INTRODUCTION

The great enemy of the truth is very often not the lie . . . but the myth.

John F. Kennedy

On September 12, 1945, FBI director J. Edgar Hoover sent an urgent letter by special messenger to Matthew Connelly, secretary to U.S. president Harry Truman at the White House.¹ Hoover had some alarming news: The Royal Canadian Mounted Police (RCMP) had informed the FBI that they had learned of an extensive Soviet espionage network in Canada. Their source, a “former employee” of the military attaché's office at the Soviet Embassy in Ottawa, claimed that Stalin's government had made “the obtaining of complete information regarding the atomic bomb the Number One project of Soviet espionage.” The source also reported that a British atomic scientist working in Canada, who had spent time at a research laboratory at the University of Chicago and was well acquainted with the process for separating uranium, had been a Soviet spy of long-standing. The scientist had furnished the Soviets with a sample of U233, which was immediately flown to Moscow, and also passed on top secret information about U.S. naval technology.

There was more to this disturbing story. The Soviet source had told the RCMP “an assistant to an Assistant Secretary of State under Mr. Stettinius [Edward Stettinius, U.S. Secretary of State until June 1945]” was “a paid Soviet spy.” The spy's name was unknown at the present, but the RCMP was making further inquiries. Hoover told Connelly that “The Canadian situation is being followed closely and any additional information will be brought to the attention of the President and you.”

Hoover's letter must have caused considerable consternation at the White House. The bombing of Hiroshima and Nagasaki just a month earlier had demonstrated the terrible destructive power of the atomic bomb. The thought that the Soviets might gain access to the secrets of its production was frightening. On top of that, America's closest ally and neighbor to the north, with whom it shared many secrets, was penetrated by Stalin's spies, and the Kremlin was very possibly getting information about what was going on at the highest levels of decision-making at the State Department. Six days later, Hoover, who had dispatched an FBI agent to Ottawa immediately upon hearing about the case, had enough information to transmit a formal FBI report, “Soviet Espionage Activity,” to Frederick Lyon, chief of the Foreign Activity Division at the State Department.²

The top secret report, dated September 18, 1945, described the source in Canada. His name was Igor Gouzenko. He was a cipher clerk at the Soviet Embassy, who had “severed all his relations with his employers” on September 5 and was now in hiding with his wife and fifteen-month-old child. Gouzenko had “furnished considerable information regarding Soviet espionage activity directed against the United States and Canada.” In addition to the British nuclear expert, there were spies in Canadian government offices and agents in the United States, and an American scientist currently working for the U.S. Navy was being developed as “a possible Soviet agent.” Moreover, although Gouzenko had worked for Red Army Intelligence (known as the GRU), he had learned that the other Soviet intelligence branch under the notorious security police, the NKVD, had also “penetrated departments of the various governments.”

As for the traitor in the State Department, the FBI report repeated what Hoover had said in his earlier letter to the White House: “an individual identified to date only as an assistant to an Assistant Secretary of State under Stettinius is a paid Soviet spy” [italics added]. Up to this point, the RCMP had been debriefing Gouzenko. But shortly thereafter, the FBI conducted its own interview with the defector. The results were provided in a second FBI report on Soviet espionage, dated September 24, and sent again to the State Department.³ Anyone who saw both reports would have noticed immediately that the description of the spy in the State Department had changed: “Guzenko [sic] was questioned carefully regarding the possible identity of the individual in the Department of State under Stettinius who is a Soviet spy. Guzenko stated he did not know the man's name but that he had been told that an Assistant to Stettinius was a Soviet spy” [italics added].

This change was highly significant, as it narrowed down the list of possible State Department spies considerably. There were many assistants to the six Assistant Secretaries of State, but only a handful of assistants to Stettinius himself. One of them was Alger Hiss, a brilliant Harvard-educated lawyer who had played a key role in the founding of the United Nations. Hiss had been appointed director of the State Department's Office of Special Political Affairs the previous March and had worked directly under Stettinius. A “New Dealer” from the Roosevelt era, Hiss was already on the FBI's radar screen. A former Soviet agent named Whittaker Chambers, an American, had told the FBI that Hiss had been a member of a communist group in the mid-1930s. The statements of the defector in Ottawa gave the Chambers allegations new weight.⁴

