Spy vs. Spy

20 years after the fall of the USSR, Vienna is still the espionage capital of Europe; A puzzling saga of Cold War proportions

Former Vienna Mayor Helmut Zilk, who spied for Czechoslovak intelligence in the ‘60s | Photo: picasa.com

July 9, 2010, on a warm Friday, the press gathered at the Vienna International Airport in Schwechat to await the swap of Russian and American intelligence agents whose identities had come to light during the preceding weeks. There were 14 agents in all, 11 Russians who had been rounded up in Arlington, New York, Boston, New Jersey, Seattle, and Cyprus in June and three Americans, one of whom had been in custody since 2004.

As the journalists watched, two planes landed on the tarmac separated from any civilian areas of the airport and taxied toward each other, stopping wing tip to wing tip. As the spies were ferried from one plane to another in a black van, the planes were being fueled. There would be no delays. Within 90 minutes, the biggest swap in post-Cold War history was over.  The Russian plane took off at 12:30 and the U.S. jet followed 15 minutes later.

In fact, the entire affair had been a model of efficiency; from crisis to conclusion it had taken just over three weeks. Apparently it had been in nobody’s interest to drag things out.

But in Vienna, the story was just beginning.  For days and weeks after the swap, newspapers were filled with stories about “Spy Hub Vienna” (Die Welt); “Espionage is Back on the Front Burner,” declared the Wall Street Journal; “Modern Twist on a Cold War Spy Story,” wrote the Financial Times; “Vienna Still a Spot for Cloak and Dagger,” said the International Herald Tribune. It was almost as if they missed the Romance of the old days; of codes and conspiracies, of moles, microfilm and MI6, and the forgotten 4th floor of the American Embassy on Boltzmanngasse. The EU was boring by comparison. Where was the intrigue of the Cold War years? Of George Smiley and Gorky Park, when intelligence officers from the East and the West found the Austrian capitol the ideal place to pass on state secrets.

After all, during the Cold War, Vienna was the Spy Capital of the World.

Between East and West, at the edge of the Iron Curtain for the better part of a century, the locale of this charming, historic city was the catalyst for drama worthy of Hollywood due to the relationship it had with the Soviet Union after World War II. While the Allied powers left in the early years after the war, voluntarily ending their occupation, the Soviets remained in Vienna and Austria for another decade, only leaving in 1955 – which helps explain the comfort Russia felt in using Vienna as the site for their swaps, dead drops and ongoing spy ops.

In his book The Main Enemy, written with James Risen, veteran CIA officer Milt Bearden describes Vienna as “the European city where [the KGB] felt most at home.” Consequently, whenever they needed a city for covert action, such as kidnapping, they most often chose Vienna.

Clandestine happenings were not limited to just the intelligence community; everyone seemed to be involved. Everyone seemed to be a threat, and it was even estimated, but not officially proven, that there were “more spies than Austrian soldiers in Vienna at that time,” according to Paul Lendvai, Austrian journalist and author. “There was no real counterintelligence; you could do whatever you wanted,” he continues.

Now, with news of the recent swap, people couldn’t help but wonder: Was Vienna still the center of espionage in Europe?

There is plenty of evidence for this. As a United Nations headquarters city, Vienna is host to many international government monitoring bodies, including the Organization for Security and Cooperation in Europe (OSCE), the Organization of Petroleum Exporting Countries (OPEC), the International Atomic Energy Agency (IAEA) and the UN Office for Drugs and Crime (UNODC), as well as some 17,000 diplomats – “and around half of them have some connection to intelligence agencies,” says Siegfried Beer, director of the Austrian Center for Intelligence Propaganda and Security Studies in Graz, making Austria the country with the highest density of foreign intelligence operatives in the world.

Lendvai thinks this is overstated. “There is a big difference between Vienna during the Cold War and now.” It was “purely a coincidence” that Vienna was chosen as the location for the swap of Russian and American intelligence agents. “They simply wanted a neutral country. This had no significance.”

But some see that history of neutrality as the determining factor.

“I think Vienna has always been, since the end of World War II, a place Russia considered as neutral; Austrian neutrality has been seen as  real,” said Alexander Rahr, head of Berthold Beitz Center on Russia, Ukraine, Belarus and Central Asia at the German Center for Foreign Policy (DGAP) in an e-mail interview. “Vienna was the center of Soviet foreign trade activities for several decades in the Cold War. Allegedly, the KGB had its strongest ‘headquarters’ outside the Soviet bloc there.”

