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Eagle and Swastika: CIA and Nazi War Criminals and Collaborators (U)

Kevin Conley Ruffner

DECLASSIFIED AND RELEASED BY CENTRAL INTELLIGENCE AGENCY SOURCES METHODS EXEMPTION 3 B 2 B NAZIWAR CRIMES DISCLOSURE ACT DATE 2007

CL BY:

2196985

CL REASON:

1.5 (b), (c), (d)

DECLAS ON:

ΥI

DRV FROM:

MIII.TIPLE

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Eagle and Swastika: CIA and Nazi War Criminals and Collaborators examines the Central Intelligence Agency's involvement with Nazis and their collaborators after World War II. It details the Agency's assistance to various US Government investigations, primarily by the Justice Department's Office of Special Investigation (OSI) and by the General Accounting Office (GAO), of dealings with Nazis from the 1970s to the present day. The study recounts the Agency's long involvement with Nazis – first as an enemy in World War II, then as a quasi-ally in the Cold War, and finally as the subjects of criminal investigations and prosecutions by Federal officials. (U)

The Charter and Judgment of the Nuremberg Tribunal, adopted by the United Nations in 1950 as General Assembly Resolution 95, defined crimes under international law as crimes against peace, war crimes, and crimes against humanity. The Nuremberg International Military Tribunal also charged German defendants with conspiracy. Those who served in the Schutzstaffeln, or SS, were accused of membership in a criminal organization. The Allied authorities also offered specific charges in subsequent trials of German war criminals after 1945. The generic term "war crimes" encompasses a variety of crimes committed by the Axis Powers and their collaborators as recognized at Nuremberg. The term is commonly used to denote support rendered to Nazi Germany by individuals even if these same individuals did not directly commit murder or other violent crimes. It should also be noted that many individuals charged with war crimes in World War II were not members of the Nazi party or even German citizens. Alan S. Rosenbaum, Prosecuting Nazi War Criminals (Boulder: Westview Press, 1993), pp. 22-23. See also Appendices, Norman E. Tutorow, ed., War Crimes, War Criminals, and War Crimes Trials: An Annotated Bibliography and Source Book (Westport: Greenwood Press, 1986), pp. 453-477. (U)

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Reich.² The story of escaped Nazis after the collapse of the Third Reich in 1945 has long gripped novelists and Hollywood screenwriters, as seen by such bestsellers and subsequent box office hits as The Salzburg Connection, The Boys from Brazil, Marathon Man, and The ODESSA File.³ Since the 1970s, the topic has also proven steady fare for historians and journalists.⁴ (U)

^<sup>2For an overall discussion, see Kevin C. Ruffner, "A Persistent Emotional Issue: CIA's Support to the Nazi War Criminal Investigations," Studies in Intelligence (Unclassified ed. 1997), pp. 103-109. (U)

^<sup>3One guide to American spy movies notes, "Hollywood, in its unique, uncanny way, was quick to turn out dramas about unrepentant Nazis planning for the next onslaught as early as 1944. During the next few decades dozens of plots centered around schemes by former Nazis to steal gold and jewels, restore their former glory and spread fear and hatred among the peoples of the world. A few were earnest attempts to expose the flight of war criminals, some were simple entertainments and others were undisguised propaganda films." See Larry Langman and David Ebner, Encyclopedia of American Spy Films (New York: Garland Publishing, 1990), pp. 258-260. (U)

⁴Public interest in Nazi war criminals can be seen in the number of publications since the mid1970s, including Charles R. Allen, Nazi War Criminals in America: Facts—Action: The Basic
Handbook (New York: Highgate House, 1985); Mark Aarons and John Loftus, Unholy Trinity:
How the Vatican's Nazi Networks Betrayed Western Intelligence to the Soviets (New York: St.
Martin's Press, 1991); Charles Ashman and Robert J. Wagman, Nazi Hunters: The Shocking
True Story of the Continuing Search for Nazi War Criminals (New York: Pharos Books, 1988);
Howard Blum, Wanted!: The Search for Nazis in America (New York: Quadrangle/The New
York Times Book Company, 1977); Tom Bower, The Paperclip Conspiracy: The Hunt for Nazi
Scientists (Boston: Little, Brown and Company, 1987); William B. Breuer, Race to the Moon:
America's Duel with the Soviets (Westport: Praeger Publishers, 1993); Linda Hunt, Secret
Agenda: The United States Government, Nazi Scientists, and Project Paperclip, 1945-1990 (New
York: St. Martin's Press, 1991); Beate Klarsfeld, Wherever They May Be! (New York: Vanguard
Press, 1975); John Loftus, The Belarus Secret, ed. Nathan Miller (New York: Paragon House,
1989, rev. ed. 1982); Allan A. Ryan, Jr., Quiet Neighbors: Prosecuting Nazi War Criminals in
America (San Diego: Harcourt Brace Jovanovich, 1984); Rochelle G. Saidel, The Outraged
Conscience: Seekers of Justice for Nazi War Criminals in America (Albany: State University of
New York Press, 1984); Christopher Simpson, Blowback: America's Recruitment of Nazis and
Its Effects on the Cold War (New York: Weidenfeld and Nicholson, 1988); and Efraim Zuroff,
Occupation: Nazi Hunter; The Continuing Saga for the Perpetrators of the Holocaust (Hoboken:
KTAV Publishing House, 1994). (L)

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During the first three decades after the war, however, the Soviet threat and the possibility of a cold war turning into world Armageddon muted public scrutiny. The presence of former Nazis and their collaborators in the United States generated little interest from the American public, and even less from the Federal government. In this environment, the Central Intelligence Agency simply avoided any discussion of its roles as having used America's former enemies as intelligence sources and operational assets. (U)

• 1. CIA, and its predecessor organizations, including the Office of Strategic Services (OSS 1942-45), the Strategic Services Unit (SSU 1945-46), and the Central Intelligence Group (CIG 1946-47), employed German intelligence personnel as sources of information.
• 2. CIA sponsored the new West German intelligence service, an organization under the control of officers of the defeated German general staff. The ranks of the Gehlen Organization sheltered many officers of the German SS and SD whose loyalty to the new West German government remained in doubt.
• 4. CIA, including the Office of Policy Coordination (OPC 1948-1952), brought German and Eastern European individuals to the United States to provide detailed information on the Soviet Union.
• 5. CIA, including OPC, formed "secret armies" from various emigre groups in Europe and trained them in the United States. The ranks of these groups included numerous former collaborators of Nazi Germany and some of these people remained active in other CIA projects.

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• CIA evacuated Nazi war criminals through "rat lines" in Southern Europe, allowing these people to escape justice by relocating them incognito in South America.
• 7. CIA abused its legal authority to bring Soviet and Soviet Bloc defectors and other persons of interest to the United States.
• 8. CIA covered up these activities from Congressional and other Federal government investigators. (U)

The Agency's involvement with Nazis and their collaborators as well as the impact that these relationships had on both American foreign and domestic policies is the subject of numerous books and articles over the years. In his 1988 book, Blowback:America's Recruitment of Nazis and Its Effects on the Cold War, Christopher Simpson asserts that:

Allan A. Ryan, Jr., a former director of Office of Special Investigations (OSI), is skeptical about claims that American intelligence deliberately brought Nazi war criminals to the United States. While he acknowledges that the government assisted in the

^<sup>5 Simpson, Blowback, p. xiv. (U)

^<sup>6Ibid, p. 10. (U)

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immigration of a "small roomful of people at the very most," Ryan is convinced that loose enforcement of US laws, such as the Displaced Persons Act of 1950, the Immigration and Nationality Act of 1952, and the Refugee Relief Act of 1953 permitted far greater numbers of Nazi war criminals and collaborators to enter the United States through legal means than any covert US intelligence project.⁷ (U)

Ryan also criticized much of the literature dealing with US Government collusion with Nazis. "From time to time in the past few years, books or other accounts have appeared claiming to expose some newly-discovered conspiracy by CIA, or the military, or a cabal of lawless bureaucrats, to bring Nazi collaborators to the United States after the war." "These accounts," according to Ryan, "have offered dubious evidence and have been unable to survive any objective analysis." In his role as director of the Office of Special Investigations, Ryan wrote, "no Federal agency, including the CIA, ever objected to any prosecution or tried to call off any investigation." (U)

Since the 1970s, the Central Intelligence Agency, in fact, has been one of the leading government agencies involved in the investigation of Nazi war criminals.⁹ The Office of General Counsel (OGC), the Directorate of Operations (DO), the Office of Security (OS), and other components of CIA have worked closely with the Office of

^<sup>7Ryan, Quiet Neighbors, pp. 4-5, and 328-329. (U)

^<sup>8Ibid, pp. 4 and 267. (U)

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Special Investigations to identify and bring Nazi war criminals and collaborators to justice for concealment of criminal activity during 1933-45. Prior to the establishment of OSI, CIA worked with the Special Litigation Unit (SLU) of the Immigration and Naturalization Service (INS) for a brief period in the 1970s. In addition, Congress ordered the General Accounting Office (GAO) to conduct two separate investigations, during 1977-78 and again during 1982-85, to determine the relationship between the US Government and Nazi war criminals. The House of Representatives held public hearings to discuss GAO's findings after both investigations. ¹⁰ (U)

According to the General Accounting Office, the Central Intelligence Agency did not have a formal or even an informal program to bring Nazi war criminals or collaborators into the United States. ¹¹ The Agency did bring defectors from Iron Curtain countries and provided "disposal" services for American agents from Europe. In some cases, these defectors or agents also had Nazi pasts, but this did not constitute a basis for US support or assistance. In its 1985 report, Nazis and Axis Collaborators Were Used to

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the Agency's role in the years after Nazi Germany's collapse. The CIA expressed reluctance to work with some individuals or organizations, as seen with the Ukrainian nationalists and the Gehlen Organization. As tensions mounted between East and West, the Agency retreated from this stand because of the pressing need for intelligence on the intentions and capabilities of the Soviet Union. The first half of this study examines many of the CIA's earliest operations in Europe when the Agency decided to work with individuals and groups with Nazi backgrounds. The second half of the study shifts to the period of the 1970s to the present day and looks at the Agency's role in the investigations, including such notable cases as Klaus Barbie and Kurt Waldheim. (U)

The records of the Central Intelligence Agency and its predecessor agencies, including OSS, SSU, and CIG, form the basis for this study. These sources are scattered throughout the Agency and are not easily identifiable or retrievable. Significant material can be found in various individual "201 files" or project files maintained by the Directorate of Operations as well as in individual files of the Office of Security. 13

⁽Washington, DC: General Accounting Office, 1985) (hereafter cited as 1978 GAO Report or 1985 GAO Report). (U)

¹²¹⁹⁸⁵ GAO Report. (U)

^<sup>13The 201 system provides the Agency with a method for identifying a person of specific interest to the Directorate of Operations (DO) and for controlling and filing all pertinent information

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Operational files of the DO and correspondence maintained in the Executive Registry of the DCI's office also provide extensive information. Records of the actual Nazi war criminal investigations after the 1970s, including outside agency inquiries and CIA responses, are maintained by the Office of General Counsel as well as by the DO. (U)

Numerous files exist in other US government agencies, including the Federal Bureau of Investigation (FBI), the Immigration and Naturalization Service (INS), the US Army's Investigative Records Repository (IRR), and the National Archives and Records Administration (NARA). Among the most important documents are those located in Record Group 226, the Records of the Office of Strategic Services, which have been declassified and transferred to the National Archives. In addition to the thousands of feet of records already declassified by CIA, the Agency has released hundreds of thousands of pages of World War II-era records under the auspices of the Nazi War Crimes Disclosure Act in 2000. This act has also brought forth a deluge of personal dossiers from the Army's Investigative Records Repository at Fort Meade, Maryland. Probably no country in the world, and certainly no intelligence service, has released to the public as much

about that person in a single file. It consists of a unique seven digit 201 file number assigned to that individual and may be opened by a DO component when there is a reasonable expectation that additional information will be acquired or retained on that individual. Normally, a 201 file will be opened when a Main Index search reveals substantive information on that individual in five or more documents. The Headquarters 201 file is the official file containing all biographic reporting on and references to the individual such as personal history, assessments, and plans for future use. DO Instruction $\Box$ , copy located in CIA History Staff files. The Office of Security, likewise, maintains its own, separate file system on individuals of interest to the CIA. (S)

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information about intelligence activities during the Second World War as the United States. 14 (U)

The amount of material released in the last two decades, as well as material that is still retained by CIA, is overwhelming. It is often possible to find the same document (or a copy) as classified in Agency files but as declassified at the National Archives. While this study is written at the classified level, a great deal of the source material and the information itself is already available at the National Archives. This is especially true following CIA's declassification of the greater portion of the "withdrawn" OSS material in 2000. 15 (U)

Since 1998, the Nazi War Crimes Disclosure Act requires the CIA to search its holdings for still-classified material pertaining to Nazi war criminals and war crimes; the ensuing searches located an extensive amount of material that was otherwise previously unavailable to the author. Although the author attempted to mine this new vein of information, a lack of time and resources to plow through the sheer number of files generated by the name traces of over 60,000 known war criminals and SS officers proved to be limiting factors. (U)

^<sup>14For further details, see Kevin C. Ruffner, "Record Group 226 at the National Archives," Center for the Study of Intelligence Newsletter (Summer 1996), pp. 3-4; Kevin C. Ruffner, "OSS and CIA Records at the National Archives," Center for the Study of Intelligence Newsletter (Winter-Spring 1997), pp. 3-4; Kevin C. Ruffner, "CIA and the Search for Nazi War Criminals," Center for the Study of Intelligence Bulletin (Winter 2000), pp. 10-11; and Kevin C. Ruffner, "CIC Records: A Valuable Tool for Researchers," Center for the Study of Intelligence Bulletin (Summer 2000), pp. 11-16. (U)

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It should be noted for the record that the author did not enjoy full and unfettered access to all DO and OS records, finding aids, manual indexes, or computer search tools. Access to records and, even more importantly, the ways to find information are highly restricted within CIA and even more so within the Directorate of Operations and the Office of Security – for operational, security, and privacy reasons. While the various components permitted me to review numerous records and 201 files, the author did not enjoy carte blanche access to all files. This does not mean that the author did not receive significant help to order and review those records that he determined to be of possible relevance. Quite the contrary, the author received bountiful help over the years from the unsung heroes of the Agency - the recordkeepers who toil in the bowels of Headquarters and at the warehouse-like Agency Archives and Records Center. Without their help, no Agency histories could be written. (U)

After shifting through hundreds of records boxes and personality files, the author is convinced that it is impossible to write the definitive history of such a complex issue as the relationships that existed between American intelligence and the Nazis during and after the war. The topic is too broad, the issues are complex and changed over time, and the timeframe itself encompasses the entire lifespan of the CIA and its predecessors. The records are scattered, and many were destroyed or otherwise are not readily available. The identification of every single Nazi war criminal or collaborator who came into

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contact with CIA is well nigh impossible. Thus, it is quite likely that investigators, historians, and journalists will continue to claim to have uncovered Nazis with connections to the CIA. (U)

Eagle and Swastika highlights the general operational activities of the Agency and its predecessors and recounts specific projects involving those with Nazi backgrounds from 1945 to the present day. The study should be regarded as a critical guide to future research into this emotional and complicated subject. (U)

The strengths and weaknesses of this study rest primarily within the CIA's own records management system. As an item of interest, Agency records generally do not contain information that constitutes a basis for judging the guilt or innocence of war criminals. The Office of Special Investigations, however, utilizes the Agency's records as a tool in its examination of existing historical documentation. These documents, in turn, may have some impact on the overall course of the investigation and prosecution. (U)

Interviews with retired Agency officers have provided some personal anecdotes and information about the early days of American intelligence operations in Western Europe after World War II. Both the GAO and OSI also conducted extensive interviews during the course of their investigations. The interviews employed for this study have not been as far ranging, but have enabled the author to gain a better understanding of the Agency's operations in Austria and Germany in the first decade after World War II. This time period, as will be seen, is crucial because the Agency became more involved with Nazi war criminals and collaborators. (U)

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The lesson of the Nazi war criminals is perhaps best applied to present intelligence operations. Sixty years after World War II, many Americans are concerned that actions taken by the US Government during the Cold War to combat the Soviet threat actually threatened our national liberties and democratic nature. Allen Dulles, the Director of Central Intelligence during 1953-61 and a former OSS station chief, displayed a cavalier attitude about Reinhard Gehlen, West Germany's then future intelligence chief. "I don't know if he is a rascal," Dulles said about the former head of the Wehrmacht's Fremde Heere Ost (FHO), the Foreign Armies East branch of military intelligence, that dealt with the Soviet Union. "There are few archbishops in espionage. He's on our side and that's all that matters. Besides," Dulles added, "one needn't ask him to one's club." 16 (U)

Dulles's alleged response to concerns about the background and trustworthiness of such an important figure as Gehlen exemplifies the attitude that the Agency adopted with regard to the past Nazi activities and affiliations of its intelligence operatives during the Cold War. Since the 1970s, this Cold War attitude has created considerable problems, only to be compounded by other scandals that have roiled the Agency. With the end of the Cold War, the Agency is hardpressed to defend or even explain some of its actions during that trying period. The CIA still faces controversies over the backgrounds of its agents, as witnessed in the recruitment of sources in Central and Latin America as

^<sup>16Leonard Mosley, Dulles: A Biography of Eleanor, Allen, and John Foster Dulles and Their Family Network (New York: The Dial Press/James Wade, 1978), p. 275. (U)

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late as the 1990s. Distrustful of the Agency, many American politicians have demanded the release of all CIA records dealing with Nazis and their collaborators. (U)

The Nazi war criminal investigations are now the longest-running examination in the CIA's history. Decades after the end of World War II, controversies about the Agency's role linger. Most, but not all, of the records of the Office of Strategic Services and the Strategic Services Unit have been declassified and released to the National Archives. The US Government, however, retains control of countless other records from the early Cold War period. Until all of this information is available to the public, the Agency will continue to defend its past in the face of suspicion, intrigue, and guesswork. (U)

In researching and writing this study, the author would like to acknowledge the support and patience of J. Kenneth McDonald,

Intelligence Agency from 1991 to 2002. As pressure mounted for the Agency to reveal its relations with Nazi war criminals, Ken McDonald assigned me to write a history of the period in 1992. As a newly minted Ph.D. and CIA historian who had joined at the end of the Cold War, the Nazi war criminal project has proven both fascinating and frustrating. Little did I know that I would still be hard at work on the topic over ten years later. (U)

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manuscript at various stages. Lawrence H. McDonald and William Cunliffe, archivists and intelligence specialists at the National Archives, are the unsung heroes to researchers of all backgrounds. Both men took me into the stacks at the National Archives to search for every lead in the massive collection of records at College Park. The interest in my work and cooperation shown by Eli Rosenbaum, director of the Office of Special Investigations, and Elizabeth B. White, chief historian, also have been most gratifying. (U)

Kevin Conley Ruffner

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Chapter One

The Conclusion Must Be Left to History (U)

From its formation in 1942, the Office of Strategic Services grew almost overnight into a leading American intelligence service in the war against the Axis Powers. By 1945, the OSS had some 12,000 men and women, both civilian and military personnel, scattered throughout the world, although the bulk of the overseas operations took place in Europe, the Mediterranean, and the Far East. The OSS dedicated a wide array of resources to the German target, including support to resistance forces in occupied Europe; support to domestic resistance efforts against Hitler; propaganda efforts; and collection against Germany's industrial and military capabilities. In the course of its operations from 1942 to 1945, the OSS came into contact with thousands of Germans, dedicated anti-Nazis as well as those who had fought for the Third Reich. The mission of any intelligence service is to penetrate the forces of its adversaries to learn as much as

For a general history of the Office of Strategic Services, see Michael Warner, The Office of Strategic Services: America's First Intelligence Agency (Washington, DC: Central Intelligence Agency, 2000). The impact of OSS is discussed in George C. Chalou, ed., The Secrets War: The Office of Strategic Services in World War II (Washington, DC: National Archives and Records Administration, 1992). (U)

As examples of the published works on OSS's war against Nazi Germany, see Joseph E. Persico, Piercing the Reich: The Penetration of Nazi Germany by American Secret Agents during World War II (New York: Viking Press, 1979); Jurgen Heideking and Christof Mauch, eds., American Intelligence and the Resistance to Hitler: A Documentary History (Boulder: Westview Press, 1996); Christof Mauch, Schattenkrieg Gegen Hitler: Das Dritte Reich im Visier der amerikanischen Geheimdienste 1941 bis 1945 (Stuttgart: Deutsche Verlags-Anstalt, 1999); and Petra Marquandt-Bigman, Amerikanische Geheimdienstanalysen uber Deutschland 1942-1949 (Munich: R. Oldenbourg Verlag, 1995). (U)

possible about the enemy's capabilities and intentions. During wartime, few restrictions hinder an intelligence service in the pursuit of its objectives.³ (U)

Operation SUNRISE (U)

In November 1942, Allen W. Dulles took over the OSS station in Bern,
Switzerland, which soon became the eyes and ears for OSS in Europe. From his post in
neutral Switzerland, Dulles "used whomever he could to further his intelligence mission\neven if some of his agents may have been of dubious political persuasion."
Consequently, Dulles worked with dozens of Germans and others, some were communis
while others were Nazis.⁴ (U)

In addition to his work with the German resistance and his recruitment of an agent who penetrated the Nazi Foreign Ministry, Dulles's most notable contribution to the war effort was his involvement in the surrender of German forces in northern Italy prior to the collapse of the Third Reich. Undertaken in secret, the surrender shortened the bloody war in Italy and saved countless lives. Known as Operation SUNRISE, the talks did not remain a secret for long; indeed, they received public attention just weeks after the war ended. Twenty years after the event, Dulles's himself wrote a detailed history of the

^<sup>3As an example, the OSS recruited German and Austrian prisoners of war to serve as agents to cross Nazi lines to collect intelligence and to spread propaganda. See Clayton D. Laurie, The Propaganda Warriors: America's Crusade Against Nazi Germany (Lawrence: University of Kansas Press, 1995). (U)

⁴John H. Waller, The Unseen War in Europe: Espionage and Conspiracy in the Second World War (New York: Random House, 1996), p. 359. (U)

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operation, The Secret Surrender, based on wartime documentation. Dulles' book forms the general outline of our knowledge about the German surrender in Italy.⁵ (U)

In the last year of the war, the German military situation became increasingly desperate. The failure of the 20 July 1944 plot against Hitler and the bloody roundup of coup suspects meant that there was little chance for the German resistance to negotiate an end to the war. As the Soviets and Western Allies drew ever closer to Germany itself, various German officials began to extend peace feelers to the British and Americans. In December 1944, Dulles's agent, Gero von Schulze Gaevernitz, told Dulles that Alexander von Neurath, the German consul in Lugano, was in close contact with senior German military and SS officers searching for an American contact to discuss surrender terms. Dulles was forced to reject this feeler because President Roosevelt and Gen. William J. Donovan, the director of OSS, had expressed concern about the reaction of the Soviet allies to any negotiations by the Western Allies with the Germans. (U)

Over the next several months, Dulles continued to receive feelers in Switzerland from senior SS officers, including such notable Nazis as Heinrich Himmler, Ernst Kaltenbrunner, and Walter Schellenberg. But these contacts all came with strings attached, such as the requirement that the Americans and the British join forces with the Germans to fight the Soviets. At the same time, intelligence reports and simple rumors

ristir, ristra, spr. spr. spr. spr. spr. spr. spr. spr.

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underscored the German determination to fight to the last man by fortifying the Alpine regions of southern Germany and Austria. The so-called "National Redoubt" concerned American planners who were anxious to avoid a major loss of lives at the end of the war. From the Allied perspective, Operation SUNRISE offered a way to end the fighting in Italy while ensuring that the Germans could not mount a last-ditch battle in the Alps. (U)

By late 1944, various SS officials in Italy and in Germany decided to contact the Allies. One of these undertakings, codenamed WESTWIND, failed because of rivalries at the highest levels of the SS. By mid-February 1945, SS-Obergruppenfuhrer Karl Wolff, the commander of all SS troops in Italy, told Walther Rauff, a subordinate SS officer, that he wanted to establish contact with the Allies in neutral Switzerland. Rauff mentioned this to another SS officer, Guido Zimmer, who suggested Baron Luigi Parilli as an intermediary. (U)

Parilli, the prewar European representative of a prominent American company, was closely tied to Zimmer and may have been one of his agents. The Italian claimed that Zimmer's love for Italy and his concern that the Germans would unleash a "scorched earth" policy motivated both men to seek the Allies. Through Professor Max Husmann, a Swiss schoolmaster, Parilli received a visa to visit Switzerland and present the German proposal to Maj. Max Waibel, a Swiss intelligence officer and a contact of Allen Dulles, the OSS station chief in Bern. This led to the first meeting between Gero von Gaevernitz and Parilli in Lucerne and the beginning of Operation SUNRISE. (U)

^<sup>7For an outline of Operation SUNRISE, see Waller, The Unseen War, pp. 366-390. (U)

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In March 1945, Dulles and Gaevernitz met in Switzerland with Wolff. Dulles knew that Wolff wanted to discuss surrender terms, but the OSS station chief made continued discussions conditional upon the release of several Italian resistance leaders in German captivity. Wolff told Dulles that he wanted to surrender SS forces to the Allies and that he would work to get Field Marshal Albert Kesslering, commander of all German military forces in Italy, and his successor, Field Marshal Heinrich von Vietinghoff, to do the same. (U)

Guido Zimmer played a steady role in facilitating German feelers with the OSS in Switzerland. Within days after the first meeting between Gaevernitz and Parilli in February 1945, Zimmer and another German officer, SS-Standartenfuhrer Eugen Dollmann, traveled to Lugano to meet with the Americans. Dollmann had served as a translator for Hitler when he visited Mussolini. Himmler valued Dollmann for his social and political contacts in Rome. As events unfolded, Zimmer continued to be a key point of contact and even coordinated the placement of a Czech-born OSS radio operator, Vaclav Hradecky, first at the SS headquarters in Milano and later in Bolzano. With Zimmer's protection, Hradecky, known as "Little Walter," provided communications between Allied headquarters in Caserta and the Germans in northern Italy. (U)

In the meantime, Wolff met with Dulles and other British and American officers in northern Italy to continue the preliminary discussions. Feelers by other senior SS officials complicated Wolff's own efforts to deal with the Western Allies. Hitler, in fact, learned of Wolff's activities, but did not take any action against the SS general. The death of President Roosevelt in April also created new problems when Dulles received

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orders to drop all contact with the Germans. After further delays and more frustration,

Dulles nonetheless succeeded in getting two representatives of the German army and SS
to sign the surrender documents on 29 April 1945.8 (U)

A More Moderate Element in the Waffen SS (U)

The fact that Operation SUNRISE ended the war in Italy has been overshadowed by other, more ominous, characterizations of the surrender in the decades after 1945. Historians, journalists, and even some intelligence officers have downplayed the importance of the secret surrender and criticized Allen Dulles for promoting his own role and that of the OSS. More damaging, however, are the accusations that Allen Dulles promised to prevent any postwar Allied retribution against the German officials involved in the surrender negotiations. Operation SUNRISE is regarded by some historians as "an early glimpse backstage before the curtain went up on a Cold War drama that dominated international affairs for a long time to come." (U)

Bradley F. Smith and Elena Agarossi regard Dulles's efforts as an important milestone in the postwar struggle between East and West. "Implicit in the cold war evolution was a shift from the picture of Germany as an evil and aggressor nation to that of comrade in the struggle against Communism . . . . What Operation Sunrise

⁸Ibid. (U)

^<sup>9Ibid, p. 390. (U)

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demonstrates is that individual Germans were eager to do what they could to push the Western powers into a cold war stance as quickly as possible." (U)

The case of SS Obergruppenfuhrer Wolff is well known to historians, who claim that Dulles had made special arrangements for the German participants in Operation SUNRISE. After having met Wolff in Bern in March 1945, Dulles cabled Washington to say that "Wolff's distinctive personality, our reports and impressions indicate he represents more moderate element in Waffen SS, with mixture of romanticism. Probably most dynamic personality North Italy and most powerful after Kesselring." (U)

After the German surrender, the Allies did not put Wolff on trial at the International Military Tribunal at Nuremberg, although the Americans extensively interrogated him. The British then held him as a witness in the trial of Field Marshal Kesslering until 1949 and subsequently placed the SS general on trial in Hamburg. The British failed, however, to present a solid case against Wolff. Aided by affidavits from Dulles and other Allied officers involved in the German surrender in Italy, Wolff won an outright acquittal. The West German Government eventually filed its own charges against Wolff in 1962 when he was found guilty of being "continuously engaged and deeply entangled in guilt" for the crimes of the Third Reich. He received a 15-year prison sentence. ¹² (U)

^"Petersen, From Hitler's Doorsteps, p. 468. (U)

^<sup>12Smith and Agarossi, Operation Sunrise, pp. 188-192; Dulles, The Secret Surrender, pp. 252-253. See also "SS General Was Aide to Himmler," New York Journal American, 30 September 1964, a copy filed in vertical files at the Historical Intelligence Collection, CIA Library. (U)

This is not the place or the time to attempt to pass on the extent of Wolff's guilt or to analyze his incentives and motives in acting as he did in the Sunrise operation. The German court has rendered its judgment, and it is useless to attempt here to reconcile his conduct as a close confidant of Himmler's for many years with that of the man who, more than any other person, contributed to the final German surrender in North Italy.... The conclusions must be left to history. One point seems to me to be clear: Once convinced that he and the German people had been deceived and misled by Hitler, and that by prolonging the war Hitler was merely condemning the German people to useless slaughter, Wolff determined that whatever his past purposes and motivations might have been, it was his duty, henceforth, to do what he could to end the war. During the weeks of our negotiations he never weakened in this determination, or varied from this course; he never, as far as I could see, made us promises which he failed to fulfill within the limits of his power and capabilities. Hence, he made his great contribution to the success of the Sunrise operation. (U)

intermediaries paved the road to the eventual German surrender in northern Italy. How did the other German participants in Operation SUNRISE fare at the hands of the Western Allies? Three SS officers —Eugen Dollmann, Eugen Wenner, and Guido Zimmer—also played important roles in Operation SUNRISE. When Obergruppenfuhrer Wolff decided to contact the Allies, moreover, he did so through an Italian businessman, Baron Luigi Parilli. The postwar records of those four men illustrate the dilemmas facing the conquerors in later years. (U)

Crisis in Rome (U)

^<sup>13Dulles, The Secret Surrender, p. 253. (U)

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The case of General Wolff was the best known of troubles that faced the German participants involved in Operation SUNRISE. As new players and political forces emerged in postwar Europe and Washington, the US government agencies in contact with the former German officers multiplied—and in many cases these organizational shifts erased institutional memories. Eugen Dollmann and Eugen Wenner created problems for the Allies in the years after the war, with Dollmann remaining active in the intelligence arena in Europe for the next decade. (U)

After a lengthy confinement, Dollmann and Wenner escaped from an Allied prisoner of war camp in 1946. In August of that year, Capt. James J. Angleton, the head of SCI/Z, the counterintelligence branch in Rome of the Strategic Services Unit (the successor to OSS), learned from Baron Luigi Parilli that Italian military intelligence had placed Dollmann and Wenner in custody in Milan. According to Parilli, a rightwing Italian faction planned to use both Germans to discredit the Allies. ¹⁴ (S)

To forestall such a plot, Angleton managed to bring Dollmann and Wenner to Rome and provided them with false identities. He also urged the US Army to publish a

¹⁴ Cardinal Ildebrando Schuster of Milan claimed that he had saved Italy from German destruction and had arranged for the Nazi surrender. A supporter of the Italian Fascist regime, Schuster had, in fact, been involved in separate unsuccessful negotiations between the Italians and Germans in the last year of the war. By using Dollmann and Wenner, Italian conservatives hoped to stir nationalistic fervor against the Americans and the British, just as the Allies were negotiating a peace settlement with Italy. Bringing German military and SS officers to justice for Nazi crimes committed in wartime Italy raised troublesome issues in postwar Italy, including wartime collaboration with the Nazis, the role of the Catholic Church, and how Italian Communisms used Italy's fascist past against the present Italian Government and the Allies. The Allies ruled Italy through the Allied Control Council under the terms of the September 1943 armistice, although the Italian Government was responsible for internal affairs after December 1945. The 1946 peace treaty, dictated to Italy by the Allies, aroused considerable antagonism on the part of both Italian left and rightwing parties. See Smith and Agarossi, Operation Sunrise, pp. 57, 66, 138, and 142. See also Giuseppe Mammarella, Italy after Fascism: A Political History 1943-1965 (Notre Dame: Notre Dame University Press, 1966), pp. 159-175. For further details, see Cable, To Special Operations, 20 November 1946, IN 44607, (S), in Directorate of Operations Records, iob. box. folder, and CIA AARC). (S)

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"white paper" on Operation SUNRISE to counteract the attacks by Italian rightists and communists. The Italian police, however, arrested Dollmann, and he became caught up in an internal power struggle within the Italian bureaucracy. Angleton, in turn, tried to get Dollmann released from Italian custody. After learning about Dollmann's arrival in Rome, the Italian Communism press raised his name as a witness, or as a possible defendant, at the trial of Nazi officers involved in the German massacre of 335 Italian civilians in March 1944. ¹⁵ (S)

The British and Americans in Rome could not agree whether Dollmann and Wenner had been offered any sort of immunity or protection as a result of their role in Operation SUNRISE. British Maj. Gen. Terence S. Airy, one of the two Allied generals

^"Cable. To Special Operations, 20 November 1946, To 1664, IN 44607, (S), in DO Records, To Box 7, Folder 201, CIA ARC. Italian partisans attacked a column of 5S troops in the Via Rasella in Rome on 23 March 1944, killing some 32 soldiers. Upon hearing the news, Hitler ordered German authorities in Rome to kill ten Italians for every German death. SS Oberstumbannfuhrer Herbert Kappler, the head of the SS in Rome, hastily gathered Jews, communisms, and other prisoners and brutally murdered 335 men and boys in the Ardeatine caves outside of Rome the following day. With the liberation of Rome by the Americans in June 1944, Italian authorities began the gruesome task of recovering and identifying the remains. In November 1946, the British tried two German generals for their role in the Ardeatine Caves massacre; Kappler was a witness for the prosecution. The court found the two generals guilty and sentenced them to death. As it turned out, the British later remanded the sentences to life imprisonment and then cancelled the jail terms. The British released one of the generals in 1952 (the other had died in prison of natural causes). In the meantime, the British also tried Field Marshal Kesselring in 1947 for ordering German troops to slaughter Italian civilians in Rome and elsewhere. He was found guilty and sentenced to death; a judgment that aroused great debate in Great Britain. Winston Churchill and other senior British leaders protested Kesselring's fate, and it was reduced to life imprisonment. In 1952, Kesselring also returned to West Germany as a free man. In July 1947, the British turned Herbert Kappler over to the Italian Government. In May 1948, the Italians tried Kappler and five other SS officers for their roles in the Ardeatine caves massacre. All of the officers, with the exception of Kappler, were acquitted. The Italian military tribunal found Kappler, as the commander, guilty of murder, and he was sentenced to life imprisonment. After numerous appeals, the Italian Supreme Court confirmed the sentencing

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who met with Wolff during the negotiations, denied that Dollmann played any role in the surrender proceedings. Allied Forces Headquarters (AFHQ), in turn, issued a press release to this effect, stating that it had Dollmann in custody after his escape from a British POW camp earlier in the year. Angleton, however, continued to urge officials in Italy and in Washington to help Dollmann and Wenner, both of whom had since been transferred to an American military prison in Rome.

scrambled to find a way out of the mess. ________, chief of CIG's Control branch, contacted the State Department to ascertain its views on the Dollmann-Wenner case. 18 ___________________________________

^<sup>16Dollmann's arrest is discussed in "Germans on Trial in Rome Massacre," New York Times, 18 November 1946, p. 5. The New York Times provided limited coverage of the British trial of Gens. Eberhard von Mackenson, commander of the German 14^th Army, and Kurt Maelzer, German commandant in Rome, in November 1946. (S)

^1'Cable, ☐ ☐ to SO, 20 November 1946, ☐ ☐ 664, In 44607, (S), in DO Records, ☐ ☐ ☐, Box 7, Folder 201, CIA ARC. (S)

^<sup>18Rome telegram 4255, 21 November 1946, provided the Secretary of State, with details of the Dollmann case as the State Department had learned from the Italian press and from the American military and intelligence. According to the cable, the Italian press "has commented bitterly, with usual strong anti-Allied bias and propaganda appeal to latent Xenophobia. Principal complaints are that Allies have derogated Italian police sovereignty and have further taken and hidden German officer who may well be connected with Ardeatine caves massacre." A copy of the State Department telegram is found in DO Records, C. Box 7, Folder 201, CIA ARC. (U)

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promises to Dollmann and Wenner during the negotiations. In researching the case for Lt. Gen. Hoyt S. Vandenburg, the Director of Central Intelligence reviewed the 1946 British interrogation report of Dollmann as well as Dulles's 1945 report of Operation SUNRISE to see what information he could find. Let determined that they had participated in the surrender negotiations "at no small risk." He found no evidence that either had received any commitments. Dulles himself confirmed to Let hat he had "made no promises or commitments to Dollmann or Wenner, nor did he authorize any other person to make such commitments." Dulles stated that "these men did participate in the negotiations and his feeling is that if they are in trouble that some effort should be made to help them." Let agreed and told his superiors that "whether or not binding commitments were made to Dollmann or Wenner, it seems that we owe some consideration to these two men." (S)

Is ummary of the Dollmann-Wenner case and his discussion with Dulles are found in "Eugenio Dollmann and Eugene Wenner," no date, (S), in DO Records, ____________________________________

Eugenio Dollmann and Eugene Wenner," no date, (S), in DO Records, ( \sum_{\text{\subset}} ), Box 7, Folder 201. CIA ARC. (S)

^<sup>22Cable, Central Intelligence Group to Commanding General, Mediterranean Theater of Operations (COMGENMED), 27 November 1946, War Department 86566, (S), in DO Records, ☐ ☐, Box 8, Folder 161, CIA ARC. A similar cable was sent from OSO to ☐ ☐ ☐ on the same date. (S)

meetings with Wolff had "had the strictest instruction not to offer any form of immunity or reward to any individual and only operate on the basis of unconditional surrender."

Lee stated, "they scrupulously carried out their instructions." Any promises made by any other individual or party to the Germans ran counter to Eisenhower's orders. ²³ (S)

Gen. Lee categorically denied that Dollmann played any part in the negotiations and refused to release him, claiming such a step would "not help Dollmann and would create confusion with respect to Allied Force Headquarters position." The American commander noted that his headquarters had already offered Dollmann to the British as a witness and would hand him over to the Italians if an Italian court decided to press charges. "Since it is now known that Dollmann is held in United States custody, it would place Allied Force Headquarters in untenable position morally should it refuse request from Italian court that Dollmann testify." If and when legal proceedings subsided, Lee promised, the Army would then "repatriate Dollmann through normal United States channels." (S)

Lee's cable brought a sigh of relief in Washington. On 3 December, Vandenberg informed Lee that he "greatly appreciate[d] proposed action on Dollmann." Vandenburg, in turn, provided the Army in Italy with further information on Dollmann's role as an intermediary between Wolff and Dulles as well as in facilitating the release of the two Italian prisoners held by the Nazis. "Records and Mr. Allen Dulles confirm that no immunity in any form was offered to any individual involved in SUNRISE," Vandenberg

• Ibid. (S)

^<sup>23Cable, ☐ ☐ Ito War Department, 29 November 1946, F73492, IN 45013, (S), in DO Records, ☐ ☐ Box 8, Folder 161, CIA ARC. (S)

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By the end of December 1946, Gen. Lee in Caserta reported that neither the British nor the Americans wanted to hold Dollmann for war crimes prosecution. The Italians had not taken any steps to gain custody of either Dollmann or Wenner. Lee recommended that Dollmann be returned to Germany where the Army could detain him if the Italians decided to press criminal charges.²⁶ In relaying this information to Angleton, the Central Intelligence Group stated that he should "confidentially advise Dollmann solution of his difficulties and repatriation to Germany solely of efforts this organization.²⁷ (S)

The Dollmann-Wenner case came to a head in the spring of 1947. In mid-April,

Joseph N. Greene, the acting US Political Adviser to Gen. Lee, reported to Washignton
that the Italians had asked for Dollmann's transfer on two occasions in January and again

^<sup>25Cable, CIG to COMGENMED, 3 December 1946, War Department 86882, (S), in DO Records, ☐ ☐, Box 5, Folder 76, CIA ARC. A copy of this same cable was sent by OSO to ☐ ☐ ☐ and is found in DO Records, ☐ ☐ ☐, Box 8, Folder 161, CIA ARC. Headquarters kept Angleton in Rome informed of the communiqués between Caserta and Washington. See HH (identity unknown) to BB8 (Angleton), "Dollmann and Wenner," 5 December 1946, (S), in Eugen Dollmann, ☐ ☐ ☐, DO Records. (S)

²⁶Cable, Supreme Allied Commander, Mediterranean (SACMED), Caserta to War Department, 28 December 1946, E 73983, IN 46259, (S), in DO Records, ☐ ☐ Box 8, Folder 161, CIA ARC.

²⁷SO to C 31 December 1946, Washignton 5263, (S), in DO Records, C Box 7, Folder 201, CIA ARC. (S)

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in April, but that the Army had failed to act.²⁸ The Italians did not know that the Americans also had Wenner, but his fate was clearly linked to Dollmann's. Both men, the Army felt, had "continuing intelligence value" and should be transferred to the Army's control in Germany.²⁹ By the first week of May, the State Department reported that the Army now wanted to "dispose" of the two SS officers "without further delay." (S)

In mid-May, the Army provided the State Department with an Italian warrant for the arrest of four German SS officers, including Dollmann, for the murder of Italian citizens. Of the four, the Americans had only Dollmann, who was ill at the time and receiving treatment at the American military hospital in Rome. By now, however, State Department officials in Italy wondered if handing Dollmann over to the Italians was a good idea. The US consulate in Leghorn advised the State Department that the "long range interest (including CIG) in Dollmann hinges on likelihood that if he is abandoned to Italian jurisdiction other agents will doubt American ability [to] protect them." (S)

^<sup>28As the Army cut its troop strength in Italy, MTOUSA headquarters moved from Caserta to Leghorn in April 1947. Most of the 25,000 American soldiers in Italy in early 1947 were employed in occupation duties in Trieste, graves registration work, civil affairs and war crimes activities in Rome, and maintenance of lines of communication from Leghorn to Austria, as well as training support for the new Italian army. See US Department of State, Foreign Relations of the United States, 1947, Vol. III: British Commonwealth Europe (Washington, DC: Government Printing Office, 1972), pp. 880-882. (U)

²⁹Leghorn to Secretary of State, 12 April 1947, State 53, (S), in Dollmann, C

⁽S)

301 asham to Sagratamy of State 8 May 1047, State 73 (S) in Dollmann.

⁽S)

^-J. DO Records.

⁽S)

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Office of the Director of Intelligence (ODI) of the European Command in Germany.³²
\ninformed CIG Headquarters of the transfer two months later and observed that American intelligence had done everything in its limited power to not only prevent handing over Dollmann and Wenner to Italian authorities, but also to the British.

asked Headquarters to contact both men in Germany to assist in their "rehabilitation";

Dollmann and Wenner had "information which would place present Italian political regime in bad light if published." Likewise, CIG in Rome was still anxious to inform the two Germans that their deliverance from the Italian authorities had come through its good graces.³³ (S)

as hot potatoes.³⁴ The Army confined both men to its interrogation facility in Oberursel, near Frankfurt, although they soon agitated to return to Italy in the fall of 1947. The new Central Intelligence Agency argued against their return and stated that they should remain in the American zone and, if they traveled to Italy, "we will not [original italics] intercede

^<sup>32COMGENUSFMTO, Leghorn, to CIG, 28 May 1947, F 76420, IN 15447, (S), in DO Records, ∴ ☐, Box 7, Folder 203, CIA ARC. (S)

To SO, 7 July 1947, [ ] 373, IN 17693, (S) in Dollmann, [ ] DO Records. The next week, Foreign Branch M, which ran OSO's operations in central Europe, requested Foreign Branch P, responsible for southern Europe, to provide the German Mission with a summary of the Dollmann-Wenner case. See [ ] to FBP, "Dollmann and Wenner," 14 July 1947, (S), and Chief, FBP to Chief of Station, Heidelberg, "Dollmann and Wenner," 31 July 1947, MGH-A-253, (S), both documents in Dollmann, [ ], DO Records. (S)

The Dollmann and Wenner were not the only Nazi intelligence personnel returned to Germany from Italy by the Americans. In August 1946, SSU in Germany asked the Army to transfer Carmine Renato Senise, an Italian citizen who spied for the Germans in the United States and Sweden during the war. SSU had arrested Senise in January 1946 and held him for questioning in the Italian capital. By August of that year, SSU grew concerned that Italian authorities would try Senise for collaboration, and he would then divulge his penetration of OSS in Scandinavia during the war. SSU wanted the Army to transfer Senise from Italy to Germany for further interrogation under American control. See Henry D. Hecksher to Chief, CIB, USFET, "Senise, Carmine Renato (Request for Transfer of Senise from AFHQ, Italy to USFET)," 26 August 1946, LWX-991, XARZ-27328, (S), in DO Records, ....................................

