CHAPTER FIVE

The CIA, Roscoe Hillenkoetter, and the Cold War

Germany

ACCORDING TO EARLY MILITARY INTELLIGENCE and CIA official James Critchfield: “During those early years . . . the Army G-2, the director of naval intelligence, and . . . the director of central intelligence were all far too preoccupied with the [Washington] struggle over the restructuring of national intelligence to be involved with what was going on in intelligence . . . overseas.”1 In the words of the editorial director of Yale University Press:

 

[What we see in these early postwar years] is a picture of two systems in action. The American intelligence system at the end of World War II had few professional or administrative resources. It was largely an ad hoc affair—poorly funded, poorly staffed, and without a secure future. By contrast in 1945 the Soviet intelligence service was a highly professional bureaucracy with a history going back to the 1917 Revolution.²

 

Germany had been the primary enemy during the world war that had just ended, and now the shattered capital city of Berlin was the laboratory that many hoped would be a model for Four Power cooperation in future relations between the Western democracies and the Soviet Union.³ Although Germany had formally surrendered on May 8, 1945, the US Army Second Armored Division (“Hell on Wheels”) was not allowed to enter Berlin until July 4. As part of Operation TORCH in November 1942, the division had landed in North Africa, where the new OSS had helped prepare the way for the first American counterattack against the Nazis. Now the soldiers were accompanied by Allen Dulles, OSS chief for Germany. Three months earlier Dulles had reported from Bern, Switzerland, that die-hard fanatic Nazis were gathering in an Alpine redoubt in southeastern Bavaria near Hitler’s heavily guarded Berchtesgaden vacation compound. In fact, because the Germans most feared the advancing Soviets, determined to exact revenge for Nazi atrocities, the demoralized and broken German army and citizenry were no longer seriously resisting the Western allies. Colonel Critchfield, then a combat commander, considered “the totality of the German acceptance of defeat and unconditional surrender . . . quite remarkable.”4 The whole country was in chaos, with no civil order or transport, no utilities like electricity or heat, and no means of distributing food. The Western armies were equally unprepared to feed, house, or even control the population—or the six million displaced persons fleeing westward, or the hordes of former inmates of German concentration or prisoner-of-war camps. So many men were either dead or captured that Europe was literally a continent of women and orphans, with fifty-three thousand lost children in Berlin alone.⁵ Many Russian prisoners of war or Red Army defectors did not want to return to Soviet control, adding to the pressure on US Army resources. Indeed, the best-organized relief effort was created by Jewish groups working to transport Jewish concentration camp survivors to Palestine.

Having liberated horrifying camps like Dachau near Munich and Mauthausen near Salzburg, most US troops were sympathetic to these Jewish efforts, despite British Army attempts to block the movement of survivors to their British Arab protectorate.⁶

US Army counterintelligence troops, soon augmented by former OSS members of the Strategic Services Unit (SSU), initially concentrated on denazification, finding and detaining former senior German military and civilian officials. President Truman had left Potsdam with the understanding that the United States was now the leader of a group of gravely weakened European allies, but he and Supreme Allied Commander General Dwight Eisenhower initially thought they could work directly with their Soviet counterparts. They didn’t understand how firmly Stalin and the Communist Party controlled every aspect of state, including the Red Army. In an effort to be conciliatory, in fact, Eisenhower’s deputy military governor for Germany, Lieutenant General Lucius Clay, made an agreement to return Red Army defectors—an action his intelligence subordinates would sometimes ignore as it became evident that the Soviets intended to loot any surviving German factories, abduct German scientists, and subvert non-communist political parties. The United States was rapidly demobilizing, having discharged a million and a half troops every month and cut the defense budget by 80 percent.⁷ By the end of 1945 the SSU was cut to two thousand, and Allen Dulles returned to his New York law practice, to be replaced by another future DCI, Richard Helms.⁸

In Critchfield’s view, “Stalin did not believe the United States was prepared to install itself as a long-term significant power in Europe.”9 Considering that the Soviets had lost some twenty-seven million in the war, compared to America’s three hundred thousand, he also believed that the Soviet Union had earned the right to the lion’s share of the spoils of victory.¹⁰

Stalin proved wrong about America’s intent and quickly Army Intelligence expanded from chasing Nazis to watching the Soviets, especially their economic and political moves in their East German occupation zone. The Russians forced the East German democratic leftist Socialist Party to join the Red “Socialist Unity Party” and harassed the conservative Christian Democrats. Robert Murphy, who had served with attaché Commander Roscoe Hillenkoetter in Paris in 1940, was now American ambassador in Berlin and read the political reports from the army’s Berlin Operations Base (BOB) with great interest.11

Of even greater interest were Soviet efforts to develop an atomic bomb using uranium from East German and Czech mines, captured German scientists, and forced labor. Almost from the creation of the American nuclear weapons program on the day before the Japanese attack on Pearl Harbor, senior US military leaders worried that Germany, famous for its brilliant scientists and engineers, might be ahead in the race for an atomic weapon.¹² Vannevar Bush—Roosevelt’s, and later Truman’s, chief scientific adviser—admitted to having no idea of German activities. Army Chief of Staff Marshall and Manhattan Project chief Brigadier General Leslie Groves both felt that the military intelligence agencies and the OSS would not understand the importance of the information being sought, and Groves was dismayed that “there was considerably more friction between the various intelligence agencies [OSS, army G-2, and ONI] than . . . previously suspected.”13 Groves thus took personal control of American intelligence efforts targeted at Germany, although he did enlist Donovan’s OSS, especially Allen Dulles in Bern, to locate specific German specialists and report on Allied bomb damage to facilities and research institutes. Once Allied forces landed in Europe, teams of scientists and intelligence officers accompanied the army to collect nuclear material, documents, or personnel. By December 1944 it was clear that there was no risk of a German bomb, but the United States and Great Britain were determined that France not acquire German secrets and so shipped uranium, heavy water, and even Werner Heisenberg, the leader of German nuclear research, to England. As intelligence scholar Jeffrey Richelson has noted, the effort against Germany was a “practice run” for the “far lengthier, more extensive, and more sophisticated” anti-Soviet program.¹⁴

Stalin appointed his notorious and feared security and intelligence chief Lavrenty Beria to head the atomic program, telling him to “build the bomb quickly and not count the cost.”¹⁵ Thanks to spies within the Manhattan Project, the Russians had the road map; they just needed machinery, raw materials, and experts. Informed by defectors interrogated by the army and its British allies, Western services were able to keep track of East German factories and block Western suppliers from selling critical materials to the Soviets. The United States also undertook Operation PAPERCLIP to identify German technical experts and bring them to the United States. Among these experts was Wernher von Braun, who had worked on the German V-2 ballistic missile program and was in many ways one of the fathers of the American space program.¹⁶

The greatest and most controversial American advantage—in what Critchfield called “the largest, most concentrated and intense intelligence war in history”—was the Gehlen Organization, often simply called “the Org.” Beginning in 1943, with the expectation that Germany would be defeated and the great future struggle would be between the Soviet Union and the victorious Western powers, German Army Major General Reinhard Gehlen assembled the intelligence files and experts from his Foreign Armies East (or Fremde Heere Ost) with the intention of volunteering this “only comprehensive information on Soviet military power held anywhere by anyone in the entire world” to the United States. Gehlen thought he had one of the few assets that Germany could offer the United States for the coming global struggle, and he was right.¹⁷ Without informing either the OSS or army counterintelligence, Eisenhower’s chief of intelligence, Brigadier General Edwin L. Sibert, created Operation RUSTY to use Gehlen’s experience and expertise to gather as much intelligence as possible on the Soviet army, its organization, and its operations.18 As one Army Intelligence officer remembered, “[We were] CIA, FBI, and military security all in one because those agencies weren’t functioning in Germany at the time . . . we were achieving a minor miracle every day in getting as much information as we did.”¹⁹ To fund the Org’s activities and pay its people, the army allowed it to sell scarce American goods, such as cigarettes, coffee, and chocolate on the black market.²⁰ The collection effort against the Soviet military was called GRAIL, and as David Murphy, later chief of the CIA’s Berlin Base and then its Soviet Division, said, “Sibert plunged into this enormous mission with remarkable energy and determination.” Some two hundred fifty spies worked on the effort, but because of poor Western security and very effective Soviet counterintelligence, most were caught and sent to Soviet Gulag labor camps before being freed in 1955, when the Soviets finally returned all German prisoners of war.²¹ Indeed, the Americans were facing a ruthless and experienced adversary, and army efforts to recruit Germans or Soviet officers were frustrated by such techniques as “Pavlovsky’s Trap,” in which Red intelligence officers would pretend to be Americans to catch any Russians tempted to betray the paranoid Soviets.²² Berlin was still a battleground, with 337 people kidnapped in June 1946, some 245 in the Soviet zone alone; many simply disappeared without a trace.²³

