Court Orders New Spy Trial for FBI Agent

Richard W. Miller, the bumbling FBI agent whose love affair with a Russian spy landed him in federal prison for two life terms, was granted a new trial Tuesday by a federal appeals court that ruled that jurors were allowed to hear too much testimony about his lie detector tests.

Reversing the conviction of the first FBI agent ever accused of espionage, the U.S. 9th Circuit Court of Appeals held that jurors had been exposed to “overwhelming potential prejudice” when told repeatedly that Miller had failed polygraph questions about whether he passed U.S. secrets to the Soviet Union.

Miller, 51, was convicted by a Los Angeles federal jury in June, 1986, for passing FBI secrets to the Soviet KGB during an adulterous affair with Soviet emigre Svetlana Ogorodnikova. The portly agent, Ogorodnikova and her husband all are serving federal prison sentences.

Setback for Government

The three-judge panel’s unanimous ruling was a stinging setback for the government and U.S. District Judge David V. Kenyon, who presided over the Miller case. It constituted the first reversal of a major espionage conviction in a series of more than five dozen prosecutions since World War II.

Federal prosecutors have already tried the 20-year veteran agent twice on the charges. The first trial, which spanned three months during 1985, ended in a mistrial when jurors deadlocked after three weeks of deliberations. The second trial ran four months. Miller has already served 4 1/2 years of a sentence of two life terms plus 50 years.

Prosecutors are likely to seek a rehearing before a full, 11-member en banc panel of the court and could also appeal the reversal to the Supreme Court--a process that could take another 18 months. Defense lawyers said they will move “very shortly” to have Miller released on bail pending any new trial.

But privately, many of those closest to the case wondered whether the government would ever take the lengthy, complex and emotional case--a major drain on both the U.S. attorney’s office and the FBI bureau in Los Angeles for several years--to a jury again.

U.S. Atty. Robert C. Bonner personally spent seven months in court prosecuting Miller, the only case he has ever personally tried as the region’s chief federal prosecutor. Now, Bonner has been nominated to a federal judgeship and will soon be leaving the office.

His co-prosecutor, Assistant U.S. Atty. Russell Hayman, is in the midst of a major, billion-dollar money-laundering case and has told some associates that he would consider leaving the office rather than prosecute Miller again.

The FBI chief who headed the Los Angeles office during Miller’s tenure on the Soviet counterintelligence squad has retired. One FBI source told The Times that there is some sentiment within the bureau against tying up staff during another lengthy trial.

Sources close to the case said it is likely the reversal will spawn a new round of plea negotiations, under which Miller might agree to plead guilty to some petty bribery and embezzlement charges in exchange for a reduced prison term.

Serious Charges

On the other hand, some sources said Tuesday that they doubt that the government could accept such a plea bargain because of the far more serious nature of the original charges against Miller and his position as a former FBI agent accused of betraying his country.

“We are reviewing the opinion and will be considering a variety of options,” including an appeal, Bonner said in a prepared statement. “We will in all probability make a decision within the next several weeks. Ultimately, if necessary, we intend to retry the case.”

Miller’s lawyers, Joel Levine and Stanley I. Greenberg, said they could not discuss the opinion until they had read it. Both were jubilant about the outcome.

“I’m very happy, and a little frustrated that we’ve had to wait this long with a client in custody to receive a fair trial,” Levine said.

Added Greenberg: “The fact that Miller’s conviction was reversed should come as absolutely no surprise to any fair and impartial observer of the Miller proceedings. The prosecution brought to the proceedings an end-justifies-the-means mentality that I have never witnessed in over 20 years of practicing law.”

Miller’s lawyers were not optimistic, however, about the chances of a plea bargain that might eliminate the need for a third trial. Levine said he expects all parties involved will end up fighting the case again in U.S. District Court.

“Why not?” Levine asked. “If you don’t get it right the first two or three times, you do it again. I’d like to think not, but I’m afraid that will be the case. I’m sure a settlement needs to be explored, but I’m not sure to what degree either side can really negotiate. I don’t think there is that much of a middle ground that we could agree on.”

Miller, according to his lawyers, had expected the reversal and took the news calmly when told about it by telephone at a small federal prison for white-collar offenders in Minnesota, where he has been confined for most of his prison term.

“I think he was prepared for this,” Levine said. “He was happy about it, but not wildly. He’s an understated guy. He sort of takes convictions, reversals, anything that happens to him the same way.”

Miller, an excommunicated Mormon and father of eight who was constantly in trouble as an agent, claimed his relations with Ogorodnikova and her husband, Nikolai, were an attempt to become a secret double agent, penetrate a KGB spy ring, come back to his superiors with the news in what he called “a blaze of glory” and rescue his failing FBI career.

