The MacNeil/Lehrer NewsHour

MS. WARNER: Good evening. I'm Margaret Warner in New York.

MR. LEHRER: And I'm Jim Lehrer in Washington. After our summary of the news this Monday, we get four congressional answers to what next for the United States in Bosnia and Charles Krause tells the extraordinary story of a Soviet spy master. NEWS SUMMARY

MR. LEHRER: The Federal Reserve announced another rise in short- term interest rates today. The specific amount was not announced, but it was believed to be a 1/4 percent. It was the third increase since February. Fed officials have said they are trying to prevent inflation by slowing down economic growth. The move prompted several major banks to increase their prime lending rate by 1/2 percent. It could also make consumer loans more expensive. Stock and bond prices fell sharply after the Federal Reserve announcement. The Dow Jones Average was down 41 points at close. Margaret.

MS. WARNER: In Bosnia today Serb heavy guns continued to pound the Muslim town of Gorazde. Sixty-five thousand people remain trapped in the town which is completely surrounded by the Serbs. The U.N. commander said it was on the verge of a major humanitarian catastrophe. The shelling came despite new promises by the Serbs to call an immediate cease-fire. The Serbs made and broke a string of similar promises this weekend. This morning in Washington, President Clinton said the weekend had not been a good one for the peace effort in Bosnia, and he renewed his call for lifting the arms embargo on the Muslims.

PRESIDENT CLINTON: I have always thought that the arms embargo operated in an entirely one-sided fashion. And it still does. That's the reason we're in this fix today, because of the accumulated losses of the Bosnian government as a direct result of the overwhelming superiority of heavy artillery by the Serbs. But again I would say we've be making good process at the negotiating table. I don't want to have a wider war. I think even if you lifted the arms embargo, and you had a lot of other people fighting and killing in the end, there would not be a decisive victory for either side in the war. There's going to have to be a negotiated settlement.

MS. WARNER: At the State Department today, Sec. of State Christopher said the President and his national security team were evaluating their options to deal with weekend developments in Gorazde.

WARREN CHRISTOPHER, Secretary of State: The situation in Gorazde is very grim. The Serbs over the last several days have lied to the United Nations, have lied to their historic supporters, the Russians, and I think have engaged in a tangle of lies and misleading statements that have seldom been equal that we're going to be dealing with the situation there. And I think it's not wise or prudent for me to discuss the options that are going to be before us.

MS. WARNER: We'll have more on the story after the News Summary.

MR. LEHRER: American Patriot missiles arrived in South Korea today. The missiles and their launchers were unloaded amid tight security from two ships in the Southern port of Pusan. They are expected to be deployed at major ports and airfields. President Clinton ordered the missiles shipped after North Korea refused to allow full inspections of suspected nuclear weapons production sites. North Korea has warned it would consider the Patriot deployment an act of war.

MS. WARNER: A Senate committee heard testimony today about last week's accidental downing of two U.S. helicopters by two U.S. fighter jets over Northern Iraq. Pentagon officials said the jet pilots worked in a stressful environment in a dangerous part of the world. But they said their training should have prepared the pilots for those conditions and prevented the accident.

MAJ. GEN. LARRY HENRY, U.S. Air Force: We train our pilots for visual recognition using slide silhouettes, they're trained, and then we give 'em tests that they have to take and pass where those same types of angles on the airplanes are flashed up and they have to identify 'em. Even that did not preclude what happened. There were probably a series of events that occurred. I can't describe them, not being there, but in the end, in the end we had a breakdown in visual identification.

MS. WARNER: The Pentagon today released the names of 11 people who were killed when the helicopters were shot down. They are Staff Sergeant Paul Barclay, Specialists Cornelius Bass and Jeffrey Colbert, Private First Class Mark Ellner, Warrant Officer John Garrett, Chief Warrants Officer Michael Hall, Sergeant First Class Benjamin Hodge, Captain Patrick McKenna, Specialist Michael Robinson, Staff Sergeant Ricky Robinson, and Colonel Jerald Thompson. Last week, the State Department identified career diplomat Barbara Schell and Second Lieutenant Laura Ashley Piper as among those as killed. The names of two other American victims have not been made public.

MR. LEHRER: And that's it for the News Summary tonight. Now it's on to what next for the United States in Bosnia and the story of a Soviet spy master. FOCUS - WHAT NEXT?

MS. WARNER: We lead tonight with the Bosnia story. The Bosnian Serbs have all but completed their conquest of the Muslim town of Gorazde. It was designated as the United Nations safe haven last year. President Clinton conceded this morning that there was little the U.S., NATO, or the U.N. could do to reverse the situation. But he did raise the possibility again of lifting the U.N. arms embargo on the Bosnian Muslims. We'll get four congressional views on American options in Bosnia after this update on the Gorazde story. It's narrated by Vera Frankl of Worldwide Television News.

VERA FRANKL, WTN: NATO fighter planes continued their reconnaissance missions over Bosnian Serb positions in Gorazde. But there's been no repeat of last week's air strikes against the Bosnian Serbs. Reports of further shelling in Gorazde continued to stream through to the outside world. The U.N. commander in Bosnia, Gen. Rose, summed up the U.N.'s apparent impotence in the region.

LT. GEN. SIR MICHAEL ROSE, UN Commander: This is a very sad week for the world when United Nations peacekeeping operations have been so blatantly used to cover the prosecution of war by the Bosnian Serb authorities. We are not about to go to war in Bosnia- Herzegovina with the present mandate that we have and with the support that we've got from the key contributing nations.