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their behalf to get them out again." If they went south, the two Germans ran the risk of being arrested, interrogated, and held for war crimes by the Italians. CIA in Washington agreed to pay for the rehabilitation costs for both Dollmann and Wenner, but only in Germany. ³⁵ (S)

The case led to further disagreements within the CIA and the Army in November 1947. Col. Donald H. Galloway, the Assistant Director for Special Operations, and Gordon M. Stewart, CIA's chief of mission in Germany, met with Maj. Gen. George P. Hays of ODI to discuss Dollmann and Wenner. Hays criticized the CIA's position in advocating amnesty in Germany for both men. He "again pointed out that the American army had won the war in Italy and that OSS publicity about Sunrise was in extremely poor taste and that these individuals, although they may have helped us were, at the same time, possible war criminals or war profiteers." Hayes opposed any form of amnesty because it would "condone their crimes without proper examination." (S)

Hayes's position, however, was not shared by all of his own office. The chief of ODI's Operations Branch, a Col. Wentworth, insisted that the two German officers be allowed to proceed to Italy. Gordon Stewart again opposed this because it "would be embarrassing to us and dangerous to them." As a compromise, the Army and CIA agreed to let the two SS men return to their homes in Germany on a pass in order to settle their domestic affairs. Stewart, however, expressed continued concern about the two Germans. "It is presumed," the mission chief told Washington, "that Dollmann and

³⁵SO to Heildeberg, 22 October 1947, Washington 8089, OUT 53419, (S), in Dollmann, ID DO Records. (S)

^<sup>36Gordon M. Stewart, COS, Heidelberg, to FBM, "Eugen Dollmann and Eugen Wenner," 7 November 1947, MGH-A-1976, (S), in Dollmann, To DO Records. (S)

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Wenner will not return after their leave, and it is expected that they will not be heard from in the future. When their failure to return is noted in ODDI, they will be entered in the rogues' gallery, and if they are picked up in Germany, they will be consigned to a civilian internment enclosure to await [a] spruchkammer [denazification] trial. If they decide, against our orders, to return to Italy, they understand that absolutely no support will be forthcoming from the Allies." (S)

Stewart privately expressed his frustration over the US Government's handling of Dollmann and Wenner. "Had this case been purely and simply ours, I should have been inclined to consign Dollmann and Wenner to a civilian internment enclosure and to have helped them with their trial. As it happens, however, the case passed out of our hands in the Italian phase, and complete responsibility for the two bodies rests with ODDI [sic]." Army officials, Stewart noted, "realize the chance they are taking in attempting to shield Dollmann and Wenner from the spruchkammer trial." The Army released Dollmann and Wenner from its interrogation center in November 1947, at which time the Central Intelligence Agency considered its affairs with both men closed. (S)

Wenner soon disappeared from sight, only to turn up later in South America.

Dollmann, however, did not vanish. An Italian source told the CIA in the summer of 1948 that the Army's Counter Intelligence Corps employed him in Milan. His life story soon appeared in serialized articles in the Italian press in 1949, and he published a

^<sup>37Ibid. (S)

^<sup>38Ibid. (S)

^<sup>39Chief, FBM to Chief of Station, Karlsruhe, "Eugen Dollmann, Eugen Wenner," 6 May 1949, MGK-W-2069, (S), in Dollmann, DO Records. (S)

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memoir, Call Me Coward, in 1955.⁴⁰ Dollmann moved from Italy to Switzerland and then to Spain and Germany, occasionally coming into contact with US diplomats.⁴¹ The Agency kept its distance from the former German SS officer, even informing its ———————————————————————————————————

Dollmann and Wenner were a handful, but the Americans also faced problems with what to do with Guido Zimmer after the war. Like Dollmann, Zimmer's connections in Italy were extensive. Unlike either Dollmann or Wenner, OSS recruited Zimmer as an agent at the war's end and harbored him in the months afterward. (S)

Born in Germany in 1911, Zimmer joined the Nazi party in 1932 and became a SD officer four years later. He was posted to Rome under Foreign Ministry cover in

^<sup>40Dollmann's book describes his convoluted wartime and postwar activities, but focused on his experiences after 1945. He claims that Allen Dulles told Karl Wolff at a meeting on 19 March 1945 in Ascona that "although you have put forth no demands of a personal nature whatever, and although you have not even asked for any undertaking concerning your future activities in Germany, I hope nevertheless that after the surrender has been carried through we shall be able to count on your co-operation and that of your closest associates." Eugen Dollmann, Call Me Coward. Trans. by Edward Fitzgerald (London: Kimber, 1956), p. 191. (S)

^<sup>41For example, see Chief of Base, Pullach to Chief of Mission, Frankfurt, "Eugen Dollmann Case," 18
August 1954, EGL-A-10377, (S), enclosing ______ Memorandum of Conversation, 6 August 1954
(C), and Chief of Mission, Frankfurt to Chief, EE, "Eugen Dollmann Case," 22 September 1954, EGQ-A-48865, (S), all in Dollmann, ______ ____________________________

⁴²Acting Chief, WE, to Chief ( \subseteq ) ("Germans in Spain: Eugen Dollmann," 23 April 1952, WSM-W-1725, (S), in Dollmann, ( \subseteq \subseteq ) ("DO Records. Dollmann was known to have been involved with the Italian intelligence services, and the Swiss had expelled him after uncovering his homosexual involvement with a Swiss police official. (S)

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1940, working for Herbert Kappler, a police attaché because the Nazis had agreed not to assign intelligence officers on Fascist Italian soil. Zimmer's true role as an officer in Amt VI, however, was exposed to the Italians, and he was forced to return to Germany. Hauptsturmfurhrer Zimmer did not return to Italy until February 1944, when he opened Amt VI's office in Milan, where he organized networks of German and Italian staybehind agents in northern Italy. (S)

Zimmer was also involved in the roundup of Jews in Milan and Genoa, working under Hauptsturmfurhrer Theodore Saevecke, the chief of the SD's Aussenkommando Milan. Saevecke's senior officer, Standartenfuehrer Walther Rauff, headed the SS Gruppen Oberitalien West in Milan. Rauff, in turn, reported to SS Gruppenfuhrer und Generalleutnant der Polizei Dr. Wilhelm Harster, the chief of the Sicherheitspolizei and Sicherheitsdienst in Italy. While only a relatively small number of SS officers served in Italy during the latter part of the war, all of these men had notorious criminal records. Rauff, for example, had previously headed SS efforts to liquidate Jews through the use of mobile vans after the invasion of the Soviet Union. 44 (S)

With his ties to both Nazi war criminals and to Operation SUNRISE, Zimmer found himself in a unique position when the war ended in Italy. Two parts of the OSS sought him-one to recruit him as an agent and the other to arrest him as an SS officer.

James J. Angleton, the commander of the SCI/Z in Italy, began rounding up SS officers

^<sup>43According to one source, Zimmer received a report from a German agent in Rome about a threat to Mussolini's life. In Kappler's absence, Zimmer gave the information to a German Embassy official who, in turn, provided the details to the Italian authorities. Zimmer's role in the Embassy and the identity of his source were thus compromised, and Zimmer was brought back to Germany. See SAINT BB8 (Capt. James J. Angleton) to SAINT AMZON, "Zimmer Guido," 28 November 1945, JZX-5519, (S), in Guido Zimmer, ____________________________________

^<sup>44For further details, see Walter Rauff, ( \square) ( \square) DO Records. (S)

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and Italian agents and collaborators even before the war ended.⁴⁵ Zimmer, as the head of Amt VI in Milan, was a key suspect, especially as the Americans had uncovered his extensive files, which outlined the organization of the SD's networks in Italy. (S)

On 11 September, four months after the end of the war, Angleton reported to the head of X-2 in Washington that "Zimmer has become the CI 'ghost' of this theater." The German officer was "evidently receiving protection from some high AFHQ quarter on the basis of his contribution to the Sunrise operation." Angleton denounced this alleged special treatment and noted that even Gen. Wolff had been arrested and sent to Nuremberg. Zimmer, he said, "should be given at least a complete tactical interrogation on Abt [sic] VI activities in the Milan area, details of which, from all available evidence, he knows thoroughly." The X-2 office in Milan, Angleton observed, "has been considerably exercised by the sloppiness with which the case has been handled and the apparent 'clamming-up' which takes place when straight questions are asked." (S)

What Angleton did not know was that Zimmer had escaped from Italy and made his way to Germany, where he had been recruited as an agent by X-2. On 27 August when Zimmer reported to US Army authorities in Erlangen, near Nuremberg, he claimed to have just arrived from Salzburg in Austria. Zimmer asked to be turned over to the

^<sup>46SAINT, BB8 (Angleton) to SAINT, DH1, "Guido Zimmer, CO, Abt VI, AKO Milan," 11 September 1945, JZX-4039, enclosing ""The Case of Guido Zimmer, Obersturmfuhrer SS/Feldpost No. 02039," (S), in Zimmer, C ———————————————————————————————————

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local Special Counter Intelligence (SCI) unit. ⁴⁷ X-2's Capt. George A. Schriever soon made arrangements for Zimmer to settle at his wife's house in Erlangen and submitted a request to use Zimmer as an X-2 agent. ⁴⁸ Schriever wanted Zimmer to penetrate a shadowy German underground group known as Freikorps Adolf Hitler. ⁴⁹ (S)

By the end of 1945, however, Zimmer's usefulness as an agent had diminished.

The Freikorps Adolf Hitler had "not developed into anything really interesting,"

Schriever reported. "We are now beginning to feel that it is one of those organizations which exist only in the minds of some men along with the broken splendors of Dr.

Goebbel's propaganda." SSU officials in Germany and Italy now wanted Zimmer off

^<sup>48 Born in February 1911, George A. Schriever received a B.S. in Political Science from the University of Missouri in 1933. He joined the US Army as a private in February 1942 and served in the Aleutian Islands, rising to the rank of sergeant major. After completing the Officer Candidate School at Ft. Benning, GA, Schriever joined OSS where he served in Special Operations (SO) until transferring to X-2 in December 1944. Schriever remained as an Army officer until the spring of 1946 and worked as a liaison officer between the Central Intelligence Group and USFET on CI matters in Germany.

⁴⁹X-2, SCI Erlangen, "Operations Report 15 Aug.-15 Sept.," 21 September 1945, LWX-010-915a, X-3379, enclosing Capt. George A. Schriever to Commanding Officer, OSS/X-2, "Semi-Monthly Report," 21 September 1945, (S); SCI Erlangen, "Semi-Monthly Report 15 Sept.-30 Sept.," 3 October 1945, LWX-010-1003, X-3655, enclosing Capt. Schriever to Commanding Officer, OSS/X-2, "Semi-Monthly Report," 3 October 1945, (S); and Maj. Crosby Lewis, Commanding SCI/Counter Intelligence Branch, G-2, USFET, to Chief, Counter Intelligence Branch, G-2, USFET, "SCI Weekly Operations Report," 26 September 1945, enclosing X-2/OSS, "Report on SCI Operations for Week Ending 26 September 1945," (S), all reports in DO Records,

Box 1, Folder 14, CIA ARC. For Schriever's request to vet Zimmer as an X-2 agent, see Ab 10, AMZUN, to SAINT, Washington, "Vetting of Guido Zimmer," 20 September 1945, LWX-002-920a, (S), in DO Records,

Box 406, (no folder listed), CIA ARC. (S)

**Operations Report 15 Aug.-15 Sept.," 21 September 1945, LWX-010-915a, X-3379, enclosing Capt. Schriever to Commanding Officer, OSS/X-2, "Semi-Monthly Report," 21 September 1945, (S) in DO Records.

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their hands.⁵¹ Capt. Angleton in Italy, who continued to argue that Zimmer did not deserve any special favors from American intelligence, pressed for a full interrogation of Zimmer by SSU officials in Germany. "The measure of [Zimmer's] good faith," Angleton wrote, "will be found by comparing whatever he has told you" with the facts as uncovered by SSU in Italy.⁵² (S)

SSU in Germany eventually agreed, but wanted Zimmer handled in Italy. Capt. Angleton still wanted to interrogate Zimmer if he returned to Italian soil. He protested to the Army officials in Italy, "Zimmer has enjoyed privileged treatment at the hands of non-CI agencies in this Theater because of his role in the SUNRISE Operation. This fact," he warned, "makes it difficult for this Unit, under present circumstances, to take a position" regarding Zimmer's disposal in Italy. Angleton offered his opinion that Zimmer "at the outset was deserving of no better or worse treatment than that afforded persons of much greater importance to the success of SUNRISE than he, namely General Wolff and Dollmann." (S)

The Army now intervened to keep Zimmer in Germany because it opposed bringing Zimmer and his family to Italy. The Army declared that Zimmer should be treated like any other enemy intelligence officer and held for interrogation in Germany

³⁴Ibid. (S)

^<sup>53Capt. Angleton to AC of S, G-2, AFHQ, "Lt. Guido Zimmer," 11 February 1946, JZX-6613, (S), in Zimmer, _______ DO Records. (S)

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and then eventual repatriation there.⁵⁵ This decision, in turn, prompted SSU in the American Zone to ask that Headquarters step in to reverse the Army's decision.⁵⁶ (S)

Anxious not to get caught in the middle of the two arguing missions,

Headquarters simply sent a cable to Germany and Italy asking what steps have been taken to review Zimmer's request with Allied Forces Headquarters. Washington emphasized that Dulles wanted to provide aid and comfort to Zimmer for his work with Operation SUNRISE and his postwar efforts on behalf of X-2 in Germany.⁵⁷ Angleton's response on 6 March was succinct. "In view of hostility to Zimmer reentering, believe it necessary for you to take action through the War Department. We can take no further action," he declared.⁵⁸ (S)

SSU officials in Washington now scrambled to gather the facts to resolve the Zimmer dilemma. A former OSS officer in Switzerland, Frederick J. Stalder, summarized his activities with Zimmer during the surrender proceedings. "There is no doubt," Stalder quoted Dulles' report on SUNRISE, "that if Zimmer had ever been against in any of these operations, he would not be alive today." Stalder concluded by saying that while Dulles offered no promises to those involved in the surrender

⁵⁵Cable, Rome to Washington, 22 February 1946, Rome 2167, IN 33190, (S), abstract in Zimmer, C DO Records. (S)

Cable. AMZON to Washington, 25 February 1946, AMZON 5107, IN 3328, (S), abstract in Zimmer, DO Records. (S)

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negotiations, he hoped that Allied officials would give Zimmer every "consideration." (S)

SSU's Bern Station weighed in with a cable on 9 April and said that the decision to send the SS officer back to Italy "should rest largely on 110's [Dulles's] analysis moral obligation to Zimmer." In any case, SSU in Bern advocated a full interrogation because Zimmer "was very active various branches German espionage and sabotage agencies until beginning of end north Italy." (S)

In an effort to provide further evidence of Zimmer's importance to American intelligence, Cdr. Edward J. Green, the Deputy Chief of the German Mission, wrote to Washington on 12 April. Green quoted Gero von Gaevernitz as saying that "Guido Zimmer was of outstanding help in Sunrise Operation by sheltering and protecting Allied radio operator in his house in Milano, Italy, under great personal risk, right under the nose of the Gestapo." Green also endorsed a proposal by von Gaevernitz and Lt. Col. Max Waibel of the Swiss General Staff that the US Government pay for the therapy of Zimmer's children in Switzerland as they recovered from bouts of tuberculosis. 62 (U)

⁶⁰Ibid (S)

^<sup>61Cable. Bern to Washington, 9 April 1946, Bern 388, IN 35548, (S), abstract in Zimmer, T

⁶⁴Cdr. Edward J. Green, Deputy Chief of Mission, to Chadbourne Gilpatrick, "Zimmer Children," 12 April 1946, (no classification listed), in Zimmer, , DO Records. (S)

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review of this entire matter that Zimmer is not entitled to any such preferential treatment." (S)

After this flurry of attention in 1946, Zimmer disappeared from the intelligence scene.⁶⁴ His former partner in Operation SUNRISE, Luigi Parilli, however, continued to interest the new Central Intelligence Agency.⁶⁵ Through Parilli, the Americans eventually renewed acquaintances with the German SS officer when the paths of Parilli and Zimmer crossed again in late 1948. When the Italian made his first trip to Germany since the war, he visited Zimmer in Erlangen and offered him a position as his private secretary. By this point, Parilli had become the Envoy Extraordinary and Minister Plenipotentiary of the Sovereign Order of Malta to the Bavarian government and the US military occupation authorities. Parilli, in fact, had spent a fascinating time after the war,

⁶³ SAINT to SAINT, AB 2, "Guido Zimmer," 10 April 1946, (S), in Zimmer, ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐

Zimmer's case came to a fitful close in the spring of 1946, Angleton in Italy remained interested in Zimmer's wartime activities. In late June, Angleton reported to Washington that the so-called Zimmer notebooks had been translated into English. The four notebooks, written in shorthand, were first translated into German and then into English, accounting for their lengthy delay following X-2's seizure in Milan at the end of the war. The notebooks, broken into 167 separate memos, covered the period from late 1944 until May 1945, although the months of November and December 1944 were missing. In Angleton's viewpoint, Zimmer's notes "provide one of the richest single bodies of information on the activities of Abt. VI Milan and the background of the Armistice negotiations." The notebooks contained detailed descriptions of Italian agents in the employ of the Germans as well as on the activities of the SS in Italy. In reviewing the notes, Angleton observed, "it is apparent that the pre-armistice negotiations were as much the work of the Intelligence (most particularly Abt VI) system on the German side as it was from the side of the Allies." See BB 8 (Angleton) to JJ2, "The Zimmer Note-books," 28 June 1946, JRX-3748, (S), in Zimmer, C

^<sup>65As early as July 1945, Parilli had fallen out with the OSS, who viewed him as a German agent. In 1946 and again in 1947, a series of articles appeared in Italian newspapers on the German surrender in Italy. American intelligence felt that Parilli was the source of information for these articles and a self-promoter of his role in facilitating the German contacts with the Allies. (S)

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and he had traveled to the United States on three separate occasions in 1946 and 1947 for business purposes. ⁶⁶ (S)

In meeting with Zimmer in late 1948, Parilli was on the verge of making contact with the Gehlen Organization, the nascent West German intelligence service. Parilli felt that Zimmer could be of benefit in reestablishing ties with many of his wartime German intelligence officials now in the service of the United States. In fact, Parilli's visit to Germany smoothed the way for Reinhard Gehlen, the head of the German service, to travel to Rome in January 1949. Accompanied by Col. William R. Philp, the US Army officer responsible for the Gehlen Organization, Gehlen met with the American military attaches in Rome, Madrid, and Paris. The meetings in Rome were particularly important because Gehlen wanted to renew his wartime ties with the Vatican. ⁶⁷ (S)

The CIA, however, expressed concern about the developing close ties between Parilli and Gehlen, in part because of the Italian's efforts to get the Gehlen Organization to aid his former colleagues, including Dollmann and Wolff. The Agency, in turn, warned Gehlen of Parilli's real intentions and the German intelligence chief began to suspect Parilli's own motives when it came time to discuss joint business ventures. By

⁶⁶CIA did not learn that Parilli had been to the United States until late 1948. This led to a flurry of memos between the Agency and the State Department trying to ascertain just how often Parilli had been to America. In 1947, the State Department rejected Parilli's non-quota immigrant visa sponsored by the Joint Chiefs of Staff because of his involvement with the Nazis and his misrepresentation of the facts about his relationship with OSS. See Cable, ☐ ☐to Special Operations, 17 December 1948, ☐ ☐1649, IN 19585, (S); Cable, ☐ ☐to Special Operations, 6 January 1949, ☐ ☐1688, IN 20804, (S); D.L. Nicholson, Chief, Division of Security, Department of State to Robert A. Schow, Assistant Director, CIA, "Baron Luigi Parilli, 1 April 1949, (S); Chief, Foreign Branch M to Chief of Station, ☐ ☐'Baron Luigi Parilli," 20 April 1949, MSB-W-1129, (S); Nicholson to Schow, "Baron Luigi Parilli," 21 April 1949, (S); and Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign Branch M to Chief of Station, ☐ Grand Chief, Foreign

^<sup>67Cable, Munich to Special Operations, 7 January 1949, Munich 252, IN 20936, (S), in Parilli, CDO Records. (S)

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the fall of 1949, Gehlen told his CIA contact that he would maintain "only the most casual and friendly relationship" with the Italian. This news was well received at Headquarters where it had learned that even Parilli's SS contacts, including Gen. Wolff, considered him as an "out-and-out mercenary." (S)

In 1951, the CIA opposed the move on the part of the Supreme Headquarters

Allied Powers Europe (SHAPE) to nominate Parilli as the semiofficial liaison between
the North Atlantic Treaty Organization (NATO) partner nations and the Vatican. In a
cable from Headquarters to

the CIA observed "Parilli undoubtedly has
numerous Vatican contacts and even direct access to Pope, we are advised that his
proposed appointment would cause unfavorable reaction among many influential Italians,
because of Parilli's double agent role during the war." The Agency also opposed Parilli's
appointment due to "certain questionable postwar activities and manipulations." (S)

The Agency's interest in both men diminished after the early 1950s. In Zimmer's case, the CIA reported only an "academic interest, despite his long disappearance from the intelligence scene." Another report noted that Zimmer was connected to Parilli and probably with SS groups in Germany. The Agency regarded Zimmer as "unimportant

⁶⁸ See Cable, Munich to Special Operations, 23 June 1949, Munich 574, IN 35287, (S); Pullach to Special Operations, 25 June 1949, Pullach 001, IN 35477, (S); and Special Operations to Pullach, Karlsruhe, 30 June 1949, Washington 5954, OUT 84266, (S); all in Parilli, , ⊂ ☐ DO Records. See also Chief of Station, Karlsruhe to Chief, Foreign Branch M, "Baron Luigi Parilli," 9 August 1949, MGL-A-192, (S); Chief of Station, Karlsruhe to Chief, Foreign Branch M, "Luigi Parilli," 21 September 1949, MGL-A-425, (S); and Chief, Foreign Branch M to Chief of Station, Karlsruhe, "Luigi Parilli," 4 October 1949, MGK-W-3082, (S), all in Parilli, . ☐ ☐ , DO Records. (S)

69 Cable Special Operations to ☐ ☐ 15 June 1951, Washington 46436, OUT 53886, (S), in Parilli, ☐ ☐ DO Records. (S)

^<sup>70Chief, EE to Chief of Station, Karlsruhe, "Guido Zimmer," 9 January 1951, MGK-W-7381, (S), in Zimmer, , DO Records. (S)

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and not of sufficient stature to take the initiative and thus become dangerous."⁷¹ By the time that Dulles wrote The Secret Surrender in 1966, Parilli, who had long suffered from poor health, had died twelve years earlier. Guido Zimmer, "the aesthetic captain who had always cut a rather unlikely figure in the SS uniform," had moved to Argentina. ⁷² (S)

Unique Contributions (U)

In its historical summary of the wartime years, the Strategic Services Unit concluded that "the negotiations carried out through OSS/Bern for the surrender of the enemy armies in northern Italy and southern Austria had underlined one of the unique contributions an undercover—and hence quasi-official—agency could make in the course of modern war." But, in order to bring about the surrender, the OSS had to deal face-to-face with the enemy. While Wolff, Dollmann, and Wenner did not suffer as harsh a fate as some of their SS colleagues in terms of lengthy imprisonments or even capital punishment for their war crimes, the CIA and its predecessors did little to assist them in the years after the war. Dollmann, in fact, harbored resentment against the Americans for his postwar circumstances. Only in the case of Zimmer do we find that X-2 in Germany sheltered the SS officer while, ironically, X-2 in Italy pushed for his confinement and interrogation as an enemy intelligence officer. From the available documentation, it is

Abstract, 4 April 1950, "Activity of Military Circles in Western Germany," MGL-A-34, (S), in Zimmer

^"Dulles, The Secret Surrender, pp. 250 and 252. (U)

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Chapter Two

DECLASSIFIED AND RELEASED BY CENTRAL INTELLIBENCE ABENCY SOURCES METHODS EXEMPTION 3828 WAZIWAR CRIMES DISCLOSURE ACT BATE 2807

An SD Agent of Rare Importance (U)

If Operation SUNRISE represents the role that OSS played to bring about the conclusion of the war by strategic means (the high-level discussions between senior German and Allied officials), then the use of low-level agents to counter enemy intelligence activities took more of a tactical character. This responsibility fell to OSS's X-2, or counterespionage branch. X-2 collected information on Axis intelligence organizations and espionage activities while protecting OSS from penetration. Following its establishment in 1943, X-2 also maintained security of OSS's own operations, "vetted" or conducted background checks on OSS employees and agents, and acted in a liaison capacity with other American counterintelligence agencies and with foreign intelligence services. (U)

In northwestern Europe, X-2 units, known as Special Counter Intelligence (SCI) detachments, operated with the American forces in the field, including the Twelfth Army

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Group and its subordinate armies, the First, Third, and Ninth. X-2 also had similar units serving with the Sixth Army Group and its Seventh Army, and liaison with the First French Army. Other SCI detachments supported the Communications Zone of the European Theater of Operations in France and the British Twenty-first Army Group.² They fell under the counterintelligence branch of the G-2, or intelligence, section of the various headquarters to which they were assigned. The strength of the SCI units ranged from 15 officers and enlisted men at the Army Group level to 10 operating at the Army level. Like most OSS organizations in the field and at home, the SCI detachments included both male and female members, including civilians, as well as a handful of officers and enlisted men who came from the US Navy and Marine Corps. The bulk of the military personnel, however, hailed from the Army. All told, X-2 had some 200 officers, enlisted men, and civilian personnel in Germany in mid-1945 under the overall direction of Lt. Col. Andrew H. Berding.³ (U)

^<sup>2The 31^st SCI Detachment, with the First Army, landed in France in June 1944 and was followed by the Third Army's 62d SCI Detachment the following month. Both units formed the Twelfth Army's Group SCI Detachment in August 1944, and it split following the liberation of Paris. Approximately half of the personnel remained in the French capital as the headquarters for X-2 in France. In the meantime, the 69^th SCI Detachment came up with the Seventh Army in southern France in August 1944. The detachment later split into three separate SCI units: the 11^th, 55^th, and 88^th, the later serving with the Seventh Army at the front and the two other detachments in the rear areas. X-2/Paris also ran its own CI operations in addition to providing command and control for the SCI detachments in the field. The 103rd SCI Detachment handled X-2 liaison with the British in the Twenty-First Army Group's area of operations. OSS War Report, Vol. II, pp. 249-250. (U)

Berding, born in 1902, graduated from Oxford University and worked as a journalist and editor before the war. Among his foreign posts, Berding had been AP's bureau chief in Rome during the 1930s. After the war, Berding held senior positions in the US Government, including deputy director of the US Information Agency and Assistant Secretary of State for Public Affairs. He was the author of several books and coauthor of The Memoirs of Cordell Hull. Berding died in August 1989. Who's Who in America with World Notables: A Biographical Dictionary of

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X-2 became involved in some of the most interesting operations during World War II, some of which formed the foundation for the earliest American intelligence operations in the Cold War. As outlined in a February 1944 directive from Supreme Headquarters Allied Expeditionary Force (SHAEF), an SCI detachment in the field had the following missions:

• 1. To distribute and interpret to the CI Staffs all counterespionage information received by them from London and from other SCI units, and advise as to its most effective and secure use.
• 2. To afford the maximum protection to special sources of secret counterespionage information.
• 3. To advise CI Staffs in the selection of counterespionage targets whose capture is likely to yield materials of value.
• 5. To assist CI Staffs in the interrogation of captured enemy agents.
• 7. To serve as a direct channel between each Army Group headquarters for information on enemy secret intelligence services collected in the field.
• 8. To serve as a channel between the Army Groups and from the Army Groups to London for any other counterintelligence information that cannot be passed through normal service channels. (U)

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The British intelligence services, primarily MI 5 and Section V of MI 6, provided X-2 with extensive training and background on the German intelligence services. In particular, the British used X-2 as the channel to provide OSS with intelligence derived from German radio traffic—the famous ULTRA intercepts. Likewise, the British indoctrinated the Americans in the shadowy world of counterintelligence, especially double-agent operations. The British, by this time, had eliminated or doubled all of the German agents in the United Kingdom. The British and X-2 set up a CI War Room in the spring of 1944 to compile and distribute information about the German intelligence personnel, agents and operations. OSS's London Office controlled all X-2 operations although the Americans also set up a subordinate headquarters in Paris in the fall of 1944 to handle counterintelligence activities on the Continent. While the close American and British cooperation experienced some strains as the Allies moved across Western Europe, X-2's liaison with the British services proved essential to its wartime success and to the future of American CI activities in the postwar years. (U)

Almost immediately after the Normandy landings, X-2 found itself in the business of tracking down agents left by the Germans behind Allied lines. As X-2 uncovered these individuals scattered throughout France, it developed some of them as "controlled enemy agent" operations. By early 1945, X-2 had recruited a number of these agents—some Germans and many French and other native collaborators—for its penetration operations. The growing number of such recruitments prompted Brig. Gen. Eugene L.

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Harrison, G-2 of the Sixth Army Group, to provide guidance to his subordinate CI staffs at Army Group headquarters as well as the Seventh Army and the French First Army. In February 1945, Harrison called for a recruited enemy penetration agent to meet the following criteria:

• 1. He should previously have had some close and trusted contact with the German Intelligence Services (GIS), preferably the Sicherheitsdienst or Abwehr.
• 2. His contact should have been on a fairly high level. Local informants would not come within this category, although clerical employees who handled records would.
• 4. He should be intelligent enough to realize that Germany has lost the war, and that his only chance to avoid the penalties for his previous association with the GIS is to help eliminate [the] GIS.
• 6. He should have had as genuine a change of political heart as possible.

  Undertaking a penetration mission merely to affect a release from jail is not sufficient motive.

• 7. He may be promised financial recompense; however, the recruiter must not let the prospective agent believe that the recruiter considers this any motive for the mission. The recruiter must convince the agent that he, the recruiter, believes the agent is undertaking the mission for patriotic motives, and the monetary angle is merely a side-issue designed to pay expenses or to maintain the agent's family.

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A Convinced Nazi (U)

The recruitment of enemy personnel as penetration agents presented both opportunities and risks for American intelligence. Brig. Gen. Harrison had appointed himself the sole approving authority in the Sixth Army Group for double agents. To act as his executive, Harrison designated Lt. Cdr. Akeley P. Quirk, the Sixth Army Group's SCI Detachment commander and a naval officer, as the coordinator of Enemy Penetration Cases. Requests by subordinate commands, including the French, to use enemy personnel as agents were routed through Lt. Cdr. Quirk who, in turn, submitted the names of the prospective agents to the War Room in London.⁶ (U)

When considering the use of enemy personnel, Harrison warned, "every effort will be made to prevent the agent from having access to [Allied] military information or observation." Likewise, case officers would not use any Allied military information as "feed" material until it had been coordinated by Lt. Cdr. Quirk and cleared, "word for word," by the G-2 and G-3 staffs at Army Group headquarters. Following the return of

^<sup>5Brig. Gen. Eugene L. Harrison, Assistant Chief of Staff, G-2, Sixth Army Group, to ACS, G-2, CI, Sixth Army Group, Seventh Army, and Commandant de Deuxieme Bureau, First French Army, "Penetration Agent Program," 19 February 1945, in Record Group 226, Records of the Office of Strategic Services, PARIS-X-2-OP-9, Entry 190B, Box 22, Folder 183, at National Archives and Records Administration (hereafter cited as RG 226, OSS Records, OSS File Number, Entry, Box, and Folder, NARA). (U)

the agent to Allied control, the Sixth Army Group G-2 advised a full interrogation by the case officer to determine the reliability of the agent and his future usefulness. Case officers, in turn, would provide a full report of the operation to the G-2.⁷ (U)

As early as Christmas 1944, in the midst of the German offensive in the Ardennes, Lt. Cdr. Quirk expressed his concerns to Col. Harrison about how prospective agents were being handled in the Seventh Army. Quirk protested the Seventh Army's Counter Intelligence Corps handling of Ludwig Nebel, a newly captured prisoner. Quirk's inquiry highlighted the difficulties of using Germans as penetration agents and foreshadowed the risks that American intelligence took in using these individuals. (U)

On 2 November 1944, G-2, Seventh Army cabled the G-2, Sixth Army Group to report that two German saboteurs had been captured after crossing into American lines. The brief message stated that the two men planned to destroy gasoline pipelines and then travel to Paris to meet at the house of another saboteur. Identified as Ludwig Nebel, a Swiss-born member of the Waffen SS and an Untersturmfuhrer in the SD, and Maurice Zeller, a French civilian, the two men were captured prior to executing their mission. A third accomplice, Ferdinand Vliegen, had escaped capture and was being sought by American and French officials. ⁹ (S)

The next day, Lt. Arthur Iselin, Jr., a member of the Seventh Army's SCI

Detachment, provided X-2, Paris with a copy of Nebel's interrogation report by the 307^th

^'Ibid. (U)

CIC Detachment at Seventh Army headquarters. Following Nebel's capture by the 36^th Infantry Division near Le Tholy, the German agent presented himself as an Alsatian who sought to join the French army. After the 36^th CIC Detachment could not crack his story, the Americans turned him over to agents of the French Securite Militaire. According to an official CIC history, the French "gave him a thorough going over physically," and he was "unmercifully clubbed." Still he refused to confess until George Perper, a special agent with the Seventh Army's 307^th CIC Detachment, produced a photo, that Perper claimed showed Nebel at Gestapo Headquarters in Paris. At this point, Nebel broke down and revealed that he was a SS NCO assigned to the sabotage section of RSHA Amt VI.¹⁰ (S)

Thirty-two years old at the time of his capture, Nebel was described as a "convinced Nazi" who "would have been glad to carry out his sabotage mission in France." A deserter from the Swiss army, Nebel had joined the Waffen SS in 1942. He stated that he had received his orders directly from Walter Schellenberg, the head of Amt

Interrogation Report on Nebel, Ludwig, alias Neumann, Leon (nom de guerre) alias Haas, Karl," 3 November 1944, (S), enclosing Capt. M.E. Porter and Special Agent George A. Perper, 307^th CIC Detachment, to Officer in Charge, "Nebel, Ludwig, alias Neumann, Leon (nom de guerre) alias Haas, Karl, confessed German Agent and Saboteur," 3 November 1944, (S), in Nebel, alias Haas, Karl, confessed German Agent and Saboteur," 3 November 1944, (S), in Nebel, alias Haas, Karl, confessed German Agent and Saboteur, 3 November 1944, (S), in Nebel, alias Haas, Karl, confessed German Agent and Saboteur, 3 November 1944, (S), in Nebel, alias Haas, Karl, confessed German Agent and Saboteur, 3 November 1944, (S), in Nebel, alias Haas, Karl, confessed German Agent and 2 November 1944 translation of Nebel's "Confession" are located in his 201 file. See also US Army Intelligence Center, History of the Counter Intelligence Corps, Vol. XVII, To the German Frontier Part II: Southern Armies 15 September-15 December 1944 (Baltimore: US Army Intelligence Center, 1959), pp. 12-15 (hereafter cited as CIC History, volume and page numbers). Citations are taken from the classified version of the CIC History, although the history has been declassified and is available at the National Archives and Records Administration and at the US Army Intelligence and Security Command, Ft. Belvoir, Va. (U)

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VI, on 1 October 1944. Nebel received a million French francs, food, explosives, and an identity card in the name of an Alsatian who had been killed in an air raid. Dispatched across the lines through a quiet sector, Nebel planned to join the French army or gain some other employment in order to get an identity card. He would then move into the interior of France to join other agents to locate Allied lines of communication and supply networks. (S)

Even before Seventh Army had an opportunity to finish its interrogation of Nebel, X-2 ordered that the German agent and his French accomplice be transferred to Paris for further questioning. X-2 promised to return both men after three days for disposition by CIC (both men faced trial and possible execution as spies). Upon arriving at the interrogation center in Paris, Maj. Franklin P. Holcomb, Jr., the chief of X-2/Paris, quickly observed that "Nebel in particular is an SD agent of rare importance, fully trained in sabotage, well acquainted with both officials and operations of the SD, and also briefed to contact a large staybehind network in France." Maj. Holcomb obtained verbal permission from the chief of the Counter Intelligence Branch, G-2 at SHAEF to "exploit"

¹² Interestingly, the Germans had also given British pounds to Nebel, which proved to be counterfeit. According to a British report in January 1945, "this incident is an interesting one if we assume that Amt VI S drew these notes from Germany and gave them to an agent for him to live on, this will be the first occasion that we know of where the Germans have deliberately paid an agent of their's with forged notes." While the British had encountered counterfeit money in the possession of German agents in Portugal, the British believed that the agents had obtained this false money on the black market. British intelligence felt that paying an agent in fake money was "almost incredibly stupid," and if "this is a new feature in the technique of the German Secret Service, it may be worth having on record." E.W. Reid to Teresa Clay, 11 January 1945, [no classification listed] in Nebel, ————, DO Records. (U)

13 Cable, X-2/Paris to X-2, Seventh Army, 3 November 1944, Nr. 187, (no classification listed), in

^<sup>13Cable, X-2/Paris to X-2, Seventh Army, 3 November 1944, Nr. 187, (no classification listed), in Nebel,
DO Records. According to Lord Rothschild, Lt. Gen. Alexander McC. Patch, commander of the Seventh Army, wanted Nebel back from Paris within three days to execute him. (S)

In Paris, Nebel underwent joint interrogations by both X-2 and MI 5 on his espionage background and sabotage mission. Lord Victor Rothschild of British intelligence examined Nebel's knowledge of German sabotage and quickly extracted what he needed from him. Rothschild then advocated that Nebel be sent to London for a more detailed interrogation at Camp 020, a special MI 5 facility for enemy prisoners in Great Britain. Instead, the French, who had been allowed to read the Nebel interrogation material, wanted to retain him in order to identify other members of the German staybehind network near Paris. The arrest of the third member of Nebel's team also added to the need for further interrogation of the three men in France. (S)

^<sup>14Maj. Franklin P. Holcomb, Jr., X-2/Paris to G-2, Seventh Army, "Custody of Nebel, Ludwig and Zeller, Maurice by SCI-Paris," 10 November 1944, (S), in Nebel, ☐ ☐', DO Records. Holcomb, born in 1917 in Washington, DC, was the son of Gen. Thomas Holcomb, the commandant of the US Marine Corps. After attending Georgetown University, Holcomb entered the Marine Corps in 1941 and served with OSS in Morocco, Algeria, the United Kingdom, France, and China before leaving the service as a major in 1946. Holcomb later worked with the Department of Commerce ☐

^<sup>15Born in 1910, Lord Nathaniel Mayer Victor Rothschild was educated at Harrow and received his M.A. and Ph.D. from Trinity College, Cambridge. After his wartime service, Lord Rothschild was assistant director of research in the Department of Zoology in Cambridge and a specialist on fertilization. He held numerous appointments until his death in 1990. See Rothschild entry in C.S. Nicholls, ed. The Dictionary of National Biography 1986-1990 (New York: Oxford University Press, 1996), pp. 384-385. (U)

^<sup>16B.1.C to War Room, through Mr. Noble, 16 November 1944, enclosing "Ludwig Nebel (Saboteur) Tactical Interrogation," 11 November 1944, (S); IID Cross-Reference Form, "SCI Weekly Operations Report (Wed. 8 Nov. thru Wed. 15 November)," 21 November 1944, FX-

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By late November, the Allies decided to use Nebel to track down his French contacts, especially a Richard Martin, the former mayor of Margency, near Paris, who headed a staybehind organization codenamed JEANNE. In addition to Martin, the Allies sought several other French links to the Germans and hoped to re-establish contact with Nebel's SS associate in order to identify the locations of hidden ammunition dumps and radio operators in Paris.¹⁷ At this point, X-2 assigned Nebel the codename OSTRICH and transferred control of his third partner to the French. The Americans had not decided what to do with Maurice Zeller, the Frenchman captured with Nebel.¹⁸ (S)

Lt. Charles C. Michaelis, the X-2 case officer for the OSTRICH project, with the permission of Lord Rothschild, released Nebel from confinement and put him up in an apartment. Michaelis and the French took Nebel to various locations near Paris in order to identify individuals with whom he had been in contact before the Allied invasion. Lt. Michaelis translated the comments of Lt. Bardet, the French Securite Militaire officer

010-1116, (S); Victor [Rothschild] to Miss Teresa Clay, B.1.C., 20 November 1944, (S); in Nebel,

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assigned to handle Nebel: "I believe that he is playing the game. [Nebel] is the prototype of the accomplished adventurer, with no scruples whatsoever, recognizing but one master, money, and one passion, women. As he is being kept happy," the X-2 officer recounted, "there is no reason why he should, in his present situation, cause us any trouble. Besides," Michaelis translated from the French report, "he is aware of the present critical situation of Germany, which should be a major reason for him to switch camps." In a mid-December 1944 summary of Nebel's work with OSS, it was noted that the Allies controlled Nebel because his girlfriend and infant daughter lived in Mulhouse under Allied occupation. Likewise, the Americans retained a large sum of money that Nebel had with him at the time of his capture. X-2, in the meantime, arranged to get his gold watch and knife returned to him from the 307th CIC

We Have Confidence in Him (U)

²⁰Lt. Michaelis to Chief, SCI, "Report of Lt. Bardet, [French] Case Officer in OSTRICH Case," 6
December 1944, (no classification listed), in Nebel,

21 Untitled Summary of the OSTRICH Case, 12 December 1944, (S), in Nebel,

DO Records. (S)

22 Extract, 12 December 1944, (S), in Nebel,

3, DO Records. (S)

23 Lt. Michaelis to Chief, SCI and Capt. [Francis C.] Grant, "Proposed Mission of Ostrich," 19
December 1944, [no classification listed], in Nebel,

Col. Rothschild to "VBZ," 3 January 1945, enclosing notes on OSTRICH mission, [no classification listed], in Nebel,

DO Records. (S)

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round up staybehind German agents in France mounted as the Allies learned that German special forces had landed behind their lines during the Battle of the Bulge.²⁴ The Americans, in particular, made a frenzied effort to track down disguised German troops who caused havoc-but little actual damage-behind the lines. In a plan devised by Otto Skorzeny and dubbed Operation GRIEF, a special unit of Germans who spoke varying degrees of English dressed in American uniforms and drove Allied vehicles. At the same time, German paratroopers, commanded by Oberst Friedrich A. Freiherr von der Heydte, parachuted into Belgium to create further panic. Soon, Allied troops all the way back to Paris were on the lookout for Germans dressed in US Army uniforms. On 28 December, Michaelis reported that Nebel had spent several days at the Cafe de la Paix trying to recognize German soldiers in American uniforms.²⁵ (S)

While Nebel spotted neither Otto Skorzeny nor any other German soldiers in Paris, he was key to the unraveling of three networks of German agents operating in France.²⁶ He enabled the Allies to capture Fernande Ney, the wife of the leader of the JEANNE sabotage network, who had returned to France and met with Nebel in Paris, at which time she was arrested by X-2.²⁷ Ney's information led X-2 to Charles Moreau,

^<sup>27Extract, SCI Weekly Operations Report, 13-20 December 1944, [no classification listed], in Nebel, DO Records. For a notice seeking the arrest of Ney's husband, see X-

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another member of the group, and several other German support agents.²⁸ Further interrogations revealed that the Germans had dispatched three young French women from Germany via Switzerland to establish contact with Nebel.²⁹ The French also arrested Rene Poncin, a key contact of Nebel's in Paris and a member of the JEANNE network. Ironically, Poncin had enlisted in the French army after the liberation and was serving on the frontlines at the time of his apprehension.³⁰ Furthermore, Nebel identified another French agent of the Germans who had escaped to Switzerland. Armed with this information, X-2/Paris contacted its counterparts in Switzerland, which resulted in the agent's arrest by Swiss authorities.³¹ (S)

These arrests, coupled with Nebel's firsthand knowledge of the SD sabotage rings organized by Hauptsturmfuhrer Arno Besekow, a German SS officer and deputy to Otto Skorzeny, persuaded Lt. Michaelis and Col. Rothschild of Nebel's value, though not of his virtue.³² The French confirmed that Nebel's information had played a critical lead in

2/Paris, "Rene Desire Nev, Saboteur of RSHA, Amt VI/S," 13 January 1945, S-408, FPX-1902, (S), in Nebel, ( \subseteq \textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\textstyre{\te

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uncovering German caches.³³ "We have confidence in him," Michaelis declared. Nebel, who had been granted many liberties while in American hands, "is convinced that the German cause is lost and that he will play with us if only to avoid a worse fate which may await him in Germany." His cooperation with his captors was also a favorable mark, and OSS felt that Nebel's work on behalf of the Allies had not been exposed to the enemy. Michaelis reported that the "Germans consider him reliable, sure, and a valuable agent."³⁴ (S)

Despite the claims on Nebel's behalf, however, other X-2 officers expressed doubts. On 9 January 1945, Paul C. Blum, the X-2 chief in Bern, cabled X-2 in Paris and warned Allen Dulles, the OSS station chief, what he had learned from a senior Swiss police official. "Shoot him at sight; he's bad," the Swiss had exclaimed, adding that Nebel was "thoroughly Nazi and completely untrustworthy." Indeed, a Swiss court had sentenced Nebel to 15 years in prison in absentia for deserting the Swiss Army. (S)

Officers at the Seventh Army still smarted over Nebel's removal by X-2/Paris and his transformation into an OSS penetration agent. Lt. Cdr. Quirk, the head of the Sixth

Besekow-Litt Organization in France," 25 January 1945, (S), in Nebel,

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Army Group's SCI Detachment, informed Col. Harrison, the G-2, on 22 December 1944 that Lt. Col. Burskin, chief of the Seventh Army's Counter Intelligence branch, and Maj. Alvie L. McDuff, commander of the Seventh Army's CIC detachment, had not acted in good faith regarding the handling and disposal of enemy agents. Quirk protested that both officers were trying to undermine Nebel's use by OSS. In fact, Quirk claimed that Burskin had even threatened to have Nebel shot if he came into the Seventh Army's lines Faced with this reaction and the fact that the Seventh Army CIC had told the French about the OSS's employment of Nebel, Lt. Cdr. Quirk wanted to clarify whether the Seventh Army had any jurisdiction in a theater-level double-agent operation.³⁶ (U)

A Big Luncheon Party (U)

Swiss and Seventh Army concerns notwithstanding, X-2/Paris soon had big plans for Nebel.³⁷ By returning Nebel to German control, Michaelis and Lord Rothschild hoped that the Nazis would believe him and dispatch other agents to France where the Allies could easily round them up. They also tasked Nebel to obtain German sabotage target lists, identify Amt VI personnel involved in sabotage training, and locate enemy radio operators in France.³⁸ Nebel, in the meantime, prepared for his mission to return to

^<sup>36Lt. Cdr. Akeley P. Quirk to Col. Harrison, "CIB Coordination, Seventh Army," 22 December 1944, in RG 226, OSS Records, PARIS-X-2-OP-9, Entry 190B, Box 22, Folder 183, NARA. Apparently, the Seventh Army officers felt that they had been exposed to Nebel and his return to German lines jeopardized their safety. (U)

³⁸ Unsigned note with no title, 12 January 1945, (S), in Nebel, ∠ , DO Records. (S)

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German control and perfected his cover story. Lt. Michaelis even introduced Nebel to Herbert J.W. Berthold, another German intelligence turncoat and a successful X-2 penetration agent who was dressed in an American uniform. Berthold formed an "excellent" impression of Nebel and his ability to recount a convincing story. Michaelis even hosted a "big luncheon party" as a sendoff for Nebel on 5 January 1945; the guests included Lord Rothschild, French Lt. Bardet, and Berthold - a courtesy that defied proper counterintelligence procedures. (S)

X-2/Paris was taking a big gamble. If Nebel proved to be unreliable, he could expose the identities of his case officers and describe Berthold, the other German double agent recruited by the Allies. Nebel could also reveal that the Allies had virtually wrapped up the JEANNE network. Nevertheless, Rothschild and Michaelis felt that Nebel's knowledge of tactical importance was "minimal" and that the benefits of sending Nebel back into German hands outweighed the risks. "It is," the British nobleman concluded, "a matter of great urgency for OSTRICH to be passed through the lines." (S)

^<sup>39Berthold was a highly-successful X-2 penetration agent known as JIGGER. He had served in the Abwehr and provided the Allies with extensive information on German agent networks and personalities as well as the locations of numerous ammunition dumps hidden in France. Lord Rothschild, for example, noted on 26 September 1944 that "Lt. Michaelis is aware of the number of times I have been out with JIGGER and the fact that these dumps cannot be found without JIGGER." For further details on JIGGER, see OSS War Report, Vol. II, p. 251. Extensive documents on JIGGER, provided by him, are located in RG 226, OSS Records, Entry 190B, Boxes 19 and 20, PARIS-X-2-OP-3, and Entry 171, Box 47, WASH-X-2-PTS-15, NARA. (U) ⁴⁰Extract of a Journal Maintained by 1^st Lt. Michaelis, 26 December 1944 entry, [no classification listed], in Nebel, ____________________________________

^<sup>42Unsigned note with no title, 12 January 1945, (S), in Nebel,

DO Records

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Deutsche Agent. Bitte Ich zum Ic (U)

On the night of 14-15 January 1945, Nebel crossed from the sector controlled by the 80^th US Infantry Division into the German lines near Ettelbruck, Luxemburg. Lt. Michaelis planned to maintain contact with Nebel through his father, who still lived in Switzerland. Nebel, while in Germany, would send his father a note indicating that he was well and had spent several weeks in Berlin. This would indicate that his project was going well and that he would be dispatched to France in the next few weeks. Actually obtaining this information from Nebel's father, however, soon posed a problem.