But the government claimed the 250-pound agent believed he was about to be fired for obesity and agreed to pass a confidential U.S. intelligence assessment to Ogorodnikova in exchange for sex, $65,000 in gold and cash and a $675 Burberry trench coat.

Miller met the tempestuous emigre Ogorodnikova in 1984 when she contacted the FBI and claimed to have valuable information. Almost immediately, they became lovers. Shortly after returning from a trip to the Soviet Union, Ogorodnikova asked Miller to provide her with classified documents. He, in turn, asked her for $15,000 in cash and $50,000 in gold--contending later that he solicited the money only to “play along.”

Both Ogorodnikova and her husband eventually pleaded guilty to espionage charges. She was sentenced to 18 years in prison after admitting as part of a sealed court record that Miller had indeed passed her a confidential intelligence document. But in dramatic testimony at Miller’s trial, Ogorodnikova proclaimed Miller “is not a traitor of his country” and denied getting any documents from her former lover.

The reversal, written by Judge Dorothy W. Nelson of Los Angeles, was not wholly unexpected; at a hearing last July, the judges had asked extraordinarily pointed questions about the polygraph evidence. Any other result would have required two of the 9th Circuit’s most liberal judges--Nelson and Judge Stephen Reinhardt of Los Angeles--to create new law broadening the government’s ability to use polygraph evidence in criminal cases. Judge Diarmuid F. O’Scannlain of Portland, Ore., a Reagan appointee, joined in the opinion.

The key issue was evidence prosecutors presented that Miller, during five days of intense interrogation by his FBI superiors, had failed several polygraph tests. After he was informed of the results and demanded to speak with another polygraph examiner, Miller made several damaging admissions.

Prosecutors did not attempt to introduce the polygraph tests until Miller’s lawyers challenged the reliability of his admissions, contending they were the products of a distraught, tired man who had been pressured by his interrogators. At that point, government lawyers argued, it was necessary to introduce the lie detector tests to show the sequence of events in which Miller ultimately made the admissions.

Miller’s “most damaging admissions were made after he had been informed that he had failed the polygraph tests,” Hayman argued in his appeal brief. “That fact is powerful evidence that these admissions were made in response to his failure of the polygraph test, rather than due to any overbearing of his will by his interviewers.”

But during the trial, the appeals court noted, Judge Kenyon allowed agents to testify in detail about the full battery of questions and answers recorded in the lie detector tests--not just the fact that Miller had failed them. And this, they found, was a crucial overstep.

Noting that polygraph tests are rarely admissible in federal cases, the court concluded: “Compared to the overwhelming potential prejudice, the marginal probative value of this additional detailed testimony was slight indeed.” It is “more likely than not,” the panel said, that the jury’s verdict was affected by the polygraph evidence despite the judge’s instruction cautioning jurors about the unreliability of polygraph results.

The court also sided with the defense’s complaints about the testimony of John Barron, an expert in KGB recruitment tactics who testified that the Soviets typically target people who are socially isolated, frustrated in their careers, dishonest or sexually promiscuous. The defense had argued that Barron’s testimony, offered as general description of KGB tactics, instead was tailored to fit the Miller case.

The court held that the government “clearly invited” jurors to use Barron’s testimony as character evidence unfairly prejudicial to Miller.

The court also rejected the admission of evidence showing previous dishonesty by Miller, specifically testimony that Miller had in 1982 secretly sold Department of Motor Vehicles driver’s license information to a private investigator. Government lawyers argued that the past arrangement made it more probable that he had a criminal intent in soliciting money from the Soviets.

‘Wholly Dissimilar’

But the appellate judges said that while the evidence might be relevant to a separate series of bribery counts, the intent involved in selling secrets to a foreign government is “wholly dissimilar” from the intent involved in selling driver’s license information.

On at least nine other points challenged by the defense, the appeals court upheld Kenyon’s rulings.

Soon after Miller’s arrest in 1984, Kenyon had agreed to sever eight bribery and embezzlement counts against the ex-agent from the espionage case. Those charges, including claims that Miller took money for selling FBI information and that he embezzled funds from a partly blind FBI informant, can be reinstated and used in negotiating any possible plea bargain.

The FBI had no official response to the reversal. Richard T. Bretzing, the former special agent in charge of the Los Angeles office during much of Miller’s tenure, said only that he was “surprised” by the reversal.

“I don’t know that there’s anything to say,” he said. “Obviously the Court of Appeals has made its ruling. . . . I don’t think I would say I was disappointed. The wheels of justice have turned.”

Times staff writer Ronald L. Soble contributed to this report.