The difficulties faced by the inexperienced and outnumbered American intelligence officers in Berlin were remarkable. Once Hoyt Vandenberg became DCI, field officers moved from the temporary army Strategic Services Unit into the new Central Intelligence Group, and then, under Hillenkoetter in 1947, into the CIA. In April 1948 the CIA Chief of Station Germany sent a lengthy message to Washington detailing the activities of Berlin Operations Base from January 1946 until just before the Berlin Blockade. In the face of fairly strong hostility from General Clay—and with an average of only forty officers, clerks, and support personnel—Berlin Base initially produced some five thousand intelligence reports a year, with more than five hundred alone produced in August 1947. Increased emphasis on quality, and a new focus on strategic reporting, dropped the numbers to a still-impressive two hundred reports a month thereafter. The rate of reporting also dropped because of devastating agent losses caused by haste, bad security practices, and tough Russian counterintelligence efficiency. It was extremely difficult to keep operations going in a ruined city. Among the most urgent requirements were housing for staff and agents and reliable transportation for field collection officers. The Base Chief described his motor pool as “unquestionably the aspect . . . in which I’ve been forced to take the closest personal interest.” It was almost impossible for the base’s German mechanics to keep their old, broken-down American and German “struggle buggys” running, until finally, in the spring of 1947, the British gave the base thirty new “bumble bee” Volkswagen Beetles from the VW factory in the British zone of West Germany.24

Still, the army was able to publish a weekly Soviet Military Roundup on the Red Army in Germany and the Central Intelligence Group and CIA were also producing increasingly sophisticated reports. As the US Army continued to withdraw, by February 1947, just before Hillenkoetter replaced Vandenberg as DCI, the Soviet army had a half million men in East Germany, compared to some one hundred fifty thousand American soldiers in West Germany. Neither the army nor the new CIA was completely comfortable with the Gehlen Org. In June 1947 Hillenkoetter recommended that the private intelligence agency be disbanded because of fears that Gehlen’s officers carried too much Nazi baggage and might become the core of a new German General Staff like the highly skilled professional officers who had served the World War I Kaiser and World War II Führer so efficiently and ruthlessly. Gehlen survived, and in December 1947 the Org, now code-named Nicholaus for the German Christmas saint, moved to a former Nazi compound in the village of Pullach, just south of Munich, under US Army cover. Gehlen, known professionally by the alias “Dr. Schneider,” continued to fund his activities with army black-market coffee and cigarettes.²⁵

Berlin Blockade and Airlift

In early 1948 the Soviets shocked the few remaining American optimists by brutally seizing control of Czechoslovakia, the second time in a decade that a small, picturesque Central European country had fallen under the control of foreign aggressors. The Jewish state of Israel declared its independence from the British protectorate of Palestine and was immediately recognized by the United States. And Stalin turned up the pressure on the Allied foothold in Berlin as subject East Germans grew more restive. Just before Christmas 1947, Hillenkoetter’s new CIA had warned policymakers that the Soviets might try to force the Western allies from Berlin, but the Russian intelligence service was too afraid to contradict Stalin’s view that the Allies would withdraw under pressure.²⁶ In early March, military governor General Clay, whom US Army Chief of Staff Bradley called one of the “brightest, most quietly forceful generals,” alarmed Washington by stating that “war may come with dramatic suddenness.”²⁷ He had sent this assessment without consulting his new CIA Berlin Base, which responded that it saw “no reliable evidence that the USSR intends to resort to military action within the next sixty days.”²⁸ Nonetheless, the Red Army increased its harassment of highways and rail traffic, and on April 6, 1948, a Soviet fighter collided with a British passenger aircraft, killing everybody aboard. A month later the KGB warned Stalin that General Clay was determined to hold West Berlin and would use fighters to escort American transport aircraft if necessary.29 The crisis could not have come at a worse time. Determined to help Republican New York governor Thomas Dewey defeat Truman in the 1948 presidential election, the Republican Congress cut taxes, and the army was reduced to a half-million troops “serving as policemen or clerks,” in the words of Army Chief of Staff General Bradley.³⁰

By now General Clay, who was responsible for all of West Germany, had determined that economic recovery was impossible without currency reform. On June 20, 1948, as the Marshall Plan for American redevelopment aid was being discussed, Clay established the West or D-Mark (deutsche Mark), which became one of the world’s strongest currencies until replaced fifty years later by the common Western European euro. Four days later the Soviets cut off electricity to West Berlin and closed all surface transit corridors between Berlin and West Germany. These actions angered East Germans, all of whom remembered how the Red Army had looted and raped its way into Berlin, and many of whom now volunteered to help the CIA. It also hurt East German industry, dependent upon West Berlin workers and western material. Without militarily challenging the surface blockade, General Clay ordered a massive airlift, which continued through the bitter German winter, bringing food, other supplies, and even coal to the surrounded city. As senior State Department officer George Kennan said, “The situation was dark and full of danger.”³¹ To everyone’s surprise, the depleted American and British air forces responded magnificently.

On Easter Sunday in 1949, some 1,349 American and British transport flights reached West Berlin in a single day. CIA Berlin Base morale during the blockade was “never higher,” with many wives of CIA officers working at the base, and they all felt that policymakers in Germany and Washington depended upon their reporting and analysis—which concluded that the Soviets would refrain from military action. On the Soviet side, KGB reporting was dangerously misleading about German and Allied resolve, encouraging Stalin to prolong the blockade. As a Soviet officer at KGB headquarters in Karlshorst in East Berlin concluded: “The blockade brought no benefit to the Soviet side, only damage. . . . It . . . arouse[d] the German population against us.”³² In General Bradley’s words: “We were very lucky in the Berlin Blockade . . . the airlift turned out to be our single greatest triumph of the Cold War.”³³

In fact, from Stalin’s perspective, the damage was much worse than simply further alienating Germans against the Soviets. A month before the end of the blockade, the Western Allies formed the North Atlantic Treaty Organization (NATO), which to this day unites Western military forces in defense of Europe and each other. In May 1949, the same month Stalin finally ended the blockade, a new constitution created the Federal Republic of Germany, with Bonn as its capital and West Berlin as its twelfth state. The United States and Great Britain agreed to combine their western occupation zones into a unified “Bizonia” and encouraged the re-arming of a West German federal military or Bundeswehr. Stalin of course saw this remilitarization as an offensive move by the West, aimed at the Soviet Union, rather than a defensive reaction to his own ill-advised policies.34

With the Berlin Airlift still underway, the chief of the CIA’s new Munich base, James Critchfield, was directed by DCI Hillenkoetter in October 1948 to investigate the Gehlen Org and recommend whether the private intelligence service should be liquidated or taken over from the US Army by the CIA. The Org was strongly contributing to the success of the Allied Airlift by providing DUSTBIN communications intelligence on Soviet air force activities to airlift commander General Curtis LeMay.³⁵ Unaware that Hillenkoetter opposed the Org, Critchfield saw the desirability of future German-American intelligence cooperation and recommended Gehlen’s activities continue. Accordingly, in July 1949 Critchfield was directed to assume CIA oversight, and seven years later, in February 1956, the Org became the German Federal Intelligence Service or Bundesnachrichtendienst (BND) of the Federal Republic.36 The US high commissioner for Germany, John McCloy, who succeeded Lucius Clay as American viceroy, was not told of the army’s association with the Org.³⁷ From the beginning, CIA and BND analysts worked closely and cooperatively on Soviet military issues, and this broad cooperation continued through the end of the Cold War and the re-unification of Germany in 1990.

