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Come Spy with Me: Cold War Espionage Against China

Intelligence services spend a great deal of time trying to recruit new assets, spies who have access to sensitive information and who are willing to provide that intel for ideological or financial reasons. Foreign diplomats often make for attractive targets, especially during the Cold War. Stephen Dachi, who was Public Affairs Officer in Hungary from 1973 to 1977, recounts an attempt to recruit him as a spy for the Hungarian Ministry of the Interior. He was interviewed by Charles Stuart Kennedy in 1997. Read how he helped with the forensic identification of Josef Mengele, Auschwitz’s Angel of Death. You can read about Naomi Collins’ adventures in Moscow in the 1960s and anecdotes about KGB surveillance.


DACHI:  I had this Hungarian background and I had some relatives there, including a cousin who in my childhood years had briefly become my legal guardian after my parents died. He was a music director at the Hungarian State Opera, so he was a very prominent person. His wife was head of the western department at the Hungarian Chamber of Commerce. Their son was in the Hungarian foreign service and had recently been political counselor at their embassy in Washington. That was a situation laden with ambiguities and potential peril. In fact, about two years after I got there, in large part for those reasons, a major full-blown effort to recruit me was made.

The general who was in charge of Hungarian counterintelligence in the Ministry of Interior personally attempted to recruit me in a carefully laid out operation in which he made a proposal for me to commit espionage for them in exchange for very substantial money payments. Many years later, after the fall of the communist regime, my cousin told me that the Ministry of the Interior had made an effort to get him and his family involved in this, which they refused to do. In fact, the whole time I was there, I had a wonderful relationship with my cousin, a very warm family relationship. At that time, he never intimated that anyone had tried to involve him.

Q: How was this proposal made? How overt was it? How were you dealing with it as an American Foreign Service officer? 

DACHI: It was sort of a classical textbook effort. My wife and I and two of our children went to Lake Balaton in Hungary, a summer resort, for our vacation. A man, who later turned out to be the general from the Ministry of Interior, showed up in the same hotel. He first approached me by saying that his daughter was along, too. He saw that I had a daughter. Could they get together and play, practice English, and so on? Then he began to chat, asking me the kinds of questions that an average educated person interested in foreign affairs would ask about the United States; in other words, general interest questions. Then he gradually intensified the dialogue until the end of our vacation period, although even by that time he had not yet revealed anything in the way of recruitment as his eventual purpose. He asked me if I was allowed to have Hungarian friends in Budapest. I said, “That’s why we’re here.”

A few days after we returned to Budapest, he called me. He invited me to dinner at a hotel in a remote suburb of Budapest. As it says in the movies and the textbooks, you’re supposed to do that in an isolated location, which is precisely what he did. I started becoming suspicious. I hadn’t been too suspicious before, but now I was alerted enough that I reported it to the Chargé, Clayton Mudd, before I went. Mudd knew that I had dozens and dozens of contacts. The idea of having dinner with any of them was nothing unusual, but there was something about this particular thing that bothered me. So, I mentioned it to the Chargé because the Ambassador, Eugene McAuliffe, was out of town.

Once we met at the hotel and sat down to dinner, the man got right down to business. He told me in a very cool and carefully crafted way that he was the General in charge of counterintelligence at the Ministry of Interior, that he wanted to propose a “cooperative venture” to me, to improve U.S.-Hungarian relations by having us work together against certain “mutual adversaries” that I could help him with. First he mentioned China. This was not long after we had opened our first diplomatic post in Beijing and we were not yet allowed to have bilateral contacts with Chinese diplomats in other countries. But we could talk if we “accidentally bumped into each other” at third-country events like Independence Day receptions.

The Chinese Deputy Chief of Mission in Budapest was an excellent Hungarian speaker and he and I did in fact bump into each other from time to time at such functions. Because of our mutual fluency in Hungarian we would have quite lengthy conversations, although never about anything terribly substantive or politically sensitive. It was the buzz of the foreign diplomatic community and obviously Hungarian intelligence had gotten wind of it too. The Hungarian spymaster was obviously eager to tap into that dialogue but I was able to deflect that by insisting, truthfully as it happened, that the Chinese man never ever said anything of importance to me. Then the General mentioned West Germany, which was easier for me to handle because I just said that they didn’t exactly qualify as “mutual adversaries,” since they were members of NATO and staunch allies of ours.

At this point, this was becoming a very stressful and intense situation for me, to put it mildly. I was trying to think back to what it was that I was told in briefings and training as the thing to do in a situation like this. It wasn’t a heck of a lot to fall back on except that I did remember, in general, that they said, “Don’t get involved in any discussions, arguments, or debates. Just listen and remember as much as you can. Say as little as possible and get out of there safely and without commitments. Then come back and report it to the embassy and we’ll take it from there.” So, that was my strategy, although, in the event, it’s a little more nerve-wracking to carry out than it is when you listen to it at the Foreign Service Institute in a briefing.

He ended up making a complete proposal for my providing them information. He kept saying, “Nothing about the United States. Just about other countries.” He then offered basically financial incentives. He didn’t refer to my family at all or try to use any blackmail of that sort. There were no “outside women” in my life that he could use. He said that they would take care of my three children’s college education in the U.S. from beginning to end. That was basically the financial offer, plus whatever expenses he thought I was going to incur in taking people to dinner, lunch, or whatever to get information for him. The evening did come to an end eventually, about what seems like nine months later, but still in the same evening.

The next couple of days I spent in the “bubble” at the embassy debriefing people with tape recorders. That was sent back to Washington. The Ambassador was then instructed to make a protest.

The Hungarian Foreign Minister eventually came back to him and said that I was hallucinating, that none of this had happened. But one of the things the Ambassador stressed very carefully was, “You may think it was a hallucination but we know he is telling the truth. One thing should be very clear: he is not leaving here. We’ve got here a list of all his contacts and all his activities. If even one of these contacts is now going to be impeded in meeting with him, we are going to consider this a major factor in harming the bilateral relationship.” He made a very strong demarche. In fact, in a rather unusual situation, I remained at post for the rest of my tour for a little over a year and they never bothered me again. I continued to work without change with all my contacts.