(MONEY Magazine) – It says a lot about today's espionage that one of the two paper trails that made the case against convicted spies Jonathan Jay Pollard and his wife Anne was left by their American Express Card. The other paper trail was 360 cubic feet of classified documents that Jonathan Pollard, a Navy intelligence watch officer in Suitland, Md., sold to the Israelis, almost by the ream, for $45,000 during 1984 and '85. ''Every day for a year, he would grab handfuls of daily messages,'' marveled the prosecutor at Pollard's 1987 sentencing, ''and throw them in a suitcase.'' A huge take, at a bargain price, that moved Secretary of Defense Caspar Weinberger to inform the court that it was difficult for him ''even in the so- called Year of the Spy, to conceive of greater harm to national security than that caused by the defendant.'' The damages recorded by American Express -- from Pollard picking up checks, which he did with the same free hand he used to pilfer documents -- are more readily calculable. They were part of $20,086.06 that the Pollards spent for fun and travel, including two deluxe trips to Europe and the Middle East. On one memorable leg, the couple traveled in a private compartment aboard the Orient Express. Cost: more than $700. How else would any upwardly mobile young spy couple entrain for the Levant? The government contended that these American Express charges proved that the Pollards did it for the money -- the dirty little secret behind most of today's espionage. For that matter, greed is the prime motive behind almost all spying, from Judas Iscariot to Benedict Arnold to Mata Hari (see the table on page 132), right on through the 26 spies caught over what might be called the extended Year of the Spy (circa 1984-85). And if these latest entrepreneurs took advantage of far greater economic opportunity than ever ; before -- much like Wall Street's inside traders -- they still turned out to be, like the Pollards, no less prone to the spy's classic economic folly: foolish expenditure, at an uncertain rate of return. Even Marine Sgt. Clayton Lonetree, the U.S. embassy guard allegedly entrapped sexually by a so-called Soviet swallow, reportedly got $3,500 in KGB petty cash from his handler, a man known to Lonetree only as Uncle Sasha. Lonetree is said to have used the cash to buy such items as a $1,000 dress for his ladylove and a silk tie for Uncle Sasha. Among other ostentatious spy movables and consumables lately have been an airplane, a cockatoo, a mobile van, a houseboat, a barbecue pit, illicit drugs, a Ku Klux Klan outfit and innumerable nights to remember, best forgotten. Each spy got hooked on fantasy expectations, often in the millions, and ended up with so much less, all of which, of course, ultimately went. The Pollards, for instance, managed briefly to double their standard of living by means of his untaxed $2,500 a month for spying, over and above their annual $29,000 take-home pay from their legitimate jobs. But no, the defense argued at trial, those excursions abroad were only to meet Rafi Eitan, their Israeli spymaster. As for the 64 receipts for meals out, said defense attorney Richard Hibey, 'Your Honor has looked at them, and he knows that basically they were between $20 and $40.'' But the government drew His Honor's attention to one particular receipt. Dinner for four at La Maree, a swank restaurant four blocks from the White House on Saturday, Nov. 16, 1985 -- two days before Pollard got caught in a suburban Maryland parking lot, loaded down with classified documents from the Navy's Anti-Terrorist Alert Center (ATAC). The couple across the table happened to be Israeli Col. Aviem Sella and his wife Judy. Colonel (now General) Sella is the Israeli fighter pilot who recruited Pollard, fled the United States the week of his arrest and, currently under U.S. indictment for espionage, was recently forced to resign command of a major Israeli air base. The dinner cost $202.02, said American Express in the usual triplicate, showing that the Pollards were feeling flush enough that Saturday, and foolhardy enough, to take their own handler to dinner. Such proof of venality was key to the government's case. Pollard tried to claim he was ideologically driven. His devotion to Israel -- a U.S. ally, after all -- had been his true motivation, he said. He never really wanted to take the money. He even blamed Rafi Eitan for forcing what he called a ''salary increase'' on him for the improved quality of his work. Said Pollard in his plea to the court: ''I informed Eitan that I not only intended to repay all the money I'd received but also was going to establish a chair at the Israeli