Austria and the Rat Line

Although many Austrians welcomed the March 1938 Anschluβ or incorporation into Hitler’s German empire, the World War II Allies officially considered Austria to be Hitler’s first victim. That did not mean, however, that at the end of the war, Austria was not held complicit in Nazi actions. Like Germany, in 1945, the small Alpine country was divided into four zones, with the capital, Vienna, like Berlin, governed by the victorious Four Powers. As in Germany, the Soviets exacted steep reparations in their occupation zone, confiscated factories, and worked hard to incite and recruit local communist activists. Like Berlin, Vienna also proved to be an excellent vantage point for American and British intelligence agencies to gather information on Soviet economic and political activities, not only in Austria but in all of Eastern Europe, including the ongoing Soviet subjugation of Poland, Czechoslovakia, Hungary, and Romania. US Army intelligence in Austria developed an elaborate system to identify and interrogate Soviet military defectors, Eastern European refugees, including Eastern European democratic politicians, forced laborers, and displaced persons. Like the Japanese prisoners of war interrogated in the Pacific by officers of Hillenkoetter’s Pacific Fleet Intelligence Center, many Europeans had valuable insights and information about activities and conditions behind Stalin’s new Iron Curtain and were willing to share this intelligence with American officials. Immediately after the war, Critchfield had been the chief of military intelligence in Vienna, but his operations chief, Major James Milano, worked out of American military headquarters in Salzburg in western Austria, near American-occupied Bavaria. As in Germany, American interrogators hid promising sources in temporary housing while they were questioned, but once these people had given all possible intelligence on the Soviets, the question arose as to what to do with them. General Clay, with Eisenhower’s approval, had agreed to return all Soviets to the Red Army, but most volunteers obviously did not wish to be repatriated. To its credit, Army Intelligence felt a responsibility to these courageous men, who faced a life of slave labor or death were it discovered they had helped the Americans. In 1949, when both the Defense Department and the CIA were strengthened and given new authorities, the DCI was granted a maximum of one hundred visas a year to bring the most valuable secret agents into the United States. Most sources were by no means so valuable, and the US government did not want to assume permanent responsibility for them.38 A number of other countries, including some in Latin America, were, however, willing to accept certain selected refugees. Without informing the State Department, or even their senior commanders, Milano’s officers devised a system to forge new identities for them and smuggle these people into British-occupied Trieste in northeastern Italy, where a Croatian priest was willing to sell Latin American visas to “respectable Christians.” It would later develop that among those who took advantage of this “rat line” to escape Europe were notorious German war criminals, but many others were simply informants seeking peaceful new lives.³⁹ Others passing through Vienna and Trieste were Jewish survivors of German death camps trying to reach Palestine. As Milano said, “The US military deliberately turned a blind eye”⁴⁰ to the flow of Jews and weapons to Zionist groups in Palestine, and in 1948 President Harry Truman was the first world leader to recognize the new Jewish state of Israel.

The CIA and Wars by Other Means

The Soviet takeover of Eastern Europe and the Berlin Blockade focused Washington’s attention on events playing out on the “savage continent,” but many battles were also being fought within the US government. In the spring of 1948, testifying in a secret hearing before the Senate and House Appropriations Committees, DCI Hillenkoetter told the members: “We thought . . . we would have time to develop this mature [CIA] over a period of years. . . . Unfortunately, the international situation has not allowed us the breathing space . . . we find ourselves in operations up to our neck.”⁴¹ He asked for authority to spend secret funds outside normal congressional oversight, and the Senate unanimously agreed, with only four House members voting against such spending. As Hillenkoetter’s sole congressional liaison officer, Walter Pforzheimer, later remembered: “There were very loose reins on us . . . because the Congress believed in us and what we were doing. It wasn’t that we were trying to hide anything. Our main problem was, we couldn’t get them to sit still and listen.”⁴² A few months earlier, speaking of the bitter civil war in Greece, Massachusetts Republican senator Henry Cabot Lodge had said:

 

I sometimes think we get a little bit too sensitive about interfering in the internal affairs of other countries. . . . The Russians . . . have gone about as far as they can go in what they say . . . and whether we interfere or [not], they are going to accuse us of the most dreadful things. . . . We are in it up to our neck, and almost everybody . . . will be damned glad to see us interfere.

Democratic Senator Walter George of Georgia agreed: “Of course . . . I agree with you. We are going to have to run the whole show.”43

 

While Congress might have been willing to pay the CIA’s relatively modest budgets of $40 to $50 million in 1948 and 1949, even the Berlin Blockade did not keep them from making draconian cuts to the defense budget.⁴⁴ As General Bradley described the situation, with no money or troops, military planners were forced to rely on using the US nuclear and long-range bomber monopoly for a strategy of “massive retaliation” against the Soviets. This pleased the new United States Air Force, which was eager to have Congress buy it expensive new bombers, but it led the airmen to question the value of the navy’s aircraft carriers and of the marines, since the Russians as a continental power had no significant navy and no islands to invade. In General Bradley’s words, “An unseemly semi-public Air Force-Navy brawl ensued.”⁴⁵ Following Truman’s shocking victory over the confident Dewey in November 1948, Dean Acheson replaced General Marshall as secretary of state and James Forrestal was replaced as secretary of defense by Truman’s incompetent political friend and fund-raiser Louis Johnson, who promptly canceled the plans to construct the navy’s new supercarrier.

Bradley, as army chief of staff, was joined on the JCS by Hoyt Vandenberg of the air force and Admiral Louis Denfield as chief of naval operations. Bradley called Johnson “probably the worst appointment Truman made during his presidency” and considered both him and Forrestal mentally ill.⁴⁶ Three months after the Berlin Blockade finally ended in May 1949, General Bradley was made chairman of the JCS, and what had been the simmering rivalry between the air force and navy over scarce funds exploded into what Bradley called an “utterly disgraceful . . . completely dishonest” admirals’ revolt and smear campaign against the air force’s new A-bomb–carrying long-range strategic B-36 bomber. Bradley was outraged by the “crybaby” attitude of naval aviators and marines who wanted to protect their aircraft carriers and, in public testimony on Capitol Hill, called the admirals “fancy Dans” unwilling to be team players.⁴⁷ With the military so weak that its commanders thought they could only defeat the huge Red Chinese and Soviet armies with nuclear weapons, the only other choice seemed to be diplomacy. But American leaders doubted Stalin would honor any treaties or agreements he might make. Still, in his Truman Doctrine, the president had promised that the United States “would support free peoples.”⁴⁸

At that moment, therefore, senior Washington officials seemed to agree that it would be better to fight communist aggression and subversion with the kind of shadow warriors that the wartime OSS and British Special Operations Executive had deployed just a few years earlier, rather than the massive numbers of increasingly costly new weapons that the military wanted. But since even “Wild Bill” Donovan had agreed that special covert operations were inappropriate for a peacetime national intelligence organization, and since most of the trained and experienced covert operators had been dismissed when Truman abolished the OSS, who in the US government would now direct, manage, and deploy these “agents of influence”?

Interestingly enough, the government agency most eager to do so was the Department of State, and the man arguing most strongly for covert action was Milwaukee-born George Kennan. His “Long Telegram” from Moscow in February 1946 described a Soviet “elaborate and far-flung operation for exertion of . . . influence in other countries . . . managed by people whose experience and skill in underground methods are . . . without parallel in history.”49 General Marshall was deeply impressed and, once he became secretary of state in 1947, appointed Kennan his chief of policy planning—in effect, head of his internal think tank. Kennan saw the need for an equally aggressive, skillfully managed American effort but had an “unconcealed low opinion” of DCI Hillenkoetter and what he saw as “ineffectual, limited CIA operations.”⁵⁰ In the words of one scholar, “Many State Department leaders wanted to control the CIA but avoid blame if things went wrong.” The very first National Security Council Directive, in November 1947, was Truman’s first move to fulfill the Truman Doctrine promise to support free people, in this case non-Communist Italian political parties. Using $10 million in secret confiscated Nazi money, the CIA supported democratic Italian parties and unions, paid for newspapers and other “psychological warfare” propaganda, paid bribes, and helped defeat the Communists in national elections. According to distinguished intelligence scholar Christopher Andrew, Truman sent Hillenkoetter his personal congratulations after the Christian Democrats won the vote.⁵¹

The NSC continued to encourage this shadow warfare. In mid-December 1947, it agreed that because of “the vicious psychological efforts of the USSR . . . to discredit and defeat the aims and activities of the US . . . in the interests of world peace and US national security, [public US activities like diplomacy and the Marshall Plan] must be supplemented by [CIA] covert operations.”⁵² By the middle of 1948, Kennan’s Policy Planning Staff, “in an atmosphere of near panic” over the Berlin Blockade, recommended a new “covert political warfare operations directorate within the government [to conduct ‘covert operations.’]”53 In mid-June 1948, the National Security Council issued the famous NSCD 10/2, which essentially defined covert action (CA):

 

Specifically, such operations shall include any covert activities related to propaganda: preventive direct action including sabotage . . . demolition . . . subversion against hostile states, including assistance to underground resistance movements, guerrillas and refugee liberation groups, and support of indigenous anti-communist elements in threatened countries of the free world.

 

And most important, if those secret CA operations should be discovered, “The US government can plausibly [deny] any responsibility for them.”⁵⁴ Even General Donovan’s OSS, in the darkest days of World War II, did not have such an expansive worldwide charter. To carry out this NSC Directive, since neither Secretary Marshall nor Secretary Forrestal wanted CA in their departments, a compromise was reached with a reluctant DCI Hillenkoetter, under which the CIA would provide “quarters and rations” or office space, funding, and staff, while Kennan’s Policy Planning Staff would provide policy guidance.⁵⁵ Allen Dulles, who was advising Thomas Dewey in his attacks on the Truman administration and expecting to become Dewey’s DCI, declined the job to lead this new office, so Kennan turned to another OSS veteran, the Mississippi-born son of a wealthy logging family, Frank Wisner.