MS. FRANKL: Back in Moscow, Russia's special envoy, Vitaly Churkin, seemed exasperated by the Bosnian Serbs' broken pledges to the UN. He said the time for conversation may be over. In Sarajevo, thousands of demonstrators took to the streets to protest against the bombardment of Gorazde. Gorazde and Sarajevo were both declared safe areas. And many of these demonstrators must be wondering how safe Sarajevo is following the UN's inability to guarantee Gorazde's security. European foreign ministers meeting in Luxembourg condemned the Bosnian Serbs that backed away from calling for further NATO action. They called on the UN peace negotiator, Lord Owen, to coordinate all the diplomatic efforts in a search for lasting peace. Two hundred more U.S. troops arrived in the former Yugoslav republic of Macedonia. They'd been sent there in the hope of keeping the conflict from spilling over.

MS. WARNER: We now get some congressional views of what, if anything, the United States should do to stop the latest Serb offensive. Indiana Senator Richard Lugar is the ranking Republican member of the Subcommittee on European Affairs. His fellow Republican Senator, John Warner, is a member of the Senate Armed Services Committee. Democratic Congresswoman Elizabeth Furse of Oregon is a member of the House Armed Services Committee, and Democratic Senator Joseph Biden of Delaware is chairman of the Senate Subcommittee on European Affairs. He joins us from Wilmington. Sen. Biden, let me start with you. Is there anything the U.S. or the U.N. can do now to save Gorazde?

SEN. BIDEN: Yes. There is. It seems to me we can tell the Serbs one of two things. Either they back off, or we lift the arms embargo, No. 1, which I think is a preferable route, or No. 2, we can, in order to get our European friends to go along, you know, they traded with us last time with regard to Sarajevo. They said they'd go for air strikes if we'd enter into the negotiating process. I think they've been pushing us very hard to offer a carrot to Serbia to lift the economic embargo. I would consider a deal with our European friends which said the following: One, if we use air power to cover all of the safe areas, then let's make a distinction here. There was no air power used in Gorazde like there was in Sarajevo, and it was never intended -- it should have been stated from the outset that we do this, but we didn't. We should say now that whether it's to Bihac or Gorazde or Tusla that in return for full NATO support and UN involvement with air power hitting direct targets as well as indirect targets of the Serbs that we would consider going along with their option of lifting the economic embargo if we could work out some compromise where they give full faith and credit to the use of air power that way. But I think the preferable route is go to the U.N. now, and the Russians at this very vulnerable time in that the Russians are exasperated with the Serbs as we are and submit the arms embargo, let the Bosnians fight for themselves.

MS. WARNER: Let me get this clear, Senator. Do you think that either of these steps would be doable in time to save Gorazde, or are you talking about trying to save the other safe areas?

SEN. BIDEN: Well, it seems to me if we don't -- if we don't make some ultimatum with regard to the Serbs now, not only is Gorazde gone but all the rest of the safe areas are gone. So it seems that if, in fact, there is a credible threat in that a unified voice comes out of NATO either to lift the arm -- in the U.N. to lift the arms embargo and/or to use air power for indirect targets in every other place, every other safe area in Bosnia. Short of one of those two things occurring I think there's no stopping the Serbs. They clearly have the dominant military position now, and they clearly want Gorazde, unlike Sarajevo. They didn't want to occupy Sarajevo, but this is part of what has been the plan for a greater Serbia all along. When you flip up your map, you show it's right along the Drina River. They want that area.

MS. WARNER: Let me ask Congresswoman Furse to get in this. Congresswoman, what do you think about the two options that Sen. Biden sketched out? Do you think that either of them could save Gorazde?

REP. FURSE: Well, first of all, I have to say that with the end of the Cold War, we all have to realize there are no experts, but we can learn from some experiences. And if we are saying that we are going to be peacekeepers, peacemakers, as the President has said, there are two absolutes in peacekeepers. One is you make no enemies, and two, you take no sides. So when you bomb, you have taken a side. And I think what we have to do is start thinking about long-term solutions. We must tighten the sanctions. We have got to tighten them. We've got to make them absolutely foolproof, because as a former South African let me tell you it is the sanctions that caused the elections to occur this year -- this month in South Africa. Sanctions work. The second thing I think we have to start thinking about is long-term solutions. How do we train ourselves to be conflict resolvers? How can we get into these -- there are trouble spots all over the world, and they -- to try and prevent them happening. Multitrack diplomacy, that is happening in Cyprus, and we think it will work. The other thing I think we have to do long-term is say we need international war tribunals. The United Nations has that before them.

MS. WARNER: Congresswoman, let me just get Sen. Lugar to get in on this. Sen. Lugar, let's go back to the situation in Gorazde. Is there anything you think can be done now to save that town?

SEN. LUGAR: No, I don't think that there is. I think that, essentially, Gorazde will fall if the Serbs want to occupy it. I think we're at a point in which very clearly unless there are new steps taken by NATO -- and I would concur with Sen. Biden -- it occurs me that lifting the arms embargo is important, but clearly the Europeans have opposed this, and we've been told again and again in the United Nations it would never count, and so the question that will come to President Clinton will not be whether he's in favor of that but whether he's prepared to take leadership in a necessarily unilateral lifting and get small arms, anti-tank devices and what have you, to Bosnian Muslims to defend the remaining five towns, if not Gorazde. I think that's a critical element. I would agree with Congressman Furse that to tighten the embargo is important likewise. And I say that because the drift over the weekend has been the other way, to suggest that we might bargain away the economics side with Serbia in hopes of a come hither look. We've got to face the facts that our nudge that was implied by those air raids didn't work. And it won't work, in my judgment, so long as the Serbs in Bosnia decide that they want to progress. And they're doing so. So at this stage, ground forces have to be involved. It should be Bosnians, not the United States or NATO. And this is why the lifting of the arms embargo is imperative.