But Gouzenko had told the RCMP initially that the spy was an “assistant to an Assistant Secretary of State.” This was cited specifically in Hoover's letter to the White House and in the first FBI report, so the FBI must have thought that the RCMP had recorded Gouzenko's statements accurately. Given that the change came after the FBI questioned Gouzenko directly (through a translator), is it possible that the interviewer already had Hiss in mind and suggested to Gouzenko that he might in fact be talking about an assistant to Stettinius? Whatever the truth (and we will probably never know), this seemingly minor alteration in Gouzenko's description would acquire huge significance. The charges that Hiss was a Soviet agent took hold, and his case eventually became a cause célèbre for both sides of the American political spectrum in the turbulent McCarthy era.

The spy in the U.S. State Department, however much it preoccupied Hoover, was just one element of a case that would involve Canada, Britain, and the United States in a concerted and protracted effort to respond to the threat of Soviet spying. For the Canadians, the immediate problem was what to do about their over twenty civil servants and scientists implicated by Gouzenko. And the British, of course, had to deal with Gouzenko's allegation that one of their top atomic experts was engaged in espionage. In short, the Gouzenko defection, which remained a closely guarded secret, quickly assumed enormous proportions for those in the upper echelons of the three allied governments. Indeed, Canadian prime minister William Lyon Mackenzie King was so alarmed by Gouzenko's revelations that he traveled to Washington to see President Truman personally at the end of September and then continued to London to discuss the problem with newly elected British prime minister Clement Attlee. For the next several months, in the corridors of the White House, Whitehall, and the Canadian Parliament Buildings, the revelations of Igor Gouzenko would be a source of deep concern.

Gouzenko was not the first Soviet defector to emerge from Stalin's intelligence apparatus with claims about Soviet espionage. Before him was Walter Krivitsky, a rather shadowy figure who had worked for Soviet military intelligence in the Netherlands as an “illegal,” or an agent under deep cover, in the 1930s. Krivitsky sought political asylum in France in 1937 and showed up in the United States late in 1938. The FBI was not particularly interested in him, perhaps because what he said was marred by exaggerations and inconsistencies and because his first step was to sell his sensational story to the Saturday Evening Post. But when he mentioned that the Soviets had a spy in the British government, he was invited to England for a debriefing. Krivitsky's claim that a young British aristocrat was a Soviet mole in the Foreign Office turned out to be true (he was talking about Donald Maclean, one of the notorious “Cambridge Five” spies). But at the time MI5 (Britain's counterintelligence service, similar to the FBI) was also skeptical about the defector. Sir Dick White, who would later become MI5's director, observed, “I did not wholly trust Krivitsky. He wasn't using his real name and he wasn't a general. He hadn't mastered enough to give us a proper lead.”⁵ In 1939, Krivitsky published a book, In Stalin's Secret Service, about his life as a spy. But once the Soviet Union entered the war against the Nazis, there was less interest in what Krivitsky had to say. As his currency declined in value, Krivitsky became increasingly despondent. In 1941, he committed suicide.⁶

Another high-profile defector was Viktor Kravchenko, an employee of the Soviet Purchasing Agency in New York. Kravchenko announced his defection publicly in April 1944, but in fact he had been in touch with the State Department and the FBI beforehand, offering to furnish information about Soviet espionage. The FBI listened but was standoffish, which was apparently why Kravchenko went to the press. The State Department actually wanted to send Kravchenko back to the Soviet Union so as not to offend the Russians, America's war ally. But the FBI, which was not worried about diplomacy, managed to keep this from happening. Like Krivitsky, Kravchenko aroused skepticism. The British, for example, were dubious about his claim of being a political dissident. He might have been sincere, they posited, but on the other hand, “he may have been recalled and just decided it was nicer here . . . he may have been caught with his wrists in the till and decided to take the breeze . . . he may have a girlfriend here of whom his superiors disapprove”⁷

The allied counterintelligence agencies had long known that the Soviets were engaged in espionage against their countries. Although they were distracted by the fascist threat, they had conducted surveillance against the Soviets and their communist contacts throughout the war years. But the diplomatic requirements of the wartime alliance had prevented them from being much more than observers of Soviet spying. Now it was different. The war was over and the alliance was crumbling. Moreover, unlike the others, Gouzenko had concrete evidence to back up his claims about Soviet espionage – a dazzling cache of stolen GRU documents. The intelligence chiefs were not inclined to sweep this defection under the carpet for diplomatic reasons.