A graduate of the University of Virginia, Wisner was intense, restless, and full of high moral purpose. As an OSS officer stationed briefly in Bucharest, Romania, during the war, he organized a daring operation to fly B-17 bombers into Bucharest to rescue seventeen hundred American aircrew prisoners of war on August 29, 1944, as the German Army retreated before the oncoming Red Army. His hatred of the Soviets arose from watching the Red Army deport minority ethnic German Volksdeutsche, many of whom had lived in Transylvania for generations, to Russian labor camps, something he called the “most profound influence of his life.”⁵⁶ According to OSS sergeant Arthur Schlesinger Jr., later a famous historian and presidential adviser, “He was already mobilizing for the Cold War. . . . [Frank] was a little excessive, even for me.”⁵⁷ By 1946 he was again at a New York law firm, where he and his friend Allen Dulles “were pining to get back. . . . They were like fighter pilots. . . . They were both great romantics and saw themselves as the saviors of the world.”⁵⁸ Initially, Wisner was brought back to the State Department by Acheson to work with the seven hundred thousand Eastern European refugees then in Germany, many of whom had fought with the Nazis against the Red Army as it overran their countries. These hardened soldiers were seen as a potential secret army that could be sent back behind the Iron Curtain, just as OSS teams had penetrated European countries occupied by the Nazis. The Italian election experience had shown that émigré political groups, labor unions, and noncommunist leftist parties could be mobilized on behalf of the West. As OSS veteran and future CIA director William Colby remembered, Wisner and his colleagues worked in “the atmosphere of an order of Knights Templar, to save Western freedom from Communist darkness.”59 As Wisner himself said, “It is possible to avert a third world war by drastic actions of an affirmative character short of war.”⁶⁰

Wisner told Richard Bissell, a Yale economist then working on the Marshall Plan but later an innovative CIA senior officer, that his new, innocently named CIA Office of Policy Coordination (OPC) was being funded, with President Truman’s approval, with foreign contributions to Marshall Fund monies.⁶¹ Once the Berlin Blockade began, the Defense Department urged Wisner to recruit “stay behind” sabotage teams to remain in areas overrun by the Soviets and be prepared to act should the Red army attack Western Europe. OPC, with US Army cooperation, buried radios, weapons, explosives, and gold coins to be used in emergency by these teams; as late as the 1990s, such caches were occasionally uncovered in Austria and Germany. Wisner hired flamboyant State Department veteran Carmel Offie, Hillenkoetter’s old 1940 Paris Embassy colleague, to recruit suitable fighters from among the refugees. Some were Nazis, and in the words of an early CIA officer: “We knew what we were doing. It was a visceral business of using any bastard as long as he was anti-communist.”⁶² Beyond the stay-behinds, OPC trained five thousand “post-nuclear guerrilla forces” and teams to be parachuted into occupied countries like Ukraine and the Baltic republics, where anti-Soviet armed bands were still hiding in thick forests.⁶³ In April 1949 Wisner and the British Intelligence Service decided to conduct a “clinical test” on the possibility of “rolling back” Communist control of Albania. The British Secret Intelligence Service (SIS) officer in Washington working with Wisner was Harold “Kim” Philby, who had, along with a number of his fellow Cambridge University students, been recruited by the KGB in the 1930s. The Albanians, forewarned, were waiting to ambush the OPC teams. The same fate awaited teams in other countries, and ruthless Soviet internal security proved impossible to penetrate. The Russians also kidnapped or assassinated resistance leaders living in the West.⁶⁴ DCI Hillenkoetter was not alone among CIA officers in his unhappiness with Wisner and the OPC, which had been walled off as a separate organization from the classic espionage and collection function of CIA’s Office of Special Operations(OSO). As an OSO Berlin Base officer recalled: “The OPCers had that missionary zeal in their eyes. We distrusted missionary zeal.”65

The CIA also distrusted the émigrés and refugees so enthusiastically recruited by Carmel Offie. In a memo to NSC Executive Director Sidney Souers, on April 19, 1948—entitled “Utilization of the Mass of Soviet Refugees”—Hillenkoetter warned Souers that the CIA had learned quite a lot about the refugees themselves while interrogating and debriefing them for intelligence on the Red Army and conditions in Eastern Europe. What the CIA had learned were the same painful lessons learned repeatedly by the OSS in trying to navigate the rival factions and local animosities to rally resistance to the Japanese in China and the Germans in Europe during World War II:

 

These groups are highly unstable and undependable, split by personal rivalries and ideological differences, and primarily concerned with developing a secure position for themselves. . . . They . . . are rarely able to tap useful sources of information within the USSR, and generally concentrate on producing highly biased propaganda materials in place of objective intelligence. . . . They are almost exclusively interested in obtaining maximum support (usually from the U.S.) for their own . . . activities and insist upon the provision of substantial financial, communications, propaganda . . . and personal assistance in return for vague and unrealistic promises of future service.⁶⁶

 

By bragging about US support, the refugees immediately attracted Russian attention and penetration by Soviet counterintelligence. Hillenkoetter acknowledged that some émigrés might be useful in wartime but recommended great caution in their use.⁶⁷ Wisner and his Knights Templar were not, however, cautious men.

Hillenkoetter’s warnings proved equally prescient in the Far East, where General Stillwell and the OSS had been bitterly disappointed by Chiang Kai-shek’s Chinese Nationalists. Immediately after World War II, President Truman had asked General Marshall to try to resolve the conflict between Mao’s Red Army and the Nationalists, the latter of whom had, by 1949, been pushed off the mainland to the island of Taiwan. From its base in Taiwan, OPC bought Flying Tiger hero Claire Chennault’s Civil Air Transport and conspired with Chennault and Chiang to drop teams and supplies into China to destabilize the Communist regime. Ironically, the first CIA officer killed in action was not one of Wisner’s shadow warriors but a classic undercover intelligence collector: Douglas Mackiernan. Experienced as a meteorologist in China, and based there as a State Department consul, one of Mackiernan’s missions was to watch the Soviet nuclear program. Once the Communists seized control of the Chinese mainland, he tried to escape south through Tibet but was killed by Tibetan soldiers who had not yet learned that they were supposed to protect him.68 When the Korean War broke out a few months later, three hundred OPC officers trained and funded eighty-five hundred Nationalist guerrillas. They also dropped propaganda leaflets and broadcast anti-Mao radio messages. They even conducted some eighteen raids, trying to link up with the five hundred thousand anti-Mao fighters that Chiang claimed were on the mainland. These raids were as unsuccessful as the anti-Mao fighters were imaginary.⁶⁹

Despite repeated disappointment, Congress continued to support Covert Action. As a British critic of the program observed, “There was little public inclination to question the wisdom or the ethics of the means by which government officials conducted the Cold War.”⁷⁰ Former congressional staffer and senior CIA official Britt Snider agreed: “[Congress] had set up the CIA to work secretly against the spread of communism, and they were not about to let a [chaotic] Congress interfere with that mission.”⁷¹ As CIA legislative counsel Walter Pforzheimer said, most members did not want to know details. They deferred to a small group of powerful senior chairmen, and there was remarkable bipartisan consensus and support for the agency. In 1949 OPC had 302 staff and 7 overseas posts, but by 1952, in the midst of the Korean War, it had 2,812 headquarters staff plus 3,142 overseas contractors in 47 posts. From an overall budget of $50 million in fiscal year 1949, Truman’s last CIA budget request for fiscal year 1953 was $587 million. In 1952 the OPC budget alone was $82 million.⁷² While the CIA budget was hidden in the larger budgets of the Defense and State Departments, Congress referred to Covert Action as “cold war activities” in its budget documents.⁷³

Give ’Em Hell, Hilly

Walter Trohan, the outspoken conservative reporter for the anti-Truman Chicago Tribune—which had printed his 1945 stories accusing Donovan of trying to turn the OSS into a postwar “super Gestapo agency,”⁷⁴—later said of Truman: “[He] wasn’t a great guy for deceit . . . it was part of his code to defend everybody in his organization.”⁷⁵ Truman was famous for his loyalty and direct plain speaking, but also for reacting with anger to criticism of his family, friends, and government colleagues. One of his campaign aides recalled that during the president’s marathon whistle-stop train tour in the bitter and hard-fought 1948 national election against Republican Thomas Dewey, people in the crowds assembled to hear him speak from the rear platform of the train would shout “Give ’em hell, Harry.” Truman would reply, “I’m not going to give ’em hell but just tell . . . the truth.” Writing in 1960, he elaborated: “I have never deliberately given anybody hell. I just tell the truth on the opposition—and they think its hell.”76

As a good naval officer, Roscoe Hillenkoetter shared many of those same impulses: loyalty to his “troops,” straightforward truth-telling, and taking responsibility for his actions as well as his “crew.” For him, as much as for Truman, “the buck stopped here.” At Pearl Harbor, his after-action report gave full credit to the heroic individual initiative of his junior officers in saving West Virginia from capsizing as it settled to the harbor bottom. Oklahoma, moored next to West Virginia in Battleship Row, was not so fortunate and rolled over as she sank with much greater loss of life. He did not try to exaggerate his own role to gain any commendation beyond the Purple Heart awarded to him. Five years later, in January 1946, now in command of the celebrated Missouri, Captain Hillenkoetter returned to his hometown of Saint Louis leading a delegation of sailors, including another Missouri-born African American mess steward like the famous Dorie Miller (who had won a Navy Cross for his heroic defense of West Virginia at Pearl Harbor).