General Staff's Intelligence Training Center outside Tel Aviv.'' But faced with his damning American Express Card as evidence, he could worm no more. Perhaps his spying, he told U.S. Judge Aubrey Robinson before his sentencing, ''might have been a little bit more understandable for some people if there hadn't been a monetary issue. But unfortunately, Your Honor, that is not the case. There was an element of money.'' There almost always is. The economic impetus behind the recent rash of espionage is an upswing in the immediate market value of defense technology, which can be skimmed off by any low-level lowlife who has ready access and the nerve to negotiate a price. That has meant a small economic boom in spying but among some very downscale people. Once, spying depended more on skillful agents-in-place, secretly gathering intelligence from humans -- known in today's trade as HUMINT. This elite had an altogether different motivation. ''It used to be ideology,'' says former FBI assistant director William Baker, ''particularly the world Communist movement. But that began to taper off after the Soviet invasion of Hungary in 1956. Now it's back to sex, coercion, revenge, money.'' The cash is increasingly used to buy the intelligence product of a worldwide network of electronic surveillance facilities -- signals from spy satellites, listening posts and other intercepts, known as SIGINT. Simple human greed has a much larger field to play in when any hacker from an army of computer operators can strike a bargain for highly sensitive materials he doesn't even need to understand. Against this economically enlarged spy threat, the FBI has been desperately pursuing what William Webster, the former bureau director who is now head of the CIA, calls its spiderweb technique. By weaving together information from electronic eavesdropping, personal surveillance and informants, the FBI tries to keep watch on approaches made to some 4 million U.S. citizens with security clearances by what it calls known agents. Those include, according to State Department authorities, more than a third of the 950 or so Soviet officials in this country. When the spiderweb is working well, the FBI can sometimes entrap a potential spy, using undercover Russian-speaking agents in a sting operation, even before information changes hands. In 1984, Thomas P. Cavanagh, a Northrop Corp. engineer, was caught this way. ''He wanted to sell the Stealth aircraft technology for $25,000,'' Webster told Time magazine in 1985, referring to the supersecret Air Force bomber. ''It cost $1 million an hour to produce that research.'' But right there, in that gross economic discrepancy between low price and high value, lies the real root of the problem. What Cavanagh was asking -- a scant $25,000 -- may sound cheap, but it is actually a middling-good espionage price, especially from an individual entrepreneur. In fact, what is truly surprising is that prices for electronic intelligence stayed so low for so long. Analysts of espionage say the market was still at bottom, even as late as 1978, when William Kampiles, a CIA drudge, sold the Soviets the manual for what was then the top U.S. photo-reconnaissance satellite, the KH-11. His low, low price: $3,000, about the cost of a used Toyota with 50,000 miles on it. Today, anything picked up for the low four figures, concedes the FBI's Baker, would be quite a bargain. If there is a rule of thumb, he says, it is that ''you certainly have to match a yearly salary to get somebody to throw away all those commitments.'' That fits the Pollards almost to the dollar -- $30,000 in extra cash from the Israelis just barely exceeds their $29,000 take-home pay. ''A long-term relationship builds up the price,'' continues Baker, until something like twice a spy's legitimate salary is enough to assure continuous delivery of quality product. But it is very difficult for the individual contractor -- panicked, nervous, uncertain of his ground -- to strike so good an initial deal. Take the case of Larry Wu-Tai Chin, the ex-CIA agent who spied for the Chinese. He eventually managed to squirrel away $180,000 in Hong Kong bank and gold accounts (after paying off Las Vegas gambling debts of $96,700). But amassing that sum took him 32 years, starting with $2,000 in 1952 for the names of Chinese P.O.W.s held in Korea. Much more typically short term are two recent cases: one harmless enough, that of Richard W. Miller, a former Los Angeles FBI agent, but the other, that of Ronald William Pelton, a former National Security Agency computer operator, very harmful indeed. Agent Miller is spying's most recent sad sack, his first mistake having been