Michaelis instead recommended that X-2 should instead take his brother, Joseph, into its confidence and tell him that Ludwig Nebel worked for the Allies. In exchange for the brother's help, the Allies would promise to help clear Nebel's name with the Swiss authorities after the war. James R. Murphy, the head of X-2, who was in Paris at the time, approved of this approach and relayed the information to Paul C. Blum, the X-2 chief in Bern. (S)

In the meantime, Allied officials began to wonder where Nebel was in Germany.

Two German parachutists, captured near St. Quentin on 3 March 1945, claimed that

^<sup>43Extract of a Journal Maintained by Lt. Michaelis, 22 January 1945 entry, [no classification listed], in Nebel, (\subseteq) (\subseteq) OO Records. See also Maj. Andrew H. Berding, Chief, SCI, Twelfth Army Group to Chief, CIB, Twelfth Army Group, "Penetration Agents, Twelfth Army Group, to 23 January 1945," 23 January 1945, (S), in Nebel, (\subseteq) (\supseteq), DO Records. (S) (^{44})Lt. Michaelis to Chief, SCI, "Contacting OSTRICH's Father in Switzerland," 22 January 1945, [no classification listed], in Nebel, (\subseteq) (\subseteq) DO Records. (S) (^{45})JJ001[James R. Murphy] to DB001 [Paul C. Blum], "OSTRICH Operation (Part A & B)," 26 January 1945, [no classification listed], in Nebel, (\subseteq) (\subseteq) DO Records. The records do not indicate that OSS ever established contact with Nebel through his family in Switzerland. (S)

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Nebel, known as LEO, had been well received upon his return to German control in January. The two agents reported that the SD had promoted Nebel and that Hitler himself had rewarded him for his service in France. 46 In addition, Michaelis, now at the front with the SCI detachment of the Sixth Army Group, reported to X-2 in Paris that another captured German agent had told the French that Nebel was last seen in Wiesbaden in mid-March. Michaelis was still hopeful, however, saying that he expected Nebel to remain with his German unit and turn the entire group over to the Allies. 47 (S)

the German lines and encountered the first picket post where he told the guards, "Deutsche agent. Bitte zum Ic," – "German agent. Please send me to the Ic, or intelligence officer." Nebel was directed to the division headquarters and waited there while his story was checked out in Berlin. He eventually made his way back to Friedenthal, the headquarters for RSHA Amt VI/S. Otto Skorzeny warmly welcomed Nebel and informed SS headquarters of his safe return. The SS directed Nebel to go to Berlin to meet with Hitler to tell him about an abortive plot to kill French leader Charles De Gaulle. On 30 January, Hitler promoted Nebel to SS Obersturmfuhrer and awarded him the Iron Cross, First and Second Class. 48 (S)

^<sup>46Capt. [John S.] Wood, [Jr.] to Maj. Holcomb, 15 March 1945, [no classification listed]; and Incoming Telegram, War Room, 15 March 1945, PF/601265, [no classification listed], in Nebel, ☐ ☐ DO Records. (S)

^<sup>48Nebel's adventures in Germany are found in X-2/Paris, "Information Received from OSTRICH," 27 April 1945, S-1194, FPX-6367, (S); X-2/Paris, OSTRICH Case – Supplementary

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While in Berlin, Nebel discussed his plans to return to France to organize further resistance efforts. Nebel wanted to dispatch equipment to France, where another man, Jacques Doriot, would use it to foment an uprising among the French against the Allies. The death of Doriot a few days later in a bombing raid ended this portion of the German plans, but Nebel proceeded to the front to prepare for his return to France. While at Badenweiler in southern Germany at the headquarters of the XVIII SS Corps, Nebel learned from Oberleutnant Kurt Merck, a former Abwehr officer stationed in France, that an agent named Alois Tonin had betrayed him. Tonin, it turned out, had escorted Nebel across the lines in October 1944 and had been captured by the French in Strasburg. He had been doubled and sent back to Germany, but reported to the Germans directly that he had learned from French officers that Nebel had been captured and severely interrogated until he agreed to work for the Allies. ⁴⁹ (S)

Information," 30 April 1945, S-1668, FPX-6398, (S); X-2/Paris, "Interrogation of OSTRICH," 7 May 1945, [S number and FPX number illegible], (S); in Nebel, ____________________________________

Beyond his link to Nebel as mentioned above, Merck, alias Captain Kaiser, commanded a German army unit, known as Kommando ADLER, to conduct reconnaissance and intelligence work behind the enemy's lines. In the last weeks of the war, X-2 expressed interest in Merck's activities and those of his former driver in France, Obergrefreiter Johnny Plum, and Merck's French mistress, a Fraulein Richter. For further details on this side aspect of the Nebel case, see SCI Detachment, Sixth Army Group, "Fraulein Richter, Mistress of Merck Alias Capt. Kaiser," 17 May 1945, S-949, (S), and SCI Heidelberg, "Obergrefreiter Johnny Plum," 21 May 1945, S-1579, [no classification listed], in Nebel, ————————————————————————————————————

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elements of the SS in the Black Forest, sought shelter. On 22 April, Nebel (and two other SD members) surrendered to the French army who transferred him to Paris.⁵⁰ (S)

After V-E Day, Michaelis brought Nebel and Berthold with him to the headquarters of the Sixth Army Group's SCI detachment in Heidelberg. ⁵¹ By June, X-2 had transferred control of the two men from the Sixth Army Group to the SCI detachment of the Twelfth Army Group in Munich to "discover personalities of interest to us in our general operations." ⁵² The following week, Capt. Eric W. Timm, commander of the SCI detachment in Munich, reported that he had arranged for both Nebel and Berthold to be employed by a firm to recover damaged vehicles. ⁵³ Under this cover, both men could travel throughout Bavaria transporting goods and, at the same time, collect information

^<sup>50Ibid. (S)

^<sup>51Sixth Army Group SCI Detachment, "Weekly Activity Report 13 May 1945 to 20 May 1945," 20 May 1945, in RG 226, OSS Records, Entry 190B, PARIS-X-2-OP-9, Box 22, Folder 183, NARA. (U)

FBI's chief of the sabotage section. He entered the Army in August 1944 with a direct commission as a first lieutenant. Following assignments in Washington and London, Timm became the liaison officer for the Third Army SCI Detachment in the spring of 1945. He returned to the United States in late 1945 and received his discharge from military service in early 1946.

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for Capt. Michaelis, who had been posted with X-2 in Munich.⁵⁴ OSS hoped eventually to use both men in intelligence operations.⁵⁵ Timm and Michaelis kept Nebel and Berthold busy with small assignments that summer.⁵⁶ As it turned out however, X-2 was unsuccessful in placing Nebel in the trucking business, and he continued to live with Berthold in Munich in September.⁵⁷ X-2 noted disappointingly that "great difficulties have been experienced in establishing JIGGER and OSTRICH under adequate business cover, and their intelligence activities have as a result been necessarily circumscribed."⁵⁸ With the departure of Capt. Michaelis from Munich in late October 1945 and directives from Washington to reduce the overall number of assets, both Nebel and Berthold were dropped. Capt. Timm determined that the two men required "too much attention, [and]

Army, and Commanding Officer, SCI Detachment, Twelfth Army Group, "Activity Report for Week Ending 16 June 1945," 18 June 1945, LMX-010-618, (S) and Capt. Michaelis to Commanding Officer, X-2/Germany, "Situation Report on Prospective Penetration Agents," 29 June 1945, LMX-002-629, (S), both in DO Records,

ARC. See also Lt. Edward R. Weismiller, Chief of Operations, X-2/Germany, to Chief, X-2/Germany, "Report of Agent Penetration Cases," 2 July 1945, LWX-002-702, (S), in DO Records,

August 1945, LWX-62, enclosing Capt. Timm to Commanding Officer, X-2/Germany, and G-2, CIB, Third Army, "Semi-Monthly Operation Report, SCI Munich," 3 August 1945, LWX-62, enclosing Capt. Timm to Commanding Officer, X-2/Germany, and G-2, CIB, Third Army, "Semi-Monthly Operation Report, SCI Munich," 1 August 1945, in RG 226, OSS Records, Entry 108A, WASH-REG-INT-163, Box 287, [no folder listed], NARA. (U)

Schott Weismiller to SAINT, Washington, "Semi-Monthly Operation Report, SCI Munich," 22 August 1945, LMX-010-815, (S), enclosing Capt. Timm to Commanding Officer, X-2/Germany and G-2, CIB, Third Army, "Semi-Monthly Operation Report SCI Munich," 15 August 1945, in DO Records,

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service, and demand [ed] substantial payment for information which can be obtained from more stable sources." (U)

American intelligence perhaps thought that this would be the last that it heard from Nebel. In fact, X-2 soon learned the extent to which Nebel had concealed his past from the Allies. In March 1946, Lt. Sidney H. Lenington, the deputy chief of X-2 in Germany, assigned Flight Officer Sherman D. Lamb to examine a Danish request for the extradition of an X-2 agent named Koehler for war crimes committed in Denmark.⁶⁰ Lenington provided Lamb with the following details:

^<sup>59Lt. Sidney H. Lennington, Deputy Chief, X-2/Germany, to SAINT, Washington, "Semi-Monthly Reports, SCI/Munich," 12 December 1945, LMX-005-1130, enclosing Capt. Timm to Commanding Officer, X-2/Germany and G-2, CIB, Third Army, "Semi-Monthly Operations Report SCI Munich," 31 October 1945, in RG 226, OSS Records, Entry 108A, WASH-REG-INT-163, Box 275, [no folder listed], NARA. (U)

⁶⁰Sidney H. Lenington, born in 1912 to American missionaries in Brazil, entered the US Army

a private in 1943. He transferred to the OSS in early 1944 and served in Italy, France, and Germany where he received a direct commission as a second lieutenant in June 1945. Lenington remained overseas and became chief of X-2 in Germany in January 1946. Upon his discharge from the Army in mid-1946, Crosby Lewis, the chief of the German Mission, noted that "Lieutenant Lenington has had almost insuperable obstacles facing him in merely keeping the Headquarters office of X-2 Branch functioning. Despite no personnel and no assistance or direction from Washington, however, he has managed to carry out the operations of the Branch, ensuring the security of SI operations, and maintaining throughout an intelligence, imaginative, and cheerful attitude."

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The information given by Koehler has subsequently proved entirely reliable, and the organization feels itself obligated to protect and aid him as much as possible in setting him up on a normal basis of living. For this reason we are very anxious to determine whether the charges made by the Danish Mission are substantiated by sufficient evidence so that any element of doubt as to Koehler's guilt is removed. At the time he was recruited there were rumors to the effect that he had been mixed up with some unsavory deal in Denmark, but the charges were never substantiated and we would be very loath to allow him to be transferred to Denmark to stand trial for some denunciation which had no basis of actual fact. ⁶¹ (U)

Lenington, however, emphasized that Lamb should verify the evidence collected by the investigators in Nuremberg and, "if Koehler is actually guilty, then we will not stand in the way of his being transferred to Denmark for trial." Lamb met with the Danish investigator and reported that the case "rests on evidence sufficiently convincing as to assure a death sentence." (U)

In June, SSU's Bern Station transmitted a request for information on Nebel from the Swiss Federal Police. The German Mission responded with the news that Nebel had been arrested and would shortly be turned over to the Danish Government. "When War Crimes approached us initially on the matter of his extradition to Denmark," Lt. Sidney H. Lenington the deputy chief of X-2 in Germany wrote, "we felt ourselves obligated to

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give him as much protection as possible due to the work performed by him while under our control. Since that time, however, the Danish Government has become increasingly insistent and has produced evidence which has made it impossible for us to block the extradition."⁶³ (S)

The Nebel case continued to distract American intelligence for the next two years, although there is no indication in existing records that the Strategic Services Unit, the Central Intelligence Group, or the Central Intelligence Agency ever reviewed the case to determine how Nebel had deceived the Allies as to his wartime background and hid his activities in Denmark. (S)

In January 1947, Brigadier C.D. Roberts of MI 6 approached Lt. Cdr. Winston M Scott, CIG's representative in London, about Nebel's situation. Roberts informed Scott that the Danes now held Nebel for crimes that he had committed in Denmark while with RSHA Amt VI. "Although this man was undoubtedly a criminal thug and a wholehearted Nazi," Roberts admitted, "the fact remains that he gave us a considerable amount of information on the S.D. and worked loyally for the Allies at considerable danger to himself." The British proposed that the two Allies make a "discreet approach" to the Danes to inform them of the role that Nebel had played during the latter part of the war. Roberts declared, "We would make it clear that we have no wish to interfere with the course of Danish justice in dealing with crimes against the Danes in Danish territory at a time when Nebel was an out-and-out Amt VI man, as any charges of this nature.

^<sup>63SAINT, AMZON to SAINT, Bern, "Ludwig Nebel," 29 June 1946, LWX-528, (S), in DO Records,
☐ ☐ , Box 1, Folder 9, CIA ARC. (S)

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would no doubt be considered by them to be exclusively of a domestic Danish nature, but we would ask them to take into consideration his later good efforts on our behalf."⁶⁴ (S)

Scott sent an urgent cable to Washington outlining Nebel's situation and the British proposal. Washington, in turn, informed the CIG representative in Copenhagen that it supported the British steps. "Maximum purpose of intercession," the Washington cable stated, "is saving his life, not reduction of sentence non-capital." Scott then told Brig. Roberts on 3 February 1947 that "our Washington office is in complete agreement with your policy of intercession with Danish authorities in Nebel's behalf and has instructed our representative in Copenhagen to act accordingly." (S)

Allied intercession soon became a sticky issue because the British and Americans in Copenhagen both reported that any "representation about Nebel would be resented by the Danish authorities." Nebel had been "loaned" to the Danes by the US Army in Germany to aid in their war crimes investigations, and thus the MI 6 and CIG representatives in Denmark argued that authorities in the American sector should make any queries about Nebel's fate. ⁶⁸ The Danes were holding Nebel as the leader of the

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German gang that had murdered Danish poet and religious leader Kaj Munk in 1944.

Munk had died in the "clearing murders"-inspired by Heinrich Himmler and approved by Hitler-when the SS assassinated well-known Danes as well as many commoners in revenge for acts of resistance to the German occupation. ⁶⁹ (S)

Nebel's case came up again in April 1947 when the German Mission cabled
Washington to request an update. For the first time, American intelligence linked Nebel
with Leo Kohler, the name of the man charged by the Danes. The German Mission
specifically asked the Danish Mission to provide the latest information on the case. Not\nuntil early January 1949 did __________________________________

The Trial of the Major German War Criminals at the End of World War II at Nuremberg, Germany, 1945-1946 (Dallas: Southern Methodist University Press, 1954, rev. ed. 1999), pp. 216-219. For a discussion of the war in Denmark, see Richard Petrow, The Bitter Years: The Invasion and Occupation of Denmark and Norway April 1940-May 1945 (New York: William Murrow & Company, 1974). (U)

70 Cable, Heidelberg to Washington, 11 April 1947, Heidelberg 399, IN 12293, (S), in Nebel,

7 DO Records. (S)

71

7 to Chief, Foreign Branch W, "Louis Nebel," 7 January 1949,
WDC-A-164, (S), enclosing

7 to the Legation of the British Empire, 3 April 1948 and
17 November 1948, in Nebel

7 DO Records. For further information on early
US intelligence

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martyr-hero. Emotion is connected with the very mention of his name. To take any stand on this matter for the defense of [Nebel] would in no way change the outcome of the [Nebel's] trial and would involve this organization's predecessor as well as the United States Government in rather unfavorable publicity." As a result, ( \square ) stated that he planned to take no action in regard to Nebel unless otherwise directed by Washington. ( \frac{72}{2} )

to appeal. OSS and its successors had not been "implicated" in the trial. Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, the Consequently, and the Nebel case was closed as far as the CIA was concerned. "From available records it has been determined that, while subject was turned over to the Danes to stand trial for war crimes committed during the German occupation, he was given as much protection as possible because of his work while under the control of our predecessor organization." Considered that the Central Intelligence Group in 1947 back considered interceding on Nebel's behalf to save his life, but later decided that such a move was inadvisable. "This viewpoint," noted Considered in the past two years." Nebel's light sentence further persuaded CIA to take no action in his case. "The past finally caught up with him. (S)

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Chapter Three

Persons From All Spheres of Influence (U)

Germany became the scene of intense competition between East and West as the Cold War heated up.¹ While Berlin was the epicenter of this struggle, many of the Central Intelligence Agency's earliest operations in Germany originated in Munich, the birthplace of Nazism. The city's proximity to both Austria and Czechoslovakia transformed the city into a crossroads for Europe's refugees in the wake of Hitler's Gotterdammerung and a center of postwar intelligence operations. (U)

American occupation officials had sole responsibility for Munich, the largest city in the US zone after the four allies divided Germany in 1945. The city's location minimized direct contact with the Russians or, for that matter, with the British and the French as well. Consequently, US intelligence agencies faced fewer obstacles from competing Allied and Soviet intelligence services and preferred Munich for unilateral

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operations. Intelligence collection and operation, however, was still split among several US civilian and military organizations. In addition, American intelligence in Germany was in a state of flux as the United States demobilized its military forces after World War II and debated the merits of creating a peacetime, civilian-controlled central intelligence structure. (U)

Life in Munich in the years after the war was a struggle. Between 1940 and 1945, Munich had been the target of some 70 Allied air raids, which dropped over 60,000 bombs and 3.5 million incendiary devices. Of the city's prewar population of 820,000, some 6,000 men, women, and children had died during the war and 15,000 had suffered injuries. Another 18,000 residents of Munich had lost their lives as members of the German armed forces, while 12,000 were still listed as missing. The city's physical structure was heavily damaged by the bombings; 97 percent of Munich's buildings, including many of its architectural wonders, sustained damage. The Americans used many of the buildings not damaged by the air raids—including the Neues Rathaus and the Haus der Deutschen Kunst— as headquarters, clubs, or billets.² (U)

With the disbandment of the OSS in the fall of 1945, the Strategic Services Unit focused on two missions in Germany. This chapter examines the activities of Secret Intelligence (SI) and Counterespionage (X-2), and their successor units in Munich, from the Nazi surrender in May 1945 until mid-1947. The transition from declared war with a

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known enemy to the murkiness of the underground war between East and West rapidly took shape. In this new conflict, yesterday's foe became today's friend in Munich. (U)

SI's New Missions (U)

Secret Intelligence played a leading role in OSS operations in the European

Theater during the last months of the war. Tasked with the collection of information on

Nazi Germany's order of battle, its economic potential, the development of new weapons,

and the assessment of the chimerical anti-Nazi resistance, SI launched over 100
\nintelligence missions behind German lines in 1944 and 1945.³ (U)

In June 1945, SI Bern station chief Allen W. Dulles established the new OSS German Mission in Biebrich, near Wiesbaden. Secret Intelligence, a part of the German Mission under the direction of US Navy Cdr. Frank Wisner was put to work, developing new networks of agents to penetrate selected targets. Wisner targeted the remnants of the Nazi military, political, and security structures; Germany's industrial, economic, and scientific elements; the defeated enemy's social, religious, cultural, and educational

n.d.), pp. 93-97. See also Landeshauptstadt Munich, Munchener Nachkriegsjahre

1945....1946....1947....1948....1949....1950....(Munich: Buchendorfer Verlag, 1997). (U)

3 For a description of SI's operations against Germany,
Clandestine Services Historical

Program

See also Joseph E. Persico, Piercing the Reich: The

Penetration of Nazi Germany by OSS Agents during World War II (London: Michael Joseph,

hierarchies; and evidence useful to the investigations of Nazi war crimes.⁴ He noted in June 1945 that it was "becoming increasingly apparent that the American authorities in Amzon [the American zone] consider the most useful activity of OSS in Germany to be that of keeping them informed of conditions and developments in adjoining areas not accessible to the other official information and intelligence agencies."⁵ (S)

The new OSS/SI organization in Germany consisted of a Steering Division and a Production Division. The former, run by Army Capt. Harry Rositzke, built upon lessons learned by SI while in London during the war and maintained liaison with all American organizations in Germany to identify intelligence requirements. The Steering Division also established contacts with German civilian organizations, such as labor and church groups. It processed positive intelligence reporting from various sources and ran requirements, liaison, and distribution services.⁶ (S)

SI's Production Division recruited agents to meet the requirements of the Steering Division. It had Production Units, or "P Units," scattered throughout Western Europe and the American Zone of Germany.⁷ By mid-September 1945, SI/Germany had some 120 civilian and military personnel assigned to the OSS German headquarters and in "P

found in Christof Mauch, Schatten-Krieg Gegen Hitler: Das Dritte Reich im Visier der amerikanischen Geheimdienste 1941 bis 1945 (Stuttgart: Deutsche Verlags-Anstalt, 1999). (S) ⁴For a discussion of the OSS role at Nuremberg trials, see Michael Salter, "The Prosecution of Nazi War Criminals and the OSS: The Need for a New Research Agenda," The Journal of Intelligence History (Vol. 2, No. 1, Summer 2002), pp. 77-119. (U) ⁵Frank G. Wisner to W.H. Shepardson, S.B.L. Penrose, and Walter Langsam, "Miscellaneous Operational Matters – SI Germany," 16 July 1945, L-002-716, (S), in DO Records, December 20, CIA ARC. (S) Jpp. 93-96. (S)

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Units" in Berlin, Bremen, Heidelberg, Kassel, Munich, Nuremberg, and Regensburg as well as smaller units in non-German missions, such as Oslo and Prague. The "P Units" were generally referred to by their British county codename; for example, the Munich "P Unit" was called "Northampton" while Berlin had two separate SI missions known as "Wiltshire" and "Cambridge." In addition to SI's regular missions, the Production Division also controlled the "Crown Jewels," Dulles's collection of high-level agents who returned to Germany from Switzerland after the Nazi surrender. In September 1945, Wisner ordered the "P Units" to target the Soviets in their zone in Germany as well as German Communism Party activities in the Western Allied occupation zones. In the meantime, SI continued to monitor German political activities in the American zone. (S)

SI Operations in Munich (U)

^<sup>7Ibid, pp. 96-97. (S)

^<sup>8The names and locations of SI personnel in Germany is found in Rolfe Kingsley to Shepardson "Personnel Roster of SI/Germany as of 15 September 1945" (S) in DO Records.

Box 2, Folder 20, CIA ARC. Dulles recruited some 40 "Crown Jewels" during the war from his base in Switzerland, and they continued to serve as intelligence sources in Germany after 1945. Prominent German citizens, the Crown Jewels sometimes created additional handling problems for OSS and its successor intelligence agencies. As late as 1970, one of the Crown Jewels still provided information to CIA.

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open-source information on Bavarian political affairs. In July 1945, SI/Munich produced 75 reports, but the SI's Steering Division disseminated only 12 of them. Capt. Rositzke commented that the Northampton reports were "mainly of CIC [Counter Intelligence Corps] or MG [Military Government] rather than SI interest." In fairness, Rositzke recognized, "a greater proportion of P-unit intelligence has thus far been of a kind normally obtainable by overt means; but the full value of coverage by agents stably and permanently placed in the German community has not been achieved by any [other] unit." (S)

SI's coverage of Bavarian regional affairs remained less than satisfactory throughout the summer of 1945. In his report for the month of August, Rositzke observed, "the Munich unit is not yet providing even semi-adequate coverage of the priority targets in its area." The outlook continued to be unimpressive for the remainder of the year. In early January 1946, the German Mission complained that SI's

^<sup>9John Langdon Caskey was born in 1908 in Boston and graduated from Yale University in 1931. He received his Ph.D. from the University of Cincinnati in 1939 and worked on excavations in Troy. After the war, Caskey taught at the University of Cincinnati and served as the university's head of the Department of Classics during 1959-72. He supervised archeological digs at several sites in Greece and served as director of the American School of Classical Studies in Athens during 1949-59. Caskey retired from active teaching in 1979 and died in December 1981. Obituary, "John Langdon Caskey, Professor of Archeology," New York Times, 8 December 1981, p. D31. (U)

^<sup>10Rositzke to Wisner, "Monthly Report of Steering Division, SI/Germany," 2 August 1945, L-010-731, (S), in DO Records, (\sum_{\substack}) Box 2, Folder 19, CIA ARC. (S)

¹¹Rositze to Wisner, "Monthly Report of the Steering Division, SI/Germany," 5 September 1945 L-038-905, (S), in DO Records, ( \sum_{\substack} \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \substack \s

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SI confronted several administrative problems that limited its ability to collect intelligence in Munich. Primarily, Maj. Caskey and three officers had little time for intelligence operations because of their cover mission with the Office of Military Government for Bavaria (OMGB).¹³ While Maj. Caskey spent most of his time as OMGB's Chief Intelligence Officer, his assistant, Lt. Calhoun C. Ancrum served as the Military Government's Public Relations Officer. Wisner quipped that Caskey's detachment was doing a "more valuable job for Military Government as such than for ourselves." ¹⁴ (S)

Wisner, however, added that SI's Military Government cover had some benefits because Caskey and his officers were "very much in the middle of things in a very important political arena and enables them to have almost unlimited contacts with the most knowledgeable and important Germans in Bavaria." Wisner's successor as the head of SI in Germany, Maj. Gordon Stewart, however, disagreed with this assessment in

¹³Wisner to Shepardson, Penrose, and Lt. Col. Howard M. Chapin, "SI Personnel and Operations in the American Zone, Germany and Denmark; Present Status and Proposals for Near-term Future," 6 December 1945, L-002-1206, (S), in DO Records, ————————————————————————————————————

^<sup>15Ibid. (S)

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January 1946. Stewart felt that SI's Military Government role in Munich "resulted in Major Caskey's concentration on semi-overt political intelligence" and "double-checking political gossip." ¹⁶ (S)

In March 1946, Stewart released Maj. Caskey to the Army for direct assignment with the Military Government or discharge to return to civilian life. "I decided," Stewart wrote to Washington, "to discontinue the Munich operation where the energies of some of our best personnel have been spent on cover work." ¹⁷ Like many other SSU operations, SI/Munich was in the midst of the Army's postwar demobilization. Caught between its clandestine mission and its cover role with the Military Government, SI/Munich never developed its resources to provide broad intelligence coverage. (S)

An Influx of Staggering Proportions (U)

X-2 in Munich had greater influence and more longlasting impact than its SI counterpart. Capt. Eric W. Timm, who transferred to the OSS in 1944 from the Federal Bureau of Investigation, established the SCI Detachment in Munich and commanded the

¹⁷Stewart to Penrose, Helms, and Rositzke, "SI, Germany," 30 March 1946, G-SITS-781, (S), in DO Records, C Box 2, Folder 19, CIA ARC. (S)

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detachment until his demobilization in November 1945.¹⁸ Despite constant turnover in unit personnel, Timm turned his attention to the new demands of a chaotic, postwar world—a world marked by shifting alliances and desperate struggles for survival in the rubble of what had been one of Germany's loveliest cities. (U)

At the end of the war, the OSS shifted to new missions in Germany with a strong emphasis on counterintelligence, as opposed to positive intelligence. The gathering of evidence for war crimes trials of Nazi officials, the rounding up of members of Nazi underground movements in Germany, and the recovery of gold and art looted by the Germans throughout Europe, all required OSS personnel and resources. ¹⁹ During this hectic period, individual Germans scurried to broker deals with their conquerers. In its monthly progress report for May 1945, X-2/Germany reported that "thousands of Germans, having various degrees of counter-espionage interest, were either arrested or processed through military channels in the three weeks following the end of the war. Every effort," X-2 commented, "has been made to exploit to the fullest these German Intelligence Service personalities, although the influx has been of staggering

Heilman Strasse. OSS had three separate units in Munich in 1945: Timm's X-2 detachment; Caskey's P Unit; and the OSS Munich headquarters element. (U)

19 Secretariat, Strategic Services Unit, "The Office of Strategic Services on VE Day - VJ Day," 11 March 1946, (S), in CIA History Staff Records, ____________________________________

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proportions." A month later, X-2 observed that "there have been surprising offers on the part of former Abwehr and SD members to turn over to the Allies networks of agents, but most probably all offers were made either to ingratiate these men with the American authorities in order to gain support for purely selfish motives (Austrian Nationalists in one case) or to embroil us with the Russians."²⁰ (S)

In a single week in June 1945, Capt. Timm noted that X-2 in Munich had arrested 15 German intelligence officers and agents.²¹ Timm wanted to use former GIS [German Intelligence Service] officers and enlisted men to uncover German efforts to resist the Allies. Consequently, X-2 in Munich and elsewhere concentrated on the recruitment of German intelligence officers and agents to work for the Americans as agents and informants. "It has been for sometime apparent," he wrote in August 1945, "that a well-balanced network of counterintelligence and counterespionage agents must include persons from all spheres of activity." Timm observed that "the implementation of the penetration agent program wherein the use of former GIS personalities is contemplated remains of critical importance." With the concerns of a resurgent Nazi party in mind, Capt. Timm commented, "such persons are of importance because they are in a position

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to recognize other GIS personalities and are logical contacts for any illegal or resistance group."²² (S)

By late August, Timm had recruited 13 agents to work for him, with another dozen under active consideration.²³ He was frustrated, however, by X-2's lack of manpower and a breakdown in the process to vet new agents.²⁴ Timm also encountered problems in getting his agents approved by the Military Government in Bavaria; restrictions on the employment of Nazi party members and German military personnel handicapped his recruitments.²⁵ As early as June, the German Mission's X-2 observed that "in the absence of any well-defined policy concerning the direction in which

Munich," 22 August 1945, LMX-010-815, (S), enclosing SCI Detachment, Munich to Commanding Officer, OSS/X-2 Germany, "Semi-Monthly Operation Report SCI Munich," 15 August 1945, (S), DO Records, ( \subseteq \textstyre{\subseteq}, \subseteq \textstyre{\subseteq}, \subseteq \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \textstyre{\subseteq}, \te

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American interests are to be pointed, aggressive exploitation [of German intelligence personnel] has been somewhat stifled.²⁶ (U)

By the end of the summer, the lack of official policy posed a serious constraint to Timm's plans in Munich as he pointed out to his superiors:

Numerous difficulties are being experienced in the actual implementation of our program for recruiting and placing agents who were formerly members of the GIS or other proscribed categories. Our primary interest in handling these people has been to place them in positions of strategic importance so that they could be in a position to obtain valuable information to observe trends and possible underground activity, and to be self-supporting, as our budget does not allow us to pay these people salaries. It is also realized that any person with no apparent means of support could at best be a short term agent.

Realizing this fact we have for some time centered our contacts with Military Government in this area, and were originally led to believe that the officers in charge were cognisant [sic] of the problem involved, the essential value of intelligence operations of the kind being conducted by SCI, and we were promised active cooperation. However, in each instance, when we proposed some specific individual there has always been a directive in existence which bars our man from employment by Military Government. Even though we have offered to submit a letter assuming full responsibility in the case, we have not been able to obtain employment for such persons.

The proscribed list of persons has now grown so large that no former member of the Nazi Party or Army officer, to say nothing of GIS personnel, can be hired. We, of course, realize the desirability of such restrictions, but we do feel that the blind adherence to a general policy without discretion on the part of Military Government in this area is potentially dangerous. It is creating a huge segment of society which has no hope of rehabilitation, and is driving the Army and the Nazi party into each other's arms. However, it is not our function to comment upon the

^<sup>26X-2 Branch, OSS Mission Germany to Secretariat, "Monthly Progress Report – X-2 Branch – May 1945," 14 June 1945, LSX-010-614, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 276, [no folder listed], NARA. (U)

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overall policy. All we are interested in is the application of this policy as it affects the operations of this unit.²⁷ (S)

A Shifting Focus (U)

Uncertainty in Washington as to the future of the Office of Strategic Services complicated intelligence work in Germany. President Harry Truman, in fact, disbanded the Office of Strategic Services on 30 September 1945, a few weeks after Japan's surrender. He divided its various functions between the State and War Departments, with the latter gaining SI and X-2 in the form of a new Strategic Services Unit.²⁸ The effect of

²⁷SCI Detachment, Munich to Commanding Officer, OSS/X-2 Germany, "Semi-Monthly Operations Report SCI Munich," 31 August 1945, G-TSX-2891, (S), DO Records, ☐ ☐, Box 3, Folder 21, CIA ARC. X-2 headquarters, in turn, raised the issue of treatment of former GIS personnel who had assisted the Americans. See Lt. Col. Berding to Chief, Counter Intelligence Branch, USFET, "Treatment of GIS Personnel," 13 August 1945, LWX-002-813, (S), in DO Records, ☐ ☐, Box 406, [no folder listed], CIA ARC. In a vetting request from Germany, a X-2 officer appealed to Headquarters to pursue requests to vet Germans, including one who "appears to be an unmitigated stinker." This officer noted, "Whatever rumors may circulate as to the duration of this organization, both branches [SI and X-2] will continue to recruit agents here at this mission for two reasons. First, they feel it particularly desirable to leave any possible successors with a well-established network of operatives. Second, much can be produced with agents now being recruited − even during the next few months. Since those months are to be critical ones for American policy in Germany, SI is anxious to do a good job getting information for American policy makers. So, please don't feel that the vet requests which we forward to you are academic. The men are being and will continue to be used. Some will occupy extremely important positions in German life and government for years to come. This is not a dream. It is already happening." AB-16 [identity unknown] to SAINT, Washington, "Vetting of Heinz Karl Hermann Krull for SAINT," 7 September 1945, LWX-002-97b, (S), in DO Records, ☐ ☐ Box 406, [no folder listed], CIA ARC. (S)

28 ☐ ☐ The Central Intelligence Agency: The First Thirty Years 1947-77

(Washington, DC: CIA History Staff, 1990), p. 10 (S). For additional information on SSU, see ☐ ☐, "Salvage and Liquidation: The Creation of the Central Intelligence Group,"

Studies in Intelligence 39 (Fall 1995), pp. 49-57, (S)

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Truman's action became apparent in Munich and threw into doubt many of the SCI Detachment's efforts. Capt. Timm glumly reported:

In view of the impending administrative dissolution of OSS, and the resultant uncertainty of the identity or nature of the successor organization it is difficult to formulate operational plans for the future at this time. Numerous contacts have been made by the Munich Detachment who are in favorable positions to assume a preeminent position in Bavarian life. Some will do so without assistance from the Americans in general or this detachment in particular. Others have been aided in some fashion to facilitate their obtaining passes, etc. At the present time the unsettled political, social and economic conditions which are a necessary result of the occupation make it impossible to anticipate specific developments. It is therefore difficult to formulate accurately a plan of definite future action for any of these people.²⁹ (S)

Changes in Washington coincided with a reexamination of American intelligence targets and operations within Germany itself.³⁰ As late as September, X-2 had been ordered by US Forces European Theater (USFET), the senior Army headquarters in Germany, to mount an "intensive program of penetration of potential German intelligence or subversive organizations."³¹ In October, however, SSU headquarters near Wiesbaden

^<sup>30For example, in September, Lt. Col. William G. Suhling, Jr., the deputy of the German Mission, outlined his proposal to dissolve OSS's presence in Germany. Likewise, Cdr. Wisner chief of SI in Germany, recommended that SI and X-2 merge because of the blurring of their intelligence missions and the need to conserve manpower and resources.

ordered X-2 in Munich to reevaluate its agents for long-term productivity. In the light of X-2's growing personnel shortages (the branch had dropped to 79 staff members by the time of OSS's disbandment), SSU wanted to focus political groups in Germany (including the Communist Party) because Nazi resistance to the Allied occupation had failed to materialize. As a result, Capt. Timm reviewed his crop of 31 agents and decided to retain only eight assets; the remainder were placed in an "inactive status," and some transferred to CIC control.³² (U)

Following a conference in Wiesbaden to discuss future SSU projects in Germany that November, X-2 received orders to abandon efforts against German intelligence organizations and the Nazi underground.³³ SSU shifted its efforts to collect information on personnel, activities, and goals of all foreign intelligence services, with particular emphasis on the Soviet Union. "It was, therefore, decided," Timm wrote,

WASH-REG-INT-163, OSS Records, RG 226, Entry 108A, Box 287, (no folder listed), NARA. (U)

^<sup>32Lt. Sidney H. Lenington, Deputy Chief, SSU/X-2, Germany to SAINT, Washington, "Semi-Monthly Reports," 12 December 1945, LMX-005-1130, enclosing Timm to Commanding Officer, SSU/X-2 Germany, "Semi-Monthly Operations Report SCI Munich," 31 October 1945 LMX-005-1130, in WASH-REG-INT-163, RG 226, Entry 108A, Box 275, (no folder listed), NARA. (U)

conversion of this agency from a wartime to a peacetime basis brings with it a shift in emphasis in counterespionage targets. No longer are the German and Japanese Intelligence Services the focal point of our attention. Instead, all foreign intelligence services, and personnel connected thereto, now become the legitimate object of observation and study for this Branch." JJ1 to All Field Stations, 27 September 1945, X010-927, (S), in DO Records, . ___________________________________

Two Distinct Operations Are Being Developed (U)

While X-2 in Germany shifted its focus to the Soviet Union, the new Central Intelligence Group-formed in Washington in January 1946-made plans to absorb SSU's field elements and provide new guidance on operational targets.³⁵ X-2 became CIG's new Security Control (SC) group while the Foreign Reports (FR) group assumed the functions of SI. The Central Intelligence Group soon formed the Office of Special Operations (OSO) in July 1946 to handle both the collection of foreign intelligence and counterintelligence work. CIG sorted SSU's field stations into geographic teams at headquarters within OSO; consequently, the German Mission fell under Foreign Branch M. Richard Helms, who had served with SI in Germany, was named the Branch's acting chief.³⁶ The changes in Washington eventually provided the German Mission with new

^<sup>35Ten months later, CIG absorbed SSU's overseas personnel in October 1946. (U)

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In November 1945, Capt. Timm had rotated to the United States, leaving Sgt.

Boleslav A. Holtsman as X-2's lone representative in Munich.³⁹ In a summary of his duties in January 1946, Holtsman estimated that he spent some 40 percent of his time in the "recruiting, training, and running of penetration agents, particularly those in a position to watch or enter the Russian service operating in Bavaria." His other major task consisted of interrogating German intelligence personnel, "particularly their counterintelligence officers concerning the organization and activities of foreign intelligence services, particularly Russian and location of German files pertaining thereto." In

^<sup>38Lewis to Helms, Acting Chief, Foreign Branch M, "Security Control Group, Amzon Mission," 3 September 1946, L-002-903, (S), in DO Records, Job 79-00332A, Box 368, Folder 3, CIA ARC. (S)

^<sup>39Born in Detroit in 1912 of Polish parents, "Bill" Holtsman spent his childhood years in Poland He returned to the United States in 1931 to attend college and was ordained as a minister in the Lutheran Church. He entered the Army in 1942 and served as a translator and later as a case officer with OSS in Europe until his discharge in early 1946. He received an appointment as Intelligence Officer with SSU/X-2 in March 1946

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addition, Holtsman mingled in "German political and intellectual circles to keep abreast as to the latest local developments which might lead to foreign agents." (S)

The next month, in December 1945, Maj. Crosby Lewis, the new X-2 chief at the German Mission, reported that he had held talks with USFET's Counter Intelligence

Branch (CIB) in the Office of the Director of Intelligence. CIB wanted to separate X-2 from the German Mission and merge its projects and files with those of the Army's. In essence, X-2 would cease to exist as an counterintelligence organization within SSU in Germany. Maj. Lewis refused to agree to this arrangement, but he agreed that X-2 would terminate the bulk of its cases in the American Zone and turn these over to the Army's Counter Intelligence Corps. Brig. Gen. Edwin L. Sibert, USFET's G-2 or intelligence chief, ordered X-2 in early January 1946 to relinquish many of its counterintelligence activities to the Army. Sibert cited SSU's manpower shortage and the need for better coordination between the various intelligence agencies in the American Zone as his

^<sup>40Holtsman, OSS Position Description Survey Form, 3 January 1946, in Holtsman, Personnel file. (S)

^<sup>42Lewis to Secretariat, "Monthly Progress Report, X-2 Branch, November 1945," LX-012-1212, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 288, [no folder listed], NARA. (U)

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reasons for this decision. He directed X-2 to concentrate on counterintelligence activities outside of the American zone of occupation, with particular emphasis on the Russian intelligence services. "Two distinct operations are being developed," according to Sidney H. Lenington, X-2's acting chief in Germany during the absence of Crosby Lewis in February 1946. The "accumulation, appraisal and study of documents prepared by the German I.S. on Russian intelligence efforts on the Eastern

Front during the war[,] and counter-intelligence operations actively in progress . . . designed to gather all possible information on present personnel and techniques of the RIS."43 (S)

A Top Target for Espionage Activities (U)

The changes in Washington gradually affected intelligence collection in Munich. For much of the interim period, Holtsman found himself simply trying to keep X-2's office in Munich and maintaining contact with other American agencies in Bavaria. He did not receive much direction from either the German Mission or from Headquarters in Washington. In fact, Holtsman had been informed in early 1946 that his office would close and that he would join the Mission in Heidelberg. Likewise, it wasn't until March 1946 that Holtsman finally learned that "our objective is the SIS" [Soviet intelligence

⁴³SAINT, AMZON to SAINT, Washington, "X-2 Operations Report for Month of January, 1946," 25 February 1946, LWX-TS-8, (S), in DO Records, ☐ ☐ □, Box 1, Folder 13, CIA ARC. (S)

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services] and that "the GIS [German intelligence services] was liquidated and is to cease to figure in our consideration." (S)

Despite these difficulties, Holtsman still produced over 350 intelligence reports in nine months. The arrival of new personnel in Munich allowed Holtsman to expand his coverage and to spread his work load. George N. Belic, a US Navy officer who had served in Rumania and Turkey during the war, joined SSU in March 1946 and was posted to Munich in May. A native of Russia, Belic took over several of the Russian cases in Munich while Holtsman, who spoke Polish and Ukrainian, concentrated on other projects. Belic's most important case was the debriefing of Anatoli Granovsky, a Soviet defector codenamed SAILOR. Granovsky, the first major defector for SSU and CIG in Germany, jumped a Soviet ship in Sweden and smuggled into the American zone from Denmark in the fall of 1946.⁴⁵ Two other officers, Toivo Rosvall and Capt. Bengt C. Herder, also arrived in Munich in 1946 and early 1947, respectively.⁴⁶ (S)

A4SAINT, AMZON to SAINT, Washington, "Review of Activity since 10 December 1945 to 10 September 1946," 17 September 1946, (S), enclosing AB-43, Munich [Holtsman] to AB-51, AMZON [Hecksher], "Review of Activity since 10 December 1945 to 10 September 1946," 10 September 1946, L-010-910, (S), in DO Records, ____________________________________

^<sup>46Belic, who shortened his name from Belicovitch in 1938, was born in Odessa, Russia, in 1911, the son of a colonel in the Imperial Russian Army. Belic moved to the United States in the 1920s and graduated from Georgetown University in 1936. After joining SSU

Toivo Rosvall, born in 1913, graduated from Clark University in 1934. A teacher and author before the war, Rosvall served in the US Army during the war. He joined SSU in February 1946 and reported to Germany in the spring.