This was especially true of Hoover. The FBI chief had been convinced for some time that his country faced a serious threat from Soviet attempts to infiltrate the U.S. government and scientific community. But Hoover felt himself at odds with Truman on the issue. In Hoover's view, Truman and his advisers, especially his new secretary of state, James Byrnes, were soft on communism and more concerned about protecting civil liberties than about unmasking spies in the government. Gouzenko's defection offered Hoover the perfect chance to draw attention to the communist danger. The case, if exposed, would discredit the liberals who surrounded Truman and enable Hoover to play center stage in Washington. In mid-October 1945, Hoover wrote a memorandum to his top aides. The Gouzenko case, he told them, was their “no. 1 project and every resource should be used to run down all angles very promptly.”⁸

Britain's MI5 and MI6, the agency responsible for intelligence-gathering abroad, also responded urgently to the Gouzenko case.⁹ MI6 chief Sir Stewart Menzies (who signed himself as “C”) had never stopped fearing Soviet spies during the war. “We have been penetrated by the Communists,” he observed in 1944, “and they're on the inside but we don't know exactly how.”¹⁰ MI6's British representative in North America, Sir William Stephenson (later immortalized as the “Man Called Intrepid”), rushed to Ottawa when he heard the news of the defection. Stephenson, like Hoover, had an agenda. His intelligence liaison body in New York, the British Security Coordination (bsc), was about to be dismantled because it was a wartime agency, and Stephenson would soon be out of a job. According to one historian, “The cipher clerk's defection provided him with a golden opportunity to keep the bsc alive until its post-war existence could be guaranteed. For the next months, therefore, he did his best to ensure that the bsc played an active role in the Gouzenko affair.”¹¹

The defection came at a time when the West was struggling with a post-war world fraught with uncertainties, especially regarding the Soviet Union. The Soviets had fought valiantly against the Nazis (suffering staggering losses of close to 20 million soldiers and civilians). No one doubted that had it not been for the Soviet Union, which battled the Wehrmacht on the ground in Europe single-handedly until June 1944, the Allies would never have defeated Hitler's army. Admiration for “heroic Russia” and its people was widespread in the West. A grateful Churchill said of Stalin at the Yalta Conference in February 1945, “I walk through this world with greater courage and hope, when I find myself in a relation of friendship and intimacy with this great man, whose fame has gone out not only over all Russia, but the world.”¹²

Even the intense Western antagonism toward communism had become more muted during World War II. Although most people still considered communism a threat to democracy, its adherents in the West were officially tolerated. And the appeal of communism among left-wing groups, after plummeting when the Soviets signed the Molotov-Ribbentrop non-aggression pact with Hitler's regime in 1939, regained its strength once the Soviets were seen battling the Fascists on the Eastern Front. Communists in the United States restored their earlier coalition with the liberals. In Canada, the Communist Party, which had been banned in 1940 and renamed the Labour Progressive Party, gained a new legitimacy. Fred Rose, who represented the LPP from the Montreal-Cartier riding, had been elected a member of Parliament in 1943 and was returned in 1945, when the lpp received more than one hundred thousand votes in the federal election. The picture was similar in Britain, where there were several communists, or communist sympathizers, among the Labour members of Parliament.¹³

Nonetheless, for the governments of the United States, Britain, and Canada, their alliance with the Soviets lost much of its raison d’être once Hitler was defeated. Indeed, the friendship had become strained soon after the Yalta Conference, when it became clear that Stalin's government was intent on extending the hold of communism throughout Eastern Europe. Just weeks later, a gravely ill President Roosevelt privately expressed his misgivings about relations with the Soviet Union: “We can't do business with Stalin. He has broken every one of the promises made at Yalta.”¹⁴ It was one thing for the West to find common cause with the Soviets against the Fascist enemy, quite another to reach a modus vivendi with them in solving the problems of a war-torn world afterward.

