesting to us.

To the question whether this was a Referat (division) engaged in counter-espionage and turning agents, Drozdov answers with silence and shakes his head: “I won’t say anything in that regard.”

In December of 1976 the KGB unit led by Drozdov was hit by fiasco: on the lead of a defector, Hofer was uncovered. Yet here the KGB’s strategic line went into action. Then-President of the BND Gerhard Wessel expressed his satisfaction regarding this successfully executed counterintelligence operation, but no one in the BND had any idea of D-104. Soon after Hofer’s arrest, for security reasons, the KGB disbanded the secret officer club. Yet by that time D-104 had already long known what organization he had gotten himself into.

Drozdov recounts:

Then we told him that should behave himself quietly, and in that case nothing would happen to him.

The KGB general’s memoirs, which were originally meant for a narrow circle of readers, might possibly cause D-104 real unpleasantness. Now the search for the mole begins in Pullach.

Work Translated: Дроздов, Ю.И. Вымысел исключен. Записки начальника нелегальной разведки. Артстиль-полиграфия. М: 2009.

Translated by Mark Hackard.

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