The Saint Louis Jewish Council of B’nai B’rith hosted a party for the sailors at one of the most elegant hotels in town, but hotel management tried to exclude the black sailor. Hillenkoetter announced: “He’s a member of the crew. . . . If he doesn’t come, we don’t come.”77 And all the sailors went to the party with their captain.

Hillenkoetter, who was apparently happiest on the bridge of a warship or serving as a military attaché, brought the same sense of duty, commitment, good humor, and righteous anger to the position of DCI that he had brought to the assignment as chief of Admiral Nimitz’s Intelligence Center, Pacific Ocean Area (ICPOA) five years earlier. And in both cases he faced similar intractable challenges. At Pearl Harbor he was up to his neck in war, and at the CIA he was up to his neck in espionage operations in the Cold War. In each case he fought against a fearsome foreign enemy without any time to catch his breath; gather a well-trained, experienced, and competent staff; or develop a clear strategy for his ramshackle organization or the war it was facing. And in neither case were all the enemies on the other side of the ocean. At Pearl Harbor Hillenkoetter replaced brilliant Commander Joseph Rochefort, brought down by jealous fellow navy officers, and in Washington he replaced a wealthy senior businessman and a glamorous and well-connected air force general—both of whom couldn’t wait to leave the job he was taking over from them. Souers was a smooth facilitator with a sharp tongue who wished to leave government, and Vandenberg an impatient young man with his eye on a completely different fledgling organization he hoped to shape. Upon his appointment as director, Hillenkoetter received a handwritten note of congratulations from one of his ICPOA workers, reminding him of their time together in the months after Pearl Harbor at “that mistrusted stepchild of the Pacific.” The director responded, “It would have been more exact if you had sent condolences. However, we shall try to make the thing work.” Three days later, Souers sent the new director a warm letter expressing confidence that he would “do a swell job in a very difficult situation.”⁷⁸

Hillenkoetter thus clearly recognized that he was again assuming command in 1947 of a struggling organization, with most of its best and most-skilled men and women long since departed and most of its offices woefully understaffed. Much of his time in those early months was devoted to dealing personally with job seekers.⁷⁹ The CIA, nonetheless, immediately had to engage in a life-and-death shadow war against a ruthless and much more experienced Soviet intelligence adversary. And beyond that, the CIA was now charged with penetrating the Iron Curtain and advising the president and his administration on the military, economic, and covert capabilities of the Soviet Union and its allies and captive states. Not only was it impossible to assess accurately just what forces and weapons Stalin might possess, it was even harder to penetrate what Chip Bohlen called the dictator’s “talent for disguise” and fully understand the “harsh and brutal nature behind his mask.”80 Both Soviet capabilities and intentions were carefully and effectively hidden. Even George Kennan—the acclaimed diplomatic Kremlin watcher whose “Long Telegram” and subsequent “Mr. X” article earned General Marshall’s respect and galvanized Washington policymakers, with their call for “containing” the Soviets—soon worried that his careful assessments were being perverted into policies that would dangerously antagonize Stalin.⁸¹ The CIA was supposed to be the authoritative source of national judgments on foreign capabilities and intentions, but hostility and obstructionism from other government agencies was making that mission impossible. In late 1947 the Defense Department’s legendary science adviser, Vannevar Bush, who had been instrumental in both the Manhattan Project and the development of early computers, warned Secretary Forrestal that the CIA was “completely stymied” in collecting scientific intelligence for the American Atomic Energy Commission (AEC) on Soviet nuclear developments because of lack of cooperation from the military services.⁸²

Hillenkoetter’s enemies, including OPC chief Frank Wisner, who officially worked for him, considered him an “amiable lightweight,” but he was initially well respected by Admiral Leahy, Secretary Forrestal, members of Congress, and even Washington journalists.⁸³ While generally trying hard to keep the CIA out of the press, he was soon on a first-name “Hilly and Joe” basis with the formidable and influential columnist Joseph Alsop. By cultivating elite journalists, he was able “by special plea of the Director” to keep such powerful magazines and newspapers as Life, Time, Newsweek, US News, and the New York Herald from printing specific stories on subjects the CIA wished to keep hidden.⁸⁴ Again, while trying hard to limit interaction with Congress, Hillenkoetter and his senior managers periodically briefed committees on the Soviet Union. They were not willing to send written reports to Congress because only the Joint Atomic Energy Committee could store secret information, but since the CIA was one of the few sources on Russia, members welcomed the briefings.⁸⁵ Once the National Security Act made Hillenkoetter the statutory DCI, he was reconfirmed unanimously. In general, as Pforzheimer and a number of members of Congress said, they didn’t want to know too much about CIA activities, but they were concerned about public “failures.” In such cases, “Congress would hold the Director personally responsible and look no further.”⁸⁶ Thanks to secrecy, most operational failures, such as the loss of agents trying to penetrate the Soviet Union or China, were unknown either to Congress or most Americans, but some events were so public that everybody read about them, critics denounced them, and Congress demanded answers.

The first such event took place in April 1948 while Secretary of State Marshall was visiting Bogota, Colombia.87 The unexpected assassination of a local politician led to riots that threatened Marshall’s motorcade. Republican presidential candidate Dewey, being advised by Allen Dulles, criticized the administration, with Truman admitting he was “as surprised as anyone.” DCI Hillenkoetter was summoned to testify about this “intelligence failure,” although he warned Republican senator Robert Taft of Ohio that the hearings would backfire against the critics.⁸⁸ Arming himself, as was his custom, with CIA reports about the situation, Hillenkoetter read from reports that had been passed to the American ambassador but not forwarded to Washington so as not to “unduly alarm” the secretary. The chairman apologized to Hillenkoetter then took him out into the corridor to apologize again in front of reporters, saying, “CIA performed its duty.” The State Department was furious that the CIA had revealed its warnings to Congress, but Hillenkoetter responded that the State Department “deserved whatever heat might now be on them.” Further, he threatened to complain to President Truman and Congress if cooperation between the State Department and the CIA on a host of issues didn’t improve.89

The next failure, and one of the most critical events of the entire Cold War, was the detonation of the first Soviet atomic bomb in late summer 1949. In Jeffrey Richelson’s words, “While US intelligence agencies would provide no advance warning . . . it was not for lack of trying.”⁹⁰ As we now know from VENONA US Army decryption of KGB messages about its American spies, the Soviets had thoroughly penetrated both the American and British nuclear weapons programs, and they had stolen the secret of the bomb’s design.⁹¹ In 1949 American policymakers knew that the Russians were feverishly trying to build an atomic bomb. American intelligence and the Gehlen Org were trying to block Soviet efforts to use German scientists and East German uranium in the endeavor, and the CIA and British SIS were trying to understand what lay hidden behind the Iron Curtain. Refugees and returning prisoners of war could identify general locations of suspected nuclear facilities, but as DCI Hillenkoetter told President Truman in July 1948, “It continues to be impossible to determine the exact status of or determine the date . . . for the completion of their first atomic bomb.”⁹² Vannevar Bush had warned Secretary of Defense Forrestal that the CIA was “stymied,” and as late as April 1949, DCI Hillenkoetter asked NSC Executive Secretary Souers for increased military communications intercepts to monitor Russian facilities and activities. The Joint Chiefs assured Defense Secretary Louis Johnson that Soviet nuclear activity was of the “highest priority.”⁹³ Truman’s second DCI, Hoyt Vandenberg, now air force chief of staff, was made responsible for long-range detection worldwide—something the United States had been studying since deploying nuclear weapons against Japan. In 1947 Hillenkoetter had estimated that it would take two years to complete a long-range monitoring system, although Bush’s experts thought the DCI was too optimistic because reliable technology simply didn’t yet exist.⁹⁴ As late as mid-1948, results of attempts to detect American tests on Eniwetok atoll in the South Pacific were generally “poor or worse.”⁹⁵ Lacking detailed intelligence, the CIA and other agencies had predicted that a Soviet bomb was likely several years away when radiation “signatures” from the first Russian test, undertaken on August 29, were first detected over Alaska in September 1949.⁹⁶ Initially, both Secretary of Defense Johnson and NSC Executive Secretary Souers thought the radiation came from a Russian nuclear reactor accident rather than a bomb, and it was almost a month before Truman announced the Russian bomb on September 23, 1949.⁹⁷ Hillenkoetter told Congress that CIA analysts didn’t have enough human or technical intelligence to allow accurate assessments, with Atomic Energy Commission Chairman David Lilienthal adding, “In my opinion, our sources of information about Russian progress are so poor as to be merely arbitrary assumptions.”98 Indeed, it wasn’t until 1956, six years after Hillenkoetter returned to the navy, that the CIA U-2 strategic reconnaissance aircraft was able to provide authoritative intelligence on Soviet nuclear and strategic weapons programs. The Soviet nuclear program was, in practical terms, impossible to penetrate in the late 1940s, and Hillenkoetter could only accept that his agency had failed to predict exactly when the Soviets would first detonate a bomb.