MS. WARNER: All right. Sen. Warner, what do you think the next step should be here?

SEN. WARNER: First, let's level with the American people and the world. Those pilots that flew of many nations were brave. Gen. Rose did his best. But I was a part of a group here for six months that have said air will not work alone. Weather blocked us, taking hostages, the Serb took U.N. forces, that blocked us, and the sooner we recognize that air is off the table, any intervention by the military of either U.N. or NATO in Bosnia is off the table, we have two things to rely on for leverage: No. 1, what's left of a rather leaky naval blockade on economic assistance to Serbia from other nations; and 2, the lifting of the blockade of arms flowing to the Bosnians. That's what's left. Let's face it, and do the best we can with that. I urge our President two things: Stay in step with our allies, principally Great Britain and France. Don't get out ahead unilaterally, and secondly, Mr. President, get your team in order, get a coherent policy, and let us all speak with one voice and don't get mixed signals, depending on which talk show you're listening to and which cabinet officer or general speaking.

MS. WARNER: Sen. Biden, let's go back to this issue now about whether the U.N. arms embargo could be lifted unilaterally, because you and Sen. Lugar are advocating that. If the United States were to do that over the objections of other members of the Security Council, what happens to other embargoes that we would like to see continue to be enforced say against Iraq or Libya? I mean, how can we then prevent other countries from willy nilly just breaking those, if they wish?

SEN. BIDEN: I don't think the Europeans nor the Russians have the nerve to veto lifting the embargo if, in fact, we insist that be done, No. 1. The one thing we should not do is what John Warner said, that is stay in step with the French and the British, who never do a damned thing. We should not stay in step with them, for if we do, there's no possibility of the embargo being lifted.

SEN. WARNER: Senator, if we step out and take unilateral action, the Europeans will suddenly say, United States, this is your war, you fight it, you deliver the arms necessary, and whatever happens, you're responsible.

SEN. BIDEN: My point is --

MS. WARNER: One at a time, gentlemen.

SEN. WARNER: Our President has wisely stayed in step with our allies, and I urge him to continue.

SEN. BIDEN: My point is if he doesn't lead our allies, John, we know what the route is. He has to insist with our allies, and what I said earlier was the only reason I mentioned the economic embargo, the one thing the Europeans have been pushing, our NATO allies, is easing the economic embargo, easing it in order to get the Serbs' cooperation, Serbia's cooperation. I don't think that will work, but I would offer that carrot in return for our NATO allies --

SEN. WARNER: We agreed --

SEN. BIDEN: -- going along --

MS. WARNER: Let me get Congresswoman --

SEN. BIDEN: -- with lifting the embargo.

MS. WARNER: Gentlemen, let me get Congresswoman Furse in here.

SEN. WARNER: We agreed but define "lead" and make sure that Great Britain and France after we lead sign on the dotted line and it's not our war alone.

MS. WARNER: All right. Congresswoman Furse, what do you think of this idea about trying to lift the arms embargo unilaterally if necessary?

REP. FURSE: Well, first of all, I think what we have to do is not do something that then three weeks later we're saying, now what? One thing we do know about lifting the arms embargo is that more people will get killed, but the other thing we need to figure out is if we lift the arms embargo, will the arms get to the people who we supposedly now wish the arms to get to? These arms come through territory that is not necessarily held by the Muslims. You have to think these things through. You cannot take these actions and then say, now what, it didn't work. What we have to do is -- and I know it sounds like, well, there's a crisis now -- what we have to do is we have to think these things through so that two weeks from now, two years from now, we are not in another place of the world saying, now what, if conflict resolution is supporting those groups who two years ago we could have been supporting in this country, peacekeeping groups, democratic groups, so lift the arms embargo is an answer, but is it an answer that we know what will happen? One thing we know is, if we lift the arms embargo, more people will die. That's the only thing we're absolutely sure of. Yes, maybe it's a good idea, but let's make sure we know where those arms will come to. Will the people who need the arms get them? That's what I want to do. I want us to take a rational approach so that we can be sane and know what's going to happen. Peacekeeping takes a lot more time, but it's a lot more permanent.

MS. WARNER: Sen. Lugar, what about Congresswoman Furse's point here that you really couldn't even be sure that the arms would get to the Muslims?

SEN. LUGAR: That's a good point. You can't be, but I would say that given the general affiliation now of Bosnia and Croatia, the odds are much better. I know in visits over in Croatia we've heard from them that they would be prepared to be a conduit, always, I suppose, taking off some from the top of what came through there. It's a messy business. The question that you started with was: What, if anything, can be done? And I think we're outlining some very tough steps. And one of them is, re-arming the Bosnian Muslims, I think with a better degree of certainty now than would have been the case six months ago.

MS. WARNER: And do you agree with Sen. Biden that probably in the end, Britain, France, and Russia would go along with it if President Clinton were to make it, insist on it, or try to insist on it at the U.N.?