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MOUNT (U)

The MOUNT case drew the attention of senior OSS officials in Washington, including Maj. Gen. William J. Donovan, and threatened to disrupt US-Soviet relations even before the end of the war. As In a separate move from Wolff's negotiations with Dulles in Operation SUNRISE, Dr. Wilhelm Hoettl, a major in the SS and a senior intelligence officer in Amt VI, acted as an intermediary between senior Nazi officials (such as Reichsfuhrer Heinrich Himmler and RSHA chief Ernst Kaltenbrunner), and a mixed bag of Austrian anti-Nazis who sought favorable terms with the Western Allies. Dulles in Switzerland reported that "Hoettl's record as a SD man and collaborator [of] Kaltenbrunner is, of course, . . . bad and information provided by him [is] to be viewed with caution, but I believe he desires to save his skin and therefore may be useful." OSS, however, regarded Hoettl's dealings as a ploy on the part of Himmler and refused to enter into negotiations. 50 (U)

Captured in Alt-Aussee, Austria, at the end of the war by the 80^th CIC

Detachment, Hoettl offered the Americans a "complex of agents in Rumania, Hungary,

Bulgaria, Jugoslavia, Montenegro and Albania, capable of reporting high-level political

Folder 3, CIA ARC (S). Many of I present and dropped agents in Munich also appear on this microfilm

^<sup>50Ibid., pp. 506-508. (U)

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and military information."⁵¹ Hoettl claimed that his radio "Centrale" still existed in Austria and could communicate with his isolated agents behind Soviet lines using a group of Hungarian cryptographers. These elements could be resurrected under American control if given the signal from Hoettl.⁵² (U)

X-2 sought to uncover further information from Hoettl, who had been confined in Munich in May 1945.⁵³ Capt. Timm in Munich and Capt. William B. Browne in Steyerling, Austria, used members of Hoettl's "Centrale" to contact both Budapest and Bucharest, although "only service messages are being sent in an effort to hold the entire ring together until a final determination of policy can be made." Coming at the end of the war, the Americans expressed natural concerns about operating a net behind the Soviet lines; the Russians, of course, were still regarded as military allies. Timm offered several possibilities about the MOUNT Case:

⁵¹Declassified MOUNT case material is found in Lt. Col. Andrew H. Berding, Chief, OSS/X-2, Germany, "Documents Pertaining to Hoettl Case," 27 June 1945, LWX-11, in WASH-REG-INT-1634, Record Group 226, Records of the Office of Strategic Services, Entry 108A, Box 287, (no folder listed), NARA. See also SAINT, London to SAINT, Washington, "War Room Comment on Hoettl Report," 6 February 1946, XX-10734, enclosing Counter Intelligence War Room London, "War Room Comment on Hoettl Report," P.F.602.139, in WASH-REG-INT-175, RG 226, OSS Records, Entry 109, Box 58, Folder 332, NARA. (U)

^<sup>52Berding to Maj. Gen. William J. Donovan, "Hoettl Case," 8 June 1945, in Berding, Documents Pertaining to Hoettl Case, NARA. (U)

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• b. Hoettl's offer may be an effort to entangle the Allies.
• c. Hoettl's agents may actually be working for the Russians already.

News of Hoettl's network soon made its way to the top echelons of OSS. Lt. Col. Berding, X-2's chief in Germany, told Maj. Gen. Donovan on 8 June about Hoettl's offer. In a series of lengthy memoranda, Berding recounted the history of the MOUNT case and its implications for the Americans. Berding forcefully advocated that OSS "secure from HOETTL the last syllable of information that he is able to furnish us on the Balkan networks." Berding, however, believed Hoettl "is not in the slightest degree actuated by a fatherly concern for the well-being of the American intelligence services; most of what he has to gain must lie in the empoisoning of Russian-American relationships."

Consequently, the X-2 chief advocated that the Americans tell the Soviets about Hoettl's system and that both powers jointly exploit it "in behalf of general Allied security." 55 (U)

Although Donovan had authorized X-2 to maintain radio contact for counterespionage purposes on 10 June, the MOUNT case quickly dissolved after the

officers in what had been planned to be the center of German resistance in the "National Redoubt." (U)

^<sup>54Capt. Eric Timm, SCI Liaison Officer, Third Army, to Assistant Chiefs of Staff, G-2, Third Army, Seventh Army, and Twelfth Army Group, "Activity Report for the Week Ending 9 June 1945," 10 June 1945, G-TSX-201, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 287, (no folder listed), NARA. (U)

^<sup>55Berding to Maj. Gen. William J. Donovan, "Hoettl Case," 8 June 1945, in Berding, "Documents Pertaining to Hoettl Case," NARA (II)

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NKVD presented OSS with specific questions about the German operation.⁵⁶ By late August, Donovan told the German Mission that the "JCS [Joint Chiefs of Staff] has now authorized OSS to execute proposed liquidation of Hoettl network in collaboration with the Russians as simply and promptly as possible."⁵⁷ (U)

Members of X-2, including Capt. Browne in the Alps, were disappointed. As early as 24 June, Browne had reported to Lt. Col. Berding on the importance of the MOUNT operation for postwar American intelligence:

It is my belief that both the organization and the direction of American Intelligence agencies are inadequate for the successful operation of these networks as a serious effort to penetrate Russian occupied territory. However, I do not believe it will be in American interests to destroy, by handing it over to Russia, the net. In Romania, at least, it can function without assistance or direction from this side. My recommendation is that it be allowed to do just that. Key personnel now in our hands could be disposed of through the IC [Interrogation Center] at Freising, some allowance being made for the offer which they have made. The Central can be easily dismantled. Unless we are sure to eliminate forever all personnel involved thus far, a double-cross such as that contemplated in the plan to turn over all the information to the Russians would eventually become known, and would possibly result in the alienation of most of those well-placed political elements in Rumania and Hungary who are tied into this net, and who now seem so favorably disposed toward the United States. We would thus loose potential friends without realizing any gain commensurate with such a loss; for all that we

⁵⁶Anthony Cave Brown, The Last Hero: Wild Bill Donovan (New York: Times Books, 1982), pp. 752-754. See also David E. Murphy, Sergei A. Kondrashev, and George Bailey, Battleground Berlin: CIA vs.KGB in the Cold War (New Haven: Yale University Press, 1997), pp. 4-6 and 456. For more recent work on the role of OSS in turning over Hoettl's network to the Soviets, see Allen Weinstein and Alexander Vassiliev, The Haunted Wood: Soviet Espionage in America—The Stalin Era (New York: Random House, 1999), pp. 247-248, and Bradley F. Smith, Sharing Secrets with Stalin: How the Allies Traded Intelligence, 1941-1945 (Lawrence: University Press of Kansas, 1996). (U)

^<sup>57Director to AMZON, 21 August 1945, OUT 20920, in WASH-OSS-R&C-3, RG 226, OSS Records, Entry 90, Box 4, Folder 42, NARA. (U)

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In September 1945, US Army officials concluded that "Hoettl has been of great assistance to Allied counterintelligence by debunking the myth of a [German] prepared plan to continue operations after defeat." The Army noted, however, that Hoettl is "a skilled opportunist and a firm believer in his own indispensability." Following his interrogation at the Third US Army Interrogation Center, the Army planned to transfer Hoettl to Nuremberg as a witness for the International Military Tribunal and then turn him over to OSS. By the fall of 1945, Hoettl had provided American interrogators with a significant amount of information about German intelligence activities and personalities. (U)

^<sup>58Browne to Chief, X-2, "MOUNT Operation," 24 June 1945, X-1339, in RG 226, OSS Records, Entry 210, Box 305, Folder 1, NARA. For information regarding the dispersal of the "Centrale," see X-2 Branch, OSS Mission to Germany, to SAINT, London, 18 July 1945, enclosing Browne to Chief, X-2, "MOUNT Operation," 12 July 1945, X-1301, in RG 226, OSS Records, Entry 210, Box 305, Folder 1, NARA. These documents were among the 400,000 pages of OSS material declassified by CIA in June 2000 and transferred to the National Archives. (U)

^<sup>59Headquarters, Third US Army Interrogation Center (Provisional), "Hoettl, Wilhelm, Dr. SS Sturmbannfuehrer, AIC 984," 15 September 1945, in Record Group 338, European Theater of Operations and US Forces European Theater, Records of the Third US Army Interrogation Center, Box 69, NARA. (U)

⁶⁰Some of the reports generated by Hoettl include Headquarters, Third US Army Interrogation Center, Interrogation Report No. 15, "The SD and the RSHA," 9 July 1945; Interrogation Report No. 16, "Amt VI of the RSHA," 13 July 1945; Interrogation Report No. 18, "The W/T Net of Gruppe VIE of the RSHA," 16 July 1945; Interrogation Report No. 36, "Japanese Intelligence Activities in Europe," 31 August 1945; Interrogation Report No. 38, "Plans of Amt VI for Postwar Activities in Spain," 9 September 1945. All of these interrogation reports are found in RG 338, ETOUSA/USFET, Third US Army Interrogation Center, Box 64, NARA. A critique of Interrogation Report No. 15 by OSS is found in SAINT, London to SAINT, Washington, "War Room Comment on the Hoettl Report," 6 February 1946, XX-10734, enclosing Counter Intelligence War Room, "War Room Comment on the Hoettl Report," [no date], P.F. 602.139, (U), in WASH-REG-INT-175, RG 226, OSS Records, Entry 109, Box 58, Folder 3, NARA. (U)

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Between 1945 and 1947, the Americans held Hoettl in Nuremberg and Dachau for further interrogations in support of Allied war crimes prosecutions. In his most memorable testimony, Hoettl recounted a meeting at his home in Budapest in August 1944 with SS-Obersturmbannfuhrer Adolf Eichmann, the "Architect of the Final Solution." According to Hoettl, Eichmann, who was depressed about the German war effort, admitted that he would rank among the chief war criminals sought by the Allies for his role in the roundup and massacre of Europe's Jews. When asked by Hoettl how many Jews had perished, Eichmann stated that some six million had died, including four million in German concentration camps.⁶¹ (U)

Following his return to Austria in late 1947, Hoettl remained active in intelligence circles in postwar Austria into the 1950s. The CIA, however, distrusted the former German SS officer since his first days in American hands. One Agency officer who had interrogated Hoettl considered him a "born intriguer and a dyed in the wool Austrian Nazi," who had "delivered a sufficient number of Nazi war criminals to the gallows,

source for the number of deaths during the Holocaust. See Whitney R. Harris, Tyranny on Trial: The Evidence at Nuremberg (Dallas: Southern Methodist University Press, 1954), pp. 313-314, and United States Chief of Counsel for Prosecution of Axis Criminality, Nazi Conspiracy and Aggression, Volume V (Washington, DC: Government Printing Office, 1946), pp. 380-382. (U) 62 Quote appears in Chief, FBM, "SS Sturmbannfuhrer Dr. Wilhelm Hoettl," 12 June 1949, in Hoettl, CIA Name File, NARA. According to one source in Austria, Hoettl was hated by at least one former comrade because Hoettl had betrayed the Nazi cause at Nuremberg. Adolf Eichmann, for example, reportedly vowed to kill Hoettl. Likewise, former SS officers felt that Hoettl had "willfully invented the number of 6 million Nazi-killed Jews, and thereby having

Nonetheless, the Agency refused to have anything to do with Hoettl, although it spent considerable time and resources to track his activities and contacts.⁶³ Hoettl continued to surface in the news and, in 1961, Hungary demanded his extradition as an accomplice of Adolf Eichmann's.⁶⁴ (U)

Hoettl died at his home in Austria in 1999, by which point he had reconstructed himself as a leading authority on the SS.⁶⁵ (U)

ROBOT (U)

bought World Jewry protection." Former Nazis also regarded Hoettl as an agent of the Americans and the Israelis who had stolen hidden SD gold and assets in Austria. (U) ⁶³CIA's extensive file on Hoettl is replete with reports about his postwar activities. Although the Army's CIC used Hoettl from 1948 until 1949, CIA regarded him as a "notorious fabricator" of intelligence. By the early 1950s, Hoettl had formed his own intelligence organization, and he may have been in contact with other intelligence services, including the West Germans and possibly the Israelis. In 1953, the US Army arrested Hoettl on the suspicion of spying for the Soviets in the Curt Ponger, Otto Verber, and Walter Lauber espionage case. For further details about this forgotten Cold War incident, see George Carpozi, Jr., Red Spies in Washington (New York: Trident Press, 1968), pp. 30-59. (U)

65An extensive amount of declassified information regarding Hoettl is found in his CIA Name File transferred to the National Archives on 27 April 2001. For Hoettl's writings, see Wilhelm Hoettl as told to Ladislas Farago, "I Was Hitler's Master Spy," Argosy, November 1953, pp. 18-19. See also Hoettl, The Secret Front: The Story of Nazi Political Espionage. Trans. by R.H. Stevens (London: Weidenfeld-Nicolson, 1954); Hoettl, Hitler's Paper Weapon (London: R.

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Mueller served in World War I and later attended the University of Munich. He settled in the city as a lawyer and became active in the Bayerische Volkspartei, or Bavarian Peoples Party, a wing of the Catholic Center Party, witnessing at firsthand the rise of the Nazis.

Mueller represented Catholic interests in Bavaria and provided information to Catholic leaders, thus earning the enmity of the Nazis.⁶⁷ (S)

Mueller's wartime saga illustrated the tangled and furtive efforts of the resistance to Hitler from within the German military establishment. German armed forces intelligence—the Abwehr—was a center of this small resistance movement. Abwehr leaders early on recognized the usefulness of Mueller's links to high Church circles, which included Father Robert Lieber, a Jesuit aide to Cardinal Eugenio Pacelli (who became Pope Pius XII in 1939), and Monsignor Ludwig Kaas, formerly the head of the Center Party in Germany and in exile in Rome.⁶⁸ In 1939, Oberst Hans Oster, chief of the Abwehr's Central Office, commissioned Mueller as an Abwehr lieutenant with the clandestine mission of acting as a conduit between the military's resistance to Hitler and

⁶⁶Mueller's file contains an extensive amount of information regarding his postwar intelligence service. See Josef Mueller, $\subset$ $\supset$ , DO Records. (S)

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the Vatican. Between 1939 and 1943, Mueller estimated that he traveled to Rome at least 150 times from his post in Munich. German intelligence agencies ran across various leads to Mueller's clandestine role, but Adm. Wilhelm Canaris, the head of the Abwehr, was able to divert the SD from arresting Mueller.⁶⁹ (U)

In April 1943, the Gestapo finally arrested Mueller and searched his home in Munich, uncovering substantial evidence of Mueller's anti-Nazi activities. But, once again, Mueller's luck held out. He was acquitted of high treason, and spent the remainder of the war at various concentration camps, including Buchenwald, Flossenberg, and Dachau. (U)

In the final days of the war, the Gestapo transferred Mueller and other political prisoners to Austria and then to northern Italy, where American forces liberated him in early May 1945. The Americans, in turn, took Mueller to the island of Capri where CIC first interrogated the German lawyer. After that point, Joe B. Cox, the CIC special agent handling Mueller, accompanied him to Rome where he was reunited with Father Lieber and his other Vatican acquaintances. Special Agent Cox completed his report on Mueller in mid-June.⁷⁰ (S)

Mueller, in the meantime, returned to Germany via military air transport. OSS quickly recognized that Mueller could be a valuable source of information about German

War Room, "Mueller Josef," 17 June 1945, GBI-389.701.Pf/1710, (S), in Mueller,

DO Records (hereafter cited as Mueller CIC Interrogation). (S)

^<sup>69Alvarez and Graham, Nothing Sacred, pp. 23-33. (U

^<sup>70Mueller CIC Interrogation. (S)

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resistance efforts against Hitler as well as political developments in occupied Bavaria.⁷¹ Henry Hecksher, an officer with the Third Army's Interrogation Center, who later served with SSU and CIA, interrogated Mueller concerning the fate of Admiral Canaris and other members of the German resistance.⁷² "From a brief conversation with Mueller," Hecksher wrote in 1949, "I carried away the impression of an unusually forceful, shrewd, and informed man, who even at the time of total internal collapse and national paralysis was laying his plans, with deliberation and diplomatic skill, for a political career." Like most American intelligence officers, Hecksher "was particularly impressed by the range of Mueller's political contacts inside Germany and the Vatican. This, coupled with a

from CIA in 1971

· Chan his remement

from CIA in 19/1

Henry D. Hecksher

⁷¹Mueller was first reported by SCI Munich as a possible penetration agent in X-2 Branch, OSS Mission to Germany to SAINT, "Semi-Monthly Operation Report, SCI Munich," LMX-010-815 (S), enclosing SCI Detachment, Munich to Commanding Officer, OSS/X-2 Germany, "Semi-Monthly Operation Report SCI Munich," 15 August 1945, in DO Records, ________, Box 3, Folder 21, CIA ARC. Starting in 1944, OSS developed a file of known anti-Nazis living in Munich, including Cardinal von Faulhaber. Mueller, however, does not appear in this file. See "Munich Biographical Record Sheets," in 7th Army-SSS-OP-1 in RG 226, OSS Records, Entry 158, Box 4, Folder 58, NARA. (S)

^<sup>72Hecksher was born in 1910 in Hamburg, Germany, and came to the United States in 1939 after attending the universities of Berlin and Hamburg. He entered the US Army in 1941 and served as an instructor at the Military Intelligence Service school at Camp Ritchie, Maryland, when he transferred overseas in 1944. Fluent in German, French, and Russian, Hecksher specialized in the interrogation of German officials. He transferred to SSU as a first lieutenant in December 1945 and became a civilian employee in May 1946. Hecksher served in Heidelberg as the chief of the German Mission's SC Branch during 1946-47 and later in Berlin. He did not depart from Germany until 1954 at which time, Hecksher partook in the planning for Operation

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seemingly untarnished personal and political record, induced me to prevail on the Munich Detachment of SCI to recruit Mueller."⁷³ (S)

Boleslav A. Holtsman served as Mueller's case officer and, according to Hecksher, Holtsman "succeeded in establishing an unusually close understanding with Mueller, based upon mutual respect and the former's rare understanding of what in Bavaria goes by the name of politics." In submitting Mueller's biographical information for vetting as an agent of SCI Munich, Holtsman noted in August 1945 that he was "being approached for advice by all political factions and by many individuals. He has numerous friends and acquaintances." (S)

Holtsman also queried whether Mueller should "be considered subject to our 'automatic arrest' policy? For in spite of the fact that he was our agent and informant during the war with Germany, he was also a member of Abwehr." Holtsman admitted that "this might sound very naïve at first glance, but our 'automatic arrest' policy does not allow for any flexibility." (S)

^1949," 19 February 1949, MGB-A-3322, (S), in Mueller, ____________________________________

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By mid-September, Holtsman submitted eleven reports written or collected by Mueller, including information on Communism Party activities and on the formation of the Christian Social Union (CSU) in Bavaria.⁷⁷ He was a rising star in the early political scene in southern Germany, and he was as much a source for SI as he was for X-2.⁷⁸ (S)

Despite Mueller's usefulness in assessing nascent German political developments American intelligence had lingering doubts about his credibility. London Station in October 1945 asked directly "Why wasn't Mueller executed? Everyone else taking part in the July 20 conspiracy was and Mueller, while admittedly having good connections, wasn't any more important or presumably better protected than Oster, Canaris, and various others." The obvious question remained – "Was he just plain lucky or did he at one time or another talk?" (S)

After an initial assessment of Mueller's case, London determined that "it seems very likely that Mueller, having primarily served the Vatican both before and during the War, will continue to do so after it. This might," SSU added, "not preclude his usefulness to us but it would certainly seem to limit it." SSU's uncertainty about

^<sup>7924 October 1945 cover memorandum to Mueller CIC Interrogation. (S)

$^{^{80}}$ Ibid. (S)

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Mueller was never fully resolved, but X-2 in Munich moved ahead with its plans to use Mueller as a penetration agent.⁸¹ After receiving permission to do so in September, Mueller was given the codename of ROBOT.⁸² (S)

Mueller had already embarked on projects for X-2 that kept him busy in the fall of 1945. He identified the members of O-VII (or Organization VII) in the former German Army Wehrkreis (Military District) VII. This shadowy anti-Nazi group drew its members from two Bavarian resistance formations, the Freiheits Aktion Bayern (FAB) and the Bayerische Freiheits Bewegung (BFB), which sought to denounce former Nazis in positions of power in Bavaria. He also provided Holtsman with information about the Austrian resistance movement that had sprung up just before the Nazi collapse. In addition to his work with SSU, Mueller also assisted the War Crimes Commission in

⁸¹In late December 1945, Lt. Lenington discussed the Mueller case with Holtsman and raised London's concerns about how the German survived the spate of executions during 1944-45. As far as could be ascertained from traces made in Rome, "at this stage of the vetting Mueller's story has been fairly well corroborated from outside checks." See AB-17 [identity unknown] to Holtsman, "Summary of Preliminary Vetting of Dr. Josef Mueller," 31 December 1945, LX-003-1231, (S), in Mueller, ____________________________________

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Nuremberg. Maj. Gen. William J. Donovan, the former director of OSS and briefly a member on the American team for the International Military Tribunal, wanted Mueller to gather information on German resistance to Hitler.⁸⁵ Donovan was particularly interested in the Church's role in opposing Hitler, which allowed Mueller to draw upon his clerical contacts.⁸⁶ (U)

SI's contact with Mueller ended when its Munich post closed in March 1946.87

In a report written in 1947, ____________________________________

^<sup>85Mueller provided a lengthy affidavit in Munich on 16 January 1946 about his knowledge of the fate of Adm. Wilhelm Canaris, the head of the Abwehr, who was executed by the Nazis just before the war's end. See Col. Edward M. Finkel, Headquarters, Third US Army, G-2, to Commanding General, Headquarters Command, International Military Tribunal, "Admiral Wilhelm Canaris," 14 February 1946, in RG 338, ETOUSA/USFET Records, HTUSAIC, Box 66, (no folder listed), NARA. (U)

^<sup>86Lt. Sidney H. Lenington, Deputy Chief, SSU/X-2, Germany to SAINT, Washington, "Semi-Monthly Reports," 12 December 1945, LMX-005-1130, enclosing Timm to Commanding Officer, SSU/X-2 Germany, "Semi-Monthly Operations Report SCI Munich," 31 October 1945, LMX-005-1130, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 275, (no folder listed), NARA. (U)

^, Chief of Base, Berlin, to Chief of Station, Heidelberg, "Josef Mueller," 25 November 1947, MGB-A-883, (S), in Mueller, ( \subseteq \subseteq, \subseteq \text{DO Records. Gordon} ) Stewart, then Chief of the German Mission, forwarded ( \subseteq \subseteq \text{comments to Munich. See} ) Stewart, COS, Heidelberg, to Chief, Munich Operations Base, "Josef Mueller," 4 December 1947, MGH-A-2268, (S), in Mueller, ( \subseteq \subseteq \subseteq, \text{DO Records. (S)} )

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him an agent. His statements," $\subset$ $\supset$ observed, "were always taken as political utterances, rather than as actual information." (S)

⁸⁸For example, Holtsman submitted several reports by Mueller on individuals of CI interest in late 1945. See SCI/Munich, "Herbert M. Ritter," 26 December 1945, (S); "Sokol, Originally of AST/Wien," 26 December 1945, (S); "Professor Euler," 26 December 1945, (S); "Dr. Ritzinger (Democratic Royal Party of Bavaria)," 24 December 1945, (S); and "Baron Vladimir Kaulbars," 26 December 1945, (S), in Mueller, ————————————————————————————————————

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X-2's relations with Mueller dwindled after 1946 for several reasons. His stature in the CSU grew controversial when he ran afoul of both American Military Government officials and the rightwing faction of his party. Mueller's contact with the French and the Soviets raised new concerns about his political allegiances as he continued his rise in Bavarian political circles. 90 In addition, reported in 1947 that, while Mueller was "very friendly with in 1946, ROBOT subsequently began to exploit the friendship to assist some of his CSU friends in denazification and other matters. The services he required," wrote, "and the small returns received prompted to break contact. On a different basis of association, ROBOT is still potentially useful, since he is a shrewd and energetic politician with a good knowledge of behind-the-scenes activities." (S)

Mueller's significance to American intelligence can be measured in the leads that he provided. Although CIA continued to meet with Mueller periodically and reported on his activities until the late 1950s, contact with and interest in the German lawyer-spy-politician never took on the same scale as it did during the first year after VE-Day.⁹²
Mueller continued to play a leading role in early West German political developments.

⁹⁰ For example, see Arthur Report No. A-3, "Discussions of Dr. (Josef) Mueller with the Russians in Berlin," 2 November 1946, MGH-106, (S); Peter Report No. 75, "Jos. Mueller in Karlshorst," 18 October 1946, MGB-75, (S); SC AMZON to ___________________________________

^91"SC Munich Present and Discontinued Contacts." (S)

⁹²Munich Base's contact reports with Mueller in the late 1950s are located in Mueller, ☐ ☐ DO Records. (S)

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He served as deputy minister president and minister of justice in the Bavarian Government from 1947 to 1950 and then joined the Federal government as minister of justice until 1952. He remained a visible figure in CSU circles until his death in September 1979. (S)

GAMBIT (U)

Hildegarde Beetz offered X-2 in Munich a unique perspective into the machinations of the RSHA. Beetz, who came to the attention of American intelligence through Wilhelm Hoettl, had been close to Count Galeazzo Ciano di Cortellazzo, the son-in-law of Italian dictator Benito Mussolini. Ciano had served as Italy's foreign minister until 1943 when he was arrested for betraying the Italian Fascist cause. (This led to his execution the following year.) Born in 1919 near Weimar, Beetz joined the SD in 1939 as a clerk after receiving language training. Two years later, she transferred to Rome, where she briefly worked for Guido Zimmer as a translator. She worked later in Amt VI of the RSHA under Herbert Kappler, the SD's representative in Rome. (U)

With the Italian surrender in September 1943, Beetz, along with other German female personnel, was evacuated from Rome. After her posting to Berlin, Hoettl, the head of Amt VI's office dealing with Italy, assigned Beetz to be Count Ciano's secretary and translator while he was held as a prisoner in Germany and later in Italy. The SD wanted her to obtain Ciano's diary with his annotations about Italian peace negotiations

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and secret meetings. She accomplished her task and, at the end of the war, buried the diary in the garden of her parents' home in Weimar. In the early summer of 1945, American intelligence officers subsequently recovered the diaries, dubbing them the "Rose Garden" papers. 93 (S)

After recovering the Ciano diaries, the Army interrogated Beetz about the German wartime intelligence organization, activities, and personnel in Italy.⁹⁴ As early as June 1945, OSS realized that it could employ Beetz to keep track of Hoettl. Lt. Col. Berding, X-2's chief in Germany, noted that "as the former secretary and confidant of Dr. Hoettl, she [Beetz] can be expected to find out from Hoettl what he considers to be the purpose of his present collaboration with us, and what his plans are for the future of Germany and of himself." She provided "partial confirmation of the suspicion that Dr. Hoettl had

the Fascist Era, pp. 73-78 and in Smyth, "Italian Civil and Military Records on Microfilm," in Wolfe, ed., Captured German and Related Records, pp. 176-179. See also Berding to Chief, CIB, G-2, Twelfth Army Group, "Hildegard Beetz, nee Burkhardt, SD Executive and Agent," 18 June 1945, XARX-3305, (S), in Hildegard Purwin, DOO Records. (S)

94Maj. Edmund L. King, Third Army Intelligence Center, "The SD (Amt VI, RSHA) in Italy," 4 August 1945, (S), in DO Records, Door Box 1, Folder 6, CIA ARC. See also Berding to Chief, CIB, G-2, USFET, "Special Interrogation Report, Frau Hildegard Beetz," 9 July 1945, (S); USFET Interrogation Center, Capt. Harry K. Lennon, Preliminary Interrogation Report, "Beetz, Hildegard, nee Burkhardt;" 19 July 1945, (S), and Capt. C.M. Hopkins, X-2/Germany, to SAINT, Caserta, "Letter of Transmittal," 8 October 1945, (S), all documents in Purwin, DOO Records. (S)

95Berding to SCI, Third Army, "Exploitation of Frau Hildegard Beetz," 6 July 1945, (S), and SAINT, AMZON to SAINT, Rome, "Vetting of Hildegard Beetz," 12 October 1945, (S), both in Beetz, File 201-0104258. Interrogation of Beetz by OSS on her relationship with Hoettl is found in SAINT BB090 to SAINT BB008, "Frau Hildegard Beetz," 24 July 1945, XX 8353, (S), enclosing Berding to Chief, CIB, G-2, USFET, "Special Interrogation Report, Frau Hildegard Beetz," 9 July 1945, (S), in DO Records, Dockson Dockson Dockson Report, Frau Hildegard Beetz," 9 July 1945, (S), in DO Records, Dockson Dockson Report, Frau Hildegard Beetz," 9 July 1945, (S), in DO Records, Dockson Dockson Report, Frau Hildegard Beetz," 9 July 1945, (S), in DO Records, Dockson Report, Frau Hildegard Beetz," 9 July 1945, (S), in DO Records, Dockson Report, Frau Hildegard Beetz," 9 July 1945, (S), in DO Records, Dockson Report, Frau Hildegard Beetz, Dockson Report, Frau Hildegard Beetz," 9 July 1945, (S), in DO Records, Dockson Report, Frau Hildegard Beetz, Dockson Report, Frau Hildegard Beetz, Dockson Report, Frau Hildegard Beetz, Dockson Report, Frau Hildegard Beetz, Dock

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By August, OSS had decided to use Beetz as a "Penetration Agent" in Munich and gave her the codename of GAMBIT. Special Agent Albert M. Grant, a member of X-2/Munich, proposed that "Frau Beetz secure employment as a secretary through the Arbeits Buro in Munich. She will then pick up former social contacts in the area which have a former [Nazi] Party affiliation." In addition, Beetz will "join the Roman Catholic Church. She feels that the Church will very possibly be the 'cover' used in any future operations of the GIS. By cultivating contacts within the Church she will be in a position to be immediately informed of any subversive action." Grant felt that Beetz could be controlled because she fell into the "automatic arrest" category as a member of the SD and because the Americans still held her husband as a prisoner. 97 Beetz claimed to have been an "unwilling member" of the Nazi party and said she had stopped paying her Party dues while in Rome. 98 (S)

Beetz soon found work with a small translating firm in Munich. The owner, formerly a diehard Nazi and now converted to communism, published tracts urging Germans to "engage yourselves with the ideals of Socialism." In December, Holtsman

^<sup>96Lt. Edward R. Weismiller to SAINT, Washington, "Semi-Monthly Operation Report, SCI Munich," 3 August 1945, LWX-62, enclosing Timm to OSS/X-2, Germany, and G-2, CIB, Third Army, "Semi-Monthly Operation Report, SCI Munich," 1 August 1945, in WASH-REG-INT-163, OSS Records, RG 226, Entry 108A, Box 287, (no folder listed), NARA. (U)
⁹⁷Special Agent Albert M. Grant to Chief, X-2/Germany, "Frau Hildegard Beetz," 11 August

admitted that "GAMBIT's present activity has been very limited because of the limited contact she is able to make." SCI Munich even contemplated setting up a joint operation with CIC to more effectively employ Beetz.⁹⁹ (U)

By early 1946, it was clear that Beetz was underutilized in Munich. At the behest of Dana Durand, Beetz departed Munich in April for Berlin to embark on a secret project in the divided city. Henry D. Hecksher of X-2/Berlin arranged with Lawrence E. de Neufville, a former civilian OSS employee now posted with the Military Government, to have Beetz employed as a confidential agent in the Economics Division of the Office of Military Government to ascertain whether the Soviets had penetrated the American command. SSU falsified Beetz's denazification papers and gave her a new identity as Hildegard Blum in order to facilitate her new employment. Hecksher, who had first met

⁹⁸SAINT, AMZON to SAINT, Rome, "Vetting of Heldegard Beetz," 12 October 1945, X1836, (S), in Purwin, _______, DO Records. (S)

^<sup>99Lenington to SAINT, Washington, "Semi-Monthly Reports, SCI/Munich," 12 December 1945, LMX-005-1130, enclosing Timm to OSS/X-2, Germany, and G-2, CIB, Third Army, "Semi-Monthly Operation Report, SCI Munich," 31 October 1945; Holtsman to SSU/X-2, Germany and G-2, CIB, Third Army, "Semi-Monthly Operations Report SCI Munich," 15 November 1945; and Holtsman to SSU/X-2, Germany and G-2, CIB, Third Army, "Semi-Monthly Operations Report," 30 November 1945, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 275, (no folder listed), NARA. (U)

¹⁰⁰Born in London, England, in 1913, de Neufville immigrated to the United States in 1933 and became a citizen seven years later. Educated at Oxford and at Harvard University, de Neufville was a journalist and magazine editor before the war. He joined OSS as a civilian in 1944 and served in Morale Operations and X-2. De Neufville was one of the first two members of X-2 to enter Berlin when the American forces moved into the German capital in July 1945. He resigned from SSU in December of that year to accept a position with the Military Government in Berlin.

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Beetz when OSS put her in touch with Hoettl, felt that "she is probably one of those extremely rare Germans who understand and are sympathetic to Democracy." (S)

As an aid to current and prospective double agent operations against Soviet Intelligence Stations lying outside Berlin it is proposed to place Frau Beetz in OMGUS as a secretary in the near future. As is now well known, one of the principal targets of the Soviet Intelligence System is the penetration of important American offices at OMGUS. In the process of doubling back Soviet agents dispatched on such a mission, it almost inevitably becomes necessary to use a cutout, someone actually employed inside the Soviet target-office, in order to give the Soviet controlling officers the illusion that their agent has in fact contacted a well-placed source of information. Such a decoy or 'sitting duck' placed inside the Soviet target would be subject to our complete control and, by giving the Soviets increasing confidence in the success of their operation, enable our penetration of their service to achieve greater results. (S)

¹⁰¹A discussion of Beetz's role in Berlin is found in AB-16 [Richard W. Cutler] and AB-51 [Henry D. Hecksher] to AB-24 [Sidney H. Lenington], "Project for GAMBIT," SCI-B-174, LTX-TS-160, (S). For approval of this project, see AB-16 to AB-24, "GAMBIT Project," 25 May 1946, LBX-TS-324, enclosing Col. H.G. Sheen, Chief, Counter Intelligence Section, Office of the Director of Intelligence, to Brig. Gen. Draper, Director, Economics Division, OMGUS, "Counter Espionage," 21 May 1946, (S), in Purwin, ————————————————————————————————————

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Project SITTING DUCK soon proved lame. By November 1946, five months after Beetz accepted her job at the Economics Division, Hecksher was forced to declare the project a failure. ¹⁰³ Hecksher, however, planned to use another SSU double agent, known as FORD, to entice MVD's Capt. Skurin's interest in the German secretary. The Americans hoped that Skurin would seek out Beetz at OMGUS and try to recruit her. In turn, SSU wanted to draw him out of the Soviet sector and, with Beetz's help, encourage him to defect. Skurin refused to take the bait, despite meeting with Beetz in the French sector. ¹⁰⁴ (S)

Beetz, now redubbed CAMISE, continued to work for the new CIA, and she was placed in the office of Arno Scholz, the publisher and editor in chief of Der Telegraf, the British licensed, pro-Social Democratic newspaper in Berlin. Through Beetz, the CIA monitored Scholz's activities, gathered information from him on his social and political

¹⁰²AB-16 to AB-51, "Project Proposal for CIB: GAMBIT," 13 July 1946, LBX-435, (S), in Purwin, ( \subseteq \subseteq ), DO Records. See also AB-16 to AB-24, "Further Details of GAMBIT Project," 29 May 1946, LBX-332, (S), enclosing Hecksher, "Aide Memoire;" and Hecksher to Capt. Everett O'Neal, "Project "Sitting Duck," 16 July 1946, LWX-TS-306, (S), both in Purwin, ( \subseteq \subseteq ), DO Records. (S)

103Beetz quickly became a highly-regarded employee at OMGUS and attracted the attention of American officers, one of whom wanted to employ her as a tutor for his children. See SAINT, AMZON to SAINT, Washington, "Transmittal of Report," 12 August 1946, LWX-TS-383, FSRO-240, (S), enclosing "Status of Berlin Operations Report: 1-31 July 46," 5 August 1946, (S), in DO Records, ( \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \text{NOPS/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \subseteq \text{Ops/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \subseteq \text{Ops/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \text{Ops/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \text{Ops/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \subseteq \text{Ops/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \subseteq \text{Ops/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \text{Ops/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \text{Ops/002, MGB-746, FSRO-1172, (S), in Purwin, ( \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subseteq \subsete

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connections, and subsidized the distribution of his paper in the Soviet zone. 105

Operational use of Beetz petered out after 1950, when she become the head of the local
Telegraf bureau in Frankfurt am Main. She soon remarried, this time to Karl Heinz

Purwin, a West German trade unionist and editor of Welt der Arbeit. The Agency, in fact,
briefly considered using Beetz to penetrate the Social Democratic party through her
husband's connections. Over the next two decades, Beetz (now known by her married
name of Purwin) became a respected West German journalist and editor of the Neue
Rhein-Ruhr Zeitung in Essen. She was considered a friend of West German chancellor
Willi Brandt, and the government presented her with an award for her work in journalism.

The Agency periodically considered reactivating her as a source, but these proposals were always dismissed. In 1961, for example, the German Station raised the idea of using Beetz as an informant on the local political scene and as a way to plant articles in West German newspapers. When the proposal reached the Counterintelligence Staff for operational approval, it was quickly squelched. The CI Staff felt that Beetz was too knowledgeable about the CIA's operations in Germany and could identify too many

¹⁰⁵Upon further investigation by the CIA, the Agency determined that Scholz had mismanaged his covert subsidies. The Agency also concluded that Scholz gave false information between 1952 and 1954; CIA terminated its relationship with him in early 1955. For information on Scholz,

Arno Scholz,

DO Records. (S)

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Thomas Polgar ____________________________________

In 1982, the CIA once again examined Beetz's case; this time in relation to private records and diaries that she asked to be returned. Headquarters claimed that all of her papers had long ago been given back and that the diary had been missing since 1945. The German Desk, in addition, reached the conclusion that her performance as an agent had been mediocre and that her forte had actually been "the ease with which she handled case officers for her own benefit. We earnestly hope you will not request permission to initiate

^7, Chief, CI/OA, to Chief, EE/Germany, "CAMISE," 19 April 1961, (S), in Purwin, ( \subseteq \subseteq, \text{DORecords.} ) In 1982, Headquarters provided ( \subseteq \subseteq \subseteq \text{DORECORDS.} ) with a summary written by Hecksher in 1949 about Beetz's work with CIA. "CAMISE is probably better acquainted with the history of our organization and its personnel than any other agent this base has ever run. This is in part due to an unfortunate occurrence that took place, I believe, in 1945. At that time CAMISE requested that her private papers be returned to her. Instead, however, of merely receiving those papers she was given the complete operational file on a (very high level double agent operation) which she studied with bated attention and then returned. After she had been turned over to BOB [Berlin Operations Base] for further handling, CAMISE's case officer became deeply infatuated with her, and we assume that the drop in security consciousness which is customary byproduct of infatuation helped to increase her

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While the CIA's interest in Beetz ceased 20 years ago, an Italian magazine located her in 1996 in an unnamed town and interviewed her about her experiences with Count Ciano. The magazine, however, left Beetz in peace and did not provide any further biographical details beyond stating her new assumed name. ¹⁰⁸ (U)

MALT (U)

The rounding up and interrogation of members of the defeated German military intelligence services and the collection of their records absorbed a great deal of X-2's time in the summer and fall of 1945. ¹⁰⁹ In addition to the MOUNT case, SCI/Munich had already organized two projects in June 1945 that utilized Nazi intelligence and communications personnel. X-2 arrested Oberstleutnant Fechner, the head of the Abwehr's Leitstelle II, and his adjutant, Hauptmann Novak, as well as another officer in

knowledge of our organization." See Cable, Director to ( \sum \frac{1}{2} ) April 1982, Director 196337, (S), in Purwin, ( \sum \frac{1}{2} ), DO Records. (S)

¹⁰⁷ See Cable, Director to ⊂ ⊐, 12 April 1982, Director 196337, (S), in Purwin, : ⊂

^☐, DO Records. See also Cable, Director to ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐

^<sup>108Moseley, Mussolini's Shadow, p. 264. (U)

^<sup>109As an example, see Capt. Thomas F. Purner, Jr., Deputy Chief, X-2/Germany, to Capt. Timm, SCI Liaison Officer, Third Army, Munich, "Records Found at Castle Lauenstein (J575190) near Probstzella (J5821)," 26 June 1945, LSX-002-626C, enclosing Lt. Sam E. Harwell, Commanding Officer, 87^th CIC Detachment, to Assistannt Chief of Staff, G-2, 87^th Infantry Division, "Records

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charge of the organization's staybehind agents in Rumania. The TIP Case, as it became known, resulted in the discovery of an extensive cache of material pertaining to German clandestine activities in the Balkans. ¹¹⁰ In mid-August, Lt. Col. Berding cited Fechner's aid to the Americans in recovering valuable enemy intelligence records. Berding sought clarification from the Army as to the disposition of the "Leitstelle Group." ¹¹¹ (S)

Found at Castle Lauenstein (J575190) near Probstzella (J5821)," 26 May 1945," in WASH-REGINT-163, RG 226, OSS Records, Entry 108A, Box 276, (no folder listed), NARA. (U)

110 See Timm, SCI Liaison Officer, Third Army, to G-2, Counter-Intelligence Branch, Seventh Army, "Frontleitstelle II Sued Ost Personnel and Documents; Pertisau, Tyrol," 5 June 1945, LSX-002-605; Timm to Assistant Chiefs of Staff, G-2, Third Army, Seventh Army, and Commanding Officer, SCI Detachment, Twelfth Army Group, "Activity Report for the Week Ending 9 June 1945," 10 June 1945, LWX-4; Lt. Col. Berding, X-2/Germany, to Chief, CIB, G-2, USFET, "Relation of Leitstelle II Sud-Ost and Other Intelligence Agencies," 19 July 1945, LWX-52, enclosing Lt. Pierre M. Haas, French Army, SCI/Twelfth Army Group, to Commanding Officer, X-2/Germany, "Lt. Alfred Piff Interrogation Report Appendix A: Relations between Leitstelle II Sud-Ost and Other Intelligence Agencies," 19 July 1945; Lt. Col. Berding, X-2/Germany, to Maj. John B. Oakes for Chief, CIB, G-2, USFET, "Technical Data from Leitstelle Sud-Ost," 24 July 1945, LWX-18, enclosing Timm, to Commanding Officer, X-2/Germany, "Technical Data from the Leitstelle II Sud-Ost," 20 July 1945; and Lt. Col. Dupre Sassard, USFET, G-2, to CI War Room, "Captured Documents Concerning Sabotage Caches in Greece," 26 July 1945, LWX-385-726, all documents in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Boxes 276 and 287, (no folders listed), NARA; and Timm to ACS, G-2, Third Army and Seventh Army and Commanding Officer, SCI Detachment, Twelfth Army Group, "Activity Report for the Week Ending 16 June 1945," 18 June 1945, LMX-010-618, (S), in DO Records,

] Box 3, Folder 21, CIA ARC. (U)

111 Lt. Col. Berding to Chief, Counter Intelligence Branch, USFET, "Treatment of GIS Personnel," 13 August 1945, LWX-002-813, (S), DO Records

] Box 406, [no folder listed], CIA ARC. (U)

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Italy, the Soviet Union, and Turkey. By June, X-2 and CIC had apprehended as many as 50 members of the unit and tried to crack the unit's call signs and frequencies. 112 (S)

X-2 continued to pursue these leads into 1946. In Munich, Bill Holtsman's contact with Oberleutnant Wolf Ulrich Wirth, a German signals intelligence officer, proved valuable. Wirth, who served in an intelligence staff position and commanded a communications unit in Russia, provided SSU with documents concerning the interception of Soviet radio traffic. He also supplemented American intelligence on certain Soviet wartime espionage activities in Germany, known as Rote Drei, and explained German intelligence material on the Polish service as it existed in 1939. Holtsman remained in touch with Wirth into 1947 and helped him enter the journalism department at the University of Munich. By this point, Wirth had been given the operational designation of BARLEY. 114 (S)

¹¹²Ibid. (U)

¹¹³See USFET, SCI Detachment, Munich to Commander, SSU/X-2 Germany, "OKW AG WNV/Fu/Ost," 14 February 1946; and "Documents Recovered from Wirth (Addendum to Report of 14 February 1946 entitled OKW AG WNV/Fu/Ost - Documents)," 14 February 1946, in WASH-X-2-PTS-135, RG 226, OSS Records, Entry 171A, Box 67, Folder 823, NARA (these same documents are also found in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 287, [no folder listed] transmitted as SAINT, AMZON to SAINT, Washington, "OKW AG WNV/Fu/Ost," 1 March 1946, LWX-TS-10,). See also AB-43 [Holtsman] to Commanding Officer, SSU/X-2 Germany, "'Razvedupr' Personnel of the Soviets, Situation as of 1939," 4 January 1946, in WASH-X-2-PTS-135, RG 226, OSS Records, Entry 171A, Box 67, Folder 823, NARA. (U)

^114"SC Munich Present and Discontinued Contacts." See also SAINT, AMZON to SAINT, Washington, 1 March 1946, LWX-TS-10, (U), in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 287, (no folder listed), NARA. For further details, see Ulrich Wirth, (\sigma) DO Records. Contact with Wirth ended after 1948 although the Agency noted that

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Holtsman's contact with Oberst Heinz Schmalschlager, who had commanded Leitstelle III/Ost der Frontaufklarung, or the German Abwehr's counterintelligence branch on the Eastern Front, was an important, but limited, success for X-2.¹¹⁵ Born in France in 1898, Schmalschlager surrendered to American forces in May 1945.¹¹⁶ Holtsman's contact with Schmalschlager (via Mueller and a former Abwehr officer, Karl Suess) later that year coincided with SSU's shift from targeting Nazi resistance groups to collecting information on foreign intelligence services operating in Germany.¹¹⁷ Schmalschlager became a desirable contact for his knowledge of the Red Army. In November, Schmalschlager came to Munich to meet with Holtsman, who promptly submitted a plan to X-2 to use the German intelligence officer and his contacts "for a thorough interrogation into the past activities" of the Abwehr on the Eastern Front. ¹¹⁸

¹¹⁵AB-17 [Cutler], AMZON, to SAINT, "Vetting of Heinz Schma[l]schlager," 28 November 1945, LX-003-1128, enclosing B. Holtsman to Commanding Officer, SSU/X-2 Germany, "Heinz Schmalschlager (former Oberst)," 14 November 1945, (S), in DO Records, ____________________________________

^<sup>116See ibid for details about Schmalschlager's biographical details with particular emphasis on his military intelligence service. See also Letter, Hans Buchler to the author, 22 January 2001, in CIA History Staff files. (S)

¹¹⁷Lenington, Deputy Chief, SSU/X-2, Germany to SAINT, Washington, "Semi-Monthly Reports," 12 December 1945, LMX-005-1130, enclosing Timm to Commanding Officer, SSU/X-2 Germany, "Semi-Monthly Operations Report SCI Munich," 31 October 1945, LMX-005-1130, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 275, (no folder listed), NARA. Karl Suess, known as GUMDROP, was also a member of the Abwehr and a Nazi party member. He retained his post as a German customs inspector through the assistance of X-2. At the same time that Holtsman learned about Schmalschlager through Suess and Mueller, he also recruited Suess as an agent through Mueller. See "SC Munich Present and Discontinued Contacts." (S)

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Holtsman described what he expected to accomplish with Schmalschlager (whom he now dubbed MALT):

It is felt that even an extensive 'interrogation' done in the usual catechistical way, would not cover all of his knowledge and experience on the Eastern Front. Since MALT is energetic and appears to be thorough and systematic, and since he has directed an important unit of the Abwehr, and moreover, since he is cooperative and willing to contact his friends who are experts on the subject—he should have the chance of checking his own information (which he will give us before any of his friends are contacted) and enlarging upon it having all members of his former staff in the same house. MALT, of course, is not doing this for the love of the Americans and democracy, but because he has a reasonable hope of having his 'active cooperation' listed on his record. It is also evident that he, having worked for years in this field, would not like to have the results of this work 'unappreciated and wasted.' 119 (U)

Schmalschlager provided Holtsman with extensive details about the Soviet intelligence services, the organization of German counterintelligence on the Eastern Front, and the location of other German intelligence personnel and records. In 1946, SSU stated that the MALT reports "were the first comprehensive study of the Russian

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In early January 1946, Holtsman, however, learned to his chagrin that the Army's Counter Intelligence Corps had arrested Schmalschlager as an "automatic arrestee" when he visited his home in Nuremberg. In reporting the arrest, Holtsman downplayed it by saying that it will not "seriously interfere with our investigation into the activities of Leitstelle III/Ost." Holtsman planned to draw upon other officers under Schmalschager's command as well as additional German wartime records that he hoped to obtain. 121 (S)

Army G-2 quickly recognized Schmalschlager's importance and transferred him to its special interrogation center at Oberursel, where it had gathered other German intelligence officers with Eastern Front experience. SSU, in turn, provided the Army with copies of the MALT report, which formed the basis of the Army's interrogations of

¹²⁰ For a description of MALT's work for X-2, see to Acting Chief, FBM, "Schmalschlager, Heinz Code Name: MALT," 4 December 1946, LBX-002-201, (S), in DO Records, solvential Box 1, Folder 6, CIA ARC. (S)

121 Holtsman, SCI, Munich, to the Officer in Charge, "MALT Operations," 6 January 1946, (S), in Schmalschlager, solvential DO Records. Holtsman also tried to deflect any criticism about SSU's use of Schmalschlager by reminding his superiors that CIC had been informed of his employment in November 1945. (S)

^<text>

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Schmalschlager and other members of the Abwehr and Fremde Heer Ost. ¹²³ The Army's work at Oberursel in 1946 marked the beginning of what evolved into the Gehlen Organization, although the Army's arrest of Schmalschalger ended SSU's brief effort to set up its own network using German intelligence officers. ¹²⁴ (S)

The Central Intelligence Agency had only limited contact with Schmalschlager in the years after his arrest.

a new member of the Munich Operations

Base, visited with Schmalschlager on several occasions in 1948 and 1949, just after his release by the Army. Schmalschlager, who had returned to Nuremberg to rebuild his business, expressed an interest in remaining on the Agency's books as an "informal, unpaid adviser." The Agency, in turn, proposed to Schmaschlager that he meet with his former officers to prepare reports on various German activities against the Soviets.

