AHungarian intelligence officer, Capt. Zoltan Szabo was convicted in 1989 of espionage in Austria, but was released in return for his evidence against his agent Clyde Conrad, who was sentenced to life imprisonment in West Germany in June 1990; nearly eight years later, in January 1998, he died in prison of heart failure. According to the damage assessment, based on the largest espionage investigation ever conducted in peacetime by the U.S. Army, Conrad had compromised the entire NATO war strategy for Europe; the report also suggested that several suspected members of his network, which may have included a dozen others, had escaped prosecution for lack of evidence. Szabo, who had fled to Budapest in 1988, negotiated immunity from prosecution by the United States and Germany in exchange for residency in Austria and his cooperation with American interrogators.
The wily Hungarian fulfilled his side of the bargain and gave a detailed account of his espionage, dating back to 1971, describing his recruitment of Conrad in 1975 and even admitting to having sold copies of Conrad’s documents to the Czech intelligence service. Szabo also implicated an Italian-born former U.S. Army paratrooper, Sgt. Tommaso Mortati, who was arrested in August 1988 at his home in Vicenza, where his American wife was working on the nearby NATO air base. According to Mortati’s confession, after he had emigrated to the United States and acquired citizenship, in 1981 he had been recruited by Szabo, who arranged for him to undergo two weeks of espionage training in Budapest. Mortati had left the Army in 1987 but had been paid a retainer of $500 a month by Hungarian intelligence, the AVH (Allami Vedelmi Hatosag), together with bonuses for additional information. A search of Mortati’s home revealed a hidden radio, which he used to transmit his reports. Mortati pleaded guilty to charges of espionage and was sentenced to life imprisonment in Germany.