SEN. LUGAR: I would hope so, but I'm not making that prediction. Each country is a sovereign nation. They have different foreign policy affairs. Our quest here is security of Europe. If the Europeans are not interested in their security, ultimately we're not going to be able to provide it for them. But clearly President Clinton could offer force leadership. I hope he will do so. I think he could be persuasive.

MS. WARNER: All right. Sen. Warren, let me ask you about something else Sen. Biden raised, which is this idea of at the same time going along with the European plan to offer a carrot, as it were, to the Serbs, partial lifting of the sanctions, if they do certain things at the negotiating table. Now would you endorse something like that either alone or as part of the lifting of the arms embargo?

SEN. WARNER: I would endorse looking at both options in conjunction with each other. One, lifting the arms embargo and offering, if you wish to refer it as a carrot of lessening the severity of such naval blockade as is present now. I conclude with U.S. should lead but U.S. should not act unilaterally in either of those options.

MS. WARNER: Well, Congresswoman Furse, doesn't it strike you though that that would be just rewarding the Serbs at this stage as some critics have said?

REP. FURSE: I think what we have to do is make it absolutely impossible or at least very painful for countries to do what has happened there. We need to keep the sanctions, and we need to tighten them down. We need to make them foolproof. We need to make it hurt. Now it may require that we provide some funds for those nations that have to trade. All right. So be it. It would be cheaper. We need to make sure the people know that they will pay for war crimes, that that is something that they can look towards. We need to prepare for the next Bosnia, and preparing our military, foreign affairs people to do conflict resolution. It is too late when the air strike has occurred. It is too late to say, what now? We, it is a painful lesson that we must learn. We know that there is an opportunity for us to be peacekeepers. We can stick the United Nations forces in in the middle of the war. That's an untenable position for them. They are designed to go in when there is a peace treaty, yet we have stuck them into a situation which is absolutely impossible for them. We have got to think the situation through. We had at least two years' warning on the situation in Bosnia. We have got to be pro-active. We've got to think through every single one of the actions we take. We cannot react and then go back and be afraid that we may have made a mistake. I think we must get the Russians. We must get our European allies. We must all get together and figure out what is the next step, the next pro-active step, the next peacekeeping step.

MS. WARNER: Sen. Biden, before we go, I'd like to try to get to one, to clear up one confusing thing here. The President and the administration are saying that the U.N. commanders on the ground are in charge of ordering strikes, yet, Boutros-Ghali, the U.N. Secretary General, today told the Bosnian vice president that he hadn't done anything recently because he hadn't gotten the green light from the Americans, the British, and the French. Who is in charge?

SEN. BIDEN: Well, the way this works is that Boutros-Ghali is in charge, but one of the problems here is, let's make a few things - - if I make three very brief points -- No. 1, we, the U.N. went in there because people believed the Serbs were involved in conflict resolution when they were lying from the beginning. That's why the U.N. forces were there. They were not there to make war; they were there to administer a peace. No. 2, think of these in cold terms. The fact that there is an arms embargo on people who have already lost several hundred thousand dead and you know there's going to be tens of thousand more dead while the other team has all the weapons, we talk about conflict resolution, while people are being shelled and killed now, seems to me to be a slightly, a disconnect with reality. And the third point I'd like to make is that whether or not we are able to convince our European allies in NATO is the determining question. We cannot go alone. But we must be forceful with our European allies and the United Nations and at least have the moral certainty to say we are no longer going to be a party to the signing on willfully to the keeping of arms from the Bosnians who are being slaughtered by the thousands as we stand here with the Serbs having no intention of negotiating.

MS. WARNER: Sen. Lugar, while people are drawing lessons here, what do you think the lesson is of all of this?

SEN. LUGAR: Well, the lesson is that Europe was not prepared for the security problems that hit it. NATO was not prepared. The U.N. was not prepared, and clearly we were not. Now, the question that you have tried to put tonight is, what do you do to put the pieces together? It's very difficult to do, but it seems to me NATO's getting better at it. You've had some reorganization during this period, and that's been helpful, and likewise, the U.N. still works. That's optimistic. The question is: Will American leadership come into this? I hope so, because absent that, it's unlikely that there will be any good outcome in Bosnia.

MS. WARNER: Sen. Warner, do you --

SEN. WARNER: If I could add a word, the lesson that we're learning from this is, our U.S. forces should never be asked to take a risk or to report to U.N. commanders unless there is a clear national security interest of America. And that case has not been made here. These people have been fighting between each other for 500 years for the same reason 500 years ago as they're fighting today against one another, ethical, religious boundaries. There are 35 different conflicts going on in the war today, carnage far worse than Bosnia taking place at this moment in Africa. We, the United States, should only enter any of these conflicts if there's a clear national security interest, and we go in under a cohesive policy with the determination of what's to be done, do it, and get out.

MS. WARNER: And I thank you -

REP. FURSE: And I would add to that --

MS. WARNER: I'm sorry. That's all the time we have. Congresswoman Furse and Senators, thanks very much. FOCUS - THE MAN WITHIN

MR. LEHRER: Now and for the remainder of the program tonight the extraordinary memoir of a great spy master of the 20th century. His name is Pavel Sudoplatov, until today virtually unknown in Russia or the West. Even his name was a secret. His memoir titled "Special Tasks" was published today. In a forward to the book Historian Robert Conquest called it "the most sensational, the most devastating, and in many ways the most informative autobiography ever to emerge in the Stalinist milieu." Charles Krause has our story about it.

