Correct, "The Traitor and the Hero" to be precise. Great movie, probably my second favorite Bertolucci film (there were only three that I liked).
Just took my Borges off the shelf. (A very Borgesian statement coming from someone with my screen name!) they call it 'The Theme of the Traitor and the Hero'. I'll have to read it again since I don't recall it. Only 4 pages.