The bombing of Hiroshima and Nagasaki in August 1945 had raised the level of tension with the Soviets further, in large part because it changed the balance of international power. The United States now had a weapon of mass destruction at its disposal and had shown its willingness to use it. Meanwhile, the Soviets, who were working furiously to develop their own atomic bomb, were still several years behind. As one historian put it, the bombing of Japan “destroyed Stalin's expectations of being second to none among the great powers.”¹⁵

Unbeknownst to the Western allies, Stalin had in fact initiated a program to develop the bomb in late 1942, while his country was still deep in the struggle against Hitler. As part of this program, the Soviets had begun an ambitious effort, coordinated by NKVD chief Lavrentii Beria, to steal Western atomic secrets. Thanks to their recruitment of Klaus Fuchs, a German-born British scientist, the Soviets had even managed to learn some details about the American atomic program at Los Alamos (the so-called Manhattan Project), where Fuchs had been employed since 1944.¹⁶ But they still had a long way to go to produce an atomic bomb.

During the autumn of 1945, the three allied governments and their intelligence agencies tried to determine what course of action to take with regard to Gouzenko. Few doubted the truth of Gouzenko's claims, especially since he had documents to back them up. Indeed, within a short time investigators had compiled a list of more than twenty probable spies, including Canadian civil servants and scientists, four possible Soviet agents in America (one of whom was thought to be Alger Hiss), and the British atomic scientist Dr. Alan Nunn May. Gouzenko also mentioned hearing of a spy in Britain code-named “Elli,” but his description was considered too vague to follow up on at the time.

The problem for the three allies was to decide when to move against the suspects and thereby let it be known publicly that Gouzenko had defected. All parties agreed they should coordinate their actions and make arrests simultaneously, but they all had different agendas. MI5 officials worried that May, who returned to London in mid-September, might escape to the Soviet Union, so they were anxious to take action. The White House and the State Department, along with the King government, realized that the Gouzenko case was inextricably involved with their efforts to come to terms with the Soviets on a host of other issues, including control of the atomic bomb. They were concerned that premature action on the spy scandal could influence public opinion against the Soviets and destroy any effort to reach an accord with them in the newly established United Nations.

Through a constant stream of telegrams and numerous high-level secret meetings, the intelligence chiefs, diplomats, and politicians of Britain, Canada, and the United States negotiated over the Gouzenko problem for months, assuming, as they planned their strategy, that the Soviets knew nothing other than that Gouzenko had disappeared. Unfortunately, this was not the case. The NKVD had a mole at the highest level of the intelligence community in Britain who was reporting to Moscow every development in the Gouzenko case. Kim Philby, who years later would defect to the Soviet Union after falling under suspicion in Britain, was at the time chief of counterintelligence for MI6. As such, he learned immediately of Gouzenko's defection and not only saw all correspondence on the case, but also sat in on meetings with MI5 to devise strategies. Philby enabled Moscow to limit the damage done by the defection and prepare in advance its responses as the situation unfolded. Despite the risks he took for his Soviet controllers, Philby was clever enough to keep ahead of his colleagues and their counterparts in the allied services.¹⁷

The months of discussion about what to do with the spy suspects came to an abrupt halt on February 3, 1946, when veteran American journalist Drew Pearson broke the story on his Sunday evening radio program. The next day Prime Minister Mackenzie King informed his cabinet about the top secret case and cleared the way for arrests of fifteen Canadians – a process which would lead to a public outcry over violations of civil liberties. The story of the Canadian arrests, and that of Nunn May in early March, made front-page news in the West for the next several weeks, with wild speculation about the defector, the spies, and the extent of the espionage. The already fragile post-war peace had now been destroyed by a new threat – the Allies’ erstwhile friend in the fight against Germany and Japan had been stealing their atom-bomb secrets. A chill descended over Western-Soviet relations, a chill that would descend inexorably into the Cold War.

Although tensions between the Soviet Union and the West had been simmering for months, it was the Canadian spy case that brought them out in the open, confirming once and for all that the Soviets were enemies rather than friends. The defection set in motion a search for communist spies that reached epidemic proportions in North America. And it abruptly put an end to movements in the United States, Canada, and Britain for international, civilian control of the bomb. The news that the Soviet Union was trying to steal atomic secrets completely discredited the idea of atomic cooperation with the Soviets. Western scientists who continued to advocate such cooperation were labeled “reds” and fell under the scrutiny of the FBI and its Canadian and British counterparts.