Beyond a vague idea of placing Schmalschlager in a new West German police force,

reported that "for the time being, MOB will continue to use AVOCET

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Despite his reluctance to work for CIA, the Agency remained interested in Schmalschlager's activities. Through a wartime Ukrainian contact of Schmalschlager's, the Agency monitored him throughout the 1950s. Other contacts reported that Schmalschlager had turned down offers to join various West German governmental agencies and that he had been an unsuccessful candidate for a post with the Bavarian Landesamt fur Verfassungschutz (LfV). Schmalschlager joined the Gehlen Organization's counterespionage section in 1953. His role in the Gehlen Organization and later the BND, however, appears to have been limited; he did not move to the headquarters near Munich. After 1961, the Agency lost interest in Schmalschlaeger and his file ends abruptly. Schmalschlaeger lived in Nuremberg until his death in 1972. 126 (S)

¹²⁵Chief of Station, Karlsruhe to Chief, FBM, "AVOCET," 25 April 1949, MGM-A-1111, (S), in Schmalschlager,

7, DO Records.

1 and visited Schmalschalger at the European Command Intelligence Center (ECIC) in Oberursel in July 1948 to discuss his future plans as an intelligence operative. The Agency wanted to know about Schmalschlager's connections with the Gehlen Organization that had started at Oberursel. As it turned out, Schmalschlager intensely disliked Hermann Baun, one of the top members of the nascent West German intelligence service. At the same time, Headquarters was apprehensive of becoming involved with former Abwehr personnel because of their close collusion with the Gehlen Organization, still under the control of the US Army. See Chief, Munich Operations Base, to Acting Chief of Station, Karlsruhe, "An Interview with AVOCET at ECIC," 12 July 1948, MGM-A-612, (S); and Chief, FBM, to Chief of Station, Karlsruhe, "AVOCET," 11 August 1948, MGK-W-580, (S), both in Schmalschlager

7100 Records. (S)

126For further information on Schmalschlager's activities (known initially as AVOCET and later as CANDIDA) in the 1950s, see numerous entries in Schmalschlager.

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FAMINE (U)

Several months before Bill Holtsman learned about Heinz Schmalschlager, X-2 in Munich recruited a member of the Abwehr as a source of information on the German military intelligence service. Like Schmalschlager, this officer fell under the Army's roundup of all mandatory or "automatic arrestees." On 5 July 1945, Capt. Timm in Munich sent a routine cable to Lt. Col. Berding at X-2 headquarters announcing Sgt. Holtsman's arrest of Oberleutnant Murad Ferid. Berding, in turn, relayed the Third Army SCI Detachment cable to the War Room in London for additional traces. This marked the beginning of X-2's short-lived, but intensive, use of this rather unusual German officer. 127 (S)

The War Room, indeed, was interested in Ferid and ordered Timm to make him available for further interrogation. Until his arrest, Allied intelligence only knew that Ferid, with his Abwehr codename of Dr. Foerster, was an important German intelligence officer who had reportedly served in Greece. Beyond numerous references to his work in building agent networks in the Balkans, the Allies had little direct knowledge of his actual operations.¹²⁸ (S)

DO Records. (S)

¹²⁷Cable, Timm to Berding, relayed to London, 5 July 1945, (S), in Bey Murad Ferid, ☐ ☐DO Records. (S)

¹²⁸ For a summary of Ferid's wartime activities, as summarized by Allied intelligence (primarily British), see annotated OSS Form 1652a and additional card entries in Ferid, CDO Records. (S)

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Born in 1908 in Salonika in what was then the Ottoman Empire, Ferid was the sor of a Turkish army officer and a Polish mother. After his father's death, Ferid moved with his mother to Munich. His grandfather, in fact, had been the honorary consul of the United States in Munich for many years, and Ferid had relatives in America. After being wounded in action in Russia, Ferid joined the Abwehr and because he spoke seven languages, he was posted to Athens. In 1942, he married a German woman, and they had a daughter two years later. Ferid remained with the Abwehr as a referent on Turkish and Middle Eastern matters when the RSHA Amt VI took over the military intelligence service in 1944. At the end of the war, Ferid, along with other members of the Militarisches Amt, evacuated Berlin and moved to the Bavarian Alps. With the final collapse of the Third Reich, Ferid deserted his unit in Bavaria and simply rejoined his family at his house in Miesbach, outside of Munich, in late April. Holtsman learned about him in early July. (S)

Holtsman used Ferid as a "bird dog" to search out other members of his wartime organization. On 12 July, he drove Ferid to Reit im Winkl, a village in the Alps on the Austrian-German border. Getting out of the car before reaching the town, Ferid walked into Reit im Winkl pretending to be a German soldier who had been released by the French in Austria and was now making his way home. Ferid told townspeople that he had no US discharge papers and thus had to watch out for the Americans until he could

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obtain his official release. 129 Information gathered from other German veterans in the village allowed him to locate several intelligence officers. (U)

The SCI Detachment expressed its pleasure with Ferid and gave him a lunch of K Rations. "Ferid's cooperation" in this matter was exemplary. Holtsman wrote: "He acted as though it was his own personal responsibility to locate these people. He is intelligent and trustworthy." 130 (U)

The CI War Room in London, which had been informed of Ferid's mission in Reit im Winkl, pressed the SCI Detachment to obtain information about Ferid's activities in Greece. Holtsman's two interrogations elicited extensive lists of names of individuals with whom he had served in Germany, Greece, and elsewhere. Ferid provided X-2 with a unique perspective on German operations in the Balkans, a theater of the war in which British intelligence had dominated. 132 (S)

¹²⁹Lt. Col. Berding, Chief, X-2/Germany, to Chief, Counter Intelligence Branch, G-2, USFET, "Dissolution Mil Amt D," 26 July 1945, LWX-53, enclosing SCI Twelfth Army Group, Munich, to Commanding Officer, X-2/Germany, "Mil Amt D, Its Removal from Reit-im-Winkel and Final Dissolution," 13 July 1945, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 287, [no folder listed], NARA. A copy of this document also appears in Ferid, ( \subseteq ) DO Records. A summarized form of this report also appears in Cable, SCI Detachment, Third Army to X-2/Germany, "Donald & Holtsman Report," 13 July 1945, 985, (S), in Ferid, ( \subseteq ) DO Records. (S)

130 Ibid. (S)

131 Cable, X-2/Germany to SCI Detachment, Third Army, 18 July 1945, 467, (S), in Ferid, ( \subseteq ) DO Records. X-2 in London also wanted SCI in Munich to get Ferid to identify a German agent known as SOCRATES. X-2 in Athens had arrested Doris Papara and wanted to know if she was Ferid's agent. X-2 in Greece also expressed interest in ascertaining collaboration between the Bank of Athens and the Nazi occupiers. See Cable, X-2, London to X-2/Germany, 31 July 1945, London 4317, (S), in Ferid, ( \subseteq \subseteq ) DO Records. (S)

132 Lt. Col. Berding, Chief, X-2/Germany, to Chief, Counter Intelligence Branch, G-2, USFET, "Interrogation of Oblt. M. Ferid," 30 July 1945, X-1691, (S), enclosing SCI Twelfth Army Group

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Because of his demonstrated reliability, Holtsman submitted Ferid's name as a prospective "penetration/informer agent" on 23 July. In Holtsman's opinion, Ferid's recruitment as an American agent would "maintain contact with a person whom we feel we can trust, who knows the German intelligence, whose position as a lawyer would keep him informed as to what is going on in Bavaria, who would remain our constant reference file to be consulted on old German Abwehr personnel." To place him in a position of usefulness, Holtsman made arrangements with the Military Government in Miesbach to appoint him as a county prosecutor. ¹³³ (S)

But Ferid had already been arrested by the Army's Counter Intelligence Corps on 21 July. Army headquarters in Frankfurt ordered his arrest without notifying X-2. Holstman reported that Ferid's arrest "causes us great embarrassment in our relation with the Miesbach CIC and with the Miesbach MG, who already have been approached re. placement of Ferid in an attorney's position under MG jurisdiction." Holtsman now had to explain why the Army had changed its mind about the German officer. "It should be

to Commanding Officer, X-2/Germany, "Supplement to the Interrogation of Oblt. M. Ferid," 28 July 1945, X-1691, (S); see also SCI Twelfth Army Group to Commanding Officer, X-2/Germany, "Oberleutnant Dr. Murad Ferid," 11 July 1945, X-1396, (S), both in Ferid, (\subseteq \subseteq \subseteq DO \text{ Records. (S)})

¹³³SCI Twelfth Army Group to Commanding Officer, X-2/Germany, "Vetting Form of Dr. Murad Ferid," 28 July 1945, X-1692, enclosing SCI Twelfth Army Group to Commanding Officer, X-2/Germany, "Vetting Form of Dr. Murad Ferid," 23 July 1945, X-1692, including XYZ-1 (Short Form), (S), in Ferid, DO Records. Ferid continued to provide Holtsman with additional information. For example, see 1st L. Edward R. Weismiller, Chief, Operations, X-2/Germany, to X-2, Washington, "Activities of Dr. Wagner Dr. Wendell Plans for Abdul Ghani," 31 July 1945, X-1621, (S), enclosing SCI Twelfth Army Group to Commanding Officer, X-2/Germany, "Activity of Sonderfuhrer Dr. Wagner alias Dr. Wendell; His Plans for Abdul Ghani," 23 July 1945, X-1621, (S), in Ferid, DO Records.

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Lt. Edward R. Weismiller, X-2's chief of operations in Germany, told the SCI Munich Detachment that Ferid's arrest had come about when Lt. Col. Lord Rothschild, the British liaison officer, read about the German officer and asked for his apprehension. "The authorities at CIB [Counter Intelligence Branch at USFET headquarters] directly responsible for this action were extremely apologetic, and have acknowledged their error in not checking into the matter more thoroughly before requesting Ferid's arrest." Weismiller felt certain that the Army would take measures to avoid such "premature arrests in the future." [S)

Despite Ferid's arrest, Capt. Timm and Sgt. Holtsman still planned to use him as a source for OSS. In a project outline dated 13 August 1945, X-2 noted that Ferid is a "cosmopolite and not a Nazi." He had cooperated with the Americans "unstintingly."

His placement as a criminal prosecutor would enable X-2 to keep an eye on nascent underground movements in southern Bavaria. The Army finally discharged Ferid on

^<sup>134Ibid. (S)

¹³⁵Lt. Edward R. Weismiller, Chief, Operations, X-2/Germany, to SCI Detachment, Third Army "Arrest and Transferral of Murad Ferid to EAGLE I.C. Ref. Your Cable 056 of 26 July," 30 July 1945, X-1703, (S), in Ferid, DO Records. See also Extract, Maj. John B. Oakes to Maj. Saxe, Counter Intelligence Branch, G-2, USFET, 1 August 1945, (S), in Ferid, DO Records. (S)

136X-2/Germany, "Penetration Project for the Third Army Territory," 13 August 1945, X-2186,

⁽S), in Ferid , DO Records. (S)

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27 August.¹³⁷ He had been a model prisoner and provided the Army with substantial information that supplemented the earlier reports submitted by Holtsman.¹³⁸ Even before his release by the Army, X-2 had approved of Ferid's use as an agent by Timm and Holtsman. (S)

Now known as FAMINE, Ferid returned to his home in Miesbach and worked on minor taskings that Holtsman gave him. ¹³⁹ In September, X-2 reported that Ferid was under consideration to become an assistant to Josef Mueller in a new Bavarian Government. ¹⁴⁰ Timm considered Ferid a "high class" agent and wanted to use him to infiltrate the Bayrische Freiheits Bewegung, a separatist movement that sought Bavaria's independence from Germany. Likewise, Ferid also provided leads to German-speaking

¹³⁷Cable, AB-21 [identity unknown] to AB-12 [Timm], 14 August 1945, (S); Cable, AB-21 [identity unknown] to AB-12 [Timm], 22 August 1945, (S); Cable, AB-00 [identity unknown] to AB-12 [Timm], 24 August 1945, (S); and Maj. Robert T. Longstreth, CI Section, USFET MIS Center to Whom It May Concern, 27 August 1945, [no classification listed], all in Ferid, C, DO Records. (S)

138See Headquarters, USFET, Interrogation Center, Preliminary Interrogation Report (PIR) No. 42, 3 August 1945, (C). Follow-up reports, based on questions obtained from intelligence consumers, are found in Headquarters, USFET, Military Intelligence Service Center (MISC), CI Intermediate Interrogation Report (CI-IIR) No. 26, 18 October 1945, (C); and Headquarters, USFET, MISC, CI Intermediate Interrogation Report (CI-IIR) No. 44, 18 January 1946, (C); and Headquarters, USFET, MISC, CI Final Interrogation Report (CI-FIR) No. 81, 30 January 1946, (C), all in Ferid, C, DO Records. (C)

139Cable, AB-21 [identity unknown] to AB-12 [Timm], 20 August 1945, (S), in Ferid, C, DO Records. (S)

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refugees from Romania settling in Bavaria, which also provided insights into the state of affairs in Romania. 141 (S)

Ferid's utility as a source diminished when American worries of an underground Nazi movement receded. By early 1946, Ferid had been reduced to minimal taskings, and Holtsman soon listed him as dropped. Holtsman, nonetheless, approved the use of Ferid as a letterbox for a project run by the Austrian Mission. CIG wanted to use a former concentration camp inmate, Anton Rychlowski, to return to Poland to establish contact with Polish resistance and obtain information on Soviet activities there. He use of Ferid in a sensitive operation raised questions at the Austrian Mission and at Headquarters in Washington. Ferid was considered too visible and too well known as an Abwehr officer to be used in "what is supposed to be high-grade United States counter-intelligence activities." Headquarters, in fact, had had no updates on Ferid's activities

Reports," 12 December 1945, LMX-005-1130, enclosing Timm to Commanding Officer, SSU/X-2 Germany, "Semi-Monthly Operations Report SCI Munich," 31 October 1945 and 15 November 1945, LMX-005-1130, both reports in WASH-REG-INT-163, RG 226, Entry 108A, Box 275, (no folder listed), NARA. (U)

¹⁴²SAINT, AMZON to SAINT, Washington, "Review of Activity since 10 December 1945 to 10 September 1946," 17 September 1946, (S), enclosing AB-43, Munich [Holtsman] to AB-51, AMZON [Hecksher], "Review of Activity since 10 December 1945 to 10 September 1946," 10 September 1946, L-010-910, (S), in DO Records, Box 1, Folder 14, CIA ARC. (S)

¹⁴³DD-102 [identity unknown] to Chief of Mission, "VERONAL Project," 31 October 1946, SBX-55, (S), in Ferid, DO Records. (S)

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The Agency later learned that Ferid had joined the Gehlen Organization but could not determine his exact role. 146 In the fall of 1951, — I visited Munich and met with Ferid, now a district attorney and instructor at the University of Munich's law school. Ferid told — I that he had a contact within the Gehlen Organization who worked on dispatching German agents into Czechoslovakia. This contact, Ferid indicated, felt that the Gehlen Organization sent poorly trained agents behind the Iron Curtain. Ferid said that the man's conscience bothered him and that "he would like to work for an agency that is more concerned with the life of the agents it employs."

— Itold the German Station that Ferid might be a "possible resident agent for CE information in Munich." The German Station at Karlsruhe dismissed the idea of using Ferid or his contact. Any American effort "to penetrate ZIPPER [the Gehlen

¹⁴⁴ Acting Chief, FBM and DH-136 [identity unknown], "VERONAL Project – SC Aspect," 16 January 1947, X-9180, (S), in Ferid,

10 John H. Richardson, "Ferid, Murad, Dr.," 25 March 1947, SBM-60, (S), in Ferid,

10 John H. Richardson, "Ferid, Murad, Dr.," 25 March 1947, SBM-60, (S), in Ferid,

11 John H. Richardson, "Ferid, Murad, Dr.," 25 March 1947, SBM-60, (S), in Ferid,

12 John H. Richardson, "Ferid, Murad, Dr.," 25 March 1947, SBM-60, (S), in Ferid,

13 John H. Richardson, "Ferid, Necords, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done Records, Done

^<sup>14/Chief of Station, Karlsruhe to Chief, Pullach Operations Base, "Dr. Murad Ferid and Andreas Zitzelsperger," 10 October 1951, MGB-A-10297, (S), DO Records. (S)

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The Agency's last knowledge of Ferid indicated that he was still in contact with the Gehlen Organization in the Munich area. Agency records do not provide any further information as to Ferid's whereabouts after June 1955. 149 (S)

SLOTH (U)

In March 1946, SSU headquarters in Washington requested that the German Mission locate and interrogate Georg Gerebkov, a 37-year old, Russian-born German who had worked in the "Directorate of Affairs of Russian Emigrants in France" for the "Russiche Abteilung" during the Nazi occupation. As a part of the overall shift from targeting German wartime organizations to the new Soviet threat, US intelligence wanted to learn from Gerebkov about his work in registering all Russians in France for the Gestapo and about his recruitment activities for German army and labor organizations.

¹⁴⁸ Acting Chief, Pullach Operations Base, to Chief of Station, Karlsruhe, "Operational," MGL-A-8965, (S), in Ferid,

DO Records. (S)

¹⁴⁹ See UJVENTURE Worksheet in Ferid, ☐ ☐ DO Records. The worksheet, compiled by CIA analysts over the period of years after the Agency took over the Gehlen Organization indicates that Ferid was a member of the Gehlen Organization prior to March 1948. The final entry on the worksheet is April 1955. (S)

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Gerebkov (whose name had numerous variants) was the grandson of an Czarist general. An actor and dancer in the 1930s, he later served as the director of the Russian Office for Confidential Affairs in Paris where he met Lt. Gen. Andrey Vlasov in February 1943. Vlasov, one of Stalin's leading officers and the hero of the battle of Moscow in December 1941, fell into German hands six months later. Having lost faith in the Soviet system, Vlasov agreed to head the Russian Liberation Movement (ROA) to cooperate with the Germans against the communists. While Vlasov's work on behalf of the Germans was often frustrated by opposition at the highest levels of the Third Reich, thousands of former Soviet prisoners of war took up arms and served against the Allies during the latter part of the war. 152 (U)

Gerebkov organized a large rally for Vlasov in Paris in July 1943 and later handled Vlasov's political affairs with the Germans and other nations. He unsuccessfully attempted to broker a separate truce between the Vlasovites and the Western Allies at the

with the Germans against the Soviets," 12 April 1946, (S), in DO Records, ( \subseteq \subseteq, \text{Box} )
1, Folder 9, CIA ARC. (S)

^<sup>152Catherine Andreyev, Vlasov and the Russian Liberation Movement (Cambridge: Cambridge University Press, 1987). See also Jurgen Thorwald, The Illusion: Soviet Soldiers in Hitler's Armies, trans. by Richard and Clara Winston (New York: Harcourt Brace Jovanovich, 1975). (U)

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end of the war.¹⁵³ When the end came, Grebekov escaped repatriation to the Soviet Union—unlike most Russians who supported the Nazis.¹⁵⁴ He instead found refuge as an employee of the United Nations Relief and Rehabilitation Administration (UNRRA) in the American zone. As early as February 1946, two of Bill Holtsman's agents in Munich reported that they had seen Gerebkov in the city and had tried to make contact with the Russian.¹⁵⁵ (S)

Two months later, Bill Holtsman interrogated Gerebkov about his wartime activities. Following this meeting, Holtsman listed several differences between what Washington knew about the Russian and what he claimed to be the truth. Gerebkov denied that he had joined the Nazi party after his arrival in Germany in the 1930s. He also said that he was never a member of the SS although "his work among the Russian emigrants was of necessity directed by RSHA Amt VI." Gerebov also claimed that he did not spread propaganda against the Allies and that "professed anti-Semitism never caused him to denounce or persecute the Jews." Rather, Gerebkov's attitude against the Jews

^<sup>153Sven Steenberg, a German soldier, who served on Vlasov's staff is the source of this information about Gerebkov. See Sven Steenberg, Vlasov, trans. Abe Farbstein (New York: Alfred A. Knopf, 1970), pp. 110-112; 181-182; 185-186; and 213. (U)

¹⁵⁴In fulfillment of the terms of the Yalta Agreement, the Americans and British repatriated over a million Soviet soldiers who had been prisoners of war, forced laborers, as well as members of the Vlasov Army in 1945. By August of that year, the US Army had returned over 90 percent of the Soviet citizens in the American zone in Germany. The remainder, estimated at nearly 40,000, refused to return to their homeland. American soldiers forced many of these Russians into communist hands, including many Vlasov followers. An unpleasant task, the repatriation of thousands of Russians to the Soviet Union by the Western Allies during 1945-46 remains controversial to this day. Earl F. Ziemke, The US Army in the Occupation of Germany 1944-1946, pp. 284-291 and 413-421. (U)

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"was based on the principle that it was through the Jews that communism was brought to Russia; it was then, merely another expression of Gerebkov's anti-communism."

Gerebkov, likewise, professed that he was not anti-Western and denied that he genuinely supported the Nazis. 156 (S)

¹⁵⁸Holtsman's reporting about Russian personalities in Munich, based on Gerebkov's information, is found in WASH-X-2-PTS-134 and 135, RG 226, OSS Records, Entry 171A, Box

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In Gerebkov's case, the CIA dropped him as an agent in 1949 after a review of his production in Munich found the Russian not worth the Agency's time and effort.

^67, Folders 821 and 822, and WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Boxes 285, 287 and 288, (no folders listed). Examples of declassified reporting at the National Archives from Gerebkov, Larionov, and Von Meyer include SCI/Munich, Report No. 1, "NKVD Activity in the Vic. Of Bodensee," 26 May 1946, LWX-TS-193, and Munich, AB-43 [Holtsman], "Liquidation of the Russian Emigration in Yugoslavia," 10 August 1946, MSC-278, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Boxes 288 and 285 (respectively), (no folders listed), RG 226, OSS Records, NARA. For Gerebkov's reporting on the wartime activities of the anticommunist Russian groups, see SAINT, AMZON to SAINT, Washington, "Russian Emigration and Its Cooperation with the Germans against the Soviets," 21 June 1946, LWX-463, enclosing B.A. Holtsman to Commanding Officer, SSU/X-2 Germany, "Russian Emigration and Its Cooperation with the Germans against the Soviets," 21 April 1946, (S), in DO Records, Job 91-00976R, Box 1, Folder 9, CIA ARC; and SC, AMZON to FBM for SC, Washington, "Russian Communism Activity in France – SLOTH," 8 April 1947, MGH-H-70, (S), in DO Records,

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Headquarters made this decision despite the protests of American case officers, who noted that his conviction by the French "gives us practically complete control over CANAKIN's life," as Gerebkov was now designated by CIA. He soon vanished from sight, only to reemerge briefly in 1961 when a CIA officer met him at a cocktail party in Madrid and suspected that he was a BND agent. (S)

RADISH (U)

By the spring of 1946, X-2 in Munich had clearly shifted from looking for former German intelligence officers who knew about wartime operations to a wider variety of individuals believed to possess information on the Soviet Union. At the same time that SSU searched for Georg Gerebkov in Munich, a former member of OSS, Jean M. Fisher, now a UNRRA security officer near the city, informed Bill Holtsman about Leonid Isaakiewitch Tschoudnowsky, a Russian-born émigré now working with the UNRRA in Pasing. (S)

Born in 1888 in Ekaterinoslav, Russia, Tschoudnowsky had served in the Russian Imperial Army and had earned several decorations. During the Russian Civil War, he fought with Gen. Anton Denikin against the Bolsheviks and rose to the rank of captain.

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The Red defeat of Denikin's forces and those of Gen. Peter Wrangel in southern Russia prompted the evacuation of the survivors to Constantinople. Like many White Russians, Tschoudnowsky was caste upon foreign shores; in his case, he settled in Yugoslavia. 162
(S)

Tschoudnowsky quickly got on his feet in Yugoslavia becoming a prefect with the Belgrade police. With the German invasion, the Nazis reportedly forced Tschoudnowsky out of the government because of his Jewish background (Fisher described him as a "Christian Jew"). According to one note, the Germans had placed Tschoudnowsky in a concentration camp but released him when they learned of his anticommunist past. When Soviet troops liberated Yugoslavia, Tschoudnowsky fled the country with his wife and ended up in Bavaria. In August 1945, he joined the UNRRA, holding various job titles as assistant security officer, legal officer, and employment manager. Fisher, in bringing Tschoudnowsky to Holtsman's attention, noted that the Russian émigré was "a perfect type of informant; he is a 'father-confessor' to many of the UNRRA and DP people in Munich; he has police experience, good memory, is a willing worker." Fisher, who had served with OSS Secret Intelligence during the war, raised a point of concern to which he

Chief of Station, Karlsruhe, "CANAKIN Project," 17 August 1949, MGK-W-2695, (S), both in Gerebkov, — ___________________________________

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had no answer: "Did he ever in any [original emphasis] way collaborate with the Germans?" 163 (S)

As early as April 1946, Tschoudnowsky, reporting through Fisher, was the source for dozens of "spot reports" on members of the White Russian émigré community in Munich as well as on Soviet intelligence operations in southern Germany. In June, X-2 formally requested that Tschoudnowsky be vetted as an agent. In July, Holtsman gave Tschoudnowsky a pass requesting both the Military Police and the German police to permit him to drive a vehicle on Saturdays and Sundays on official business.

Tschoudnowsky's reporting focused on individuals that he encountered during the course of his work for the United Nations. In August 1946, for example, Tschoudnowsky told Holtsman what information he had obtained from Dr. Georg Kossenko, another UNRRA employee in the Munich area. Kossenko, described by Tschoudnowsky as a "honest, positive, anticommunist character," relayed his meeting with a Russian émigré, known by the alias of Philip Sollinger, who had been arrested by the NKVD in July 1945

¹⁶⁵ Pass, signed by Holtsman, dated 12 July 1946, in DO Records, ☐ ☐ , Box 1, Folder 11, CIA ARC. (S)

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By August 1946, Holtsman felt that Tschoudnowsky simply took up too much of his time because his information tended to be of local interest and more suited to the Counter Intelligence Corps. Tschoudnowsky, who served as a cutout to several other agents employed by Security Control, needed to spend more time on collecting information from his subsources. ¹⁶⁷ Rather than terminate his services, Holtsman transferred Tschoudnowsky to George Belic, who had just arrived in Munich to work with X-2. When Belic met with Tschoudnowsky in mid-August, the new case officer emphasized that he sought information on foreign intelligence services that could be exploited for double-agent operations. Belic planned to use Tschoudnowsky as a chief cutout to another agent and, while complimenting him for his previous work with Holtsman, explained that his new taskings would be of a "different nature." ¹⁶⁸ (S)

Belic soon found himself with a problem. On 19 August 1946, just after Belic met with Tschoudnowsky, Capt. Novakovic, the Yugoslav Repatriation Officer in Munich, demanded that the local CIC office in Bavaria arrest the Russian émigré. The

¹⁶⁶AB-43 [Holtsman], "Philip Sollinger and His Experience with the NKVD; Abwehr Officer Klaus, and Franciszek Marynowski," 12 August 1946, LWX-897, (S), in Tchoudnowsky $\subset$ A, DO Records. (S)

^<sup>167For example, Tschoudnowsky handled Klavoli Voss (codename ANT), Alexander Chikolov (codename CLAM), Miron Pankevich also known as Michail Pankovski (codename FIDO), Josef Kuznetsov (codename TROY), and a Mrs. Birkholz. For more details on these agents, see "SC Munich Present and Discontinued Contacts." (S)

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Yugoslavs had apparently learned about Tschoudnowsky's presence in Munich and sought his arrest on behalf of the Yugolsav War Crimes Commission. Only through Belic's personal intercession with the local CIC chief did the Americans not detain Tschoudnowsky. From that point on, SSU knew that its agent was vulnerable to communist machinations. ¹⁶⁹ (S)

By November 1946, however, the Central Intelligence Group began to express doubts about Tschoudnowsky's veracity. The Philip Sollinger case, as reported to Tschoudnowsky by Kossenko in August, did not match up after the Counter Intelligence Corps looked into the matter. Indeed, Kossenko now denied that he even knew Sollinger or any of the facts of the story. "We are not surprised at the unsatisfactory outcome of this investigation," Henry Hecksher in Heidelberg wrote Bill Holtsman in Munich. "As a matter of fact," Hecksher wrote, "we would have been surprised if Kossenko had told the truth, because it now appears that he himself may be engaged in activities of a conspiratorial nature conducted in the interests of some unidentified Soviet agency. We are also beginning to wonder how RADISH himself fits into the picture." 170 Hecksher

¹⁶⁸AB-102 [Belic], Munich, "Personal Observations," 17 August 1946, MSC-301, (S), in Tschoudnowsky,
DO Records. This same document, cited as XARZ-18284, is found in WASH-X-2-PTS-134, DO Records,
RADISH, Attempted Arrest of," 21 August 1946, XARZ-18284, (S), in WASH-X-2-PTS-134, DO Records,
ARC. In early 1947, for example,
Wrote to the chief of the Displaced Persons Control Section in Munich to maintain his status as a displaced person. See
Prochef, DP Control Section, Munich, "Leonid Tschoudnowsky," 17 March 1947, LWX-913, [no classification listed], in DO Records,
While Sollinger, "4 November 1946, MGH-003-104, (S), in Tschoudnowsky,
While Sollinger, "4 November 1946, MGH-003-104, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November 1946, MGH-003-100, (S), in Tschoudnowsky,
White Sollinger, "4 November

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to use Tschoudnowsky, the American case officer felt that the Russian was still a good contact for information on DP personalities and activities.¹⁷³ (S)

All contact between the CIA and Tschoudnowsky ended when the Russian applied to immigrate to the United States in 1951. Headquarters in Washington, after learning about Tschoudnowsky's application to the US Displaced Persons Commission, simply noted that it had no derogatory information in its files and asked the German Station to take any necessary steps regarding its old agent.¹⁷⁴ (S)

Opening Act of the Cold War (U)

Between 1945 and 1947, Munich was a place of mystery, confusion, and intrigue, a war played in the shadows. An entire generation of Cold War operations had their genesis in Munich's ruined streets. The operations launched by X-2's C _______ and ______ between 1945 and 1947 set the stage for the rapid expansion of the CIA's Munich Operations Base after 1948. Their contacts tended to be former German Intelligence Service personnel or Eastern Europeans who had supported the Nazi regime in one form or another. The Office of Strategic Services first sought those individuals in the weeks after the war to counteract the threat of a resurgent Nazi

^☐, DO Records. (S)

174 Acting Chief, FDM to Chief of Station, Karlsruhe, "CAMPHOR's Application for Entry to the US," 23 May 1951, MGK-W-9036, [no classification listed], in Tschoudnowsky, ☐ ☐, DO Records. (S)

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movement. These same individuals soon proved to be useful to the Straetgic Services Unit, the Central Intelligence Group, and the Central Intelligence Agency for their knowledge on the new threat, the Soviet Union. In its quest for information on the USSR, the United States became indelibly linked to the Third Reich. (S)

Chapter Four

DECLASSIFIED AND RELEASED BY CENTRAL INTELLIGENCE ABENCY SOURCES METHODS EXEMPTION 3828 VAZI WAR CRIMES DISCLOSURE ACT DATE 2007

The RSHA Financial Operation (U)

In November 2000, CBS Television broadcast its efforts to locate hidden Nazi treasures in the deep, dark waters of Lake Toplitz in the Totes Gebirge (Range of the Dead) mountains of the Salzkammergut region in western Austria. In one of the last desperate acts of the Nazis in World War II, the SS dumped crate loads of money into Toplitzsee, as it is known in German. The money sat undisturbed at the bottom of the lake, measured in some parts at over 300 feet. (U)

^<sup>1Portions of this chapter initially appeared in Kevin C. Ruffner, "Shifting from Wartime to Peacetime Intelligence Operations: On the Trail of Nazi Counterfeiters," (S), in Studies in Intelligence (Vol. 46, No. 2, 2002), pp. 41-53. (S)

^<sup>2For information on the Toplitzsee expedition in 2000, see CBS 60 Minutes II, "Hitler's Lake," prod. by Bill Owens, 21 November 2000. See also Associated Press, "American Salvage Crew Ends Search of Austrian Lake," 21 November 2000; Reuters, "'Hitler's Lake' Yields Counterfeit Currency," 20 November 2000; Associated Press, "American Team Begins Mapping Austrian Lake in Search of Nazi Relics," 10 June 2000; Emmanuel Serot, "Underwater Search for Nazi Relics in Austrian Lake," Agence France Presse, 7 June 2000; Julia Ferguson, "Divers Start Hunt for Nazi Loot in Austrian Lake," Reuters, 5 June 2000; Nick Fielding and Shraga Elam, "Titanic Team to Search Lake for Nazi Treasure," Sunday Times (London), 4 June 2000; Agence France Presse, "Search for Nazi Documents in Austrian Lake to Start Monday," 4 June 2000; and Julia Ferguson, "Is Austrian Lake a Treasure Trove of Nazi Plunder?," Reuters, 1 June 2000. See also Robert Buchacher and Herbert Lackner, "Das Raubgold der 'Endloser," Profil 27 (2 December 1996), pp. 56-62 and Walter Mayr, "Mehr als Fische und Falschgeld," Der Spiegel (17 January 2000), pp. 140-141. (U)

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expeditions, including the recovery of TWA Flight 800 in 1997. Going far beyond earlier searches of the lake by Stern, a German magazine, in 1959 and by the Austrian Government in 1963, CBS wanted to use modern technology to locate the Nazi treasure in Toplitzsee, whose legend had grown over the decades as the "garbage can of the Third Reich." Some felt that the lake contained not only German money and documents, but also gold from the Vatican, and the looted panels of the Russian Imperial Amber Chamber. (U)

For a month in the summer of 2000, Oceaneering mapped the entire lake and then used a sophisticated one-man submarine to scour Toplitzsee's freezing dark bottom. The lake, which has no oxygen below 65 feet, "preserves everything" that falls into the water. Finding Nazi relics, however, would be another matter. Even with modern equipment, the salvage crew faced numerous challenges, ranging from bad weather in the Alps to a lake floor covered by thousands of trees washed into the water over the centuries (the preserved logs are stacked up to heights of 60 feet at the bottom of the lake). As Bill Owen, Oceaneering's dive team leader, admitted, "we have a 50-50 chance of finding what we're looking for." (U)

^<sup>3As quoted in Fielding and Elam, "Titanic Team to Search Lake for Nazi Treasure," Sunday Times (London), 4 June 2000. For information on the 1959 expedition, see "Himmler Papers in Lake," The Times (London), 11 August 1959, p. 6; "SS Secrets in Files Raised from Lake," The Times (London), 12 August 1959, p. 6; "9M. Pounds 'Bank Notes' Go Up in Flames," The Times (London), 19 November 1959, p. 10. (U)

^<sup>5Fielding and Elam, "Titanic Team to Search Lake for Nazi Treasure," Sunday Times (London), 4 June 2000. (U)

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Only toward the end of the search period did Oceaneering detect the remnants of wooden crates, which turned out to contain counterfeit British pounds and American dollars. Rabbi Marvin Hier of the Simon Wiesenthal Research Center declared that the results justified the expense of the undertaking even though the anticipated treasures did not emerge from the Toplitzsee. "Had this counterfeiting operation [been] fully organized in 1939 and early 1940," the Holocaust scholar commented, "results of World War II may have been quite different." (U)

In the decades after the war, the search for treasures stolen by the Nazis during World War II has taken both fictional and real-life characteristics.⁷ How the Germans obtained their wealth from individual victims and conquered nations and sought to hide it from the Allies is one of the unsolved mysteries of World War II.⁸ (U)

Hitler's Gotterdammerung (U)

^<sup>6Reuters, "'Hitler's Lake' Yields Counterfeit Currency," 20 November 2000. (U)

^<sup>8The looting of European art from individual owners, dealers, and museums is one such example. For further information, see Craig Hugh Smyth, Repatriation of Art from the Collecting Point in Munich after World War II (Maarsen: Gary Schwartz, 1988) and Lynn H. Nicholas, The Rape of Europa: The Fate of Europe's Treasures in the Third Reich and the Second World War (New York: Alfred A. Knopf, 1994). The recovery of Nazi monetary and other wealth is found in Greg Bradsher, "Nazi Gold: The Merkers Mine Treasure," Prologue: Quarterly of the National Archives 31 (Spring 1999), pp. 7-21. (U)

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US intelligence was first drawn to Germany's counterfeiting operations as it ascertained Nazi plans to conduct a final battle, or Gotterdammerung, in the Alpine regions of Bavaria and Austria. In September 1944, Allen Dulles, chief of the OSS mission in Bern, crossed the newly opened border from Switzerland into France.