MR. KRAUSE: Pavel Sudoplatov is a spy who influenced history, the mastermind behind some of the most daring and most successful intelligence operations carried out by the Soviet Union during and after World War II. Sudoplatov's rise to power began in 1938. It was then that he personally assassinated one of Stalin's leading political rivals in Rotterdam. Years later, Sudoplatov was promoted by Stalin to head the administration for special tasks. In that position he was in charge of all intelligence, sabotage, and other Soviet covert operations behind German lines, and also, it turns out, for running the spy rings that provided the Soviet Union with top secret U.S. plans for the atom bomb.

PAVEL SUDOPLATOV, Former Soviet Spymaster: [speaking through interpreter] We had major specialists in physics and, of course, an enormous amount of translators working on making use of the espionage materials on the atomic problem from the U.S. and England.

MR. KRAUSE: Today's publication of Special Tasks is the result of a two-year clandestine collaboration between Sudoplatov, his son, Anatoli, and two American journalists, Jerrold and Leona Schecter. Jerrold Schecter was Time Magazine's Moscow bureau chief during the late '60s and was instrumental in the acquisition of Nikita Khrushchev's memoirs. In addition, he's written a book about CIA penetration of the KGB, although both he and his wife have written together about other aspects of contemporary life in Russia. At their home in Washington, we asked the Schecters about Sudoplatov's motives for writing this book and how they could be sure what he told them isn't deliberate disinformation.

JERROLD SCHECTER, Author: This book was done according to journalistic and historical standards, namely first of all we have Sudoplatov, himself, on the record, and we have more than 20 hours of tape. We also have all his notes. He has signed the pages of the translation, actually of the Russian, of the most controversial parts of the book, and we tried to document as best as possible where this information came from, so that what we have here, we feel, is a unique oral document based on this man's own experience, plus his conversations with his peers.

MR. KRAUSE: How can you be sure though that he's telling the truth? Now, that's a different --

LEONA SCHECTER, Author: Well, after working with him for two years, one begins to think a little bit like an intelligence officer and begin to look for those motives. And I think that he was very open about those things where he had an emotional ax to grind.

JERROLD SCHECTER: But our basic role here is as journalists and historians, namely to present the facts of vital importance which really changed our view of history in many important areas. And it's up to the viewer and the reader to decide.

MR. KRAUSE: Special Tasks [The Memoirs of an Unwanted Witness - - A Soviet Spymaster, Special Tasks By Pavel Sudoplatov and Anatoli Sudoplatov and Jerrold and Leona Schecter] is both an autobiography and the chronicle of Sudoplatov's exploits before his own arrest and imprisonment after Stalin's death in 1953. Without question, the book contains new and startling information. Among the headlines, Sudoplatov reveals that after receiving a direct order from Stalin, he was assigned the task of organizing Leon Trotsky's assassination in Mexico in 1940. Sudoplatov also says that Swedish diplomat Raoul Wallenberg, who saved tens of thousands of Hungarian Jews from the Nazis, was almost certainly executed at KGB headquarters in Moscow on July 17, 1947, after refusing to become a Soviet agent. He says that Soviet scientists secretly developed lethal poisons and regularly executed enemies of the state and political prisoners like Wallenberg during and after World War II in a secret poison lab they called Laboratory X. Sudoplatov says that Soviet intelligence had a secret agent, whose identity has never been revealed, in Roosevelt's White House throughout World War II; that Julius and Ethyl Rosenberg executed for delivering atomic secrets to the Soviet Union were only minor operatives who did not provide crucial intelligence to Moscow; and finally that before his arrest in 1957, Soviet spy Rudolf Abel had set up a network of saboteurs to destroy U.S. military bases and ports in case of war. But what will almost certainly be the most controversial section of Special Tasks is what Sudoplatov reveals in Chapter 7, that J. Robert Oppenheimer and other top U.S. scientists collaborated with Soviet agents to infiltrate the Manhattan Project, the U.S. Government's super-secret billion dollar program to build the first atom bomb during World War II. And that story begins in Mexico, in 1940, with Leon Trotsky's assassination.

UNIDENTIFIED SPOKESMAN: Stalin's trial against me is built upon false confessions extorted by modern prosecutorial methods.

MR. KRAUSE: Trosky was a thorn in Stalin's side, a direct threat to his leadership of world Communism. In his memoirs, Sudoplatov now confirms what had long been suspected, that it was Stalin who ordered Trotsky's assassination. Sudoplatov also reveals that he was the one who arranged to have the order carried out.

JERROLD SCHECTER: Sudoplatov had proved himself under fire, so to speak, because he had assassinated a Ukrainian nationalist named Yevin Konovolitz in Rotterdam in 1938 with a bomb that was disguised in a box of candy. And so they felt that they had a man that they could really rely on, and that's why he was given the assignment to eliminate Trotsky.

MR. KRAUSE: To carry out the assassination, Sudoplatov sent his deputy, Leonid Eitingan, to set up an espionage network in Mexico and in the American Southwest. It was largely made up of illegals, Russian agents with falsified papers. Some of the agents in the network took an active role in Trotsky's murder.

JERROLD SCHECTER: These illegals were used in Mexico first for the assassination of Trotsky, but the network that was set up was kept in place in the Southwest and around Santa Fe. And, in fact, they bought a drugstore which they used as a kind of safe house, in other words, a place where these illegals could either get money or messages or deliver materials.

