Was Pope Victim of Canada's Program?

WASHINGTON Ч The gun-toting Russian security agents who burst into Edmond Pope's hotel room in Moscow last April videotaped his arrest on suspicion of espionage, catching the retired U.S. Navy captain in slack-jawed astonishment.

Pope, 54, a businessman who scoured Russia for promising technologies, is said to have remained baffled for the eight months he spent in the 18th-century Lefortovo Prison.

Charged with stealing state secrets, he was tried behind closed doors this fall and sentenced to 20 years in prison. Pope was pardoned by President Vladimir Putin on humanitarian grounds Dec. 14 and is now back at home in State College, Pennsylvania.

Why the Federal Security Service, or FSB, arrested Pope is a tangled affair still shrouded in secrecy. A former Navy intelligence officer, he was operating in a dangerous gray area when he sought to buy Russian technology that could be useful to the Pentagon.

But sources knowledgeable about U.S. intelligence said Pope fell afoul of an intelligence operation in which he was not involved: an effort by the Canadian government to buy a handful of Russia's advanced Shkval (or Squall) torpedoes from a defense plant in the former Soviet republic of Kyrgyzstan.

Middlemen working for the Canadians Ч and indirectly for the United States, which sources called a "junior partner" in the operation Ч were on the verge of landing the weapons last year. But the deal fell through, for reasons that are not entirely clear.

It may be that Russian authorities learned of the impending sale and pressured Kyrgyzstan to stop it. Another version is that the middlemen failed to make the huge payoffs that certain officials expected. Either way, the FSB turned its full fury on Pope.

He had been researching the Shkval for years and was in the process of buying technical information about it. But he thought his purchase had been approved by the Russian government, and he was completely unaware of the simultaneous Canadian operation, the intelligence sources said.

The Canadian deal has not been revealed publicly before now. Commander Kevin Carle, a spokesman for Canada's Department of National Defense, acknowledged Ottawa had sought "a legal and authorized business transaction to acquire that torpedo." But, he added, "there's no connection between Mr. Pope" and the Canadian effort.

Pope is planning a book about his experience and has declined requests for interviews. Friends say he is still puzzled by his arrest.

The Pope case centers on the Shkval, a fearsome weapon that has fascinated Western military officials for years. It screams through the water at up to nearly 500 kilometers per hour, five times the speed of other torpedoes. The eight-meter-long torpedo can go so fast because at top speed its oddly shaped nose creates a vapor bubble around its entire length. Water does not touch its metal skin, so drag is dramatically reduced.

Hoping to reverse-engineer the torpedo to learn how to defend against it, the Pentagon and its allies have tried for years to lay hands on the Shkval. Some British arms experts were deported from Russia several years ago after asking questions about it.

At his trial, Pope's lawyers hammered on the point that one version, the Shkval-E, has been described in books and magazines, and has even been marketed at defense expositions. But despite attempts by various governments to buy it, only one deal is known to have been consummated: China bought as many as 40 Shkvals in the mid-1990s.

The Russians who distributed glossy marketing brochures about the Shkval were from the Russian defense lab that developed it, called Region. Though based in Moscow, it has a fabrication plant and testing facility on a large lake in Kyrgyzstan.

Region, whose torpedo plant has almost no business and whose employees routinely go unpaid, has been desperate for sales. But it was free only to promote the Shkval for sale, not actually to sell it. Top officials of the recently renamed Russian arms export agency, Rosvooruzheniye, insist that only they, and not far-flung defense plants such as Region, control most weapon sales.

As a Navy intelligence officer, Pope specialized in Soviet bloc weaponry, and worked closely with the Office of Naval Research. After retiring as a Navy captain in 1994, Pope worked for three years at Pennsylvania State University's Advanced Research Lab, which has close ties to the Office of Naval Research. In this job, he set up collaborations between Russian and U.S. engineers to study technologies and weapons. He remained a consultant to the lab after leaving in 1997 to enter business.