Meeting with then Brig. Gen. William J. Donovan, Director of Strategic Services, in Lyons, the two intelligence officers flew to London and then to the United States. While in New York, Dulles summarized his views of the future of postwar Europe, in particular relations with the Soviet Union and the American role in defeated Germany. 9 (U)

Dulles warned his superior "upon the German collapse, hundreds of thousands of Nazis and SS will attempt to hide themselves in the German community. There are various conflicting stories as to the extent to which they are already preparing an underground movement," Dulles admitted. "In any event, this is a danger which is sufficiently real to justify the most careful following and we should have in Germany competent secret police and CE [counterespionage] forces to attempt to break this up at its inception." Dulles also discussed the "credible but not confirmed" reports of last-ditch efforts by the Nazis to fortify the mountainous regions of southern Germany and Austria. 10 (U)

¹⁰Ibid. (U)

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appreciably. 11 Rumors of an Alpenfestung or a National Redoubt in the Alps impacted American and British strategy at the end of the war and had long-term political ramifications. 12 The surprise German counteroffensive in the Ardennes in December 1944 foreshadowed the fury that the enemy could unleash. In mid-January 1945, Dulles told Washington that the "idea of a defense in a mountain fortress is in line with the Wagnerian complex of the whole National Socialist movement and the fanaticism of the Nazi youth. Hitler and his small band of brigands," the OSS station chief noted, "who started in the beer-hall in Munich, may find their end not far away in the Bavarian Alps, after having laid most of Europe in ruins." 13 (U)

Even as German forces melted away as Allies armies raced across the shell of the Thousand Year Reich during the spring of 1945, Gen. Dwight D. Eisenhower noted that "if the German was permitted to establish the Redoubt, he might possibly force us to engage in a long, drawn-on guerrilla type of warfare, or a costly siege. Thus," the Allied Supreme Commander wrote, "he could keep alive his desperate hope that through disagreement among the Allies, he might yet be able to secure terms more favorable than those of unconditional surrender." ¹⁴ (U)

^<sup>11For a history of the end of the war in Europe, see Charles B. MacDonald, The Last Offensive (Washington, DC: US Army Center of Military History, 1993, rep. 1973 ed.). (U)

^<sup>14Joseph E. Persico, Piercing the Reich: The Penetration of Nazi Germany by American Secret Agents during World War II (New York: Viking Press, 1979), p. 11. (U)

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While the evacuation of high-ranking German officials and their offices from Berlin to southern Germany seemed to presage the enemy's plans to continue the struggle, Allen Dulles grew increasingly dubious of German plans to defend the Alpine regions. The potential threat of the National Redoubt, however, weighed heavily on Allied leaders. In one of his most controversial actions of the war, Gen. Eisenhower decided not to assault Berlin, the Nazi capital, but instead ordered American and British forces to clear the northern and southern flanks. The role that Allied intelligence played in changing the course of the war in these last months still intrigues military and intelligence historians. (U)

Sonderkommando Schwendt (U)

As the Allied noose tightened around the Third Reich, OSS gleaned pieces of information about an intricate plot by the Germans to undermine the American and British currencies. In March 1945, OSS in Bern learned that the former chauffeur of the Hungarian ambassador to Switzerland had met a "Herr Schwendt" as he passed through Merano in northern Italy. According to the driver named Bela Tar, the mysterious man (whom Tar called Fritz Wendig) proposed, that on his return to Switzerland, the

^<sup>15An example of OSS's increasing reluctance to accept the idea of a last-ditch German struggle in the Alps can be found in OSS/X-2, German Section, "Memorandum of Nazi Resistance Plans," 10 March 1945, XX-5674, (S), in Walter F. Schellenberg, (\nabla_{\text{op}}) 7, DO Records, (S)

^<sup>16Cornelius Ryan, The Last Battle (New York: Simon and Schuster, 1966). (U)

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Hungarian get a job in the American or British legations and provide information to the Germans. At the same time, Tar would be furnished with dollars and pounds to sell on the Swiss black market. (S)

After crossing the Swiss border, Tar instead surrendered to the authorities and provided OSS with his information. He reported that "Herr Schwendt" lived at Schloss Labers, on the outskirts of Meran, which had "a radio station, extensive telephone installations and source happened to see by chance where cases full of brand new Italian Lire where [sic] being unpacked." Tar also gave the Americans a sketch of the Schloss, which, in turn, OSS reported to Paris, Caserta, and Washington as a "bombing target." [9]

The following month, a German deserter told OSS in Switzerland that Heinrich Himmler, head of the SS, had formed "Sonderkommando Schwendt" as an independent unit "to purchase abroad a variety of objects including gold, diamonds, securities, as well as certain raw materials and finished products such as silk stockings, expensive perfumery, etc." The source pinpointed offices in Trieste, Meran, and Milan with the goods stored in a military barracks in Merano and in nearby caves.²⁰ (S)

In May 1945, two weeks after VE-Day, OSS in Switzerland intercepted a letter from what appeared to be a German civilian, who had been involved in obtaining the

^18"Italy – Bombing Target (Sketch Attached)," 16 March 1945, B-2037, [no classification stated], in Fritz Schwend, ☐ ☐ ☐ DO Records. (S)

¹⁹ Ibid. Further information about Bela Tar, including his affairs in Switzerland, is found in a summary report in Hans Max Clemons.

^20"Sonder-Kommando Schwendt," 12 April 1945, B-2460, [no classification stated], in Schwend DO Records. (S)

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right paper stock for the printing of British currency. In the letter, the individual (who was not known to OSS) provided an account of the beginnings of the operation, the names of the firms involved, and the names of several SS officers who supervised the production. The writer had visited the production facility and had met the Jewish inmates.²¹ (U)

The McNally Investigation (U)

As the Americans moved into northern Italy and Austria, Operation BERNHARD quickly unraveled.²² Immediately after the war, the United States undertook two separate investigations of Operation BERNHARD. The first investigation, led by an

^<sup>21Germany: Economic. "Manufacture of English Pounds Notes," Date of Report: 20 June 1945, Information: 26 May 1945, Date of Distribution: 10 July 1945, Report No. B-2832, in Col. William G. Brey, Chief, Foreign Exchange Depository, Finance Division, Office of Military Government (US), to Director, Finance Division, OMGUS, 3 October 1946, enclosing untitled, undated report by Maj. George J. McNally, Chief Counterfeit Detection Section, with attachments, in Record Group 260, Records of US Occupation Headquarters, World War II, Records of the Office of Military Government (US), Office of Finance Division and Finance Adviser, Central Files of Foreign Exchange Depository Group 1945-50, Box 451, File 950.31, Currency – Counterfeit Investigations, NARA (hereafter cited as McNally Report, RG 260, OMGUS Records, NARA). (U)

²²A number of books have been written on the German counterfeiting operation. For example, see Adolf Burger, Unternehmen BERNHARD: Die Geldfalscherwerkstatt im KZ Sachsenhausen (Berlin: Edition Heinrich, 1992). Burger was one of the Jewish inmates forced to work for the Germans. See also Anthony Pirie, Operation BERNHARD (New York: William Morrow and Company, 1962). While Pirie provides an overall description of Germany's efforts to undermine British and American currency, the book is misleading in some areas. For example, Wilhelm Hoettl's role in the affair is obscured, and he is referred to as "Dr. Willi Holten." Ladislas Farago's Aftermath: Martin Bormann and the Fourth Reich (New York: Simon and Schuster, 1974) should also be read with some caution. Other sources include Magnus Linklater, Isabel Hilton, and Neal Ascherson, The Nazi Legacy: Klaus Barbie and the International Fascist Connection (New York: Holt, Rinehart and Winston, 1985) and Richard Wires, The Cicero Spy Affair: German Access to British Secrets in World War II (Westport: Praeger, 1999), pp. 85-96.

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Army captain and a former Secret Service officer, sought to discover how the Germans had compromised the security of the American monetary system. At the same time, OSS undertook a separate investigation to locate members of Operation BERNHARD who, in turn, could pinpoint the hidden wealth before it could finance underground Nazi resistance efforts. (U)

In early May, Capt. George J. McNally, Jr., a Signal Corps officer assigned to the Currency Section of the G-5 Division's Financial Branch at Supreme Headquarters Allied Expeditionary Force (SHAEF) in newly captured Frankfurt, received word that American troops in Bavaria had located a factory stocked with boxes of counterfeit British pounds. At the same time, he learned that American soldiers and Austrian civilians were busily fishing millions of pounds found floating in the Enns River. Meanwhile, a German army captain had surrendered a truck with 23 boxes of English money, valued at 21 million pounds sterling, in Austria. A Secret Service agent before the war, McNally specialized in detecting counterfeit money, and he soon found his peacetime skills in demand in occupied Europe. For the next eight months, McNally would trace the entangled webs of Operation BERNHARD that extended into Austria, Czechoslovakia, Germany, and Luxembourg. 23 (U)

Until McNally took charge in late May, the British and Americans had not coordinated their investigation into German currency operations. Reports came from

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scattered army units throughout Germany and Austria, many linked to rumors of sightings of German Werewolves, the Nazi underground resistance movement. From intelligence sources in the Middle East, the British already knew that the Germans had been busily undermining their currency. At a meeting in early June 1945 with British officials in Frankfurt, McNally met P.J. Reeves, the manager of the St. Luke's Printing Works in London (the British equivalent of the US Bureau of Printing and Engraving). Reeves was visibly perturbed when he saw the amount of British currency that McNally had recovered in Austria. "He began going from box to box, riffling the notes through his fingers. Finally he stopped and stared silently into space. Then for several seconds," McNally later recalled, "he cursed, slowly and methodically in a cultured English voice, but with vehemence. 'Sorry,' he said at last. 'But the people who made this stuff have cost us so much." 24 (U)

Capt. McNally, joined by Chief Inspector William Rudkin, Inspector Reginald Minter, and Detective Sgt. Frederick Chadbourn from Scotland Yard and Capt. S.G. Michel, a French army liaison officer attached to the Americans, soon concentrated their efforts on interviewing Germans involved with Operation BERNHARD and concentration camp inmates who produced the false money. Drawing on support from the Army's Counter Intelligence Corps (CIC), OSS, and the US Navy, McNally compiled

^<sup>24Indeed, the Bank of England had to recall all its notes and exchange them for new five pound notes. McNally, "The Nazi Counterfeit Plot," p. 507. (U)

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"While the exact date of inception is vague," McNally wrote, "it seems reasonable to suppose in the light of all evidence that the German Reich had a counterfeiting plan as early as 1939." By 1942, McNally reported that Operation BERNHARD was in full swing with two barracks as living and work areas for Jewish prisoners at Sachsenhausen concentration camp near Berlin. Isolated from the main prison area by barbed wire fences, the SS, under Sturmbannfuhrer BERNHARD Kruger, oversaw the work of 140 Jewish inmates in such fields as printing, binding, photography, and engraving. The Nazis placed a prisoner as the head of each section under the overall charge of Oskar Stein (also known as Oskar Skala) as office manager and bookkeeper. In addition to sparing their lives, Kruger offered the prisoners better food and other privileges for their hard work. (U)

The Germans faced numerous technical difficulties to counterfeit British and American money. By mid-1943, the SS had contracted with the Hahnemuhle paper factory in Braunschweig in northern Germany to produce the special rag needed for British money. The Germans used ink produced by two companies in Berlin. Wartime

^<sup>25McNally Report, pp. 1-11, with attachments and addendum, RG 260, OMGUS Records, NARA. The report indicates that McNally had provided photographs, but none are located with the report at the National Archives. (U)

^<sup>26McNally Report, p. 1, RG 260, OMGUS Records, NARA. Operation BERNHARD, known originally as Operation Andreas, actually got its start in 1939 when two SS officers, Alfred Naujocks and BERNHARD Kruger of the Reichsicherheitshauptamt, RSHA or the German Security Main Office, undertook to produce false British currency in addition to other false documents. For further background on Naujocks, see Gunter Peis, The Man Who Started the War (London: Odhams Press, 1960). (U)

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shortages, coupled with imperfections, limited the production of British currency. Oskar Stein estimated that only 10 percent of the fake money could be considered usable; yet the Germans reportedly produced some 134 million pounds in less than two years. Efforts to reproduce American currency proved less successful despite the work of Solly Smolianoff, a well-known forger whom Krieger added to his collection of skilled workers at Sachsenhausen.²⁷ (U)

In addition to American and British currency, the SS reproduced a wide array of civilian and military identity cards, passports, marriage and birth certificates, stamps, and other official documents from throughout the world. According to McNally, Reichsfuhrer Heinrich Himmler planned to use these forged documents and money for Nazi agents as well as to create havoc among the Allies. For example, Himmler wanted to drop the "expendable," or Abwurf, British pounds on the United Kingdom by airplane. These notes "were good enough to fool anyone but an expert. Therefore," McNally wrote, "if a large quantity was dumped and the English government declared them counterfeit, many would say the government was merely trying to avoid redeeming them and would hold them." 28 (U)

The rapid advance of the Soviet army into Germany in early 1945 necessitated the evacuation of the Jewish inmates from Sachsenhausen to Mauthausen, a concentration camp in Austria. In mid-April, the Germans again moved the prisoners and machinery to

^<sup>27For further details on Smolianoff, described as the "only criminal" involved in Operation BERNHARD, see Murray Teigh Bloom, The Brotherhood of Money: The Secret World of Bank Note Printers (Port Clinton: BNR Press, 1983) and Murray Teigh Bloom, Money of Their Own: The Great Counterfeiters (New York: Scribner, 1957). (U)

^<sup>28McNally Report, p. 6, RG 260, OMGUS Records, NARA. (U)

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an unused brewery at Redl-Zipf where they hoped to start up production in an underground factory in the mountains. The Nazis had little time to resume production as the war came to a sudden end in Austria. By the last week of April, the Germans ordered the inmates to destroy as much of the machinery, money, and records as possible. The inmates, in turn, moved to Ebensee concentration camp where the US Army liberated the camp on 6 May, shortly before the SS planned to kill them. By the time that Capt. McNally launched his investigation, Operation BERNHARD's concentration camp workers had scattered throughout Europe. (U)

As the fronts collapsed, the SS scrambled to get its money out of Berlin to safety in the south. According to McNally's research, one truck left Redl-Zipf and made it as far as Pruggern, where it broke down. The money was dumped in the Enns River where the bills scattered for miles. Another truck left the same location and arrived in Bad Aussee, and the SS then put the money on a cart for the trip to Toplitzsee, where they dropped the cases into the lake. A convoy of trucks from Berlin brought more money to Taxenbach, where the Germans burned the trucks and their contents. Another truck ended up near Innsbruck, where the Counter Intelligence Corps found it and over two million British pounds. A German army officer surrendered yet another truck with 23 boxes full of bills of small British dominations totaling some 21 million pounds. McNally also tracked down other unconfirmed reports of sightings of the German money. (U)

Throughout the summer and fall of 1945, McNally and his British and French counterparts crisscrossed Europe to interview witnesses and interrogate German

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participants, including Obersturmbannfuhrer Josef Spacil, BERNHARD Kruger's commanding officer.²⁹ Capt. McNally also tried to raise the crates of money that the Germans had dumped in the Toplitzee and Traunsee. A special US Navy team of divers flew from Le Havre, France, to Frankfurt and then drove to Austria. Despite the depths of the Toplitzsee, the Navy divers entered the shallower sections of the lake, but found nothing. The special team encountered a similar lack of luck in searching the area near Gmunden.³⁰ (U)

By early 1946, McNally had wrapped up his investigation and completed his report. "Thus," McNally commented, "in disorganization, flight and destruction, ended

^<sup>29Transcripts of interviews with former concentration camp inmates, including Adolf Burger and Oskar Stein in Czechoslovakia, are found in McNally Report, RG 260, OMGUS Records, NARA. The apprehension of Spacil by OSS is recounted in Capt. F.C. Grant, SCI Detachment, Seventh US Army, to Commanding Officer, SCI Detachment, Twelfth Army Group, "Weekly Report," 16 June 1945, LSX-002-616, in WASH-REG-INT-163, RG 226, OSS Records, Box 276, [no folder listed], NARA. Grant placed Spacil in the Seventh Army Interrogation Center for further questioning about Operation BERNHARD. Later that year, McNally took Spacil from the Military Intelligence Service Center's interrogation camp at Oberursel, near Frankfurt, to Austria to get a firsthand description of what transpired at the end of the war. McNally's interrogation of Spacil and Chief Inspector Rudkin's report on Spacil are both located in McNally Report, RG 260, OMGUS Records, NARA. The Americans continued to seek information from captured Germans about Operation BERNHARD even after the completion of McNally's investigation. For example, see "SAINT, London to SAINT, Washington, "U/Stuf Rudolf Guenther," 7 February 1946, XX-10723, enclosing Headquarters, US Forces European Theater (USFET), Military Intelligence Service Center (MISC), Counter Intelligence Preliminary Intelligence Report (CI-PIR) No. 96, "U/Stuf Guenther, Rudolf" 17 January 1946, in WASH-REG-INT-175, RG 226, OSS Records, Entry 109, Box 58, Folder 2, NARA. Guenther was Spacil's private accountant after July 1944 and knew about Germany's counterfeiting activities. CIC arrested him in Wurzburg, Germany, in June 1945 and sent him to Oberursel in late December. (U) ³⁰Capt. McNally to Capt. W.A. New, US Naval Forces, Germany, "Recovery of Enemy Materials and Equipment from Inland Waters in Germany and Austria," 26 September 1945; Capt. New to Capt. McNally, "Enemy Materials and Equipment from Inland Waters in Germany and Austria, Recovery of," 11 September 1945; and J.H. McDonald, US Naval Ship Salvage Grou

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the most elaborate and far reaching scheme that an invading army ever devised for the wholesale counterfeiting of the money and credentials of other countries." The American military returned the counterfeit British currency to the Bank of England and closed the file on Operation BERNHARD. Nazi Germany's clandestine activity became a curious footnote in the annals of the war. Yet, the expertise gained by Operation BERNHARD's participants would soon be a valuable tool at the dawn of the Cold War. (U)

RSHA Financial Operation (U)

At the same time as Capt. McNally learned of the Nazi fortunes in Bavaria and Austria, OSS was already on the trail of members of Operation BERNHARD. In mid-May, Lt. Alex Moore, an X-2 officer assigned to the Sixth Army Group's Special Counter Intelligence (SCI) detachment, took Karl Hermann Friedmann, a captured SS officer and member of Operation BERNHARD, to Rosenheim near Munich to pick up George Spitz, a 52-year old Austrian Jew.³¹ Friedmann fingered Spitz, a prewar art

^<section-header>>>>>

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dealer who had lived in the United States as a youth, as a key operator in the distribution of the counterfeit funds. Spitz, in turn, admitted to Moore that he had worked for the Germans, but only under duress, and he soon provided extensive leads into the Nazi efforts to undermine the Western Allies monetary system.³² (S)

Spitz recounted to Moore how he had escaped from the Nazis and then actually worked for them. Spitz had approached a half-Jew, Hans Oskar Markuse, in Munich and sought his help to obtain false documents in order to avoid arrest by the Nazis. For a price of 5000 Reichmarks, Spitz received a false passport from an SS ObersturmfuhrerJosef Dauser, who worked in the SD office in Munich, and his secretary, Frau Bertha von Ehrenstein. In 1943, Spitz claimed to have met a man named Wendig in Munich who, in turn, asked him to travel to Belgium to purchase gold, jewelry, and pictures. Spitz made six trips and exchanged some 600,000 marks worth of English pounds on these trips. Lt. Moore, the first OSS officer to work on this case, interrogated both Dauser and his secretary to confirm the accuracy of Spitz's account.³³ (S)

HQ&HQ DET-PERS-13, in DO Records, ( \subseteq ), Box 23, CIA ARC. Additional material is also located in WASH-PPB-PERS-13, in DO Records, ( \subseteq \subseteq ), Box 40, CIA ARC. Moore also privately published a memoir of his wartime service entitled From Normandy to Aachen in 1979. A copy of his memoirs and correspondence are found in the CIA History Staff files. (S)

32SCI Sixth Army Group, "Interrogation of Subject, George Spitz," 16 May 1945, (S); and SCI Sixth Army Group, "Sale of Foreign Currency by the RSHA," 17 May 1945, (S); and SCI, Sixth Army Group, "Agents Used by Lieutenant Moore, SCI 6 AG," 17 May 1945, (S), in George Spitz, ( \subseteq \subseteq \subseteq \subseteq \subseteq ), DO Records. (S)

33"Interrogation of Bertha von Ehrenstein," 25 May 1945; "Additional Statement of Mrs. Von Ehrenstein," Innoversells and "Memorandum on Schwend alias Wendig," 30 May 1945. Inoversells and "Memorandum on Schwend alias Wendig," 30 May 1945.

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By the end of the month, Moore had pinpointed Friedrich Schwend as Operation BERNHARD's mysterious paymaster and identified his various cover names, including Dr. Wendig and Fritz Klemp. Born in 1906 and a member of the Nazi party since 1932, Schwend (spelled also on occasion as Schwendt) lived a charmed life. A businessman who had settled in Abbazia, Italy, Schwend had married a wealthy German woman in 1929 whose aunt resided in Argentina. Drawing on his family ties, Schwend managed the aunt's business in Latin America, and he established numerous contacts throughout Europe and the Americas. In the 1930s, Schwend also established himself as an arms dealer and provided aircraft and other weapons to China. (U)

At the outbreak of the war, Schwend's activities drew the attention of the Gestapo, and the Italian was arrested as an Allied agent and was returned to Germany. Schwend's time in prison was short as he was soon released to become the leading salesman of Operation BERNHARD. From his headquarters at Schloss Labers, just outside of Meran in northern Italy, Schwend distributed money throughout Europe using numerous couriers. He was not a member of the SS, although he took the rank and identity of SS Sturmbannfuhrer Dr. Wendig, who had died in a partisan attack in Italy in 1944. Schwend's castle in Merano was guarded by a detail of Waffen SS soldiers and identified as Sonderstab – Generalkommando III Germanisches Panzerkorps, the Special Staff of the Headquarters of the Third German Armored Corps. (U)

Schwend retained one-third of the profits derived from the sale of the counterfeit money. Despite mass destruction, money was still to be made in war-torn Europe.

Schwend and his underlings used the fake currency to purchase luxury items on the black

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market as well as to buy weapons from Yugoslav partisans anxious to make a buck from arms provided by the British and Americans. The Germans, in turn, then sold the Allied equipment to pro-Nazi groups in the Balkans. Money distributed by Schwend also went to pay German agents throughout Europe; Elyesa Bazna, the famous German agent in Turkey known as CICERO, was paid in false British currency produced by Operation BERNHARD. (U)

It was, however, not a job without risks. The German secret police, the Gestapo, was on the lookout for counterfeiters and black marketers and sometimes apprehended Schwend's men by accident. Rivalries among senior German SS officers, including Reichsfuhrer Heinrich Himmler, Reinhard Heydrich (first head of the RSHA), Heinz Jost (first head of RSHA Amt VI or foreign intelligence), Ernst Kaltenbrunner (Heydrich's successor as RSHA chief), Heinrich Mueller (head of Amt IV, the Gestapo), Otto Ohlendorf (head of RSHA Amt III), and Walter Schellenberg (Jost's successor in Amt VI), all hindered Operation BERNHARD to one degree or another. Mainstream German entities, such as the Foreign Ministry and Reichsbank, vehemently opposed any tinkering with the monetary systems, even those of the enemy. As it turned out, German use of counterfeit pounds destabilized the already fragile economies of several countries, Italy in particular. (U)

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Operation BERNHARD.³⁴ On 18 May, Lt. Moore took Spitz to Prien where they located a large collection of trunks and crates belonging to Schwend. Schwend, however, was nowhere to be found.³⁵ Spitz also helped Lt. Moore collar Heinrich Hoffmann, Hitler's personal photographer, and Loomis Taylor, the American "Lord Hee Haw." (S)

On 10 June, OSS reported that it had arrested Schwend and started its interrogation for further details about what it now referred to as the "RSHA Financial Operation." The Americans initially held Schwend at the Seventh Army Interrogation Center in Ludwigsburg with hundreds of other German military officers and security suspects. The Center's Weekly Status Report for the period 16-23 June 1945 listed Schwend as being detained by the 307^th CIC Detachment as a counterintelligence interest. Listed as a "mechanical engineer," the Army noted that Schwend "bought machinery and tools for factories." Whether the Army listed Schwend in this category out of ignorance or for other reasons is not known. Shortly afterward, OSS officers removed Schwend

^<sup>34Lt. Charles Michaelis to Commanding Officer, X-2/Germany, "Preliminary Statement of Agi Zelenay in Connection with RSHA Operations," 4 June 1945; Michaelis to Commanding Officer, X-2/Germany, "Continuation of the Statement by Agi Zelenay," 26 June 1945; and Michaelis to Commanding Officer, X-2/Germany, "RSHA Financial Operations," 5 June 1945, [no classifications listed], in Spitz,

, DO Records. (S)

³⁵Moore to Commanding Officer, SCI, Sixth Army Group, "Financial Operations of RSHA Amt VI," 22 May 1945, [no classification listed], in Spitz, ☐ ☐ , DO Records. (S)

³⁶Early OSS reporting on Schwend is summarized on several note cards in his 201 file. Many of these documents, however, are not located in his personality file, which the CIA did not open until 1957. A good number of documents pertaining to the RSHA Financial Operation, Spitz, Schwend, and other members of Operation BERNHARD are located in the declassified OSS records at the National Archives. A copy of a report written by Schwend for OSS has not been located in either the classified or declassified files. Spitz's classified 201 file, on the other hand, is more complete and contains many early OSS reports on the RSHA Financial Operations. (S)

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from the Interrogation Center and placed him in Munich's Stadelheim prison where he remained for three weeks before he relented to speak to his captors.³⁷ (U)

In an effort to get Schwend to talk, OSS brought George Spitz to Stadelheim prison to meet with Schwend. Spitz, now a recruited American asset, had impressed Capt. Charles C. Michaelis, who had replaced Lt. Moore as his OSS case officer, as "reliable, trustworthy and intelligent. He is willing to cooperate and has already given useful information." Michaelis, it will be recalled, had served as Nebel's case officer in France during the war, and he was now assigned to Munich. Still uncertain of the connections between Schwend and his agents, OSS stated that it "believed that Spitz is primarily responsible for the success of this mission." According to Michaelis, Spitz

³⁷Weekly Status Reports for the Seventh Army Interrogation Center commanded by Maj. Paul Kubala are found in Record Group 338, Records of United States Army Commands, 1942-, Records of the European Theater of Operations/US Forces European Theater, Records of the Seventh Army Interrogation Center, Box 74, Folder 2, NARA. The Seventh Army Interrogation Center, or SAIC, prepared Weekly Status Reports (WSR) and Daily Status Reports (DSR) providing a breakdown of the number of internees held at the Center and for what reasons. The WSR also provides a listing by name of all internees while the DSR carries only numbers of internees on hand. The DSR did, however, carry the names of those individuals admitted to or released from the center. In Schwend's case, he was listed on Weekly Status Report Number 1 for the period 16-23 June 1945, but his name is not found in WSR No. 2. Interestingly, his departure from SAIC is not found on the Daily Status Reports for that period. The Seventh Army Interrogation Center prepared hundreds of interrogation reports of different types from April until the Center's disbandment in October 1945. Schwend's name does not appear in the index of any of these reports. See Seventh Army Interrogation Center, Index of SAIC Reports (6 April 1945-2 October 1945) in Box 73. (U)

³⁸Capt. Michaelis to Commanding Officer, X-2/Germany, "George Spitz," 25 June 1945, X-645, (S), in Spitz, (\subseteq) (\supseteq), DO Records. For information about Spitz's use by OSS and that of other Operation BERNHARD personnel, see Capt. Michaelis to Commanding Officer, X-2/Germany, "Situation Report on Prospective Penetration Agents," 29 June 1945, LMX-002-629, (S). in DO Records, (\subseteq) (\supseteq), Box 3, Folder 21, CIA ARC (a copy is also filed in Spitz, (\supseteq), DO Records). OSS headquarters in Germany approved Spitz's use on 12 July

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"persuaded Schwend that his best chance would be to confess his activities with the RSHA and to cooperate with us." (S)

As an act of good faith, Schwend agreed to turn over to OSS all of his "hidden valuables." Capt. Eric W. Timm, X-2's chief in Munich, and Capt. Michaelis accompanied Spitz and Schwend to a remote location in Austria in July 1945 where Schwend uncovered 7139 pieces of French and Italian gold, which he had buried only days before the end of the war. Michaelis reported that Schwend estimated that the gold, which weighed over 100 pounds, had a value of \$200,000. The "money constituted a possible threat to Allied security as it could have been used to finance anti-Allied activities," Capt. Michaelis stated. ⁴⁰ (U)

With one successful mission under his belt, OSS began to use Schwend as a "bird dog" for other hidden assets. In late July, Timm and Michaelis took Schwend and Spitz to Meran in Italy to visit Schwend's former headquarters. The Army's Counter Intelligence Corps had already rounded up several of Schwend's personnel, who had remained in Meran, including several purchasing agents and George Gyssling, a former German consul in Los Angeles and a friend and an associate of Schwend's. Capt. Harry

^<sup>39Capt. Michaelis, SCI Detachment Munich to Commanding Officer, X-2/Germany, "RSHA Financial Operations," 20 July 1945, LWX-50, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 287, [no folder listed], NARA. See also Capt. Timm to Chief, X-2/Germany, "RSHA Financial Operation," 20 July 1945, with copies of receipts, and Capt. Timm, Capt. Michaelis, 1^st Lt. Stewart French, and Mrs. Jane Burrell, Memorandum for the File, "RSHA Financial Transactions," 19 July 1945, (S), in Spitz, ( \subseteq ), DO Records. (S) ( \frac{40 \text{Tbid.}}{3} ), DO Records. (S)

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Riback, the CIC commander in Merano "had no information on the exact missions of these men nor did they have a clear picture of the over-all RSHA operation." ⁴¹ (U)

After interrogating one of Schwend's staff still in Meran, OSS recovered nearly \$200,000 worth of gold, American currency, and diamond rings. Timm and Michaelis turned the treasures over to Capt. Riback who was "most appreciative of the information given to him by SCI." Both Spitz and Schwend had clearly established themselves with OSS and, according to Capt. Michaelis, Schwend added to his laurels by writing a history of Operation BERNHARD. 43 (U)

After the summer of 1945, OSS changed the scope of its RSHA Financial Operation. While it still collected information on Nazi Germany's clandestine efforts to counterfeit money, OSS began to use both Schwend and Spitz as agents for information beyond the scope of their wartime activities. In the meantime, OSS collected additional information about Schwend, who had a somewhat shady reputation even within the SS. Because of his role as a senior SS intelligence officer in Italy and the Balkans, Wilhelm Hoettl had been in contact with Fritz Schwend. During an interrogation by American

^<sup>42Ibid. A copy of the receipt dated 26 July 1945 is found in Spitz, ☐ ☐ DC Records. (S)

^<sup>43As explained above, Schwend's report has not been found. (S)

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officers, Hoettl admitted "Schwend is a highly gifted businessman with a good bit of adventurism in him who particularly enjoys to drive around in the middle of rebellious areas and to deal with the most roughest partisan leaders. In doing so," Hoettl recalled, "he was less concerned with the profit than with the adventure of the affair." (S)

Walter Schellenberg's surrender in 1945, and his transfer to Great Britain for interrogation, offered the Allies a window into German operations from the highest vantage point. OSS in London relayed to Washington what it learned from the former head of RSHA Amt VI throughout the summer of 1945.⁴⁵ Schellenberg readily told his captors about the intrigues that riveted the intelligence and security organs and the Third Reich. He elaborated in great detail about German activities throughout the world and was especially helpful in filling in the gaps about Operation BERNHARD. (S)

Schellenberg grew incensed at the wide berth that Schwend enjoyed in disposing of the false British currency. He decried the entire affair and blamed Schwend's success on RSHA chief Kaltenbrunner and corrupt SS officers, including Wilhelm Hoettl. The chief of Amt VI claimed that he did not even know Schwend's real name and only recognized him by his pseudonym of Wendig. In Schellenberg's opinion, Schwend was "one of the greatest crooks and imposters." By marketing his false money in territories

⁴⁴Undated, unsigned German-language report and rough English translation pertaining to Schwend. "Engineer Frederico Schwend" appears to be an excerpt of a longer interrogation of Wilhelm Hoettl. The report, classified Secret in the English version, is located in Schwend, C. J. DO Records. (S)

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Despite reservations about Schwend's reliability, he became one of X-2's new stable of agents in the fall of 1945. Schwend, in turn, recruited other Operation BERNHARD associates, including George Srb, a Czech, and Guenther Wischmann, his "salesman" in Slovenia, as subsources.⁴⁷ Capt. Michaelis had obtained Wischmann's release from prison after his arrest by the US Army in June 1945 when the British claimed that he had worked for them.⁴⁸ (S)

Following the departure of both Michaelis and Timm in the fall, Holtsman used Schwend to obtain a variety of reports on personalities who "might be used by the American intelligence in some way." Additionally, Schwend gave the Americans details on the organization and structure of the Czech intelligence service and the use of

⁴⁶SAINT, London to SAINT, Washington, "Interrogation Report on Schellenberg, 27 June-12 July 1945," 2 November 1945, XX-9667, (S), enclosing a copy of the British interrogation report. Schellenberg, DO Records. (S)

47For a description of Wischmann, see Lt. Michaelis to Commanding Officer, X-2/Germany,"

^"Preliminary Statement of Agi Zelenay in Connection with RSHA Operations," 4 June 1945; Michaelis to Commanding Officer, X-2/Germany, "Continuation of the Statement by Agi Zelenay," 26 June 1945, in Spitz, I DO Records. (S)

^<sup>48Security Control (the successor to X-2 in the new Office of Special Operations or OSO) in Munich eventually dropped Srb, known as CAMEL, as a source because of his black market activities and denunciations as a German collaborator by the Czech Government. Wischmann, also a subsource of Schwend's, traveled throughout Germany and Austria, but Holtsman did not use him as a "full-time agent" because of suspicions about his dealings on the black market. For further details on Wischmann, see various reports in Guenther Wischmann,

⁴⁹Quote found in AB-43 [Holtsman], "Dr. Robert Scherkamp, Munich, Fuchsstr. 5," 30 August 1946, MSC-332, LWX-002-916a, (S), in Schwend, ( \subseteq \subseteq ), DO Records. Examples of other personality reporting are found in Schwend's personality file. (S)

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Jewish refugees by the Soviets.⁵⁰ Holtsman grew impressed with Schwend's work in Munich and commented, "his knowledge of personalities and underground groups in Italy, Yugoslavia, and in Germany is very wide."⁵¹ Perhaps reflective of his ability to get information, X-2 provided Schwend with the codename of FLUSH. (S)

George Spitz, in the meantime, provided information to both Schwend and Holtsman as a X-2 source known as TARBABY. Capt. Timm had first used Spitz in a variety of ways, although he was not generally tasked as a regular agent. In late October, X-2's chief observed, "TARBABY will prepare and submit regular semi-monthly reports on financial and economic matters, as well as other items of interest which he can obtain." Timm felt that Spitz had "an encyclopedic knowledge of all figures of any importance in industry and economics throughout Europe." In this capacity, Spitz gleaned tidbits on the German Red Cross and the Bayarian Separatist Movement in

⁵⁰Reporting on the Czech services is found in SCI/Munich Report No. 135, "OBZ (Obvodove Bezpecnosti Zpravodajstvi)," 7 June 1946, MGH-H-28, (S); SCI/Munich Report No. 159, "OBZ Headquarters, Washington Street, Prague," 18 June 1946, (S); AB-43 [Holtsman], Munich, "OBZ headquarters at Prague," 1 July 1946, Report No. 208, (S); and AB-43 [Holtsman], Munich, "Election Note from Czechoslovakia," 1 July 1944, Report No. 209, (S), in Schwend, File 201-0206556, DO Records. Information stating that Jewish refugees from Poland were "active for the Russians" came from Schwend as reported by a Dr. Ohrenstein, a Jewish rabbi and leader of refugees in Munich. See SCI/Munich, "Use of Eastern Jewish Refugees for Soviet Intelligence Work," 26 April 1946, Report No. 53, LWX-TS-124, (S), in Schwend,

⁵¹SAINT, AMZON to SAINT, "Review of Activity since 10 December 45 to 10 September 46," 17 September 46, L-010-910, enclosing AB-43 [Holtsman], Munich to AB-51 [Hecksher], AMZON, "Review of Activity since 10 December 1945 to 10 September 1946," 10 September 1946, (S), in DO Records, — J, Box 1, Folder 14, CIA ARC. (S)

^<sup>52Lt. Sidney H. Lenington, Deputy Chief, X-2/Germany to SAINT, Washington, "Semi-Monthly Reports," 12 December 1945, LMX-005-1130, enclosing Timm to Commanding Officer, SSU/X-2 Germany, "Semi-Monthly Operations Report SCI Munich," 31 October 1945, LMX-005-1130, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 275, [no folder listed], NARA. (U)

Spitz was also in contact with the INCA project. In September 1945, X-2 obtained the release of seven Munich businessmen, either directors of subsidiary companies of I.G. Farben or prominent city bankers. Capt. Timm stated "these persons are only of potential value if they are returned to their respective businesses. Contacts," Timm noted, "are constantly being made with the functional heads of Military Government detachments to see if the men have been cleared to operate their businesses.' OSS expected the INCA agents to provide information on the financial aspects of illegal Nazi activities within Germany. The INCA project, however, was short-lived and the X-2 dropped it the following month when it realized that the operation's "value is still only potential and it has not proven productive to maintain regular contact." (S)

Reports," 12 December 1945, LMX-005-1130, enclosing Timm to Commanding Officer, SSU/X-2 Germany, "Semi-Monthly Operations Report SCI Munich," 15 November 1945, LMX-005-1130, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 275, [no folder listed], NARA. (U)

⁵⁴Timm to Commanding Officer, X-2/Germany, "Semi-Monthly Operations Report SCI Munich," 15 September 1945, G-TSX-3310, (S), in DO Records, Box 3, Folder 21, CIA ARC. (S)

Munich," 15 September 1945, G-TSX-3310, (S); Timm to Commanding Officer, X-2/Germany, "Semi-Monthly Operations Report SCI Munich," 30 September 1945, G-TSX-3747, (S), both in DO Records, C , Box 3, Folder 21, CIA ARC; Lt. Sidney H. Lenington, Deputy Chief, X-2/Germany to SAINT, Washington, "Semi-Monthly Reports," 12 December 1945, LMX-005-1130, enclosing Timm to Commanding Officer, X-2/Germany, "Semi-Monthly Operations Report SCI Munich," 31 October 1945, LMX-005-1130, in WASH-REG-INT-163, RG 226, OSS Records, Entry 108A, Box 275, [no folder listed], NARA. (S)

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This Case Should Be Handled Very Carefully (U)

Neither Schwend nor Spitz maintained low profiles in the ruins of postwar

Munich, and they soon attracted attention. Spitz became a well-known figure in early

postwar society circles in Munich. In a 1947 report, ————————————————————————————————————

It did not take long for Spitz's past to catch up with him. In November 1946, Edwin C. Rae, the chief of the Monuments, Fine Arts, and Archives Section of the Military Government in Bavaria contacted his headquarters to request that US authorities in Italy assist in tracking down looted Dutch art in that country. The Dutch representative at Munich's Central Collecting Point for art recovered from the Nazis had tracked down several pieces of art and rugs that Spitz had sold to Schwend during the war. He wanted the Americans to locate the missing paintings and rugs from Schwend's last known location in northern Italy.⁵⁸ (U)

⁵⁶See "SC Munich Present and Discontinued Contacts." For much of this period, — Jwas SSU's sole representative in Munich, and he needed to maintain good relations with Military Government and CIC officials. (S)

^<sup>58Edwin C. Rae, Chief, Monuments, Fine Arts, and Archives Section, Restitution Branch, Economics Division, Office of Military Government for Bavaria, to Office of Military Government (US), Economics Division, Restitution Branch, Monuments, Fine Arts, and Archives Section, "Art Objects of Dutch Origin, now in Italy," 18 November 1946, enclosing R.F.P. de

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In October 1947, another Dutch investigator questioned Spitz about his activities in Holland during the war. According to H.J. Stach, Spitz "became furious" and demanded to know why he was being sought after when he was a Jew who had been in the "underground." Spitz then produced a letter from Capt. Timm that the X-2 chief had written in September 1945. He also told Stach to go see $\Box$ as further verification of Spitz's good service. Stach, however, distrusted Spitz and commented, "it is of great importance that this case should be handled very carefully. Spitz is one of the greatest swindlers." $^{59}$ (U)

In January 1948, Spitz again fell under suspicion for his role in the looting of art in Europe during the war.⁶⁰ A year later in 1949, Spitz again drew high-level attention

Beaufort, Dutch Representative, to Mr. Rosenbaum, "Restitution of Art Objects in Italy to the Netherlands," 18 November 1946, in RG 260, OMGUS Records, Records of Museum, Fine Arts, and Archives Section, Restitution Research Records, Box 484, [no folder listed], NARA (hereafter cited as RG 260, OMGUS Records, MFAA Section, Restitution Records Research, NARA). (U)

^<sup>59H.J. Stach to Stewart Leonard, "Interrogation of George Spitz, Opitzstr. 4, Munich," 28 October 1947, in RG 260, OMGUS Records, MFAA Section, Records Restitution Branch, Box 484, [no folder listed], NARA. (U)

⁶⁰CIA's German Mission told Headquarters in January 1948 that "G. Spitz presently under investigation. Arts and monuments have turned over to ODI highly incriminating reports by Belgian representative Central Collecting Point Munich and a Netherlands investigation officer on Spitz's wartime activities." The Munich Operations Base added, "George Spitz, at present being investigated by Dutch and Belgian authorities due to his war time art-looting activities, is living in Munich and possibly in touch with Schwend. Spitz is engaged in questionable financial deals and in minor black-market operations and is quite friendly with high-ranking officers of OMGB [Office of Military Government for Bavaria]." Cable, Frankfurt to Washington, 27 January 1948, Frankfurt 628, IN 33751, (S); Cable, Heidelberg to Frankfurt, 27 January 1948, Heidelberg 2840, IN 33727, (S); and Chief of Station, Heidelberg, to EUCOM Liaison Office, "Fritz Schwend," 24 February 1948, MGM-A-365, (S), in Schwend,

Grecords. See also Cable, Berlin to Munich, Information Heidelberg, 13 January 1948, Berlin 804, (S), and Cable, Munich to Berlin, Information Heidelberg, 13 January 1948, Munich 125, (S), in Spitz,

Grecords. Berlin asked Munich if it should pressure the Military Government in Berlin to stop this investigation.

Grecords Spitz investigation.