MR. KRAUSE: The illegals in the Southwest would soon be activated again because of this man, British diplomat and Soviet spy Donald MacLean. In September, 1941, MacLean, alerted Moscow that Britain and the U.S. were going ahead with a program to build an atom bomb. Headquarters for that program, known as the Manhattan Project, would be in Los Alamos, New Mexico, a short distance from Santa Fe and within easy reach of the Soviet illegals. The illegals were only one piece of a larger espionage mosaic that also included Soviet agents operating under official diplomatic cover. In all, Sudoplatov says there were four major spy networks, each operating independently of the other. One was run out of Washington; the others out of New York, Mexico City, and San Francisco. It was in San Francisco that Gregory Kheifetz, the station chief at the Soviet consulate there, made his most valuable American contact. Posing as "Mr. Brown," a Soviet diplomat, he introduced himself to J. Robert Oppenheimer in December 1941. A brilliant 38-year-old nuclear physicist, Oppenheimer would soon be appointed director of atomic energy research for the Manhattan Project. Oppenheimer was known to be a contributor to many left-wing projects. Indeed, Kheifetz hoped to exploit Oppenheimer's leftist sympathies and the fact that the United States and the Soviet Union were allies in the war against Nazi Germany to obtain Oppenheimer's help.

MR. KRAUSE: Tell me, how did the Russians make contact with him, and how did -- what happened?

LEONA SCHECTER: There were parties in San Francisco to raise money for the people who had been exiled from Spain or in other way victims of the Spanish Civil War, and Oppenheimer went to some of these parties because he was sympathetic to those people. And that's where Kheifetz was able to make contact with him. And he befriended Oppenheimer and arranged to have lunch with him.

MR. KRAUSE: At that lunch, according to Sudoplatov, Oppenheimer told Kheifetz about a secret letter Albert Einstein had written President Roosevelt. The letter warned that new research into nuclear fission held out the potential of a bomb with almost unlimited power. Oppenheimer also expressed his concern that the Nazis might get the bomb before the allies. Later, Kheifetz learned that Oppenheimer and a number of other prominent physicists in the allied world were already involved in a secret nuclear project and the U.S. had committed 20 percent of its military research budget to develop an atom bomb. It was crucial information. Up to that point Sudoplatov says Soviet intelligence had been skeptical that an atom bomb could be built. Now they realized for the first time that the U.S. was serious about trying.

PAVEL SUDOPLATOV: [speaking through interpreter] The first reports were from Gregory Markovich Kheifetz. There were Oppenheimer's plans for the atomic bomb.

MR. KRAUSE: Perhaps the most shocking revelation in Sudoplatov's memoirs is his assertion that after 1942 Oppenheimer and several other top nuclear scientists involved in the Manhattan Project actively collaborated to provide atomic secrets to the Soviets in clear violation of U.S. security laws. Besides Oppenheimer, Sudoplatov says his other top level sources included Enrio Fermi, the Italian-born scientist who won the 1938 Nobel Prize in physics; Leo Szilard, a Hungarian-born physicist and college of Fermi's who had first urged Einstein to write the letter to President Roosevelt; Bruno Pontecorvo, another nuclear physicist considered Fermi's protege; Neils Bohr, a Danish physicist and winner of the 1992 Nobel Prize in physics, he also played an important role in developing the bomb; and finally, George Gamow, an emigre whose family was still in the Soviet Union, and, according to Sudoplatov, the only one of the Manhattan Project scientists to be blackmailed into collaborating.

JERROLD SCHECTER: But they gave you information in written form.

PAVEL SUDOPLATOV: Sometimes they gave us information in written form when they asked for it.

MR. KRAUSE: The Schecters videotaped many of their interviews with Sudoplatov, interviews which were then transcribed for the book. In this videotape, edited from two separate interview sessions, Sudoplatov talks about his impressions of what motivated Oppenheimer and the other scientists.

PAVEL SUDOPLATOV: [speaking through interpreter] Here I would like to underline to you all the time that we are talking not about these comrades. Comrades, that's an old way of speaking. These scientists were not our agents, Lord save us. We're not talking about that. An agent is someone under your command. They were not under our command, not one of these people.

JERROLD SCHECTER: But they passed material to you.

PAVEL SUDOPLATOV: [speaking through interpreter] We received material all the same, but it wasn't from agents that we received materials. We received materials from people who were fearful of the spread of the atomic plague, people who were worried about the future of our world. They didn't want the atomic problem to remain just in the hands of some, for it all to remain the monopoly of the U.S.; they wanted others to have it too.

MR. KRAUSE: Whether Oppenheimer was an idealist or an agent, Sudoplatov clearly considered him to be the crown jewel in his atomic espionage network. And Moscow took extraordinary precautions to shield Oppenheimer from discovery.

LEONA SCHECTER: The first decision they made was to keep anybody else, any other Communists in America, away from Oppenheimer and to not put any other kind of pressure on him. The reason for that was the FBI was watching the members of the Communist Party and people who were known to be leftist sympathizers, and so they wanted to make a very clear-cut arrangement whereby he would not be under any suspicion.

MR. KRAUSE: To further protect Oppenheimer, Sudoplatov decided to place some of his own people inside the Manhattan Project. It was Elizabeth Zarubina, a Soviet spy and wife of the Soviet station chief in Washington, who got Oppenheimer to cooperate in this scheme by befriending Oppenheimer's wife, Katherine. Katherine Oppenheimer was known to be sympathetic to the Soviet Union and was almost certainly a member of the Communist Party.