The defection, after it was confirmed in messages from Philby, also sent shock waves throughout the Kremlin. Soviet intelligence officers were recalled to face interrogations by their bosses in Moscow, who were under instructions from Stalin to get to the bottom of the affair. What had gone wrong? How could it be that a cipher clerk managed to circumvent tight security and escape for good, wife and child by his side, with stolen documents in hand? Was it the fault of the NKVD, which was responsible for security at the embassy, or the GRU, which employed the defector? For the Russians the defection was nothing short of a disaster, calling for a thorough reexamination of their intelligence operations.

The Gouzenko affair did not end with the resulting spy trials in Canada and Britain, or with the publication of a lengthy report on the case by a special Canadian Royal Commission. Indeed, for some, such as the brilliant Canadian diplomat Herbert Norman, whose name was drawn into the web of espionage allegations that grew around Gouzenko, a terrible ordeal was then just beginning. There were others as well whose careers and reputations would be destroyed as a result of Gouzenko's claims, including a leading American geneticist named Arthur Steinberg, who had the misfortune to befriend a Canadian scientist later charged with spying. The Canadians, who had initially seen the Gouzenko defection simply as an opportunity to draw attention to the communist danger and participate on an equal footing with their American and British allies, would increasingly find themselves drawn into an unrelenting witch-hunt for spies, with even their future prime minister Lester B. Pearson on the Americans’ list of suspects.

Igor Gouzenko was presented to the West as a man of courage who did a great service in opening up the eyes of the world to Soviet treachery. But like most defectors, Gouzenko is more complicated than that. The popularly accepted account of his defection and the subsequent investigation leaves many unanswered questions. Was Gouzenko really a hero? Those who were accused unjustly of spying, and who had their names and reputations tarnished for life as a result, viewed Gouzenko as an opportunist whose word should never have been trusted. But was it really his fault that his allegations were used for the purposes of realpolitik? Once he made his pact with Western intelligence services, much of what Gouzenko did or said was out of his control.

To understand Gouzenko's historical legacy, we must go back to the beginning, to that fateful day in September 1945 when he walked out of the Soviet Embassy in Ottawa with a sheaf of secret documents. What motivated this obscure young cipher clerk to betray his country and embark on what would become a life of fear, acclaim, and, eventually, frustration and poverty? What evidence did he actually produce to show that there was such a massive Soviet spy ring in North America? And what were the driving forces that led Western government officials and politicians to seize on Gouzenko's allegations and engage in an unprecedented struggle against the communist menace?

For decades, much of the official documentation on the Gouzenko affair in Canada, Britain, and the United States was kept under wraps as part of long-standing secrecy regulations. But government files in all three countries have opened up, and recently the intelligence services of Canada and Britain have released an impressive amount of exciting new evidence. In 2003, the Canadian Security Intelligence Service (CSIS), at this author's request, declassified hundreds of RCMP Gouzenko documents, and at the end of that year the British made a large portion of their MI5 Gouzenko file publicly available. It is now possible to document, for the first time, the details of the defection and the response of the allied governments, and to examine the impact of the case in the years that followed. And thanks to “glasnost,” we now can learn about the impact of the Gouzenko affair in the Soviet Union, the turmoil it created in the Kremlin, and the repercussions it had for the Soviet intelligence apparatus.¹⁸

In chronicling Gouzenko's story, this book renews a debate that began in the McCarthy era and divides historians to this day. To what extent were the people accused of passing secrets to the Soviets during the 1940s really spies, and to what extent were they merely individuals sympathetic to the communist cause and unwittingly drawn into the Soviet espionage network? Another important question, one that resonates particularly strongly in today's post-September 11 world, is whether the harm that was done to Western interests by those who did spy justified the widespread abuse of individual rights, the vast expenditures of public resources, and the shattering of so many innocent lives. Was the Gouzenko affair necessary to open up our eyes to the evils of the Soviet empire, or did the defection produce an overreaction that polarized Western society and diverted Western governments from a more reasoned and productive response to Soviet espionage as we gradually came to understand its capabilities and aims? Can we say today, with over fifty years of hindsight and a vast amount of new archival documentation, that the Cold War, as fought by the West against Soviet espionage in the early post-war years, was worth fighting? This book aims to answer these questions.