to jump into same with Svetlana Ogorodnikova -- a tattered Soviet swallow who phoned Miller at his FBI office in May 1984 and offered information on the Soviet community in Los Angeles. Svetlana paid the motel and dinner bills in and around the city, then suggested that Miller might want to work for the KGB. According to his signed confession, Miller first told Svetlana that he would consider providing FBI files to the KGB only ''for a lot of money, like $1 million or $2 million, because if I was caught I would lose my job and everything.'' He was, after all, the 47-year-old father of eight. Svetlana assured him he was too smart to get caught. Presumably flattered, he then allowed as how ''$50,000 in gold placed in a safe-deposit box divided between three different banks'' might persuade him. By the time she had him air- ticketed to Vienna for KGB vetting, they had agreed on $15,000 in cash. But before he could get to that meeting, and before any money changed hands, Miller was arrested along with Svetlana and her husband Nikolay. The following is all Miller ever received from Svetlana for whatever services were rendered: -- One pair of Italian shoes -- $40 in change from the shoe purchase -- A jogging outfit -- A gym bag -- A cap This outfit was for a man chronically overweight and the butt of office jokes at FBI headquarters in Los Angeles, who frequently went into 7-Eleven stores where, he confessed, he ''read comic books and stuffed himself with candy for two to three hours per sitting.'' Furthermore, the FBI report went on to say, ''Miller stated that he did not pay for this candy and realized that he has, in fact, shoplifted from 7-Eleven stores.'' He was never charged with that, but he did come up with an inspired defense at his first espionage trial in 1985: that all along, he had been trying to penetrate the KGB to save his failing FBI career. Miller actually hung the first jury with the story, but a second panel put him away for two lifetimes plus 50 years. His vain plea still echoes in the final sentences of his confession. ''Most of this has been done on my own time -- not on bureau time. I have also incurred moderate expenses.''

As for Ronald William Pelton, it was genuine financial despair that motivated him to betray the government's most secret bureaucracy, the National Security Agency, which breaks codes and monitors foreign communications from & its headquarters outside Washington, D.C. After working for NSA for 14 years -- like a ''hunchback'' over a computer, Pelton said -- his salary had risen to only $24,500 a year in 1979. Meantime, his debts had swelled to $64,000, principally from trying to build a three-bedroom house by himself for his wife and four kids in the Maryland suburbs of Washington. His debts brought him down in 1979, and he had to quit the NSA as a bankrupt -- ironically, per security regulations. Pelton was almost destitute when he phoned the Soviet Embassy in Washington, D.C. on Jan. 14, 1980. He walked in the next day, and on a map of the Pacific, pointed to a spot in the Sea of Okhotsk. It became known at his 1986 trial as Project A. Better known to U.S. naval intelligence as Ivy Bells, Project A was a deep-sea tap placed by U.S. submarines on a communications cable that connected the Soviet mainland and Kamchatka Peninsula. ''He didn't have to go home with stacks of classified documents,'' said the prosecutor. ''What he had was in his head.'' His memory covered 57 different channels of intercept. The Soviets simply picked his brain, channel by channel, during eight-hour sessions over three- to four-day stays inside their embassy compound in Vienna. Pelton flew there three times for hire but never got out of the low five figures -- in 1980, $20,000, and in 1983, $15,000. But in 1985 he missed connections altogether and was left to wander endlessly around the city's Schonbrunn Gardens. By then, he had lost 75 pounds and his Soviet contacts failed to recognize him. That was because he had left his wife and family and gotten into drugs with one Ann Barry, 29, a former teenage beauty queen from Maryland. The FBI finally arrested him in November 1985 in Annapolis, Md., where he was cruising along as a yacht salesman. The tip came from KGB defector Vitaly Yurchenko. ''He was always going to make a million,'' said Ralph Marshall, who worked with Pelton at yacht sales. He planned to buy a farm, make a major contribution to the church as a born-again Christian and give Ann Barry a trip to Rome, a house in Georgetown and a yacht. But by the time of his arrest, reported the FBI, he was bargaining three times a week on the street for ''two four-milligram dosages of Dilaudid ((a painkiller)), which he would share with Ann Barry.'' ''The concern we have for the future,'' admits agent Baker, ''is drugs.'' But money still remains the overriding motive, even more than sex. Yet what these flawed spies sadly demonstrate is the weak bargaining stance often taken by the individual espionage contractor, even in his greed. They were squeezed dry because they didn't know what to ask for, took what was handed to them and finally didn't know when, or how, to stop. They never got it together the way former Navy warrant officer John A. Walker Jr. did. He is the only recently caught spy to build an entrepreneurial espionage ring into a real commercial success. Known as Jaws by family and acquaintances -- for his nastiness as well as his initials -- Walker converted his friendships, marriage, even his closest family ties, into what the tradecraft calls assets. The human toll was horrendous, but he proved that even in espionage business is business. Like a well-schooled M.B.A., he knew how to manage and, under market pressures, how to make the business grow by diversifying. As with Pelton, Walker was a walk-in, having first dropped in on Soviet officials in 1968. A greasy spoon he owned in Ladson, S.C. had gone bust, and he needed quick cash to pay off debts. Luckily, the Navy had taught him a useful skill: how to repair encoding devices called cipher machines. So he looked up the Russian Embassy in the Washington, D.C. phone book and marched right in to pitch them what he knew they'd want to buy: crypto. He could give them the ability to read what was then the Navy's most sensitive coding machine, the KL-47. ''If they wanted to tell a ship's captain his wife was screwing the delivery boy,'' said Walker, as reported by John Barron in his 1987 book on the case, Breaking the Ring (Houghton-Mifflin, $17.95), ''they'd send it on the KL-47.''(Money's requests to interview Walker were declined by his attorney, Fred W. Bennett.) He was bold enough to ask for $1,000 a week, right up front, and against all their usual caution the Soviets decided to take an immediate chance on him. In February 1968, he delivered to the Soviets his first key list for the KL-47; it let the Russians read U.S. messages day by day. His Soviet contact gratefully handed him a tight roll of $50s. Total: $5,000. A hefty sum in 1968, and payments kept on that way for Walker through a constantly rising market for crypto over the next 17 years, including a three- year stint in the early 1970s as a Communications Material Systems custodian aboard the U.S.S. Niagara Falls, a Pacific fleet supply ship. Concluded Walker: ''K Mart has better security than the Navy.'' Over the years, Walker involved his wife Barbara, by forcing her to accompany him on espionage-related courier flights and hide illegal monies from the Soviets on her person. She eventually divorced him and sank into silence and alcoholism until, in 1985, she at last found the courage to turn him in. But not before he had already recruited their son Michael, a yeoman aboard the aircraft carrier U.S.S. Nimitz, as a spy. In 1979 he even tried to talk their daughter Laura, recently married and pregnant, into having an abortion so she could stay in the Army and become a spy. She refused. Just over two years later, he gave her $500 to reconsider. She did, and helped her mother turn him in. But Walker's boldest stroke came shortly after he quit the Navy in 1976 out of fear that he would fail a scheduled security review. He persuaded a jobless ex-Navy friend, Jerry Alfred Whitworth of Muldrow, Okla., to rejoin the service in 1974 as a turncoat codeman and carry on in his footsteps. He even put up $18,000 of his own money to pay Whitworth to make his first foray into the code room at Diego Garcia, the Navy's Indian Ocean island base, and only then told the Soviets. To their dismay, they learned that Walker -- against all accepted tradecraft -- had recruited his own agent-in-place, Whitworth, whom he now proposed to run on a fifty-fifty split. They would simply have to double their payments. His KGB handlers were furious, but because of his slick, corporate-style management, he had seen to it that Whitworth reported to him, not to them. Besides, the crypto Whitworth started delivering to the Soviets once aboard the U.S.S. Niagara Falls -- in Walker's old code room -- really impressed them. He kept coming up with key lists that let the Russians read the Navy's codes for three months ahead at a stretch. Walker, then working as a private detective in Norfolk, began a worldwide stop-and-shop espionage junket to keep up with Whitworth. He would fly to whatever port Whitworth's