On his dozens of trips to Russia in the 1990s, Pope easily persuaded Russian engineers and plant directors to describe their technologies, some quite sensitive.

The collapse of communism had left factories and labs flailing for business.

"Ed would have a meeting with a group of engineers, and five others would show up for a show-and-tell, and others would line up out the door," said a close friend. "Ed was trying to get as much exposure to the technology as possible. Е His message was, 'You lift your skirt, and I'll lift mine.'"

Even after he had left the military, Pope was asked by officers in Navy intelligence and research to report on details he gleaned about the Shkval and other Russian technologies, sources said. Eventually Pope was doing research about the Shkval under a mishmash of overlapping contracts, some with the U.S. government and some, ostensibly at least, private.

Region discussed the possibility of Pope advising it on marketing the Shkval to foreigners. He also signed a 1999 contract with Region to commercialize various technologies used in the Shkval.

The other participant in this deal was a Russian government export agency called Russian Technologies. At his trial, Pope's lawyer cited this contract to show he had official permission to explore the technology.

"He thought everything was open" with the Shkval, said Keith McClellan, Pope's partner in the firm doing that work. Pope also had a $178,000 contract with the Office of Naval Research to study possible applications for the commercial ferry industry of the Shkval's propulsion system.

Moreover, in connection with work for the Penn State Advanced Research lab, Pope paid $30,000 to a Moscow academic who had worked on the Shkval. Pope was seeking information about the motor in one of the torpedo's new variants, as well as its new fuel, partly made of a powdered metal.

These were sensitive areas, and Western intelligence officials learned recently that for months before his arrest, Pope had been on a list of a dozen U.S. and European defense experts whom the FSB had targeted for criminal charges if they persisted in their activities.

Pope had unsettling encounters on his last visits to Russia. For the first time in years, he was tailed. Strangers who appeared to be either security officials or mobsters visited him and demanded fees if he wanted to keep doing business.

U.S. intelligence sources said they think these men were under the mistaken impression that Pope was connected to the Canadian attempt to buy Shkvals. With U.S. and British naval intelligence acting as junior partners, Ottawa had retained some European middlemen to buy at least five torpedoes as well as testing equipment, blueprints and the like.

Russian and Kyrgyz officials knew the middlemen represented buyers from the West, but little else. The price tag for the entire deal was between $6 million and $10 million, with the middlemen retaining a handsome fee. After dragging on for two years, the deal seemed close to fruition earlier last year.

At the last moment, U.S. intelligence sources said, Rosvooruzheniye and the FSB stopped the sale. In part, Rosvooruzheniye was angry that an upstart former republic would sell off a Soviet military treasure without clearing it with Russia, U.S. sources said. Western intelligence sources also said the middlemen and the sellers from Region had not paid Rosvooruzheniye officials the fees they demanded. Such fees are often hazy; exactly who pockets them is seldom clear.

Another factor is that the FSB has appeared eager to display its new power since the election of Putin, a former KGB officer. FSB director Nikolai Patrushev said the Pope case shows that "in Russia's murky waters, foreign businessmen-spies have worked freely, buying technologies created by thousands of people for mere kopeks. With Pope, Russia showed this has ended."

Some intelligence sources contend that, with the Canadian deal pending, naval intelligence officials should have warned Pope to stop his work on the Shkval.

"Ed is a techie, an engineering officer, not an intelligence officer" trained to spot danger, said a man who buys weapons overseas for U.S. agencies. "They had a guy over there [working on sensitive Navy contracts] with no business being there."

U.S. Navy officials rebuffed these criticisms. "To our knowledge Ed Pope was a businessman who occasionally did work on a contract basis with our Navy research lab" and was not a spy, so he was in no need of any warning, said Admiral Stephen Pietropaoli, the Navy's spokesman.

Correspondent David Hoffman contributed to this report from Moscow.