Grecords Spitz investigation.

because of allegations that he worked with August Lenz, a Munich banker and a former OSS agent with the INCA project, in the Munich black market.⁶¹ In August 1945, Lenz had worked with X-2 to gain the release of the head of the Bavarian Red Cross, a wealthy countess, who had been arrested by CIC after an anonymous denouncement.⁶² Lenz also helped to manufacture the false Czech and Polish documents that American intelligence used to evacuate SAILOR, one of its first Soviet defectors.⁶³ (S)

In the spring of 1947, — I dropped Spitz as an agent because he had become a security risk. 64 A senior CIA officer later concluded in a 1949 cable that "services both Spitz and Lenz minimal and reports praising their services need grain of salt. Both believed [to be] opportunists who made most connections with American officials to further [own] personal positions, which [were] quite precarious [in the] early days occupation since it known that Spitz particularly had served as agent for SD and

Belgium and Netherlands, let investigation proceed." See also Lt. F.S.E. Baudouin, Belgian Representative, to Herbert S. Leonard, Chief, MFAA Section, "Information Concerning the Spitz Case," 5 August 1948, in RG 260, OMGUS Records, MFAA Section, Restitution Records Research, Box 484, [no folder listed], NARA. (S)

64SC, AMZON to FBM, "Progress of Munich Operations," 15 May 1947, HSC/OPS/33, FSRO-1796, (S), in DO Records,
☐ ☐ , Box 516, Folder 5, CIA ARC. (S)

⁶¹See Cable, Munich to Karlsruhe, Information Berlin, 27 April 1949, Munich 429, (S); Cable, Karlsruhe to Special Operations, 2 May 1949, Karlsruhe 4620, IN 30658, (S); Cable, Berlin to Karlsruhe, Information Munich, 3 May 1949, Berlin 1593, (S); Cable, Berlin to Special Operations, 5 May 1949, Berlin 1600, IN 30910, (S); Cable, Berlin to Special Operations, 5 May 1949, Berlin 1593, IN 30960, (S); all in Spitz,

35, DO Records. (S)

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He Will Always Remember the Americans (U)

George Spitz's troubles, however, occurred after Fritz Schwend left Europe. The leading German member of Operation BERNHARD, however, continued to attract attention. In February 1947, the Central Intelligence Group in Rome reported that CIC and the Italian police had raided a number of buildings in Merano, including Schwend's old headquarters at Schloss Labers, the previous year. According to this late report, provided by CIC in Rome, the joint raid uncovered "large quantities of counterfeit pound"

⁶⁵Cable, Special Operations to Karlsruhe and Munich, 11 May 1949, Washington 3385, OUT 81161, (S), in Spitz, ☐ ☐, DO Records. (S)

I, DO Records. Spitz's file, opened in 1956, contains no further documents after 1959. Spitz's case was not the only example of a Jew who supported the Nazis in Operation BERNHARD. See Randolp L. Brahm, "The Nazi Collaborator with a Jewish Heart: The Strange Saga of Jaac Van Harten," Eastern European Quarterly (Winter 2001, Vol. XXXV, No. 4), pp. 411-434. Van Harten, a German Jew born Jakob Levy, worked for the Abwehr, and later with Schwend. Van Harten later moved to Palestine and was regarded a genuine hero of the Jewish resistance movement until his death in 1974. (S)

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notes." The Americans, however, believed that the Germans had a plant still producing counterfeit dollars and pounds as well as US military occupation script.⁶⁷ (S)

Schwend's position in Germany diminished, according to

| Jecause he had defrauded what appears to have been the Gehlen Organization, the nascent West German intelligence service under Army sponsorship. 68 At this point in early 1947, Schwend went "to visit his family in Italy and thence immigrated to Brazil."
| attended Schwend's last party in Munich during which he announced that he would soon take a trip. While the records do not indicate how Schwend escaped from Europe, it is believed that he utilized the underground "rat line" through Italy to South America. He later wrote two letters to | __________________________________

In early 1948, Louis (also referred to as Aloys or Vjekoslav) Glavan denounced Schwend in a letter to Gen. Lucius D. Clay, military governor of Germany, through the

⁶⁷Intelligence Report, External Survey Detachment, Rome, "Counterfeiting Plant in Milan Area," 11 February 1947, PIR-1095, (S), in DO Records,

Box 288, (no folder listed), CIA ARC. (S)

¹⁹⁹³ interview. At one point, Schwend even provided $\subseteq \mathcal{I}$ with a car when the American no longer had access to an official vehicle. (S)

o9"SC Munich Present and Discontinued Contacts." (S)

^70"Suspicious Personalities – Wenceslau Turi and Hedda De Turi," 17 February 1948, TPL-263, (S), in Schwend, DO Records. (S)

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American ambassador in Rome. Glavan, who had handled Schwend's affairs in Yugoslavia, had been arrested by CIC in July 1945, but, unlike Schwend or Wischmann, he remained in confinement until August 1946. After his release, Glavan visited Schwend in Munich as he made his way to Italy. Born in Italy of Yugoslavian descent, Glavan was "an interesting personality," according to Schwend. The German recalled that Glavan "is capable, intelligent, dependable (though, no doubt, without regard for law or regulations), and [a] daring man open for any proposition." A real professional, "smuggling is Glavan's trade, and he can smuggle things, news or people and keep his mouth shut [original italics]."71 (S)

Between the time of Schwend's meeting with Glavan in August 1946 and early 1948, the two men must have fallen out. In his letter to Clay, which was subsequently referred to the European Command's Office of the Director for Intelligence (ODI) and to the Central Intelligence Agency, Glavan claimed that Schwend and his wife had moved to Lima using false identities and were living from proceeds derived from counterfeit RSHA funds. Furthermore, Glavan fingered George Spitz as the individual who persuaded the Americans not to investigate Schwend for his Nazi activities. He also mentioned that several of Schwend's relatives in Switzerland and Italy supported Schwend in his South American hideout. 72 (S)

⁷¹AB-43 [Holtsman], Munich, "Louis Glavan," MSC-283, 16 August 1946, (S), in Schwend, ⊂ ☐ DO Records. (S)

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After a preliminary investigation, CIA told the Army that it had no contact with Schwend and that it had nothing to do with his immigration to South America. By February 1948, CIA had cleaned its hands of the German operator and, as it stated in a cable from Headquarters to C, the allegations against Schwend "comes from a person who is probably identical with one of his co-workers in the GIS, who may possibly be denouncing Schwend for personal or business reasons. Thus," CIA concluded, "the reliability of that information should not be taken at its face value until confirmed by other sources." The Army, in turn, handed the case over to the Military Government's Financial Division to investigate Glavan's claims because it related to illegal German funds. (S)

Continuing Attention (U)

The investigation into Schwend's alleged use of old Nazi counterfeit money appears to have come to a dead end. This did not mean that Schwend had successfully

⁷³Headquarters directed ( ) to conduct traces of Schwend in Peru and report results to Washington. See Cable, Washington to ( ) 30 January 1948, Washington 2081, OUT 58113, (S), in Schwend, ( ) DO Records. (S)

74FBM to Chief of Station, ( ) "Fritz Schwend," 5 February 1948, TPL-W-275, (S), in Schwend, ( ) DO Records. (S)

75Extract, "Progress Report for Jan. 1948," 16 February 1948, MGF-A-727, (S), in Schwend, ( ) DO Records. In 1960, Glavan reappears in Ecuador where he had reestablished contact with Schwend. See Chief, WHD, to Chiefs ( ) ( ) "Transmittal of Traces on Friedrich Schwend ( ) ( ) ind

Additional Information on Aloys Glavan ( ) ( ) in Schwend, ( ) ( ) and Chief ( ) ( ) And Aloys Glavan ( ) ( ) and Aloys Glavan ( ) ( ) ( ) "Friedrich Schwend ( ) ( ) ( ) and Aloys Glavan ( ) ( ) ( ) "Transmittal 960, HEQ-A-4030, (S), in Schwend, ( ) ( ) ( ) DO Records. (S)

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evaded his past. In 1955, an Italian court sentenced him in absentia to 24 years in prison for having ordered Glavan to kill Theophic Kamber, another Operation BERNHARD agent, who had embezzled some of the counterfeit money. While this conviction was later overturned, Italian officials still sought Schwend's arrest, as did West German authorities under an Interpol warrant. After his arrival in Peru in 1947, Schwend worked for Volkswagen in Lima and also served variously as an informant for several Peruvian intelligence and security services. Throughout the 1960s, Schwend's reputed counterfeiting activities, drug smuggling, and arms dealings throughout Latin America attracted the attention of CIA, the US Secret Service, the British Intelligence Service, and the Bundesnachrichtendienst, the West German Federal Intelligence Service. (S)

^**Schwend, Carbor DDC to DD/P, Memorandum Number A-279, 1 August 1963, ER 63-6111, (S), in Schwend, Carbor DO Records. (S)

78 In 1963 and again in 1969, the West German Federal Intelligence Service requested that CIA provide name trace results on Schwend. Cable Munich to Washington, 7 February 1963, Munich 4699, IN 63752, (S), and Chief Do Records. (S)

"Request for BDC Check and Traces," 14 July 1969, EGMA-72853, (S), in Schwend, Do Records. For the results of the trace done by CIA's representative to the US Army headquarters in Heidelberg, see Cable, Frankfurt to Washington, 8 April 1963, Heidelberg 4043, IN 13240, (S), in Schwend, Do Records. This cable provides additional information about West Germany's legal efforts against Schwend. Trace results on Schwend at the Berlin Documents Center are found in the files for both 1963 and 1969. In 1965, the British Intelligence Service told CIA that Schwend had approached the MI 6 Dand and offered to sell information. The British refused to make any deals despite Schwend's claim to have worked for CIA. The Agency, in turn, replied "Schwend's statement that he had been secretly taken out of Germany by this Agency in 1946 and had subsequently worked for us is quite false." CIA Headquarters told the British representative in Washington, "we have no operational interest in Schwend and believe your Head Office was well advised in recommending that your Abert Dand Advised in Percommending to do with this man." See Dand Advised in Frederick Schwend, "18 February 1965, CP/4965, (S); Ali Chief of station, to March 1965, 2871, (S); and Chief, WHD to Chief Abor Dand Frederick Schwend, "17 March 1965, 2871, (S); and Chief, WHD to Chief Abor Dand Frederick Schwend, "18 February 1965, CP/4965, (S); Ali Chief, WHD to Chief Abor Dand Frederick Schwend, "18 February 1965, CP/4965, (S); Ali Chief, WHD to Chief Abor Dand Frederick Schwend, "18 February 1965, CP/4965, (S); Ali Chief, WHD to Chief Abor Dand Frederick Schwend, "18 February 1965, CP/4965, (S); Ali Chief Orbital Britania

Schwend's case even came to the attention of Lt. Gen. Marshall S. Carter, the Deputy Director of Central Intelligence, in August 1963. Carter received visitors from the Secret Service who were anxious to learn more about Schwend's wartime counterfeiting activities and whether any communist countries, such as Czechoslovakia or Cuba, had employed him in the counterfeiting field. Gen. Carter told Richard Helms, the Deputy Director for Plans, "I did not pay too much attention to the details since I did not want to become a case officer for this one!" The DDCI, however, directed Helms to contact the Secret Service and "unless there are overriding reasons to the contrary with which I am not familiar (and on which I would like to be briefed if existent), please cooperate to the fullest extent." (S)

Following up on the Secret Service request, the Agency directed a source in the Peruvian Investigations Police to approach Schwend and ask if he was involved in any counterfeiting activity. Schwend denied that he was involved in any current activity, but he proceeded to tell the Peruvian informant about his wartime role with Operation BERNHARD. Schwend claimed that he did not know where the plates for the British

Schwend/Contact with SMOTH in $\sqsubset$ $\rightrightarrows$ '26 March 1965, HPLW-3864, (S), in Schwend $\sqsubset$ $\rightrightarrows$ DO Records. (S)

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counterfeit pounds were buried, although he suspected that they might be located with a cache of RSHA chief Kaltenbrunner's papers near Toplitzsee in Austria.⁸⁰ (S)

As a result of the Secret Service's inquiry, CIA took a closer look at Schwend's activities in Latin America. A West German walk-in to the US Embassy in Algiers in 1966, for example, claimed to be able to provide fresh samples of counterfeit dollars produced by Schwend in exchange for "financial help." After the Peruvians arrested and interrogated Pierre Robert Roesch in April 1966, CIA learned that Roesch made a number of allegations against Schwend, including that he was in contact with an East German named Julius Mader. Shortly afterward, the US Army in West Germany intercepted a letter from Schwend in which he described his work in Italy during the war and denounced his former collaborator, Louis Glavan. 82 (S)

Chief, United States Secret Service, "Frederick Schwend," 21 October 1963, (S), in Schwend,

, DO Records. (S)

Cable,

Ito Director, Bonn, Info

DO Records. (S)

Cable,

Ito Director, Bonn, Director, 28 November 1966,

Info Bonn, Director, 28 November 1966,

Info Bonn, Director, 28 November 1966,

Interrogations of Pierre Robert Roesch," 24 June 1966, HPLA-8118, (S); and Deputy Director for Plans to FBI, "Federico Schwend," 13 February 1967, CSCI-316/00667-67, (S), in response to John Edgar Hoover to Director, Central Intelligence Agency, "Alois Jecoslav Glavan," 21 December 1966, DBB-67314, (C), enclosing translation of 18 August 1966 letter from Schwend to Julis Mader, a "well-known East German political agitator." Schwend's comments about Glavan drew the attention of the FBI. In his letter, Schwend called Glavan "the biggest swine whom I ever met." Schwend commented that he had helped to get Glavan out of an American prison and enabled him to escape to South America. In return, Glavan stole \$15,000 and a 23-carat diamond from his benefactor. Schwend thought that the Yugoslav, who had many false names, had become a spy in California before moving to Ecuador. Despite Schwend's efforts to have Glavan arrested, he managed to escape. (S)

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Schwend's Adventures (U)

The Agency's reporting on Schwend tails off in the early 1970s just when the press began to publicize the presence of former Nazis in South America. According to one book, Schwend collaborated with Klaus Barbie in trafficking arms in Spain, Chile, and Paraguay. Both men manipulated the intelligence and security services throughout Latin America and received protection from various countries. As early as 1966, CIA learned from an interrogation report that Schwend was in contact with Klaus Altman, a name used by Barbie. That same year, CIA in Peru described Schwend as a "completely unscrupulous person who thrives on intrigue and illicit schemes. Has bought protection for himself in Peru by establishing high level political contacts and by peddling info to local security service." (S)

During the investigation of a murder of a wealthy Peruvian businessman in early 1972, the Peruvian Government took Schwend into custody. Papers found in his possession revealed the extent to which Schwend had blackmailed Peruvian officials, traded national secrets, and broken currency laws. While the Peruvian judge initially released Schwend, the ensuing publicity exposed Barbie's hideout. This marked the

⁸³Linklater et al, The Nazi Legacy, pp. 235-265. (U)

⁸⁴Cable, $\square$ to $\square$ Info Bonn, Director, 28 November 1966, $\square$ 20063, IN 47738, (S), in Schwend, $\square$ DO Records. (S)

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beginning of the long trail leading to Barbie's eventual expulsion from Bolivia and return to France to face justice for his World War II war crimes.⁸⁵ (U)

Schwend's life unraveled following his arrest in 1972. The Peruvian Government tried Schwend, and he was found guilty of smuggling \$150,000 out of the country; he was given a two-year prison sentence. ⁸⁶ In 1976, Peru deported Schwend to West Germany, where he landed in jail once again when he could not pay a \$21 hotel bill. ⁸⁷ The West German and Italian Governments, however, failed to pursue the wartime murder charge, leaving Schwend a free, but homeless, man. He returned to Peru only to die in 1980. ⁸⁸ (U)

Wrapped Up in the Cold War (U)

Schwend's death, by no means, brought the riddle of Operation BERNHARD to a close. In fact, the German counterfeiting plot became an opening drama at the dawn of

⁸⁵ Ibid. In late 1972, the New York Times, citing a London Daily Express series on Martin Bormann, reported that South America provided refuge for four major Nazi war criminals: Schwend, Klaus Barbie, Josef Mengele, and Walter Rauff. Three years later, the paper noted, "thirty years have passed since the war. The scores of wanted Nazis who fled to South America, gambling that they could find refuge and anonymity in the widespread German communities here are virtually immune to the postwar European courts and Jewish agencies that once vowed they would never forget." See "Paper Identifies 4 Nazis Said to be in South America," New York Times, 1 December 1972, p. 11 and Jonathan Kandell, "Nazis Safer in South America Today," New York Times, 18 May 1975, pp. 1 and 26. (U)

^...<sup>86Reuters, "Nazi in Bolivia Called Chief of Peruvian Currency Ring," New York Times, 7 December 1973, p. 7. In addition to Schwend, the Peruvian prosecutor also indicted Klaus Barbie and four other individuals. (U)

^<sup>87Reuters, "Nazi Forger's Bad Bills," The Washington Post, 14 July 1976. (U)

^<sup>88 "Nazi Plotted to Cripple British, American Economies," Los Angeles Times, 7 April 1980, p. 22. (U)

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the Cold War. Russian troops in Austria, for example, also fished British pound notes from the Enns River and, consequently, Soviet headquarters quickly learned about the mysterious appearance of large sums of money. ⁸⁹ Like the race for German scientists, the wartime Allies quickly scrambled to procure many of Germany's skilled counterfeiters. In the spring of 1947, Army CIC in Berlin reported that the Soviets had kidnapped Franz Zemlicka, a German engraver and draftsmen, who specialized in Soviet documentation for the Abwehr. The Soviets failed in their attempt to apprehend Heinz Eichner, who forged passports for the Abwehr and RSHA Amt VI during the war. CIC brought Eichner to the American sector and eventually planned to move him to greater safety in the American occupation zone of Germany. The Central Intelligence Group, when it learned of the kidnap attempt on Eichner, commented, "examples of Eichner's production have come to the attention of some members of this organization; they were favorably impressed with Eichner's competency." ⁹⁰ (S)

The Russians were not the only country interested in the abilities of the German counterfeiters. As the Americans drew closer in late April 1945, BERNHARD Kruger, the mastermind behind the German operation, left his charges. He took with him several thousand British pound notes and vanished. Not until November 1946 did the British catch up with him, and he was confined for the next two years. In 1949, the British turned him over to the French, who promptly tried to recruit the former SS officer to start

^<sup>89Report, Chief Inspector Rudkin, 26 August 1945, in McNally Report, RG 260, OMGUS Records, NARA. (U)

^90"MVD Interest in Former Abwehr Forgers," 9 May 1947, MGB-3300, (S), in . $\square$ Box 263, [no folder listed], CIA ARC. (S)

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The Secret Service also wanted to locate Solly Smolianoff because it was concerned that the Polish Jew could have run off with the plates to the America counterfeit bills. Like Kruger, Smolianoff had disappeared in 1945. Nearly two years later, the Treasury Department got a break when the American Consulate in Bern learned about a Russian professor with counterfeit money. The Swiss police arrested the Russian who, after lengthy questioning, revealed that he had been in touch with Smolianoff. It was also learned that Smolianoff then lived in Rome, waiting for a visa for South America. (U)

The Army's Criminal Investigations Division (CID) picked up Smolianoff in Rome and questioned him about his activities. He provided a full account, although he had spent most of his adult life in prison or in concentration camps. Newly married, Smolianoff announced that he wanted to abandon his counterfeiting ways and start anew in Uruguay. Released from custody, Smolianoff dropped from sight after he left for South America in 1948.⁹² (U)

^<sup>91Bloom, The Brotherhood of Money, pp. 88-89. (U)

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An Enduring Mystery (U)

While the search of Toplitzsee in 2000 appears to have quieted speculation that the lake was the "garbage can of the Third Reich," the lure of hidden Nazi treasures is still strong. Questions of collusion between American intelligence and the architects of Operation BERNHARD are bound to come to the forefront. (U)

In 1946, the Strategic Services Unit wrote a classified history of OSS during World War II. The RSHA Financial Operation was still fresh in the minds of the compilers of the OSS War Report. X-2's role in Germany and Austria was hailed as a great success story for OSS because of what it revealed about the German counterfeiting operations and the recovery of large sums of money and other valuables. 93 Yet, for all the positive attributes of the RSHA Financial Operation, it marked a growing link between American intelligence and unscrupulous Nazi characters, including Fritz Schwend and George Spitz. 94 (S)

⁹⁴In turn, American intelligence may have been corrupted as an aftermath of Operation BERNHARD. An unconfirmed statement indicates that at least one OSS officer may have materially gained from his work on the RSHA Financial Operation. In 1969, Army trace results reported that Schwend ten years earlier had written "various American authorities charging that during confinement by CIC in 1945 he was robbed of a considerable amount of money and that much of his immediate personal property was confiscated and never returned." The Army, given the late date of Schwend's charges, was unable to investigate and found nothing in its files to substantiate them. See Headquarters Liaison Team, US Army Intelligence Center, to Deputy Director for Plans, "Schwend, Frederico (Fritz)," 19 August 1969, (C), in Schwend, C.

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Chapter Five

Long Experience in the Anti-Soviet Game (U)

Even before the end of World War II, Allied intelligence grew intrigued by the work that the Germans had done to rally much of Europe to the Nazi cause. As the Allied armies fought across Italy and France in 1944, growing numbers of Wehrmacht prisoners who fell into British and American hands were not Germans, but Poles, Czechs, Hungarians, Russians, Balts, Cossacks, Ukrainians, and dozens of other nationalities and ethnic groups that took up arms for the Third Reich. While many of these combatants proved to be less than enthusiastic soldiers, the Nazis nonetheless raised substantial manpower from Europe's non-Aryan populations. (U)

Within weeks after the collapse of German resistance, Allied intelligence pondered the advantages and disadvantages of using for its own purposes the numerous émigré groups that sought shelter in the West. As the US Army took up occupation duties in Austria and Germany, it encountered members of these groups who claimed to be not only anti-Nazi, but also anticommunist. Sorting out the various factions, their leaders, philosophical goals, motivations, and backgrounds took up an increasing amount of time and effort on the part of American intelligence as tensions mounted between the East and the West. (S)

^<sup>1As an example, X-2 in Munich came into contact with Lithuanians in the summer of 1945, but was told to leave those groups alone for SI's exploitation. See Boleslav A. Holtsman's reporting

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Mission RUPPERT (S)

Even before the war ended, the Americans made efforts to learn more about the supposed anti-Nazi groups in Nazi Germany. On 3 November 1944, Youri Vinogradov, a 21-year old White Russian born in Germany and educated in France, crossed over German lines. Recruited by SI's Labor Division in Paris for Mission RUPPERT, Vinogradov had spent the latter part of the war in Berlin working at the Swiss Legation until his arrest and brief confinement in a concentration camp. Following his release, Vinogradov found a new job in the German capital, but finally decided to make his way to Allied lines in the fall of 1944 with plans to join the French army.² (S)

After making his way across the lines, he was picked up by the French and brought to Paris for interrogation by OSS. Vinogradov quickly proved to be a valuable source of information on life in Germany. He also furnished details that led to the arrest of a Gestapo agent in Paris and explained how French collaborationists operated in Germany. His new SI case officer, Lt. Albert E. Jolis, proposed that Vinogradov be returned through German lines to resume his life in Berlin. Jolis wanted Vinogradov to

on the Lithuanian activities in Bavaria in SCI, Twelfth Army Group to Commanding Officer, X-2/Germany, "The Underground 'Government of Lithuania," 17 June 1945, (S), and SCI Twelfth Army Group to Commanding Officer, X-2/Germany, "Union of the Combatants for the Freedom of Lithuania," 19 June 1945, both in DO Records, ( \sqrt{} \sqrt{} ), Box 515, Folder 2, CIA ARC See also Headquarters, Third Army Intelligence Center, Research Section, to G-2, Intelligence Center, "The Government of Lithuania (Supreme Lithuanian Committee of Liberation)," 3 June 1945, (S), in DO Records, ( \sqrt{} ) ( \sqrt{} ) Box 515, Folder 2, CIA ARC. (S) ( \sqrt{} ) Box 515, Folder 2, CIA ARC. (S) ( \sqrt{} ) The basis of this account regarding Vinogradov's work with OSS is found in 1st Lt. Albert E. Jolis to Col. David K. Bruce, "Mission RUPPERT," 14 October 1944, [no classification listed], in Michael Kedia, ( \sqrt{} ) ( \sqrt{} ), DO Records. Mission RUPPERT is also recounted in Joseph E. Persico. Piercing the Reich: The Penetration of Nazi Germany by American Secret

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penetrate the SD through an acquaintance, who he claimed worked for the Nazi security service. This man, a Georgian, "served the Nazis out of his opposition to the Stalin regime. His position," Vinogradov told Jolis, "is now extremely delicate. He dreads the arrival of the Russian armies and will undoubtedly grab at any opportunity of being able to show that he helped the Allies." Jolis hoped Vinogradov would obtain an organizational layout of the SD and learn its plans for resistance after Germany's defeat. In addition, Vinogradov would also seek out targets to be attacked by Allied aircraft and keep his finger on the pulse of life in Berlin. He would have no radio to communicate with SI, but he would let OSS know that he had arrived safely by placing advertisements in two Berlin newspapers as well as sending a postcard to an address in Switzerland.³ (S)

German troops quickly seized Vinogradov and passed the White Russian, who claimed to be dissatisfied with life in Paris because of the growing strength of the Communist party in France, to SD Amt VI's office in Strassburg. Vinogradov claimed that he was an agent for an SD collaborator named Michael Kedia, president of the Georgian National Committee in Berlin and a critical link between the Nazis and various Caucasian and Turkestan nationalist groups. Vinogradov was directed to report to a Standartenfuhrer Bickler in Baden Baden, where he underwent an interrogation for three days. He was then allowed to proceed to Berlin to visit his sick mother. He arrived on 7 November, changing trains 14 times en route due to the Allied bombings. On arriving in the city, he contacted Kedia. (S)

The next day, the Gestapo arrested Vinogradov after learning that he had returned from Paris. Taken to a local office, Vinogradov met Sturmbannfuhrer Erich Georg-Karl

³¹st Lt. Albert E. Jolis to Col. David K. Bruce, "Mission RUPPERT," 14 October 1944, [no classification listed], in Michael Kedia — — — DO Records (S)

^4"Personal Report of Agent RUPPERT," c. April 1945, [no classification listed], in Kedia, ☐ ☐ DO Records. (S)

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Albin Hengelhaupt, the Amt VI referent on Russian émigré matters.⁵ Once again his luck held. Hengelhaupt, who worked closely with Kedia, trusted Vinogradov and accepted him as an Amt VI agent. Vinogradov was allowed to remain in Berlin, where he fought various character denunciations while collecting information on the SD. As the Soviets approached in April 1945, he managed to escape to the West with a group of fellow Georgians, and he fell into American hands near Eisenach. He was transferred to Paris for further debriefings.⁶ (S)

The RUPPERT Mission was one of only three OSS operations in Germany in December 1944. While OSS did not have regular contact with Vinogradov during his five months in Berlin, he provided extensive information from the capital. Most importantly, Vinogradov opened the eyes of OSS to the existence of an entire underground network of Eastern Europeans who supported the Nazi cause. Upon his return to Paris, he told OSS that he had been in regular contact with Prof. Gerhard von Mende of the Ostministerium and a special assistant to Alfred Rosenberg, and with Michael Kedia. Vinogradov also told the Americans that Kedia and his followers had

^<sup>5For further details on Hengelhaupt, see Hecksher to FBM, "SS Stubaf. Dr. Erich Hengelhaupt," 29 May 1947, MGH-003-529, XARZ-28061, (S), enclosing Hecksher to FBM, "SS Stubaf. Dr. Erich Georg-Karl Albin Hengelhaupt," 26 April 1947, MGH-003-426, (S), with a copy of Maj. J. Walmsley, 7 Review and Interrogation Staff, 7 Civilian Internment Camp, British Army of the Rhine, "Report on the Interrogation of Dr. Erich Georg-Karl Albin Hengelhaupt," 7 March 1947, [no classification listed], in WASH-REG-OP-1, DO Records, — , Box 4, Folder 27, CIA ARC. (S)

^6"Personal Report of Agent RUPPERT," c. April 1945, [no classification listed], in Kedia, ⊂ ⊃, DO Records. (S)

^<sup>7Alfred Rosenberg was a leading figure in the development of Nazi anti-Semitism in the years before the war. Born in Estonia, Rosenberg lived in Russia during the revolution and fled to Germany where he became an avid supporter of Hitler. In 1941, Hitler appointed Rosenberg as the Reich Minister of Eastern Occupied Territories. While he did not decry the Nazi genocide, Rosenberg worked to get the Russian minorities to cooperate against the Soviets. The Allies tried Rosenberg for his role during the Third Reich and sentenced him to death at Nuremberg in 1946. (U)

escaped from Berlin to Switzerland where they wanted to meet with an American representative. Kedia, according to Vinogradov, hoped to contact the International Red Cross to assure the safety of the Georgians in Germany so as to prevent their repatriation to the Soviet Union. He also sought Allied protection of some 100 officials, both German and non-German, who were "most active in anti-Russian activities." Most interestingly, he wanted to meet with OSS to discuss the "mutual' problem of penetrating Georgia and Russia." Kedia, Vinogradov felt, was hoping to meet with the Americans on behalf of other unnamed individuals in the German SD, SS, and Wehrmacht.⁸ (S)

Jolis quietly coordinated with the OSS station in Bern to establish contact with Kedia's group "to determine what intelligence potential they represented." At this point, OSS had only a limited knowledge of Kedia's background as the leader of the Georgian movement in Germany. Jolis suggested a plan of action:

Inform him of the treatment accorded to Russians captured by the American forces (both Wehrmacht and civilian personnel) who either do not wish to return to Russia or do not acknowledge Soviet citizenship.

Ascertain who are the 100 persons whom he wishes to protect and obtain a list and their names, pseudonyms, jobs, physical descriptions, if possible.

Thomas S. Wilson, OSS/Labor Division to Cdr. Thomas G. Cassady and Maj. Robert B. Dodderidge, "Preliminary Report on Mission RUPPERT (Youri)," 16 April 1945, (S); "Mission RUPPERT," 19 April 1945, [no classification listed]; and "Mission RUPPERT: Summary of Mission and Results Obtained as of this Date," 31 May 1945, [no classification listed], all in Kedia, DO Records. (S)

9"Mission RUPPERT: Summary of Mission and Results Obtained as of this Date," 31 May 1945 [no classification listed], in Kedia, DO Records. (S)

10 For a summary of what OSS knew about Kedia by the spring of 1945, see the entries on OSS Form 1652a in Kedia

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Indicate to him that such persons will be treated as P/Ws (and will not be turned over to the Russians) but that any other concessions will depend entirely upon their value to us after suitable opportunities for interrogation and screening. 11 (S)

In late April, Jolis and Vinogradov slipped into Switzerland to meet with Kedia and his motley group in Geneva. What Jolis found there did not please him. "He was not," the SI Labor Division officer wrote a month later about Kedia, "a suitable person to be used for current intelligence objectives. His fanatical anti-communism, which amounted to a strong desire to see an early war between Russia and the US as a means of realizing the independence of the Caucasus, and the fact that basically he is a political activist and revolutionary, rendered it essential for security reasons that no commitments be made to him, and that contact be held to a minimum." Jolis still expressed the hope that Kedia could be the source of leads on Nazi planning for postwar resistance. ¹² (S)

But the Allies Must Know Stalin (U)

With the end of the war, OSS began to learn more about Kedia and his shadowy movement. On 11 May 1945, for example, a few days after the German surrender, Eduard Waetjen, a German lawyer and Abwehr officer who had defected to the Allies in 1944, told Allen Dulles in Switzerland what he knew about Kedia and the Georgians. Kedia, born in 1902 in what had been the Sudetenland region of Czechoslovakia, was a

^12"Mission RUPPERT: Summary of Mission and Results Obtained as of this Date," 31 May 1945, [no classification listed], in Kedia,

, DO Records. (S)

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German national of Armenian heritage. He fled Georgia after the Russian Civil War and settled in Paris, where he allied himself with the exile government of Georgia. In 1940, he became the president of the Caucasian National Committee, a loose alliance of Georgians, Armenians, Azerbaijans, and Caucasians, formed by the Germans to support the Nazi cause. During the war, the Committee recruited troops to serve with the Germans and agents to penetrate Soviet-held territory. The Committee acted as the government-in-waiting for the time when their nations were free of the Bolshevists, but the Nazi regime was ambivalent in its support of the various nationalities. ¹³ (S)

Waetjen expressed his opinion that Kedia was "a person of great decency, strong character, sharp intelligence and trustworthiness. Knowing him," the German agent told Dulles, "we should give his friends the benefit of the doubt." Kedia and his comrades were not traitors, but sought to free their homelands from the yoke of communism. Waetjen urged the Americans to aid Kedia and other Georgians now in Allied prisoner-of-war camps. By all means, they should not be turned over to the Russians, Waetjen reported to Dulles. 14 (S)

The principal question which dominates the international situation today is the determination of Stalin to emerge as sole beneficiary from this war which has been fought with so much sacrifice by the Allies . . . .

^<sup>13 Waetjen to Dulles, "Michael Kedia and His Friends of the Caucasian National Committee,"

¹¹ May 1945, [no classification listed], in Kedia, (\sigma), DO Records. (S)

^<sup>14Ibid. (S)

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and wherever else he can. In addition to his legendary cunning and his iron will, he possesses throughout Europe and Asia armies of discontented people and fifth columns. The ranks of these fifth columns are being swelled in proportion with Stalin's advance through Europe under the halo of a Liberator . . . .

With regard to the people of Eastern Europe including non-Russians in the USSR who number 90 millions, the Baltic states, White Ruthenia, the Ukraine, the Caucasus, Turkestan, Volgar-Tatar, and the Taxus people of the Crimea for whom I and my friends were the spokesmen in Berlin; their organization and direction will be simple. These people all want to separate from Russia and establish the independence of their countries . . . . This great mass of men consisting of several hundreds of thousands cannot of course be organized on a policy based on a concept of the 'sub-human' out of the east, but with a democratic policy of Liberty and the self-determination of peoples.

The first thing to be done in this direction is to prevent at once all the Caucasians and other non-Russian people who have fallen into the hands of the Western Allies as prisoners, refugees or deported workers from being returned to the Russians....

^15"Translation of Aide Memoire Prepared by Kedia," 28 April 1945, [no classification listed], in Kedia, ☐ ☐ , DO Records. (S)

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over to the French. Kedia and a number of the other émigré leaders remained in Switzerland where they quickly attracted the attention of the local authorities. (S)

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background material. X-2 in Washington also summarized its information on Kedia contained in the larger study. SSU had ascertained that Kedia's contact with the Germans had started in September 1940 when he began to work for the Abwehr. He specialized in the recruitment for the Abwehr of Georgian emigres in France. Later during the war, Kedia recruited a legion of Georgians to serve in the German army. SSU believed that Kedia had also been the head of the section of the Sicherheitsdienst involved in German sabotage and other subversive actions in the East (the so-called ZEPPELIN operations). Kedia was implicated in several pro-Nazi organizations, including the Georgian National Committee under the Ostministerium. From a variety of reports, SSU headquarters determined that Kedia was an "opportunist," willing to take advantage of the situation for his own gain. ¹⁷ (S)

Perhaps for this reason, American intelligence kept Kedia at a distance for the next couple of years until he simply disappeared. While the Agency collected an extensive amount of material on him, his activities, and collaborators, Americans remained skeptical of the man and his motives. Richard Helms, Foreign Branch M's

January 1946, BX-625, XARZ-26814, (S), in Kedia, DO Records. (S)

17 SAINT to SAINT, Bern, "Georgians in General – Kedia et al," 13 March 1946, XARZ-28659, (S), in Kedia, DO Records. A copy of the study, "Georgia and the Georgians," is also located in Kedia, DO Records. (S)

18 Kedia's file after 1947 contains reporting from numerous sources, including American, German, Swiss, and Ukrainian, about Kedia and his activities. Much of it deals with suspicions that Kedia was a Soviet agent and that his wife in Paris was the mistress of a high-ranking Soviet official. The files show that, while the CIA was interested in Kedia as an intelligence personality, the Agency did not recruit him as an agent or employ him for other purposes. The Georgians, however, were among the groups that the Office of Policy Coordination later tried to

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By April 1946, the Strategic Services Unit had established contact with the Ukrainian resistance movement in Western Europe.²⁰ Hesitant at first, SSU's contact marked the start of one of the CIA's oldest covert action projects.²¹ It also marked the beginning of a controversial relationship between the Agency and a large Eastern European population in which many had supported Nazi Germany's invasion of the Soviet Union. While sharing a hatred for Russian imperialism and Soviet Communism, many Ukrainians also despised Poles and Jews. The war that passed over Ukraine became deeply entangled in ancient hatreds; the Agency's Cold War support to the Ukrainian émigré struggle also became entwined with these age-old conflicts. (C)

Throughout 1946, American intelligence grew interested in anti-Soviet resistance movements in the Soviet-occupied areas of Eastern Europe.²² Through a sensitive source

Origins of CIA's Relationship with Ukrainian Nationalists," in , Central Intelligence: Fifty Years of the CIA (Washington, DC: Central Intelligence Agency, 1998), pp. 19-43. (S)

A description of the first contact between American intelligence and the Ukrainian nationalists is found in [Zsolt Aradil to Chief of Mission, "Belladonna Project," 24 June 1946, (S), in DO Records, Box 168, Folder 5, CIA ARC. For a request to vet various Ukrainian clerics as SI agents, see Cable, Vienna to SSU, War Department, 13 June 1946, Vienna 131, IN 38136, (S), in DO Records, Box 3, Folder 25, CIA ARC. A week earlier, SI/Austria designated the American-Ukrainian contact as Project Belladonna. Alfred C. Ulmer, Jr., to Chief, SI, SSU/Germany, "Project Belladonna," 7 June 1946, (S), in DO Records, ABOX 168, Folder 5, CIA ARC. (S)

22SSU disseminated what it knew about the Ukrainians, their various factions, and the extent of collaboration with the Germans in SAINT, AMZON to SAINT, "Ukrainian Nationalist Movements," 24 June 1946, LWX-485, in WASH-INT-REG-163, RG 226, OSS Records, Entry 108A, Box 284, Ino folder listed], NARA, SSU's London station response to this report is found

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in Switzerland, OSS had first learned in the summer of 1945 that Ukrainian partisan groups, active in fighting the Germans, were now engaged against the Soviets.²³ X-2's Boleslav A. Holtsman in Munich became the primary American contact with the Ukrainian leaders in the American zone in Germany.²⁴ By September 1946, Holtsman had obtained reports from Ukrainians dealing with the organization of Soviet intelligence in Western Europe.²⁵ American intelligence also learned through other sources about the partisan struggle in the Ukraine.²⁶ (S)

SSU in Washington initially told its subordinates in Germany that "these White Russians and Ukrainians have but one aim and that is to create dissension between us and the Russians since they must be intelligent enough to know that their specific aim, i.e., the independence of the Ukrain[e] or of White Russia, is practically impossible of fulfillment."²⁷ Headquarters also told its German mission that "we believe here that generally it is not a good idea to have our officers make direct contacts with these

²⁵SAINT to SAINT, Bern, "Ukrainian Nationalist Movement," 27 September 1946, X-8363, (S), in DO Records, \$\subseteq \text{3} \xeta, Box 1, Folder 9, CIA ARC. (S)

²⁶Open press reporting on resistance to the Soviets was fairly common in the years after the war. As an example, see a September 1946 report in a Warsaw newspaper translated in FR/Berlin, "Poland/UPA (Ukrainian Insurgent Party), Directed against Polish and Russian Regimes," 18 December 1946, Peter Report A-1163, (S), in WASH-REG-INT-131, DO Records, C Box 258. Ino folder listed CIA ARC. (S)

^<sup>27SAINT to SAINT, AMZON, untitled memorandum, 12 August 1946, X-8014, (S), in DO Records, C ☐,6R, Box 1, Folder 9, CIA ARC. (S)

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dissident groups before we have had an opportunity to find out much more than we know now about their individual background, reliability, and motivation."²⁸ (S)

^<sup>29SAINT, AMZON to SAINT, "White Russians–Vetting Policy," 31 August 1946, LWX-1058, (S), in DO Records. (** Box 1. Folder 11. CIA ARC. (S)

^<sup>30Strategic Services Unit, "Ukrainian Nationalist Organizations," Intelligence Brief No. 13, 15 October 1946, in Zsolt Aradi, "Ukrainian Nationalist Movement: An Interim Study," October 1946, (S), in History Staff Records, HS/CSG-2482, ————————————————————————————————————

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Citing Aradi's study, SSU's Director, Col. William Quinn, recommended that American intelligence concentrate on gathering information about Ukrainian groups before "major steps are taken to exploit them for intelligence purposes." He believed that US officials could obtain much of the information from open sources, but warned that "unwillingness of a source to provide the information required must be interpreted as evidence of bad faith and ipso facto [original emphasis] good ground for treating such sources with the utmost caution." Quinn summarized current activities among the scattered Ukrainian groups and their impact on American intelligence:

The elements of the Ukrainian Nationalist movement . . . are presently engaged in acquiring allies in their struggle against the USSR or, at least, in gaining sufficient moral and physical support to maintain their existence in exile. Their leaders, therefore, create the impression that their cause is just, that their past record is a clean one, that there exists a strong resistance movement in the Soviet Ukraine, that they have excellent intelligence services leading directly into the USSR, and that they are backed by an efficient organization.³² (S)

³¹ Ibid. As an example of what American intelligence gathered on the Ukrainians in the fall of 1946, see AB-51 [Hecksher] to ———————————————————————————————————

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The SSU director then admitted "actually, these are almost all open questions for each of the major groups concerned. The Ukrainian Nationalist leaders are among the most highly opportunistic groups in Europe," Quinn reported. "They are adroit political intriguers and past masters in the art of propaganda. The attempts of the old OUN [Organization of Ukrainian Nationalists] leadership, for example, now representing UHVR-UPA [Foreign Representation of the Ukrainian Supreme Liberation Council-Ukrainian Insurgent Army], to give the movement a 'democratic' aspect and to represent it as the only [original emphasis] effective Ukrainian group have been especially conspicuous in recent weeks—the first statement is false, and the second is yet to be proved."33 (S)

Stefan Bandera and the Organization of Ukrainian Nationalists (U)

Col. Quinn had good reason to question the motives of the Ukrainian nationalists. The Organization of Ukrainian Nationalists, formed in Prague in the late 1920s to fight for Ukrainian independence, split at the outbreak of the Second World War. The bulk of the Organization followed Stefan Bandera while a smaller segment remained with Andrey Melnik. Both factions had participated in terrorist activities against Polish officials before the war. To complicate matters further, Ukrainian nationalists allied themselves with Nazi "liberators" during of Operation Barbarossa in 1941.³⁴ (U)

³³ Ibid. (S)

^<sup>34Ukrainian collaboration with the Nazis is discussed in Boshyk, ed., Ukraine during World War II, pp. 61-88. The historical backdrop to Ukrainian political activism is found in John A. Armstrong, Ukrainian Nationalism, 2d ed., (New York: Columbia University Press, 1963). See also Jeffrey Burds, The Early Cold War in the Soviet West Ukraine 1944-1948, The Carl Becker Papers, no. 1505 (Pittsburgh: University of Pittsburgh, 2001); Alexander J. Motyl, The Turn to the Right: The Ideological Origins and Development of Ukrainian Nationalism, 1919-1929 (New

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While Ukrainian enthusiasm dimmed after the Nazis failed to support Ukrainian statehood, thousands of Ukrainians fought with Germans until the end of the war. At the same time, the OUN's leaders also stated that they had been held in German concentration camps during the war. These claims made it difficult then, and now, to determine the full extent of Ukrainian collaboration with the Nazis. (U)

Stefan Bandera, one of the leading Ukrainian nationalists, earned a fierce reputation for conducting a "reign of terror" against the Poles, according to an OSS report issued in September 1945. "The mere mention of the name 'Bandera' invariably brings curses and imprecations among Polish refugees, OSS officers discovered." OSS summarized its information on this notorious Ukrainian nationalist:

Bandera is a young and violent student who some five years ago began opposing the elderly Melnik as leader of the OUN [Organization of Ukrainian Nationalists]. In 1941 he went to Lemberg [Lvov] and proclaimed himself head of a Ukrainian state, supposedly with the approval of the German General Staff. This caused the Germans great embarrassment, and he was instructed to desist from further political activities unless given official approval. However, he and his followers began a campaign of terrorization, directed mainly against the followers of Melnik, which resulted in his [Bandera's] arrest and

York: Columbia University Press, 1980); and Maria Savchyn Pyskir, Thousands of Roads: A Memoir of a Young Woman's Life in the Ukrainian Underground during and after World War I, Trans. by Ania Savage (Jefferson: McFarland & Company, 2001). Timothy Snyder's article, "To Resolve the Ukrainian Problem Once and For All:'The Ethnic Cleansing of Ukrainians in Poland, 1943-1947," in Journal of Cold War Studies (Spring 1999), pp. 86-120, provides a description of Ukrainian-Polish relations before, during, and after the war. Other sources of information include John-Paul Himka, "Ukrainian Collaboration in the Extermination of the Jews during the Second World War," in Jonathan Frankel, ed. The Fate of the European Jews, 1939-1945 Continuity or Contingency? (The Avraham Harman Institute of Contemporary Jewry: The Hebrew University of Jerusalem Studies in Contemporary Jewry Annual XIII) (New York: Oxford University Press, 1997). See also Sol Littman, "The Ukrainian Halychyna Division: A Case Study of Historical Revisionism," in Saul S. Friedman, ed., Holocaust Literature: A Handbook of Critical, Historical, and Literary Writings (Westport: Greenwood Press, 1993), pp. 279-300. (U)

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confinement at Klein-Sachsenhausen. Melnik was also arrested. Both were later released, however, when the Wehrmacht and Ostministerium attempted to build up a strong Ukraine. Bandera can be regarded as both anti-Soviet and anti-German. He appears to be continuing his campaign of violence since the German withdrawal from the Ukraine.³⁵ (S)

As the Third Reich collapsed, many Eastern and Southern European Nazi collaborators fell into Western Allied hands as prisoners of war or displaced persons. The presence of a large body of anticommunists in Germany and Austria, with intimate knowledge of Soviet activities, proved too enticing for American intelligence to ignore. (S)

SSU's Hungarian Connection (U)

Bill Holtsman in Munich became involved with the Ukrainians through Zsolt Aradi.³⁶ The author of the October 1946 interim study, Aradi exploited ties to Ukrainian church officials at the Vatican in order to meet with emigre leaders in Germany and to gain positive intelligence on the Soviets. SSU moved Aradi from Italy to Austria in late 1945, where he continued to work as a "consultant." Aradi maintained close ties to his Vatican sources and, according to Alfred C. Ulmer, Jr., SSU's chief of mission in Austria, "it is believed that KILKENNY [Aradi] was one of the first to suggest to OSS the use of

³⁵OSS Intelligence Report, A-61154-a, "Activities of Bandera," 21 September 1945, (S), in Stefan Bandera,

J, DO Records. (S)

³⁶Zsolt Aradi was born in Zombor, Hungary, in 1908 of Jewish background although his father's family converted to Catholicism. He moved to Rome at the beginning of the war and worked as press attaché at the Hungarian Legation at the Vatican until the Allies liberated the city in 1944. Married to a German woman and a father of three children, SI recruited Aradi in June 1944. He worked with OSS and its successors in Italy, Austria, and Germany until he moved to the United States in early 1948. During the period that Aradi worked in Munich, he was known initially as KILKENNY and, after September 1947, as CARRYALL. For further information, see Zsolt Aradi.

priests and Vatican contacts for obtaining intelligence in Central Europe." In the spring of 1946, Aradi became acquainted with several Ukrainian religious leaders in Rome. Through the Hungarian, Ulmer reported "it has been possible to establish contact with representatives of the so-called Ukrainian government, an anti-Soviet political group." (S)

Ulmer made the following comments about the Ukrainian nationalists based on reports provided by Aradi:

This group appears to be well organized both within the Ukraine and among Ukrainian DPs in southern Germany and Austria. It controls a strong resistance movement which appears to be giving considerable trouble to the Red Army. Two vice-presidents of the government (both of them closely connected with the Catholic Church) have been contacted in southern Germany with the view to exploiting the intelligence possibilities such a movement can furnish to SSU.... If all goes well, within a reasonable period of time there should be established a good line of communications to the resistance within Russia and the results of this chain will be available to both the Austrian and German Missions. ³⁸ (S)

Both Ulmer and Gordon M. Stewart, chief of SI in Germany and later mission chief, expressed satisfaction with Aradi's efforts.³⁹ Ulmer claimed "it should not be

JOO Records. For further details on Aradi's Vatican sources, see Lt. Benjamin H. Cushing to Harry Rositzke, "Contacts in and through the Vatican," 17 February 1947, FSRO-1379, (S) enclosing Zsolt Aradi, "Contacts in and through the Vatican," 5 February 1947, (S), in DO Records,
Box 513, [no folder listed], CIA ARC. (S)

Box 513, [no folder listed], CIA ARC. (S)

Box 513, [no folder listed], CIA price of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Contacts of the Co

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forgotten that much of the success for past operations is due to KILKENNY himself. He is ideally suited by years of experience in Church matters, by temperament, and as a result of intimate contact with important people within the Church to carry out these valuable and highly delicate operations."⁴⁰ Stewart asked Ulmer to tell Aradi, "I am glad that your relations in Munich are satisfactory and hope that your work in that area will soon bear fruit." Commenting on Aradi's initial approach to Ukrainian nationalists in Bavaria, Stewart wrote, "it is my understanding that Washington is quite interested in the type of contacts you are making."⁴¹ (S)

After dealing with several Ukrainian religious figures in both Italy and Germany, Aradi met with the leaders of the Ukrainian Supreme Liberation Council (UHVR or Ukrainska holovna vyzvolna rada) in Germany.⁴² He initially worked with Father Ivan Hrinioch and Yury Lopatinsky, two members of the Council.⁴³ Hrinioch, a Greek

⁴⁰Ulmer, "Vatican Contacts," 4 June 1946, (S), in Aradi,

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Catholic priest and longtime Ukrainian nationalist, served as the UHVR's second vice president while Lopatinsky acted as liaison between UHVR and the Ukrainian Insurgent Army, UPA (or Ukrainska povstanska armiia), fighting the Soviets in Ukraine.⁴⁴ (S)

Aradi dubbed the Munich group Referat-33 (or R-33). It also included Mykola Lebed, who still lived in Rome (he later moved to Germany with American assistance in 1947). Lebed served as the foreign minister of Zakordonne Predstavnytstvo UHVR or Foreign Representation of the Ukrainian Supreme Liberation Council. A key figure in the Ukrainian liberation movement, Lebed was also one of the most controversial. Convicted for involvement in the 1934 assassination of the Polish minister of interior, his death sentence was later commuted to life imprisonment. A founder of the Organizacya

the Americans during this time period. Born in 1907, Hrinioch grew up in western Ukraine where he was ordained in the Church and became an active Ukrainian nationalist. While one American case officer noted "subject was in contact with the GIS [German Intelligence Service] during the early stages of the German campaign in Galicia," American intelligence officers found Hrinioch to be "very well informed and highly intelligent" as well as "incorruptibly honest." Hrinioch, in fact, served as the chaplain of the infamous Ukrainian Nachtigall Legion of Ukrainian Nationalists, which collaborated with the Nazis during the invasion and played a major role in the 1941 proclamation of Ukrainian statehood. Hrinoich had the operational cryptonym of CAPARISON in this early period and continued to provide information to US intelligence through the 1970s. Hrinoich served after the war in his clerical role and by 1982 he had been elevated to the rank of Patriarchal Archimandrite. See External Survey Detachment, Intelligence Report, "UHWR and UPA," 26 October 1946, FSRO-677, (S), in Bandera, ————————————————————————————————————

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Ukrainskych Nationaltiv or the Organization of Ukrainian Nationalists, Lebed fervently desired the independence of his homeland.⁴⁶ (S)

Aradi reported to the Americans about the members of R-33. He observed that Hrinioch, Lebed, and Lopatinsky were "determined and able men, but with the psychology of the hunted. They are ready to sacrifice their lives or to commit suicide at any time to further their cause or to prevent security violations, and they are equally ready to kill if they must." The Hungarian added, "it is always necessary to remember that they have an almost religious worship of their nation and distrust anything foreign: first and foremost, Polish; then Russian; then German." Aradi believed that if the Ukrainians were "properly treated they can be useful at any time and for any purpose."⁴⁷ (S)

By October 1946, Aradi reported that both Hrinioch in Munich and Lebed in Rome offered to provide the Americans with intelligence on Soviet activities and agents in exchange for US assistance to the Ukrainian struggle.⁴⁸ Drawing upon his contact with numerous Ukrainian groups, Aradi commented later in December that "after a thorough study of the Ukrainian problem and a comparison of information from several sources in Germany, Austria, and Rome, source believes that UHVR, UPA, and OUN-Bandera are the only large and efficient organizations among Ukrainians." Based on information provided by leaders of the UHVR, Aradi believed that this group had "the support of the younger generation and of Ukrainians at home." Aradi also noted "some other groups are envious of the UHVR complex because the organization is independent

^<sup>47"Operation Belladonna," 27 December 1946, p. 17. (S)

^<sup>48ESD Intelligence Report, "UHWR and UPA," 26 October 1946, FSRO-677, (S), in Bandera,

☐ ☐ ☐ DO Records. (S)

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First Projects (U)

In mid-1946, Aradi in Austria and Holtsman in Munich launched two separate projects involving Ukrainians in Germany. The first project, BELLADONNA, drew upon Aradi's contact with Hrinoich to dispatch Ukrainians from Germany into the western Soviet Union in order to collect information on the Soviet military.