KGB officers meet with an agent while strolling through Vienna, 1970s | Photo: blingyou.net

And today, Vienna still often acts as the setting for Russian espionage activities. The Russian SVR (who took over where the KGB left off) maintains an active intelligence network based in the city, whose primary task is the surveillance of Chechens in exile. The 2009 assassination of Umar Israilov, a key witness in a case involving Chechnya’s President Ramsan Kadyrov, was attributed to the spy milieu, as was the attempted kidnapping of the head of Kazakhstan’s National Security Committee in Vienna in October 2008.

It is also a question of ambiance. “Vienna is a city where people can withdraw,” says Dr. Karin Kneissl, international law professor at Webster University Vienna and a former diplomat in the Austrian Ministry of Foreign Affairs. “It has discrete places, a nice quality of life, a calm atmosphere and exceptionally good flight connections.”

What made Vienna even more appealing was that, until recently, Austria had a very strong banking secrecy policy. This enabled various groups to set up accounts without being asked a lot of questions and, “inter alia, facilitated the money transfer among groups involved in organized crime,” Kneissl states.

In Vienna, “it is relatively easy to obtain weapons and to launder money,” adds Peter Pilz, defense expert for the Green Party.

However, since the Cold War, “there has been a shift from political towards economic espionage.” According to Kneissl, this shift is due to the city’s newer status as a center of energy policy negotiations, with an increasing number of summits and meetings being scheduled here, thus “opening the gate to the East.”

The Austrian annual Report on the Protection of the Constitution (Verfassungsschutzbericht) confirms this. According to the 2008, 2009 and 2010 studies conducted by the Austrian Interior Ministry, espionage activities are increasingly focused on the economy, energy supplies, science and research.  Generally, there has been “no decrease in the number of secret intelligence agents in recent years,” the reports continue to acknowledge, as Austria has “maintained its significance as an operating field for foreign intelligence services.” Additionally, the latest report emphasizes the activities of “[Far] Eastern intelligence agencies…whose work focuses on keeping up with developments in the technologically advanced states.”

However, not only Eastern intelligence agencies but also leading Austrian public and political figures have been involved in a variety of espionage-related activities. Helmut Zilk, journalist and former mayor of Vienna, is said to have worked as an informant for the Czechoslovak intelligence service between 1965 and 1968. In 2009, the Austrian news weekly profil revealed the connection of Otto Schulmeister, editor-in-chief of the Austrian daily Die Presse, to the CIA. He was discovered to have had close ties to the spy milieu and collaborated with the U.S. intelligence organization from 1962 through the ‘70s.

“The systematic exploitation of journalists was an important phenomenon of the Cold War,” Siegfried Beer explains.

Considering Austria’s reputation as an espionage-gateway and its handling of spy-related activities in the past, it is not surprising that the country’s authorities declined to make any official comments on the recent American-Russian spy swap in Vienna.

This demeanor of Austrian officials is typical, characterized by a preference for “looking away,” allowing intelligence officers and their agents to operate with “hardly any interference in Vienna,” Beer says. Additionally, foreign espionage activities are not illegal in Austria, unless they are directed against the country itself.

More than its legal intricacies and favorable geographic position, it may simply be Vienna’s cherishment, and even cultivation, of its reputation as a spy hub that keeps the tradition alive.

The legendary spy thriller The Third Man, with a screenplay by British novelist (and former MI6 officer) Graham Greene, is still screened each week in Vienna, at the English-language movie theater Burgkino, as it has for some thirty years. In addition, several organizations host walking tours tracing the steps of Harry Lime, played by Orson Welles, through neighborhoods and even the city sewers, almost unchanged since the film was made in 1948. Vienna also hosts an annual Krimi Nacht play, acting out detective stories in coffee houses around the city center, and at summer film festivals like this year’s Kino am Dach, Vienna’s past is honored with a crime-time theme.

“It’s simply a part of Viennese folklore,” Lendvai adds.

Others agree. “Vienna just loves the idea of being this international spy capital,” remarks Edward Lucas, author of The New Cold War: Putin’s Russia and the Threat to the West.

Although the threats that were associated with the Cold War are no longer immediate, in a sense, “the game is still afoot,” as the great Sherlock Holmes might have said, and has endured as a symbol of Vienna’s rich history as Europe’s spy capital.

It may not have reached its final chapter yet. The tradition continues, encouraged by Vienna’s favorable geographic location, its tolerant authorities and an increasing number of international organizations headquartered here.  And perhaps too, the growing threat of organized crime operating across borders in an ever more globalized world.

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