Is GDR information trade next chapter in old story?

Insight on the News, June 30, 1997 by Jamie Dettmer

If men could learn from history, what lessons it might teach us!" The British poet Samuel Coleridge was, of course, saying that man does not learn from history. As federal and congressional investigators try to determine whether Red China penetrated President Clinton's inner circle by using agents of influence, and Beijing-linked businessmen and disguised lavish donations to the Democratic Party, Reagan-era cold warriors are being gripped by a sense of deja vu. Lessons once learned -- such as being wary of foreigners bearing gifts and cautiously handling acquisitive Communist bloc firms -- apparently were lost on a money-hungry Clinton White House desperate to secure reelection for its leader and clinch headline-catching trade deals with China.

No evidence has been presented to prove beyond doubt that Beijing mounted a successful cash-lubricated inflitration of the Clinton White House. But current and former Western and Eastern-bloc intelligence sources say the nature of the Chinese money operation and the shadowy backgrounds of Clinton chums such as the Indonesian Riady family, Yah Lin "Charlie" Trie and John Huang fit the pattern of classic Communist espionage missions of the past -- particularly those mounted on a smaller scale by the German Democratic Republic, or GDR, targeting Western leaders.

If Clinton unwittingly was rubbing shoulders with Chinese agents of influence in the months before the last election, as some GOP lawmakers believe, he at least may be able to console himself with the knowledge that he isn't the first Western leader unguardedly to have embraced a Communist power's agents of influence and to have been manipulated in an inflitration operation presumably designed to influence policy and perhaps help secure Western technology and capital.

For most of the Cold War, the GDR's highly effective foreign-intelligence service, the HVA Stasi, had little trouble slipping agents into the offices of top West German politicians -- and of businessmen, for that matter. In his just-published autobiography, Man Without a Face, former HVA Stasi chief Markus Wolf devotes an entire chapter to his successful penetration of then-German Chancellor Willy Brandt's office in the 1970s. Placing HVA agent Gunter Guillaume close to Brandt easily was brought off, the GDR spymaster records. Guillaume was recommended by a labor leader for a Brandt post after years of unrewarding backroom service in Germany's Social Democratic Party. "As simply as that, we secured a spy at the elbow of the leader of our prime target country," writes Wolf.

And Brandt wasn't the only European head of government to have a Stasi shadow as an intimate pal. Insight has discovered new evidence to suggest that British Labour Prime Minister Harold Wilson may have been compromised through his friendship with Austrian-emigre turned-British-industrialist Rudi Sternberg, who was ennobled in 1975 by Wilson and took the title Lord Plurenden. Since his death in 1978, speculation has persisted that Sternberg was an East German spy.

A penniless refugee when he arrived in Britain in 1937, Sternberg made a postwar fortune based on trading behind the Iron Curtain -- initially importing potash from the GDR and exporting chemicals and fertilizers to Berlin. A long-time close friend of Wilson, Sternberg partly financed the Labour leader's private office -- he also arranged several East European trips for Wilson that prompted the concern of long-serving CIA counterintelligence chief James Jesus Angleton, who later was mocked by journalists and historians -- and by many of his own colleagues -- for his obsessive conspiracy theories, which included Angleton's belief that Wilson was a Soviet agent.

In 1981, Sternberg's widow slammed as "disgusting and shocking" the spy allegations against her late husband and dismissed a claim that Britain's MIS warned a disbelieving Wilson that his industrialist friend was a Communist tool. But Insight has learned that a German police team -- established after the fall of the Berlin Wall to try to locate 20 billion deutsche marks of missing GDR money -- discovered that Sternberg's main firms, the London-based Sternberg & Co., Sterling Group and Dominion Exports, regularly received money from Stasi-controlled overseas bank accounts. Uwe Schimdt, the head of the police team, says it strikes him as inconceivable that Sternberg didn't know the source of the money -- especially as the transfers were unusual and bore the hallmarks of a money-laundering operation. At his death, the mysterious wheeler-dealer left virtually nothing in his will.

"It is hard to look at the Riady family and the likes of Charlie Trie and their commercial connections with Beijing without being reminded of Rudi Sternberg and his ties to Berlin" says a retired CIA counterintelligence officer.

Trie, like Sternberg, rose from obscure refugee beginnings and in quick order jumped from being the proprietor of a modest Little Rock Chinese restaurant serving low-priced meals to a globe-trotting international business consultant having the where-withal to donate $640,000 to Clinton's Whitewater legal-defense fund. Wire transfers also play a part in the Trie story as they did in the Sternberg case: Federal investigators say they have tracked 1996 Bejing wire transfers to Trie through the New York branch of the Bank of China.