Sarah Laskow | Topic | July 2017 | 14 minutes (3,700 words)

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Ronald Rewald and Richard Craig Smith did not appear to have much in common. The founder of an investment firm in Hawai’i, Rewald lived like a Master of the Universe, traveling the world in expensive cars, staying in expensive hotels and throwing expensive parties. Smith, by contrast, lived in Utah, with a wife and four children. A former case officer in intelligence with the United States Army, he had resigned from his job at the start of the 1980s to spend more time with his family. He sought to make a new life for himself as an entrepreneur;  when VHS tapes were still cutting-edge, he began a service to make video diaries and testimonials for families to pass down from one generation to the next.

What brought Rewald and Smith together was espionage. In the early 1980s, legal troubles tangled the two men in a similar narrative of spying and betrayal. First charged in August 1983 in state court with two counts of theft, Rewald was eventually indicted, a year later, on 100 counts of fraud, tax evasion, perjury and other federal crimes. In April 1984, Smith was accused of much more serious offenses—conspiracy, espionage, and transmission of secret material, charges that, were he convicted, could lead to a death sentence. The two men were represented the same lawyer, the bombastic Brent Carruth, and they had the same defense for their alleged crimes: The CIA made me them do it.

Rewald and Smith’s assertions sometimes seemed preposterous, as if lifted from a convoluted spy novel. The cartoonish stories they told involved fake names, fear of assassination, and envelopes full of cash. (They certainly seemed fictional to government prosecutors, who dismissed the tales as fabrications.) But in the Reagan era, as now, the news was full of undisclosed meetings and clandestine plots to swing elections. Americans were being inundated with reports about the secrets of the intelligence community: the Watergate revelations about the CIA’s domestic surveillance, the assassination attempts on foreign leaders, and the Iran-Contra scandal, for starters.

Suddenly, anything seemed possible.

On paper, the government’s success in Smith’s case was all but assured. Americans have little tolerance for disloyalty. There have been more than 110 Americans arrested on espionage charges since the 1950s and those who didn’t defect before they were sentenced to years, sometimes decades, in prison.

But though Rewald and Smith’s stories sounded wild, their juries weren’t entirely willing to trust the veracity of the government’s narrative, either. In the end, one of the two men would be sent to jail, the other set free. Read more…