Two events in 1950 gave further evidence of Hillenkoetter’s character—and of the difficult challenges facing his new organization. In one case, Hillenkoetter was almost alone in Washington in standing up for his staff, just as he had alone confronted general community attitudes in January 1946 in defending his black sailor against pervasive racial animosity. In February 1950 demagogic Republican Wisconsin senator Joseph McCarthy accused the State Department of harboring scores of communists—and the CIA of having one Red. In fact, as we now know from VENONA and from British historian Christopher Andrew’s research on KGB archives, the Soviets had indeed been remarkably successful in penetrating American institutions, including the OSS and Department of State.⁹⁹ McCarthy did not have any facts to back up his reckless accusations, however, and the army was just beginning to analyze the KGB VENONA material. But for the next several years, McCarthy and his Red-baiting allies terrorized Washington, until his drunkenness and wild excess finally destroyed him. Only Hillenkoetter and the CIA resisted his initial attack. The DCI immediately sent McCarthy a detailed letter describing the careful security investigation made by both the OSS and CIA of the accused individual, and threatened to publicize the letter unless McCarthy stopped attacking the CIA. McCarthy agreed to do so if the DCI “did not make his letter public or make [the matter a] political issue.” As a scholar said in 2005, “The CIA’s first director has never been properly credited with standing up to Joe McCarthy.”¹⁰⁰

Thereafter the CIA was not damaged by the “Red Scare,” but McCarthy did turn on the agency again, in what was called the “Lavender Scare,” attacking homosexuals. And in this instance he was absolutely correct, for Hillenkoetter’s old Paris colleague Carmel Offie was indeed openly and promiscuously homosexual.¹⁰¹ Ironically, Offie was not really working directly for Hillenkoetter but for Kennan and Wisner’s quasi-independent Office of Policy Coordination. Nonetheless, Hillenkoetter stepped forward to defend him in an extraordinary secret congressional hearing in July 1950, at which the DCI acknowledged Offie’s homosexuality but made the blunt case that the CIA might need to use homosexuals in field operations, much as the Soviets used sexual entrapment to blackmail victims into spying. Hillenkoetter told the squeamish members that he was confident “no member . . . of the Congress would balk against our use of any technique to penetrate [Soviet] operations. . . . After all, intelligence is, at best, an extremely dirty business.” Congress did not wish to hear anything further of such matters, and Wisner was able to keep Offie working for him under a contract rather than as a State Department or CIA officer.102 Hillenkoetter also put himself on record in a personal letter to Offie on May 17, 1950, expressing “great reluctance” at receiving his formal resignation from the CIA and thanking him for his “very loyal and competent service . . . and for . . . the industry and skill you have at all times displayed in furthering the objectives of this organization.”¹⁰³

By then, however, DCI Hillenkoetter had already suffered two fatal wounds. The most immediate one was inflicted by Joseph Stalin when he gave his North Korean ally, Kim Il-Sung, Soviet blessing to attack South Korea, which Kim’s forces did on June 25, 1950. The US government had thought the Soviets were more likely to engineer crises in Berlin, Greece, Turkey, or Iran, but through the spring of 1950, the CIA had been reporting on a steady concentration of North Korean military forces and on increasing North Korean guerrilla raids into the South. As Truman remembered: “Throughout the Spring the Central Intelligence reports said that the North Koreans might at any time decide to change from isolated raids to full-scale attack . . . but there was no information to give any clue as to whether an attack was certain or when it was likely to come. But [the CIA told me repeatedly] that there were any number of other spots in the world where the Russians ‘possessed the capability’ to attack.”¹⁰⁴

The Soviets had been training and equipping the North Koreans since 1946, but it was extremely difficult for the CIA to see into the hermit kingdom to estimate the strength or organization of the North Korean army. Many Europeans saw the North Korean attack as a prelude to a Soviet attack on West Germany, and although that did not seem plausible in those grim days, CIA senior officer David Murphy later called Stalin’s approval of Kim’s attack a “massive miscalculation.” Stalin “failed to calculate the effect of the invasion on Western Europe and the United States” and foresee the Western decision to expand NATO and integrate the new German military into a common European defense.¹⁰⁵ The Korean attack also reversed the congressional tendency to cut the defense budget, and Congress quickly added $28 billion for defense. The draft was re-activated, and the US Army was increased to eighteen divisions, with four divisions going to Europe in 1951.¹⁰⁶ Despite crises in other parts of the world over the next few decades, the American military would maintain a strong defensive presence in West Germany until German re-unification and Saddam Hussein’s attack on Kuwait in 1990. Only after the final disintegration of the Soviet Union in December 1991 would the American military forces—which arrived with the Second “Hell on Wheels” Armored Division in July 1945—finally be withdrawn from a free and united Berlin.

The day after the initial North Korean attack, both Secretary of State Acheson and Secretary of Defense Johnson told the Senate that the invasion of South Korea had been a “complete surprise.” Despite what a historian called Acheson’s “nimble trashing” of the CIA, he told Hillenkoetter that he had tried to pacify the Senate Appropriations Committee.107 In the words of his legislative counsel Pforzheimer, “Hilly was furious” when he discovered that State and Defense had blamed his analysts for not warning of the attack, and he got Truman’s permission to testify for the CIA, just as he had during the Bogota scandal. As he had done in the 1948 Bogota investigation, he brought CIA reports to the Hill and read the warnings to the senators. Hillenkoetter argued that while the CIA could not be expected to be able to predict the exact date of the North Korean attack—any more than OSS or military intelligence had been able to predict the exact date of the Pearl Harbor attack—the CIA had given policymakers, including Acheson, Johnson, and President Truman, adequate warning.¹⁰⁸ Most senators agreed, with California Republican William Knowland concluding, “The Central Intelligence Agency was doing its part of the job.”

In part, Republicans’ sympathy for Hillenkoetter can be explained by their hostility toward the State Department—and especially toward the patrician and self-assured Acheson—and also by a general desire to criticize the Truman administration by using CIA testimony on North Korea as further grounds for attack. Acheson returned their hostility, a feeling that senators doubtless sensed. Years later, in an oral interview for the Truman Presidential Library, Acheson vented: “I say Congress is too damn representative. It’s just as stupid as the people are; just as uneducated, just as dumb, just as selfish.”¹⁰⁹ Kennan expressed similar views in his memoirs: “I could not accept the assumption that Senators were all such idiots that they deserved admiring applause every time they could be persuaded . . . to do something sensible.”¹¹⁰

For Sidney Souers and Harry Truman, the North Korean surprise was the final nail in DCI Hillenkoetter’s coffin, but he had already suffered serious wounds from Allen Dulles more than a year earlier. Dulles, based upon his highly respected Bern OSS service, had hoped to replace Donovan as national intelligence chief and then, two years later, had expected to become Republican Thomas Dewey’s Director of Central Intelligence (had Dewey defeated Truman in the 1948 election). Given his close political ties to Dewey, and his role in Dewey’s criticisms of the CIA and Truman’s international policy in general, it’s remarkable that in early 1948 the Truman administration made Dulles the chairman of a committee investigating CIA operations and effectiveness. As Souers later explained the background, once he became executive secretary of the NSC in 1947, he casually reminded Secretary of Defense Forrestal that the NSC was supposed to supervise the CIA. Souers noted that at that point, Hillenkoetter had been DCI for only a few months, and the statutory CIA was even newer. There were no indications of trouble, and Souers considered the reminder completely innocent. Forrestal said he was too busy with the Defense Department, where the navy and air force were fighting bitterly for survival or dominance, and said the NSC executive secretary should take on the task. Souers responded that “if he wanted to supervise the CIA, he would still be DCI” and thus Forrestal chose a three-man survey group to produce a report. Years later, Souers said he would not have selected Dulles to lead the survey because of his connection to “arrogant and arbitrary” OSS director Donovan and his activities “coaching Dewey to attack CIA.” Dulles and fellow survey group member William H. Jackson—who, as an Army Intelligence colonel, had served as Brigadier General Edwin Sibert’s deputy when he was directing Operation RUSTY to use the Gehlen Org—were “certainly not the disinterested and impartial investigators that they were supposed to be.” In Souers’s words, they were both prejudiced against Hillenkoetter before they began their survey. In turn, Hillenkoetter thought the Dulles report was a “hatchet job” to destroy him and replace him as DCI.111