LEONA SCHECTER: She then persuaded Mrs. Oppenheimer to persuade her husband to take into his laboratory a young mole, a young research assistant, who would then copy secret documents that would be left out for him to see by -- with Oppenheimer's cooperation. Oppenheimer would not actually handle documents and hand them from one person to another. But he would allow these young assistants - -

JERROLD SCHECTER: He was knowing of what was going on, and so Fermi --

LEONA SCHECTER: And Szilard.

JERROLD SCHECTER: And Szilard, according to Sudoplatov.

MR. KRAUSE: So, according to Sudoplatov, Robert Oppenheimer, Enrico Fermi, and Leo Szilard -- all three of them --

JERROLD SCHECTER: And Gamow.

MR. KRAUSE: And Gamow -- knowingly hired people who they knew were going to copy secret documents from the Manhattan Project in order to give those documents to the Russian government?

LEONA SCHECTER: Yes.

JERROLD SCHECTER: That's right. They were ostensibly sharing them with -- with Russian scientists. And from their point of view, they were sharing with Russian scientists in an effort to defeat a common enemy. Now whether that's treason or not depends on how you look at it. Certainly, this is the most secret project that the United States military and the United States government was ever involved in, and it was against the law to discuss this, let alone to share it. On the other hand, the scientists involved felt that it was so big that it should be shared, particularly with our -- with the Soviet Union, which was then an ally. And there was fear that the Germans were going to have a nuclear weapon first, which would have meant defeat.

MR. KRAUSE: The debate raged on both sides of the Atlantic, but it was Churchill in particular who rejected the idea of sharing atomic secrets with Stalin. Meanwhile, the Soviets continued to do everything they could to get the nuclear secrets on their own. While one Soviet network handled Oppenheimer at Berkeley and Los Alamos, another was going after Enrico Fermi at the University of Chicago. Sudoplatov reports that Fermi and his young colleague, Bruno Pontecorvo, had been targeted as dedicated anti-fascists and potential Soviet sources during the 1930's while they were still in Italy. As it turned out, the Soviet recruiters could not have been more prescient. On December 2, 1942, Fermi set off the world's first nuclear chain reaction. It was an extraordinary step forward, because up to then, nuclear fission had been just a theory. Pontecorvo made sure Moscow got a full report.

LEONA SCHECTER: By early 1943, they knew that this experiment which had been thought to be impossible had been accomplished in Chicago, and that made it a very serious problem for the Russians. They had to get moving.

JERROLD SCHECTER: It's wonderful in a bizarre kind of way because the code word was sent in a telephone call from somebody who was at the experiment to the Soviet residenteur in the station in New York saying, "The Italian sailor has landed in the new world," meaning that Fermi had achieved this experiment and had actually created a nuclear reactor.

MR. KRAUSE: In Moscow, the report confirmed that an atomic bomb could be made and for the first time created a real sense of urgency. Responsibility for accelerating the Soviet program fell to Sudoplatov's boss, Lavrenti Beria, head of Soviet Intelligence, and Igor Kurchatov, a 40-year-old physicist whom Stalin had picked to head the Soviet atomic program. In 1943, in a secret letter to the Soviet leadership, Kurchatov acknowledged the invaluable assistance that Sudoplatov's agents were providing to the Soviet nuclear project.

LEONA SCHECTER: At one point they say that they had 286 vital documents from the United States.

JERROLD SCHECTER: And that was by 1943, I believe.

MR. KRAUSE: But the point is that the book also says Sudoplatov says that Kurchatov, the head of the atomic program in Russia, would literally sit down and sort of write requests, saying, try to get us this, try to get us that, we need some more information about something else.

JERROLD SCHECTER: And that we have on the record. I mean, that's --

LEONA SCHECTER: We have his handwritten notes.

JERROLD SCHECTER: Handwritten notes in which we have some examples.

MR. KRAUSE: Who, of Kurchatov?

LEONA SCHECTER: Kurchatov's notes.

JERROLD SCHECTER: Saying I read these reports and what about this, that, and the other thing, this highly technical stuff about pressures and how to make a reactor, how do you handle certain rare gases, that, that kind of stuff.

MR. KRAUSE: The United States would spend more than $2 billion developing the atom bomb, an enormous sum of money during World War II. Much of it was spent building huge uranium processing plants and the infrastructure to support them, whole towns, roads, and power plants. Fearful that the Germans would get the bomb first, the U.S. built two separate processing plants based on three different designs. It was a duplicative, tremendously expensive operation, but essentially if the U.S. was going to beat the Nazis to the bomb. If design problems arose at one plant, the others would already be in development.

LEONA SCHECTER: By knowing what hadn't worked, the Russians were able to avoid those experiments which would have cost them a lot more time.

JERROLD SCHECTER: And resources.

LEONA SCHECTER: And resources. But knowing that the Americans or the British had failed along a certain course, they were able to avoid wasting that time.

MR. KRAUSE: Sudoplatov provides few details of espionage activity from late 1943 till 1945, despite his direct control over Soviet spy rings during that period. Even today, the Schecters say Sudoplatov is still reluctant to disclose the sources and methods used by his agents. One new piece of information from this period though concerns Klaus Fuchs, a German physicist and Soviet agent living in England. According to Sudoplatov, it was Oppenheimer who recommended hiring Fuchs to work at Los Alamos at the suggestion of Soviet agent Elizabeth Zarubina.

JERROLD SCHECTER: Did Oppenheimer know about Fuchs' sympathies to the Soviet Union?