ship was in -- Casablanca, Hong Kong, San Diego -- make his pickup, then dead-drop the take back for the KGB in a wooded area in the Virginia suburbs of Washington. By a series of signals with a 7 Up can left under a tree, he would know to pick up money in the same woods, then fly off again to pay Whitworth. At a 1980 meeting in Vienna -- everybody's favorite spy town -- Walker's KGB handler said of Whitworth: ''Tell him we give $10,000 bonus every time he gives 90 days' key.'' On May 18, 1980, at what must have been a high for crypto on the espionage market, the KGB left $200,000 in cash wrapped in heavy plastic in the Virginia woods. When Walker gave Whitworth his half -- a tight roll of $50 bills -- the warrant officer chortled: ''I've never held $100,000 before.'' All together, Whitworth received payments of $332,000 between 1975 and 1985, when he quit to enjoy the good life. Apart from several substantial bank deposits, the IRS found he spent his take on such items as a Rolls-Royce rented to drive him from his ship to his house ($438.78), a chauffeur for the car ($20), gold Krugerrands ($4,380), a Honda motorcycle ($2,500), a cockatoo ($900) and -- get this -- $1,600 in lingerie from Victoria's Secret for his wife. For their part, the Russians seem never to have truly understood their man Walker. In 1979, in the midst of the standard complicated walk through Vienna -- a tedious procedure to shake trailing agents that drove Walker nuts -- his KGB case officer told him solemnly that he had been granted the rank of admiral in the Soviet Navy. ''Tell them thanks a lot,'' said Walker. But he could hardly keep from laughing. He had no interest in glory or braid. His only objective was organizational growth to guarantee profit, even when Whitworth quit him and he knew he wouldhave to develop his son and his brother Arthur as income-producing assets. When his wife turned him in to the FBI in 1985, his material assets were substantial. They totaled $250,603, including 10 100-ounce bars of silver, plus stamps and coins ($8,140), a Grumman airplane ($20,000),a 34-foot houseboat and 14-foot sailboat (combined value: $8,000), real estate ($195,000) and miscellaneous firearms($1,500). Total cash over 17 years toWalker was approximately $1 million, minus Whitworth's $332,000. Even on the day of his arrest, and despite debts of $65,668, Walker still had a positive net worth of approximately $174,785. But on June 4, 1985, his financial status changed significantly. At 4:40 p.m. that day, the Internal Revenue Service filed a tax lien for $252,487.66 in unpaid taxes on his espionage earnings from 1979 to 1984. This produced a negative net worth of ''at least $79,702.66,'' said Fred Warren Bennett, the federal public defender. Suddenly Walker was a pauper. Still, what about the other half a million? Some quick arithmetic says that the $700,000 or so earned by Walker after paying Whitworth his $332,000, minus $ $174,785 in cash outlays, leaves more than $500,000. ''He dribbled it out over 17 years,'' explains Bennett, ''so as not to leave a paper trail.'' That would also jibe with Walker's penchant for living up the proceeds. He kept a level head about the business, but like so many spies he wanted the instant gratifications that espionage afforded him. Among them: Scotch whisky, an expensive hairpiece and houseboating forays on the Drift-R-Cruise with his several lady friends. Bennett describes Walker's spying as really ''a form of white-collar crime. Same as insider trading. If you can get the information, you can pull it off, and if you're a salesman, you can extend it.'' As such a completely amoral operator, did Walker ever have any regrets, feel any remorse? ''He does,'' Bennett hesitantly suggests, ''only he can't articulate it. He drafted a statement the night before his sentencing, and it was good. But he couldn't say it in open court. He's afraid people will think he's lying. He won't even tell his probation officer.'' So he got life, which is the downside of his and so many other recent espionage escapades. The sole escape -- the classic last act in a successful espionage career -- would have been to flee to the enemy for honor and profit. But of the recent spies, only Edward Lee Howard, a turncoat CIA agent, is known to have successfully fled the country to Moscow, which he did in 1985 to the acute embarrassment of the FBI, whose agents had been staking out his house near Sante Fe. In fact, it is hard to imagine any member of the Walker spy ring running to the Russians. Walker himself was regarded by his friends as staunchly anti-Communist. This could have been an attempt to mislead, but more likely it was