Remarkably, given that Souers himself had been director during the first disorganized and stressful months after the creation of the weak Central Intelligence Group—and was now executive secretary director of the NSC, with a very negative view of Allen Dulles—his admission that “they did not anticipate such a devastating report” is surprising. The survey acknowledged that “an efficient intelligence organization cannot be built overnight. It will require years of patient work to . . . do the job.”¹¹² It also acknowledged great risks facing the United States: “[The possibility of] sudden and possibly devastating attack” from “a vast area of the world . . . behind an iron curtain where the normal sources of information are partially or wholly lacking,” aided by “the far-flung activities of the [Red] fifth column, both here and abroad.”¹¹³ In such circumstances, conditions for intelligence collection were “uniquely difficult.”¹¹⁴ Clearly, without sufficient and accurate secret intelligence reporting, analysis and estimating were equally difficult. In summary, though, Dulles focused on Hillenkoetter:

 

It is the Director who must guide the organization . . . and win the confidence of . . . the Government. This is not an easy task. The Central Intelligence Agency has a diversified and difficult mission to perform. . . . Its success depends, to a large extent, on the support it receives from other agencies which may be ignorant of its problems and suspicious of its [authorities.] . . . the pressure to build rapidly has been strong and there has been little time in which to demonstrate substantial accomplishments.115

 

Even so, in a very legalistic sense, the CIA had indeed been given authorities and the DCI had been given responsibilities, particularly to coordinate the efforts of all US intelligence agencies and to produce National Intelligence Estimates to inform the NSC and the president, and help them develop well-reasoned national policy. In the single most pointed sentence in the whole report, the survey group concluded, “Since it is the task of the Director to see that the Agency carries out its assigned functions, the failure to do so is necessarily a reflection of inadequacies of direction.”¹¹⁶ In their view, the buck stopped with Hillenkoetter. Christopher Andrew, probably the most knowledgeable expert on the relations between American presidents and their intelligence chiefs, took another perspective:

 

The “inadequacies of direction” however were as much Truman’s as Hillenkoetter’s. Hilly was heavily outgunned on the NSC by the secretaries of both state and defense. Without the strong support of the president, he could not hope to fulfill the task . . . required of the DCI.¹¹⁷

 

Ludwell Montague, an early senior CIA analyst and historian, illustrated Hillenkoetter’s problem and Truman’s neglect with a small but telling anecdote: As a new two-star rear admiral, a rank he held during his entire term as director, Hilly was junior to every single military officer he was supposed to supervise, and much junior to the secretaries with whom he worked. His successor, Beetle Smith, came to the CIA as a three-star lieutenant general fresh from long service as chief of staff to Supreme Allied Commander Dwight Eisenhower and as ambassador to Moscow. Within a year, Truman refused to promote any other generals until Bradley reluctantly gave Smith his fourth star, making him the equal of all the service chiefs of staff, and greatly senior to every military intelligence chief. Perhaps Truman had learned from what Montague called Hillenkoetter’s “painfully frustrating and thankless experience.”¹¹⁸

It should also be noted that every DCI before or since has struggled to some degree to meet the standard laid out by Dulles and his partners. In 2005, concluding that DCIs could not, in fact, successfully accomplish the ideals of the National Security Act of 1947, the US Congress took both coordinating and estimating functions away from Director of Central Intelligence Porter Goss and gave them to a new official outside and above the Central Intelligence Agency: the new Director of National Intelligence.

Stung though he was by what he considered unreasonable and unfair criticism, which he felt underestimated the amount of resistance and hostility he had routinely faced from State and the military services, Hillenkoetter still made efforts to respond to some constructive suggestions. He had never been happy that Covert Action activities under Wisner were isolated from and independent of his chief of secret operations and agreed with the Dulles recommendation that OSO and OPC be combined. Naturally, the State Department resisted, with the Deputy Special Assistant for Intelligence Fisher Howe writing his chief, “It is obviously impossible to get a man big enough to be over Wisner and small enough to be under Hilly.” Howe added, with obvious regret, that there was no hope Hillenkoetter would resign over the State Department’s support for Wisner.119

The challenge of estimating was even more difficult, especially until the invention of remarkable technological systems like the U-2 strategic reconnaissance aircraft by the CIA in the mid-1950s. Only then, in the words of a CIA memo:

 

For the first time we are really able to say that we have an understanding of much that was going on in the Soviet Union. We are no longer dependent on an “estimate” or a “judgment” or an “assessment”. . . . [The U-2 has] already proven that many of our guesses on important subjects can be seriously wrong, that the estimates which form the basis for national policy can be projections from wrong guesses, and that as a consequence, our policy can indeed be bankrupt.¹²⁰

 

On issues not subject to American technological superiority, unfortunately, analysis has never gotten easier and is still prey to uncertainty and what Sherman Kent called ”the unknowable.”¹²¹

Transferring the Flag

With characteristic bluntness, Souers considered Allen Dulles to be both biased and partisan in his criticism of the CIA but speaking years later concluded: “The fact remained that Hillenkoetter was a disaster as DCI. He was not qualified . . . and should never have been appointed.” To Souers, himself of German descent, Hilly was an “amiable Dutchman.” Since Hillenkoetter refused to resign to please the State Department’s Fisher Howe, once the Korean War broke out, Souers told Truman it was “imperative” to replace him. Hillenkoetter himself also asked to return to sea duty after more than three thankless years as DCI.¹²² As a successor, Truman suggested Walter Bedell Smith, based on his good performance as ambassador to Moscow, knowledge of the Soviet Union, and acceptability to both the Departments of State and Defense.123 This appointment bitterly disappointed Dulles, who had argued strongly in his survey report for the benefits of long-term civilian leadership and the disadvantages of having military leaders, for whom the CIA was simply a temporary tour of duty.

Hillenkoetter returned to the navy with a tribute in the Congressional Record from John McCormack, who noted that he had served during the CIA’s

 

most difficult years . . . [in their criticisms of the CIA] people have tended to lose sight of the immense difficulties in building America’s first permanent intelligence organization in the short period of three years. . . . It has fallen upon the admiral’s shoulders to build an American system which is second to none. Those of us who have known of the development of the Central Intelligence Agency under his regime realize the strides that have been made and the credit that is due to Admiral Hillenkoetter for his great contribution to national security.¹²⁴

 

A letter from Truman noted the president’s

 

heartfelt appreciation of the splendid service you have rendered as Director. . . . The work you did in developing this agency into an effective foreign intelligence service for the President . . . is worthy of highest praise. . . . With foresight, tenacity, and discretion you performed manifold duties in a manner designed to serve the national interest rather than that of any particular group.¹²⁵

 

In turn, in a letter in early October, Hillenkoetter expressed his “sincere appreciation and gratitude for the understanding, consideration, and support you have always so generously and so cheerfully given me.”¹²⁶ The internal White House description of his service noted his “extreme modesty and self-effacing devotion to duty; friendliness and good will in dealing with [colleagues]; patience and forbearance in the face of difficult but unavoidable problems arising from his task of coordinating the national intelligence effort.”¹²⁷ Whatever else Hillenkoetter might have been, his successor was not patient, self-effacing, or friendly.

Beetle Smith, born in Indianapolis, Indiana, had started as a private in the Indiana National Guard and advanced to the rank of lieutenant general and the position of chief of staff for Supreme Allied Commander Dwight Eisenhower. After the war, Truman appointed Smith ambassador to Moscow, where he served for two and a half years, until Christmas 1948. Suffering from ulcers and unable to eat a normal diet, Smith was said to have an even temper: He was always angry. He told Eisenhower, “I wanted to avoid the intelligence job if possible, but . . . in light of the Korean affair, I did not feel I could refuse.” He confided to a friend: “I expect the worst and am sure I won’t be disappointed.”128 He was nominated as DCI in August 1950 and, with Hillenkoetter present, addressed the senators about “some of Hillenkoetter’s troubles.”