PAVEL SUDOPLATOV: [speaking through interpreter] Maybe Oppenheimer knew about his feelings, and this may have made them closer to some degree. But, of course, we're not talking about his knowing there was a connection to Soviet espionage. Soviet espionage was never mentioned.

MR. KRAUSE: Although it's not clear whether Oppenheimer knew at the time that Fuchs was a Soviet agent, once inside the Manhattan Project, Fuchs became one of the Soviet's most important sources. In June and July of 1945, for example, Fuchs and Bruno Portecorvo reported crucial intelligence that a U.S. atomic test was imminent, and they were right. On July 16th, as Oppenheimer waited nervously in his bunker, the night sky over the New Mexico Desert suddenly turned as bright as day. A month later, two similar bombs would be dropped on Hiroshima and Nagasaki, forcing the Japanese surrender. According to Sudoplatov, Fuchs provided Moscow with detailed plans of the three U.S. bombs on September 19, 1945, just two months after they were first tested and then dropped on Japan. But initially, not even the plans were enough. In 1946, as Kurchatov and his scientists raced to duplicate the American bomb, the Russian program ran into a serious snag; the Soviet nuclear reactor didn't work. To solve that problem, Sudoplatov sent Yakov Terletsky, a young intelligence officer and a bona fide physicist, along with a more experienced officer, to Copenhagen to meet with Niels Bohr. The distinguished Danish physicist thought the meeting would be strictly between scientists.

LEONA SCHECTER: When the two men got there and he saw that one of them was an intelligence officer, Sudoplatov tells us that the young physicist, who died only recently, told him that Bohr's hands shook, that for the first time perhaps Bohr realized that he wasn't just dealing with scientists but dealing with intelligence officers.

MR. KRAUSE: Bohr refused to meet with the man he suspected was a Soviet agent, but he did meet again with Terletsky, the scientist. Sudoplatov says that as far as he knows Bohr had never before disclosed nuclear secrets prior to that meeting. Nonetheless --

LEONA SCHECTER: Bohr pointed with his hand -- he says, there's your problem, we had that too, we fixed it, I'll tell you how to do it. And he went back and after that, they were able to build their bomb.

MR. KRAUSE: The Soviet Union exploded its first atomic bomb in 1949, just three years after the meeting with Bohr in Copenhagen. The Soviet bomb was almost an exact replica of the U.S. bomb exploded four years earlier, a product as much of Soviet intelligence as Soviet science. According to Sudoplatov, Soviet knowledge of U.S. atomic secrets would again pay political dividends for Stalin during the early years of the Cold War.

NEWSREEL SPOKESMAN: In Stalin's calculations, the great unknown was the American reserve of atomic bombs and the American potential for creating many more. The atomic threat, and that alone, meant that at least in 1950, he must move warily.

MR. KRAUSE: In fact, this newsreel from the period could not have been more wrong. In his memoirs, Sudoplatov writes that Stalin had a very good idea how many atomic bombs the U.S. had thanks to Klaus Fuchs. Stalin was able to aid Mao Tse Tung's Communist revolution in China in 1948.

LEONA SCHECTER: Stalin knew that the Americans didn't have enough atomic weapons to fight in two places at once because they had such a limited number. And on the basis of this information from Fuchs, Stalin started the Berlin crisis which resulted in the Berlin airlift in order to deflect American attention away from the Chinese civil war and allow Mao Tse Tung to win.

MR. KRAUSE: During his career at the center of Soviet espionage, Pavel Sudoplatov weathered several of the purges that inevitably followed changes in party leadership. But in 1953, when Nikita Khrushchev unseated Lavrenti Beria, after Stalin's death, Sudoplatov's luck ran out. He was thrown in prison as a Beria accomplice and remained there, discredited, and an enemy of the people for 15 years. He was eventually released from prison in 1968, and he's been fighting to regain his pension and his honor ever since. For his part, J. Robert Oppenheimer was accused of disloyalty and lost his security clearance in 1953 but continued throughout his life to defend his view that atomic secrets had to be shared.

ROBERT OPPENHEIMER: I have been asked whether there is hope for the nation's security in keeping secrets, some of the knowledge which has gone into the making of the bombs. I am afraid there is no such hope. I think the only hope for our future safety must lie in a collaboration based on confidence and good faith with the other peoples of the world.

MR. KRAUSE: In 1963, Oppenheimer received the Enrico Fermi award from President Johnson. At the time, the medal was viewed as a kind of semi-official apology to Oppenheimer and partial vindication for the loss of his security clearance 10 years before. But now the controversy over Oppenheimer's loyalties is almost certain to be revived with today's publication of Pavel Sudoplatov's Special Tasks. RECAP

MR. LEHRER: Again, the major stories of this Monday, the Federal Reserve announced another rise in short-term interest rates. It was the third increase since February and was believed to be 1/4 percent. In Bosnia, Serb guns continued to pound the Muslim town of Gorazde. The U.N. commander said the town is on the verge of a major humanitarian catastrophe. This evening, U.N. Secretary General Boutros-Ghali said he had asked NATO to give him authority to order air strikes to protect U.N.-declared safe areas in Bosnia. Gorazde is such an area. Until now, the United Nations had only requested air strikes to protect U.N. peacekeepers on the ground in Bosnia. Good night, Margaret.

MS. WARNER: Good night, Jim. That's it for the NewsHour tonight. We'll see you tomorrow night when Robin MacNeil will be reporting from Denver to begin a special three-day look at how government is working. Our first focus will be on crime. I'm Margaret Warner. Good night.