a twisted allegiance to the very society that had allowed him to become at least on paper (if he could ever have put anything down on paper) a millionaire. In fact, among all the recent spies, only Jonathan Pollard put into place arrangements to escape -- code word: Cactus -- should he find himself suddenly under suspicion. In the fall of 1985, Joseph ''Yossi'' Yagur, who was then his handler in Washington, showed Pollard an Israeli passport, with Pollard's photograph, in the name of Danny Cohen. ''Defendant,'' the indictment stated, ''understood that he would assume this name upon his eventual return to Israel.'' Yagur also gave Pollard signature cards for a Swiss bank account in Cohen's name. ''Yagur told defendant that thirty thousand dollars ($30,000) had already / been credited to the account, and a deposit in the sameamount would be made annually for the 10 years defendant had agreed to continue serving as a covert Israeli agent operating in the United States Navy.'' Pollard signed the bank cards so that, in addition to his monthly $2,500, he was accumulating overseas savings that made his total remuneration twice his and his wife's annual $29,000 annual take-home -- about right, as agent Baker points out, for locking in a spy. It also could have grown, at present interest rates, to more than $350,000 by the time Pollard was 41 and ready to retire as Danny Cohen. Unluckily for him, he was caught during only the first year of deposit. Thus ended the ultimate yuppie dream of espionage, right out of John Le Carre, via Woody Allen. Tinker, Tailor, Soldier, Schmuck. The Israeli government called the Pollard case a ''rogue operation,'' but it was more dangerously a fantasy operation, run by both amateur (Sella) and cynical (Eitan) handlers. They had the Pollards believing they could spy for fun and profit yet emerge as Israeli heroes, somehow with tacit U.S. understanding. This has caused much outrage and soul searching among American Jews over dual loyalty. As for the Pollards, it raises an even sharper question: Just how did the two of them really think -- financially, legally, morally -- the system worked? Before the court, the Pollards both pleaded their deep love for each other as if it were somehow a mitigating circumstance. ''He is everything in the world to me wrapped up into one,'' said his wife, and she had done, obviously, everything for him, including shred incriminating papers. Pollard confessed he had betrayed two trusts, but the trust of a wife was ''a little bit more ancient and perhaps a little bit more sacred'' than that of his country. She, if not he, should be spared. The judge gave her five years. Finally, the Pollards kept going public -- despite a court order not to do so -- with pleas for sympathy. Pollard even told the Jerusalem Post that he was like an Israeli pilot shot down behind enemy lines and left to languish. Anne Pollard went on 60 Minutes the Sunday before her March 1987 sentencing. When she was asked about the money by interviewer Mike Wallace, she said, disingenuously: ''Well, I personally didn't get any money from the Israelis.'' Every spy, it is often argued, is a sociopath. ''They lack all loyalty and all guilt,'' says former FBI agent Conrad Hassel. ''They enjoy living on the < edges and practically need the excitement, the constant danger and the adventure in order to carry on their lives.'' It sounds like a description of inside traders, or even Gary Hart. It is as if the money -- whether a pittance or a fortune -- is only the means by which a spy keeps the excitement alive. For most of those caught during the extended Year of the Spy, that excitement has altogether run out, along with the money. But Jonathan Pollard, the government claims, could still be an asset. He has said he wants to live in Israel, after prison -- the fighter pilot finally exfiltrated to his homeland. ''Defendant's ability to relate the classified information he has obtained during his U.S. Naval employment remains undiminished after a year of incarceration,'' observed the prosecutor. Pollard was still leaking knowledgeably to journalists about U.S. intelligence only a week before his sentencing. He remains potentially exploitable, in every worst way, economically viable, still creditworthy. Judge Robinson put him away for life. Somewhere, within such a span of days, lies the only true terminus -- and end of value -- to such a spy's career. In all likelihood, Pollard will stay there until he is, quite literally, history.

CHART: TEXT NOT AVAILABLE CREDIT: NO CREDIT CAPTION: The dollars and nonsense of spying DESCRIPTION: Compensation and fate of famous spies from A.D. 33 to the present.