“There are only two personalities that I know of [to be DCI.] One is God, and the other is Stalin, and I do not know if even God can do it, because I do not know whether he is close enough in touch with Uncle Joe to know what he is talking about.”129 According to Time magazine, he added: “[The American people] expect you to be able to say that a war will start next Tuesday at 5:32 pm.”¹³⁰

Smith was accepted enthusiastically and unanimously by Congress, to whom he was “deferential, responsive, and soldierly.” In World War II he had been known as Ike’s hatchet man, and after his experience dealing with Allied intrigues and Stalin’s paranoia, he was a tough, no-nonsense, highly skilled bureaucratic infighter. Smith, not completely candidly, told Souers that he knew nothing about intelligence and needed a deputy who did.¹³¹ Not liking Dulles, Souers suggested his survey partner, William Jackson. The latter met with Smith and told him he had no intention of being “bawled out by a tyrannical soldier.” Laughing and saying his bark was worse than his bite, Smith agreed to “no bawlings out.”¹³² Both Jackson and Smith understood that they needed to address the Dulles Commission recommendations and quickly brought back William Langer and Sherman Kent to create a real Office of National Estimates. Jackson urged Smith to bring in Allen Dulles as director of operations, and after Souers arranged a personal meeting between Dulles and Truman, the president agreed to the appointment.¹³³ Dulles brought Wisner’s OPC back under CIA control, with the Office of Secret Operations and the Office of Policy Coordination being combined in August 1952 into a real Clandestine Service, called the Directorate of Plans to try to hide its espionage and Covert Action missions.¹³⁴ Neither Souers nor Smith ever warmed to Allen Dulles, and when President Eisenhower, in 1954, insisted Smith become John Foster Dulles’s undersecretary of state, with Allen Dulles succeeding him as DCI, Souers grumbled that “there was a good deal [of] impropriety in appointing a brother of the Secretary of State to be DCI.”¹³⁵

Whatever Truman might have said publicly about “cloak and dagger” espionage and Covert Action, there is no question that he was willing to direct the CIA to use both. He was also a supporter of the communications intelligence (COMINT) methods that had made World War II MAGIC and ULTRA such powerful tools. Indeed, just as he was disbanding Donovan’s OSS in September 1945, he approved continued US-British cooperation on communications and signals interception and decryption. The Army Security Agency, which proved so successful with Soviet VENONA messages, was created at the same time.¹³⁶ With the Korean War, DCI Smith demanded that the CIA finally be given access to this communications intelligence, and he got Truman to support a reorganization and consolidation of all military COMINT. Finally, almost eleven years after Pearl Harbor, President Truman, using a secret presidential memorandum, created a National Security Agency, which officially came into existence on November 4, 1952, the day Republican Dwight Eisenhower was elected president.

By then Rear Admiral Roscoe Hillenkoetter had again served in a hot war. Returning to the Fleet as Commander of Cruiser Division One of the Far East Seventh Fleet, his cruisers and the rest of the navy supported General of the Army Douglas MacArthur’s American and UN soldiers fighting in Korea. In late 1950 the Chinese Communist People’s Liberation Army entered the war and pushed surprised and outnumbered UN forces southward through the frozen North Korean mountains. Hillenkoetter, in his flagship St. Paul, commanded a gunfire support group of cruisers, destroyers, and rocket ships, creating a “ring of fire” around the port of Hungnam, and allowing some hundred thousand US and Korean soldiers—and almost as many Korean civilians—to escape in December 1950.

Hillenkoetter’s warships were even joined by his old battleship command Missouri two days before Christmas 1950, as the Chinese wisely stayed out of range while the US soldiers and marines and Korean civilians were rescued from Hungnam by the US Navy.137

In 1956 Hillenkoetter, by now a vice admiral, was appointed inspector general of the navy and served as such until he retired in May 1957. Thereafter, he joined the management of the American Banner steamship line and, aside from letters or interviews with historians curious about his role in the great events of World War II and the early Cold War, had only one more public association with intelligence issues.138 This occasion was, however, truly extraordinary and has dominated general public knowledge of this now little-known and obscure man. On February 28, 1960, the New York Times reported that the US Air Force was warning its commands to treat UFO sightings as “serious business.” Hillenkoetter, identified as a member of a privately funded National Investigations Committee on Aerial Phenomena, or NICAP, was quoted as saying, “It is time for the truth to be brought out in open Congressional Hearings.” “Behind the scenes, high-ranking Air Force officers are soberly concerned about the UFOs but through secrecy and ridicule, many citizens are led to believe the unknown flying objects are nonsense.” Hillenkoetter charged, “To hide the facts, the Air Force has silenced its personnel.”¹³⁹

This article caused some dismay within the CIA, for the Agency and the air force were indeed hiding facts that would become known worldwide two months later, when Gary Francis Powers, piloting a CIA U-2, was shot down over the Soviet Union on May 1, 1960. According to a chief historian of the National Reconnaissance Office, and later of the CIA, highly secret U-2s on training missions were being spotted over the United States by civilian and military pilots. Mistaken for “unidentified flying objects,” since no known airplane could fly so high, the CIA and air force created Project Blue Book, supposedly to record and track UFOs. In fact, the purpose of Blue Book was to convince people that they had not, in fact, seen a secret American spy plane. Obviously, Allen Dulles, by then DCI, had not shared knowledge of the U-2 program with his predecessor. The air force and CIA debated whether CIA general counsel Lawrence Houston, who had served as Hillenkoetter’s Agency lawyer, should talk to the former director. Whether or not Houston had a quiet word with him, Hillenkoetter resigned from NICAP in 1962.140 This has not prevented the first CIA director from being widely known today primarily among UFO conspiracy theorists, although now the U-2 is equally widely known. Hillenkoetter died on June 18, 1982, at the age of eighty-five in Weehawken, New Jersey, where he and his wife had lived since his retirement from the navy. In his obituary, the New York Times quoted Navy Chaplain Captain Joshua Goldberg as calling the admiral “a symbol of what an American should be.” “He was modest, and people who served under him just loved him.”¹⁴¹ He and his wife are buried at Arlington National Cemetery, immediately across the Potomac River from his office at the old OSS and CIA headquarters on a hill just above the Lincoln Memorial in Foggy Bottom, Washington, DC.

Sidney Souers also returned to business life, although he and his wife remained close to the President he addressed as “Boss.” Three years after Hillenkoetter’s suspicions about UFOs attracted the attention of the New York Times, Truman himself caused a great stir in late December 1963 by complaining that the CIA had become “an operational and at times a policy-making arm” “injected into peacetime cloak and dagger operations” far outside the “original assignment” “as the intelligence arm of the President.”¹⁴² In Truman’s view, the CIA “is being interpreted as a symbol of sinister and mysterious foreign intrigue.” Souers quickly wrote Truman a “Dear Boss” letter, enthusiastically agreeing and blaming Allen Dulles, who “caused the CIA to wander too far from the original goal established by you.” “Its principal effort [seems] to cause revolutions in smaller countries around the globe.”

Truman’s criticism stunned the CIA because “with his explicit but secret approval . . . CIA covert action . . . were initiated to help contain the communist threat.”¹⁴³ Allen Dulles was also deeply upset, even though he had been fired as DCI two years earlier by President John F. Kennedy, after the spectacular failure of the CIA Bay of Pigs covert action effort to overthrow Cuban leader Fidel Castro in April 1961. Dulles immediately wrote back to Truman to remind the president that

 

you also were first to take stock of the fact that the communist subversive threat could not be met solely by the overt type of assistance. . . . I can say—frankly—that I feel there are parts of your article . . . which might be interpreted as a repudiation of a policy which you had the great courage and wisdom to initiate 15 years ago.144

 

A few months later, in April 1964, clearly still smarting from the criticism, Dulles went to visit Truman at his presidential library office in Independence, Missouri. As David McCullough quoted Dean Acheson: “Truman might be fierce and hot-tempered in writing but was always very considerate of people’s feelings in person.”¹⁴⁵ He was now hospitable and considerate with Eisenhower’s DCI. In a memo he wrote after the meeting, Dulles said he reminded Truman of the “procedures . . . by CIA to meet the creeping subversion of communism. . . . I reviewed the various steps which had been taken under [your] authority . . . of the problems we had faced during the Italian elections of 1948. . . . Mr. Truman . . . interjected reminiscences of his own, recalled vividly the whole Italian election problem. . . . At no time did Mr. Truman express other than complete agreement with the viewpoint I expressed.”¹⁴⁶

It was clear that both Truman and Souers felt a deep pride in and affection for the Central Intelligence Agency they had created—even if they did choose either to forget or gloss over some of the aspects of what DCI Hillenkoetter had told Congress was “at best, an extremely dirty business” while he was trying to save Carmel Offie from Joe McCarthy’s venom.¹⁴⁷ In a letter to a friend in October 1949, Souers said he had “gotten a great kick out of helping these babies [the NSC and CIA] begin to walk.” Upon leaving Washington at the end of 1952, he told the same friend, “I am at last getting away for good with the feeling that both the National Security Council and the Central Intelligence Agency are pretty solidly fitted into the government machinery.”¹⁴⁸ In a letter dated January 17, 1953, Truman told Souers, “No President ever had a more trustworthy, loyal and capable associate.”¹⁴⁹

Twenty years later, on January 14, 1973, Souers died in Saint Louis. Two days later, Richard Helms, who had served in the OSS and was now DCI, wrote his widow:

 

I wish to commemorate the great contribution he made to our country in the development of the concept of central intelligence after World War II . . . from these events came . . . the National Security Council and the Central Intelligence Agency, enabling our Government to meet its critical intelligence needs through the most turbulent times of the cold war. . . . We who inherited your husband’s concept are particularly aware of what our country owes him in the field of national security.150

 

The last word on Truman’s CIA belongs to the man himself. On the wall of the main corridor—on the first floor of the CIA Building that Allen Dulles built in bucolic Langley, Virginia, overlooking a peaceful interior courtyard—hangs a row of presidential portraits, beginning with the Man from Missouri. In his own hand, Truman wrote, “To the Central Intelligence Agency, a necessity to the President of the United States, from one who knows.”¹⁵¹