BELLADONNA had a positive intelligence function while LYNX, launched by Holtsman in July 1946 as a supplementary project of BELLADONNA, focused on the identification of Soviet agents in western Germany. Security Control in Munich (formerly X-2) replaced LYNX with a new project, TRIDENT, in early 1947 to better manage Ukrainian affairs and overall security. A third project, known as UKELE, drew upon the services of a double agent known as SLAVKO. (5)

Ukrainian proposals for cooperation. A supplement to this report is found in Aradi, "Belladonna Operations - 2," 27 December 1946, MGH-430, FSRO-985, (S), in DO Records.
Box 510, [no folder listed], CIA ARC. Aradi wrote both reports, but according to Stewart, "they are the work of Zsolt Aradi and Mary Hutchison. If you find them obscure, don't hesitate to fire questions at us. Mary did wonders in converting Zsolt's quaint English into 'Reports Style' but the material has, after all, come a long way around (Ukrainian to Hungarian or German to English) and some concepts may be a little blurred." Mary Hutchison, the wife of Capt. Gregory L. Hutchison, the adjutant of the War Department Detachment in Germany, worked with X-2 in Heidelberg. Stewart to Helms, "Belladonna Operation,' 2 January 1946 [1947], FSRO-1111, (S), in DO Records,
Box 511, [no folder listed], CIA ARC. (S)

50For details on these early SC Munich operations, see "CE Operational Progress Report No. 5," 17 February 1947, (S), in DO Records,
Box 513, [no folder listed], CIA ARC; "Operation Trident: Progress Report 1," 21 January 1947, MGH-642, HSC/OPS/9, (S); "Developments in the TRIDENT Project," 21 February 1947, MGH-900, HSC/OPS/026, (S); and SC Munich, "Operation TRIDENT," 15 June 1947, (S), all in DO Records,
J, Box 4, Folder 20, CIA ARC (hereafter cited as "Trident Project."). See also SC, AMZON to FBM,

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Sluzba Bezpeka, as their primary contacts in Munich for the three projects. Matvieyko, who had served as an agent for the German Abwehr during the war, exchanged information gained by OUN's "bunkers" in Germany with American intelligence "in return for protection in the American Zone and some minor operational supplies." He, however, proved to be increasingly unreliable, and the CIA eventually dropped Matvieyko in 1950 for "ineptitude." The following year, Matvieyko defected to the Soviets after his return to the Ukraine on a secret British mission. He later denounced the entire Ukrainian emigre leadership as Nazi collaborators and tools of the "capitalist intelligence services." Matvieyko's defection seemed at the time to confirm some American and Ukrainian suspicions that he had been a Soviet double agent throughout the period of his work in Germany with US intelligence. (S)

Low Scale and Ideologically Biased (U)

^"Progress of Munich Operations," 15 May 1947, HSC/OPS/53, FSRO-1796, (S), in DO Records, Dox 516, Folder 5, CIA ARC. (S)

51SC, AMZON to Chief, FBM, "Organization of Project UKELELE," 28 March 1947, HSC/OPS/35, FSRO-1547, (S), in DO Records, Dox 514, Folder 4, CIA ARC. See also Dox 7, "SLAVKO, Resident MGB Agent in Munich," 17 February 1947, MGH-826, MSC/RIR/429, (S), and Dox 7, "SLAVKO and the MGB," 28 March 1947, MGH-1100, MSC-445, (S), both in WASH-REG-INT-131, DO Records, Dox 272, [no folder listed], CIA ARC. (S)

52 Quotation cited in SC Munich, "CAPANEUS," 15 June 1947, (S), in "Trident Project." (S)

53 English translation of Radio Kiev broadcast, "Broadcast for Ukrainians in the Emigration," 24 November 1960, in Myron Matvieyko, Dox Records. For further information on Matvieyko's defection, see Pavel Sudoplatov and Anatoli Sudoplatov, Special Tasks: The Memories of an Unwanted Witness—A Soviet Spymaster (Boston: Little, Brown and Company, 1994), pp. 257-259. (S)

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Matvieyko's illegal activities (including murder and counterfeiting) strained American willingness to work with the Ukrainians in Germany.⁵⁴ As early as the fall of 1946, the Office of Special Operations expressed its dissatisfaction with the OUN when it commented that Aradi's reports were slanted in favor of Hrinoich and Lebed, downplaying the role of other Ukrainian nationalists.⁵⁵ Headquarters told Security Control in Heidelberg that "the securing of information on activities of the various Ukrainian groups in the American Zone is a straight CIC job and we should get no more involved in it than we unfortunately already are."⁵⁶ (S)

By the spring of 1947, Headquarters personnel noted that "intelligence derived from such Ukrainian groups is [not] worth the time and effort which would necessarily have to be expended on such a project. Experience has shown that information derived from such organizations has been both low-grade and ideologically biased."⁵⁷ In another dispatch, Headquarters commented that "it has been impossible so far to elicit from our SB [Ukranian] contacts the names of any of their subsources—this in spite of repeated attempts to get such data from them. Time and again mention has been made by our Ukrainian sources of the existence of "bunkers," supposedly small intelligence cells, in the American Zone of Germany as well as Czechoslovakia." The report went on to say, "it is fully appreciated that it is often extremely difficult to check on the veracity of such

description of other murders committed by Matvieyko and the SB/OUN is found in . For description of Matvieyko's counterfeiting activities, see numerous reports in his 201 file. (S)

55 SAINT to SAINT, AMZON, "Ukrainian Nationalist Movement," 24 October 1946, X-8565, (S), in DO Records, . Box 6, [no folder listed], CIA ARC. (S)

56 SC, FBM to SC, AMZON, "Ukrainians in Germany," 23 January 1947, X-9223, (S), in DO Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Report No. 5," 17 February 1947, FSRO-1306, (S), in DO Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Records, . Re

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reports; on the other hand unless attempts are made to verify the existence of such groups, we will never be able to evaluate the quality of the intelligence reporting of the Ukrainians." OSO added that "it is seriously recommended that this contact be severed completely, although graciously." 58 (S)

Holtsman, in fact, dropped arrangements with the LYNX group in late 1946 and focused on more limited contacts under Operation TRIDENT. In doing so, SC Munich severed relations with Hrinioch (who had been Aradi's source) although it still maintained contact with Matvieyko. In the meantime, the OUN's ongoing internal dissension further tested American patience with the Ukrainians. The explosion came after a stormy meeting in Germany in August 1948 when the leaders of the ZPUHVR in Germany (principally Lebed and Hrinioch) broke with Bandera's OUN. The increasingly totalitarian attitude taken by Bandera and his resentment toward the Americans constituted the main reasons behind this break.⁵⁹ (S)

Hiding Bandera (U)

Despite the general instability of the Ukrainian emigre leaders and the dissolution of the Organization of Ukrainian Nationalists, American intelligence continued to protect the Ukrainians in exchange for information. In 1947,

^<sup>58"Munich Detachment," 6 May 1947, (S) in "Trident Project." (S)

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OUN.⁶⁰ Several months earlier, the German Mission had sheltered Stefan Bandera from extradition to the Soviet Union. Since the end of the war, the USSR had demanded that the United States return all Soviet citizens suspected of war crimes and Nazi collaboration from the American zones in Austria and Germany.⁶¹ The Ukrainians

60SC, AMZON to FBM for SC Washington, "CAPELIN-New Agent of SC Munich," 3 June 1947, HSC/OPS/60, (S), in "Trident Project." SC Munich reported that "CAPELIN [Michael Korzan] was moved by us on 17 May 1947 from his former residence in Taxenbach, Austria (E96), and is now living at Gausstrasse 3, Munich. We are supplying him with a residence permit for Munich and the necessary food and identification cards." Korzan "is expected to give us better coverage than has been possible through CAPANEUS [Matvieyko] and CANAAN [Kamian Korduba] who have refused agent status, preferring instead to 'cooperate' with the Americans. Consistent with this attitude, the two have been withholding information from us when they judged it unfavorable to the Ukrainian cause." Korzan, a former member of OUN's SB in the Ukraine, came to Germany from Austria to take charge of Matvieyko's SB counterintelligence section. Korzan had already assisted American intelligence by identifying SLAVKO, the double agent in Project UKELELE; something that Matvieyko had refused to do. Information on Korzan was first reported in Aradi to ( \subseteq \text{. "Belladonna Agent," 14 December 1946, (S), in DO Records, ( \subseteq \subseteq \text{. Box 168, Folder 5, CIA ARC. For an example of an OUN/SB semi-monthly report compiled from sources throughout Europe, see SAINT to SAINT, Bern. "DB-7/1 and Mme. Rudnika," 19 November 1946, X-8804, (S), in DO Records, ( \subseteq \subseteq \text{. Box 6 Folder 125 CIA ARC. (S)} )

61It was common practice for the Soviet Military Administration to communicate to the American military governor lists of names and organizations that it sought. In June 1946, Marshal Sokolovsky wrote Gen. Joseph T. McNarney, commander of US Forces in the European Theater, to protest the presence of numerous Ukrainian groups "functioning in the American of Occupation and engaged in open anti-Soviet propaganda and in spreading rumors aimed at underming the friendly relations existing between our two countries." McNarney wrote back in October stating that he had instituted tighter controls on newspapers published in the American zone by displaced persons, but adding that the "evidence of the organizations furnished by you cannot be substantiated by our investigations in all cases." McNarney added that "it now appears that some national committees, by working under UNRRA, believed that they had received some moral approval by the United States occupational authorities. However, this is not the case." McNarney remained "greatly concerned in fair treatment in this Zone to protect the interests of our esteemed allies. Measures are continually in effect for that purpose." See Marshal Sokolovsky to Gen. McNarney, 5 June 1946, R-496-A, and McNarney to Sokolovsky, 12 October 1946, in RG 260, OMGUS Records, The Records of the Executive Office, The Chief of Staff, Records Maintained for Military Governor Lucius D. Clay 1945-49, Box 19, [no folder listed], NARA. As another example of a similar Soviet request in 1949 and the American reply, see US Department of State, Office of Public Affairs, Germany: 1947-1949 The Story in Documents (Washington, DC: US Government Printing Office, 1950), pp. 124-127.

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presented an unusual situation, as did other Eastern Europeans, such as the Latvians, Lithuanians, and Estonians. Many Ukrainians claimed to be Polish citizens, thus exempt from repatriation to the USSR (Poland controlled tracts of Ukraine). Likewise, the United States did not recognize the Soviet occupation of the Baltic nations in 1940, and these refugees refused to be classified as Soviet citizens or to be returned to their homelands as long as they remained under Soviet domination. (S)

A Soviet request for the repatriation of the Ukrainians came at the same time as Zsolt Aradi and Boleslav A. Holtsman were making their first contacts with the OUN and ZPUHVR. American authorities faced a predicament as to how to respond. On 15 October 1946, Colonel-General P.A. Kurochkin, the deputy commander of the Soviet Military Administration, wrote his counterpart, Lt. Gen. Lucius D. Clay, to request the arrest of Stefan Bandera as a war criminal. "For these crimes committed against the Russian people," the Soviet officer wrote, "he should be arrested and tried by a Military Tribunal, but this can only be done with your assistance because of the fact that he is now hiding in the American Zone of Occupation" Three days later, Gen. Clay responded that the Soviet request had been forwarded to Gen. McNarney, the commander of American forces in Germany, for further investigation. 62 (U)

A few days later, Henry D. Hecksher, Security Control chief in Heidelberg, advised Holtsman in Munich that he "should take special pains at steering a judicious middle course." Hecksher wanted Holtsman to "place yourself squarely on record with Bandera as greatly concerned as regards Bandera's security but equally unable to materially contribute to its preservation, because you had not been taken into the

^<sup>62Kurochkin to Clay, 15 October 1946, R-934-A, and Clay to Kurochkin, 18 October 1946, in RG 260, OMGUS Records, The Records of the Executive Office, The Chief of Staff, Records Maintained for Military Governor Lucius D. Clay 1945-49, Box 19, [no folder listed], NARA. (U)

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complete confidence of the UHVR."⁶³ By doing this, Hecksher hinted that Holtsman could blame Ukrainian reticence in the event of Bandera's arrest. "Tipping off Bandera if this should be decided upon, would have to be done with utmost discretion obviating the remotest possibility that his escape is traced back to a US agency." Holtsman was told to use cutouts to advise the Ukrainians "taking into account, of course, that should any intimation of our connivance in Bandera's escape reach the ears of the UHVR, we could expect with certainty that the Soviets would learn about it sooner or later."⁶⁴ (S)

Clay soon replied to the deputy Soviet military governor, informing him that the US Army was doing what it could to locate Bandera. "US police agencies which were already alerted were directed to intensify the search for Stefan Bandera. He has not yet been apprehended and our initial efforts to date have proven fruitless." Clay assured his counterpart that, if located, Bandera would be turned over to the Russians via "the regular channels established by international agreement for the handling of war criminals." (U)

Hecksher explained to Washington that "G-2 USFET is definitely loath to comply with the Soviet request to find Bandera and to repatriate him as a 'war criminal.'"

Bandera's arrest would hurt American intelligence efforts to learn more about the Ukrainian resistance movement. "We are," Hecksher wrote, "definitely interested in cautiously cultivating our contacts with the UHVR if not along lines of active cooperation, then with at least the objective to keep ourselves informed of what its plans

⁶³AB-51 [Hecksher] to AB-43 [Holtsman], "Stefan Bandera," 28 October 1946, FSRO-656, (S) in Bandera, (\subseteq) DO Records. (S)

⁶⁴thid (S)

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are and to what extent it has succeeded in building up and servicing cells in the Ukraine."66 Zsolt Aradi speculated that:

There can be little doubt as to what would happen in case the American authorities should deliver Bandera to the Soviet. It would imply to the Ukrainians that we as an organization are unable to protect them, i.e., we have no authority. In such a case, there is not any reason or sense for them to cooperate with us.

One of the reasons why full cooperation between the UHVR and our organization has not developed yet is the suspicion of these leaders that we will ultimately 'betray' them.

From the very beginning they complained that Americans have no real interest in them and that Communist-penetrated USA officers will trade them to Russia. This belief was shared by both the Bandera people and the conservative Ukrainians.

My personal feeling and conviction is that in case of Bandera's arrest, it would immediately put an end to operations Bella Donna and Lynx. (S)

In the meantime, OSO officials at the German Mission headquarters in Heidelberg remained concerned about how to handle this crisis. Gordon M. Stewart, Intelligence Branch chief, told Richard Helms in early 1947 that he and his colleagues "wanted, on the one hand, to have the American authorities appear energetic in satisfying the demands of the Russians and, on the other, to have [Operation] BELLADONNA take on adequate

⁶⁶SC AMZON to SC Washington, "Search for Bandera, Leader of the OUN," 20 November 1946, FSRO-766, (S), and Attachment 1 (KILKENNY) in Bandera, (\subseteq) (\supseteq), DO Records. (S)

^<sup>67Ibid. (S)

cover." In doing so, the Central Intelligence Group urged Maj. Gen. Withers A. Burress, USFET G-2, to delay his investigation until after 15 January 1947.⁶⁸ (S)

The additional time permitted Aradi "to inform his people that they must be under cover by 15 January, because the United States Government is going to accede to a legitimate request of the Russians that war criminals and conspirators be rounded up and delivered to them, even if they are not former Soviet citizens." Stewart added, "by taking cover we mean breaking off all contact with the overt political groups in the Ukrainian colony, changing names and cover documents and actually hiding until the political flap is over."⁶⁹ According to Stewart's communiqué to Helms in early 1947, "the result was less dramatic than we expected." The Soviets did not push further for Bandera's arrest and. Stewart wrote, "the Belladonnians fell into line very nicely."⁷⁰ (S)

Despite their role in sheltering Bandera, OSO officials in Washington's Foreign Branch M and Special Projects Division still took a dim view of Munich's work with the Ukrainians. This movement, Washington commented, "is, as the field agrees, primarily [original emphasis] a terrorist organization." Headquarters felt that intelligence produced by both LYNX and BELLADONNA had been minimal. In a fitting—and prophetic—statement, Washington told its field officers that:

Records, — — — — — — — — — — — — — — — — — — —

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The case of Randera's extradition and our part in it brings to the

The day after Harry Rositzke, the acting chief of Special Projects Division—Soviet (SPD-S), wrote this memo, he criticized OSO for failing to develop Soviet strategic "Lambda targets." Rositzke, who later headed CIA's efforts to penetrate the Soviet Union, protested to Col. Donald H. Galloway, the Assistant Director for Special Operations, that OSO was overinvolved in tactical operations in Europe. He expressed concern about OSO's "hasty exploitation of sources of opportunity, especially anti-Soviet emigres from the USSR and satellite countries, to the exclusion of actual penetration operations." Rositzke wanted to centralize American intelligence efforts against the Soviets and to reduce "OSO exploitation of such organized anti-Soviet groups as the

^<sup>72The term LAMBDA was used to designate "critically important reports" dealing with the Soviet Union. (S)

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Ukrainians, Georgians, and Balts for penetrating the USSR [which] involves dangerous security and political hazards." (S)

As a part of a major reorganization of operations in Germany and the formation of the Munich Operations Base in mid-1947, Holtsman was told to reduce his work with the various émigré groups, especially the Ukrainians, and to concentrate on other targets.

This led him to drop many of his Ukrainian contacts, with CIC, in turn, picking up both Ivan Hrinioch and Mykola Lebed as sources.⁷⁴ (S)

CIG officials in Washington advocated a gradual reduction in the American involvement with the Ukrainians during 1947 because of the inherent weaknesses of the OUN and the UHVR as well as the belief that these organizations were penetrated by Soviet intelligence. The fact that many of the Ukrainian leaders and organizations had worked with the Nazis was not regarded as a decisive factor. American interest in the Ukrainians lay dormant until the pressure of Cold War rivalry prompted another review. (C)

⁷⁴Region IV, 970th CIC Detachment, Lt. Col. Ellington D. Golden to Commanding Officer, 970th CIC Detachment, "Hrynioch, Ivan," 18 November 1947, (C), enclosing Special Agent Camille S. Hajdu, Memorandum for the Officer in Charge, "Hrynioch, Ivan," 17 November 1947, (C), in Ivan Hrynioch, Dossier XE-20-19-66, Investigative Records Repository, US Army Intelligence and Security Command, Fort George G. Meade, Maryland (hereafter cited by dossier number, IRR, INSCOM), (C)

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Chapter Six

From 1946 through 1948, American intelligence officials in Washington were ambivalent, if not wary, of establishing contact with Ukrainian emigres in Germany.

They regarded the exiled groups as splintered and vulnerable to Soviet penetration. At the same time, American intelligence officers at Headquarters realized that these groups had a record of employing terrorist measures and supporting the Nazis. The opportunistic nature of the Ukrainian groups called into question the extent to which the United States should become involved with the emigres. (S)

As the Cold War deepened, American rationalization for using these anticommunist groups underwent a subtle, but crucial transformation. After 1948, the Central Intelligence Agency moved to cooperate with the Ukrainians against the Soviets as opposed to merely collecting information on the emigre movements. This denoted a major shift from the approach that Headquarters took in 1946 and 1947. As a result of this new cooperation, the CIA launched its first attempts to penetrate the Iron Curtain.² The Ukrainians and other Eastern and Southern European emigre groups now became

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linked to the CIA's own clandestine efforts against the Soviets during the Cold War. The development of such relationships eventually raised questions about American intelligence using men with unsavory backgrounds who had allied themselves with America's enemies only a few years previously. (S)

Terra Incognito (U)

Adm. Roscoe H. Hillenkoetter, the Director of Central Intelligence from 1947 to 1950, was reluctant to involve CIA with emigre groups in Europe despite pressure from other Federal agencies, including the Army and the Department of State. In early March 1948, Frank Wisner, a former OSS officer and a member of the State Department's Policy Planning Staff, proposed that the State-Army-Navy-Air Force Coordinating Committee (SANACC) form an ad hoc committee to explore the use of Soviet émigrés. The SANACC took up Wisner's proposal and circulated his paper, Utilization of Refugees from the Soviet Union in U.S. National Interest (SANACC 395), on 17 March 1948. Shortly afterwards, the ad hoc committee, composed of members from State, Army, CIA, and several other agencies, began exploring the paper's implications.³ (U)

Wisner wanted SANACC 395 to "increase defections among the elite of the Soviet World and to utilize refugees from the Soviet World in the national interests of the US." Describing the history of the Russian anticommunist movement since the Bolshevik Revolution in 1917 and Russian collaboration with the Nazis in World War II, Wisner felt that the 700,000 Russians scattered in European DP camps and elsewhere

^<sup>3State-Army-Navy-Air Force Coordinating Committee 395, Utilization of Refugees from the Soviet Union in US National Interest, 17 March 1948, located in Scholarly Resources, Inc., National Security Policy of the United States, LM-54, Roll 32, SWNCC Case Files Nos. 382-402 March 1947-June 1949, NARA. (U)

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around the world could provide the bulwark of a new anti-Soviet movement. The Russian émigrés, Wisner claimed, represented "the potential nucleus of possible Freedom Committees encouraging resistance movements into the Soviet World and providing contacts with an underground." According to Wisner, the United States remained "ill-equipped to engage in the political and psychological conflict with the Soviet World," and the "Soviet satellite areas like the USSR are tending to become a terra incognito." American ignorance of the Soviet Union in all fields and at all levels, he lamented, was profound and growing.⁴ (U)

With SANACC's approval, Wisner planned to "remove present deterrents and establish inducements" to spur defectors among the Soviet elite. He also wanted to increase the utilization of these refugees "to fill the gaps in our current official intelligence, in public information, and in our politico-psychological operations." At the same time that the special group began to review SANACC 395, the State Department requested that CIA prepare a study in accordance with Paragraph 6 of the SANACC 395's recommendations and report its findings to the committee. Navy Capt. Alan McCracken, CIA's Deputy Assistant Director of Special Operations (DADSO), served as the Agency's interim point of contact for SANACC 395. McCracken expressed great reservations about the overall value of Soviet defectors, and he rejected most of Wisner's proposals. A naval officer detailed to CIA, McCracken criticized the State Department for wanting to establish a "social science institute composed of refugee and American scholars for the purpose of doing basic research studies on the Soviet World."

^<sup>4Ibid. (U)

^<sup>5W.A. Schulgen, Acting Secretary, SANACC, to Members, 18 March 1948, SANA-5983, LM-54, Roll 32, NARA. (U)

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bringing Russians to the United States. "I do not think any [original emphasis] 'social science scholars' will do us a particle of good—we have too damned many of this type of faker in the US already." (C)

Capt. McCracken also noted that he had no "objection to making a study, but I cannot see that the refugee mass will be useful." He did, however, support thoroughly interrogating defectors, and believed that "OSO is in a position to furnish a certain amount of details on the capabilities of anti-Soviet refugees for intelligence purposes and can supply additional data on the many factors connected with the utilization of these groups and individuals for other than intelligence purposes." (C)

Hillenkoetter's Response (U)

Adm. Hillenkoetter provided his own comments on SANACC 395 to the National Security Council on 19 April 1948. Responding to the problem statement "whether the mass of refugees from the Soviet world, now in free Europe and Asia can be effectively utilized to further US interests in the current struggle with the USSR," the DCI told the NSC:

⁶DADSO, Alan R. McCracken, Memorandum to Chief, Interdepartmental Coordinating and Planning Staff (ICAPS), "Utilization of Soviet Refugees," 29 March 1948, (C), in DO Records, Box 1, Folder 13, CIA ARC. This same document is also found in DO Records, I. Box 1, Folder 10, CIA ARC. McCracken's memo was in response to a request for comments by ICAPS chief and CIA's representative to the staff of the Executive Secretary of the National Security Council. See Chief, ICAPS, to ADSO, "Utilization of Refugees from the Soviet Union in US National Interest," 23 March 1948, ER-8618, (C), DO Records, IABC. (C)

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anti-Soviet groups in Central and Eastern Europe. Contacts have been developed with the leading groups of the mass of Soviet émigrés, e.g., Ukrainians, Georgians, Balts and White Russians. Although these contacts were established primarily for purposes of procuring intelligence on Eastern Europe and the USSR, sufficient overall information on these groups has been inevitably gathered to permit a sound evaluation of their possible value to the US Government for the purpose of propaganda, sabotage and anti-Communist political activity.

• b. They have been completely unable to provide intelligence of real value since 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.
• c. They are almost exclusively interested in obtaining maximum support (usually from the US) for their own propaganda activities and insist upon the provision of substantial financial, communications, propaganda, movement and personal assistance in return for vague and unrealistic promises of future service.
• d. They immediately capitalize upon any assistance which they receive to advertise the fact of official (US) support to their colleagues and to other governments in order to advance their own personal or organizational interests.
• e. These groups are a primary target for Soviet MGB and satellite security agencies for purposes of political control, deception and counterespionage. CIA has sufficient evidence at this time to indicate that many of these groups have already been successfully penetrated by Soviet and satellite intelligence agencies. (S)

Hillenkoetter concluded, "the large mass of these people cannot be effectively used in time of peace." He added, "in the event of war, on the other hand, the possible value to the US Government of large numbers of Soviet émigrés would be great. The US Government would, in a war with the USSR, have a critical need for thousands of these

Hillenkoetter recommended that "there will be no organized utilization by the US Government of large groups or the mass of Soviet emigres." He did, however, advise that the State Department screen all refugees from the Soviet orbit and prepare a master index of names, residences, and occupations. This screening, Hillenkoetter noted, "must include the object of isolating persons who are suitable for direct use in intelligence purposes, as distinct from merely furnishing miscellaneous information." (S)

Project ICON (U)

As early as March 1948, Hillenkoetter told James Forrestal, the secretary of defense, that he preferred to recruit competent individuals within the Soviet Union or former Russian intelligence officers as agents. Only days after Hillenkoetter made this statement, he assigned responsibility of investigating the operational utilization of emigre groups to the Office of Special Operations. 11(S)

As a result of SANACC 395, CIA undertook a study of the various émigré groups in Europe asking for American support to fight Communism. By mid-1948, Zsolt Aradi,

^*BDCI to the Executive Secretary, National Security Council, "Utilization of the Mass of Soviet Refugees," 19 April 1948, ER-428, (S), in DO Records, ( \subseteq \subseteq \text{\subset}, \text{Box 498, Folder 9, CIA ARC. (S)} )

^<sup>9Tbid. (S)

^<sup>10DCI to Secretary of Defense, "Exploitation of Anti-Communist Underground Groups in Eastern Europe," 25 March 1948, OSO TS-658, (S), WASH-CIA-AD-75. This document has not been located and information cited here is derived from an index card in CIA History Staff files. (S)

¹¹ ADSO to Chief, Operations, "Possible Utilization of Soviet Refugees," 30 March 1948, (C), in DO Records, $\Box$ , Box 1, Folder 13, CIA ARC. This same document is found in DO Records, $\Box$ , Box 1, Folder 10, CIA ARC. (C)

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"implementation" phase would encourage those same groups to oppose the communist regimes while inspiring the formation of new resistance organizations. Finally, the "ultimate" phase would use the "tested underground groups for direct action against Communist-dominated regimes, Communist Parties, and agencies of the USSR in Eastern Europe." (S)

A Fresh Look at the Ukrainians (U)

After completing his initial survey. ——Jembarked on a larger study to update Zsolt Aradi's earlier December 1946 report on the Ukrainian nationalists. Drawing on the files of the Army Counter Intelligence Corps in Munich and CIA's own records, ——Pevaluated the Bandera and Melnik factions of the OUN, the UHVR/ZPUHVR, and the Ukrainian National Republic (an older emigre group in western Europe) to

• b. The political and ideological program of the group is one which the United States would not be embarrassed to support.
• c. The group has the recognition or approval of some resistance leaders in the Ukraine and a communication channel to those leaders.

^<sup>14Ibid. (S)

¹⁵Chief of Station, Karlsruhe (signed by James Critchfield and __________________________________

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d. The support of the groups by the United States could feasibly remain clandestine and work to the detriment of the present Russian government and its military potential. ¹⁶ (S)

To provide him with some firsthand accounts of the Ukrainian nationalist movement, $\square$ reestablished contact with Ivan Hrinoich in mid-1948. $\square$ held ten interviews with ZPUHVR's clerical first vice president and with Michael Korzan, an early member of the OUN and a member of the Austrian branch of the Anti-Bolshevik Bloc of Nations (ABN), for Project ICON. Thinioch, whom $\square$ had not contacted since 1947, had been picked up as a source by both CIC Special Agent Camille S. Hajdu and by the Military Intelligence Service (MIS), two different Army organizations in Munich. Capt. Zoltan Havas of MIS, in the meantime, had already embarked on discussions with Hrinioch about expanding the ZPUHVR's courier networks between Germany and UPA operatives in the Ukraine. Interestingly, Havas used Dr. Fritz Arlt, a former SS officer, as his cutout to Hrinoich.

^<sup>16Ibid., p. 2. (S)

$^{^{17}}$ Ibid., p. 1; Dr. Hrinioch is cited directly in the report while Korzan is referred to as CAPELIN. (S)

¹⁸A description of $[ ]$ contact with Hrinioch is contained in COS, Karlsruhe to Chief, FBM, "Project ANDROGEN Memo No. 1: The Genesis through 20 January 1949," 16 March 1949, MGM-A-1023, (S), in DO Records, $[ ]$ Box 4, Folder 22, CIA ARC. This memo discusses how Hrinioch proved difficult to work with and explains the delays that the CIA experienced with ZPUHVR. See also Project ICON/Ukraine Report, pp. 19-21. (S) 19 Special Agent Hajdu assumed control of Hrinoich immediately after $[ ]$ dropped him in 1947. By mid-1948, however, the Counter Intelligence Corps had reduced its contacts with Eastern European dissident groups in West Germany. By February 1949, CIC dropped the Ukrainian priest from its list of active informants. See COS, Karlsruhe to Chief, FBM, "Project ANDROGEN Memo No. 1: The Genesis through 20 January 1949," 16 March 1949, MGM-A-1023, (S), in DO Records, $[ ]$ Box 4, Folder 22, CIA ARC. Talks between Hrinoich and Capt. Havas, which started in August 1948, are discussed in Cable, Munich to SO, Karlsruhe, 13 January 1949, Munich 265, IN 21449, (S), in DO Records, $[ ]$ Box 4, Folder 23, CIA ARC. Ironically, $[ ]$ OSO's Executive Officer, told the Personnel Division in September 1947 that "it has been learned from the US Constabulary that Captain

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efforts, which met only halfhearted approval in Washington, CIA headquarters now eagerly sought to work with the Ukrainians in Munich. Richard Helms, chief of Foreign Branch M, cabled Munich on 3 December 1948 to ask Hrinoich and ZPUHVR if the Ukrainians could provide volunteers for courier missions under American control. The CIA now wanted to work with the Ukrainians against the Soviets, as opposed to merely collecting information on the émigré groups. "Best approach these groups . . .," Helms advised, "probably stating our aim as rendering assistance [to] dissidents rather than purely intelligence purposes." (S)

Following Helms's directive, ( \sigma ) ( \sigma ) convinced both Hrinioch and Mykola Lebed in January 1949 that the United States now planned to cooperate with the ZPUHVR to send couriers (the so-called APOSTLES) to the Ukraine. By early February, ( \sigma ) ( \sigma ) ( \text{cabled Washington with the news that "our relations with ZPUHVR have greatly accelerated at our initiative. Both Havas and CAPARISON [Hrinoich] agree to turn complete operational allegiance of ZPUHVR over to MOB [Munich Operations Base]." ( \sigma ) ( \sigma ) also informed Headquarters about Ukrainian requests for support and other details concerning the commencement of operations.( \frac{23}{3} ) (S) ( \sigma ) ( \sigma ) gathered as much information as he could about the ZPUHVR's periodic, but generally unsuccessful, courier missions that had attracted some open press reporting since 1946.( \frac{24}{3} ) By late March 1949, ( \sigma ) ( \sigma ) submitted a developmental plan for Project

^<sup>22Cable, SO to Munich, Karlsruhe, 3 December 1948, Washington 5815, OUT 72439, (S), in DO Records,
☐ ☐, Box 4, Folder 23, CIA ARC. (S)

^<sup>23Cable, Munich to SO, Karlsruhe, 2 February 1949, Munich 292, IN 22867, (S), in DO Records ⊃, DO Records, CIA ARC. (S)

²⁵COS, Karlsruhe to Chief, FBM, "ANDROGEN Project," 31 March 1949, MGM-A-1059, (S), in DO Records, Box 4, Folder 22, CIA ARC. Approval of this project with stipulations by headquarters is found in Chief, FBM to Chief of Station, Karlsruhe "Project ANDROGEN," 25 April 1949, MGK-W-1952, (S), in DO Records, Box 4, Folder 22, CIA ARC. (S)

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admitted, "transporting the APOSTLES and several radios by air to be dropped by parachute offers the only solution with good possibilities of success." (S)

In the first of many demands, the ZPUHVR wanted the CIA to publicize its resistance efforts as well as to permit several of its leaders, including Hrinoich and Lebed, to address Ukrainian groups in the United States and Canada. The Ukrainian organization even asked that CIA assist the ZPUHVR to promote its activities outside of Germany.²⁸ (S)

Foreign Branch M's Richard Helms and Harry Rositzke, chief of Foreign Branch S, submitted a proposal to Col. Robert A. Schow, the new Assistant Director for Special Operations, on 26 July 1949 seeking approval to exploit the Ukrainian resistance movement within the Soviet Union. Schow approved the project the same day.²⁹ At the same time, the Ukrainian project was redesignated as Project CARTEL (it had been known as ANDROGEN), utilizing the same personnel. In addition to providing radio and cipher training to the Ukrainians, unmarked American aircraft would transport the

²⁷COS Karlsruhe to Chief, FBM, "Project ANDROGEN Memo No. 1: The Genesis through 20 January 1949," 16 March 1949, MGM-A-1023, (S), in DO Records,

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Black Missions (U)

The first CIA-sponsored airdrop into the USSR took place in September 1949 when two Ukrainians landed near Lvov. This mission, coordinated and handled by $\square$ , sought to establish contact with the UHVR/UPA in the Ukraine. While this mission failed because the Soviets quickly rounded up the agents, $\square$ 3 operation sparked considerable interest at Headquarters. The Agency moved to expand its exploitation of the ZPUHVR as well as with other émigré groups in Germany. By 1950, the CIA engaged in joint talks with the British to launch operations into Ukraine;

³⁰COS, Karlsruhe to Chief, FBM, "CARTEL," 24 June 1949, MGM-A-1312, (S), in DO Records,
[
\subseteq J, Box 4, Folder 22, CIA ARC. (S)
]
31Chief of Station, Karlsruhe (signed by ( \subseteq J) to Chief, FBM, "Project CARTEL: Operational Memorandum No. 8. A Synopsis of the HIDER-CARTEL Plane Flight," 16 September 1949, MGM-A-1584, (S), in DO Records, ( \subseteq J), Box 4, Folder 22, CIA ARC. Headquarters response to ( \supseteq J) report is found in Chief, FDM to Chief of Station, "CARTEL Project," 10 October 1949, MGK-W-3164, (S), in DO Records, ( \subseteq J) Box 4, Folder 22, CIA ARC. The various CIA-Ukrainian missions are covered extensively in ( \supseteq J) Box 4, Folder 22, CIA ARC. The various CIA-Ukrainian missions are covered extensively in ( \supseteq J) Box 4, Folder 22, CIA ARC. Schow to Wisner, "Exploitation of Ukrainian Nationalist Resistance Organization," 22 December 1949, (S), in DO Records, ( \supseteq J), Box 4, Folder 22, CIA ARC; J. Bryan III to Chief, Programs and Planning Division, OPC, "Use of Ukrainian Partisan Partisan [sic] Movement Against USSR," 25 January 1950, (S); undated, signed, "Agreement for Joint OSO/OPC Exploitation of ZPUHVR/UHVR;" undated, unsigned, "Memorandum of Understanding between OPC and OSO Concerning the Joint Exploitation of the Foreign Representation of the Ukrainian Supreme Council of Liberation (ZPUHVR) and the Supreme Council (UHVR);" Project Outline Clearance Sheet, AERODYNAMIC-PBCRUET, 15 December 1950; and "Summary Joint OSO/OPC Report on the Ukrainian Resistance Movement, 12 December 1950" with cover sheet, Schow and Wisner to DCI, "Joint OSO/OPC Report on the Ukrainian Resistance Movement, 4

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The Ukrainian airdrops also formed the basis for expanded CIA illegal border crossings into the Soviet Union by Foreign Division S, which assumed responsibility for all OSO operations behind the Iron Curtain in February 1950. The bulk of these missions were launched from Munich in a project called REDSOX. These operations took agents to Belorussia, Latvia, Lithuania, Ukraine, and other areas of the Soviet Union. But it was a project marked by tragedy. According to one CIA official in 1957, "the path of experience in attempts at the legalization of black infiltrated bodies into the USSR has been strewn with disaster." At least 75 percent of the 85 CIA agents dispatched under REDSOX disappeared from sight and failed in their missions. A survey of these agents reveals that most of these men had recently deserted from the Soviet Army or had collaborated with the Nazis during the war. 34 (S)

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Going to America (U)

After 1953, the CIA no longer supported aerial missions into the Ukraine, but the Agency's operational relationship with the Ukrainians remained not only the first such activity, but one of its most resilient. Even before the missions were abandoned, the Agency brought Mykola Lebed to the United States in 1949 where he became the president of the Prologue Research Corporation, a CIA proprietary company, three years later. Prologue (supported by the Agency in a number of projects called AERODYNAMIC, QRDYNAMIC, and QRPLUMB) was a Ukrainian publishing and distribution corporation with affiliates in Munich, London, and Paris. It published Suchanist, a Ukrainian-language monthly political-literary magazine, and other material for dissemination in Ukraine.³⁵ The Agency regarded this activity as one of its best projects with the emigres and it took on a larger role as the CIA abandoned efforts to infiltrate agents into the Ukraine. The costs were relatively minor — in 1967) and

^1978), pp. 55-57; John Prados, Presidents' Secret Wars: CIA and Pentagon Covert Operations Since World War II (New York: William Morrow, 1986), pp. 30-60; and Harry Rositzke, The CIA's Secret Operations: Espionage, Counterespionage, and Covert Action (New York: Reader's Digest Press, 1977), pp. 18-38. (S)

³⁵Chief, Political and Psychological Staff, $\square$ , to Deputy Director for Operations

^"Potential Threat of Exposure to Major Covert Action Instrumentality," with attachment,

^"Approval-FY-86 Operational Activity-QRPLUMB," 5 December 1985, (S), in Lebed, Z DO Records, (S)

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the Agency continued to support it until September 1990 when it ended "after 38 years of successful CA operations." ³⁶ (S)

When he submitted his proposal for Project ANDROGEN in March 1949, ———————————————————————————————————

remained as a part-time consultant for the organization. — ___________________________________

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was not essential to the airdrop mission, Munich base recommended that he move to the United States under an alias. "Subject does not dare use true name for immigration purpose [because he] has had to go into complete hiding several times in Germany because of threats on life." 38 (S)

Even at this point, knowingly using a false identity during immigration posed legal issues for the Agency and Lebed himself. "Subject loath to perjure self and face deportation after arrival as result of passing false info to the US Govt. and therefore wants our sanction for his immigration under alias,"

Itold his superiors. The Agency in Munich did not anticipate any problems with the background checks being done by the Army's Counter Intelligence Corps in Bavaria, but it was concerned about immigration officials in the United States. Headquarters, in the meantime, wanted complete personal details on Lebed, but allowed the Ukrainian's immigration to proceed. (S)

December 1947, (C). All documents are found in Mykola Lebed, Dossier C 8043982WJ, IRR, INSCOM. (C)

³⁸Cable, FBM to SO, 18 May 1949, Munich 472, IN 32012, (S), in DO Records, ☐ ☐ Box 4, Folder 23, CIA ARC. For a discussion on the threats to Lebed's life and why the Army moved him from Italy to Germany, see ☐ ☐, The Early Cold War in Soviet West Ukraine, 1944-1948, pp. 54-55. (S)

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that Lebed, using the name of Roman Turan, had submitted paperwork for his departure from Germany. Winecoff advised that, "for some time, one Mykola Lebed has been rendering valuable assistance to this Agency in Europe." He added, "the reasons for using the name Turan are substantial." Repeating much of the same information as in the Munich cable, Winecoff admitted that Lebed "possesses rather extensive knowledge of certain CIA operations and is familiar with certain groups with which we are in contact. Consequently, for his own personal safety and for the security of our operations, it is essential that he not be picked up [by] any police authorities." In the margin of the document, Winecoff added that since Lebed had already been using the alias "prior to entry, his entry under that name would be legal." (S)

The Immigration and Naturalization Service agreed to the CIA's request in July and Headquarters told the German Station that "full info on CARTEL 2 given immigration authorities here and no objection their part to use alias." Headquarters also stated that Lebed should maintain his cover story and that "our action best protection [against] fraudulent entry charge and no difficulty anticipated on resumption [of] true identity upon CARTEL 2 entry [into the] States." On 16 September, Munich notified Washington that Lebed had completed his immigration processing under his alias. Lebed

^<sup>41In addition to his alias of Roman Turan, Lebed also had CIA cryptonyms of ANTLER, CAPARISON 2, and CARTEL 2 during this same time period. (S)

⁴²Winecoff to Wiggins, 20 June 1949, (S), in Lebed, $\subseteq$ $\supset$ , DO Records. (S)

^<sup>43Cable, SO to Munich, 19 July 1949, Washington 6898, OUT 85455, (S), in DO Records, □ ☐, Box 4, Folder 23, CIA ARC. (S)

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No Better Than OUN Leader Stephen Bandera (U)

After settling in New York, Lebed maintained a low profile but resumed the use of his real name. The Agency quickly reestablished ties with Lebed and conducted extensive debriefings about Ukrainian resistance activities and the relationships between the UHVR and the different Ukrainian émigré groups, particularly Bandera's OUN. 46 At the end of November 1949, Helms asked the Office of General Counsel to check with US immigration officials about Lebed's entry status and to make sure that he could use his own name. 47 The INS rejected Lebed's petition for permanent residence, and he was informed that he needed to obtain legal counsel in order to revert to his real name. The

⁴⁴Cable, Munich to SO, 16 September 1949, Munich 723, IN 43248, (S), in DO Records,

J, Box 4, Folder 23, CIA ARC. (S)

45Cable, SO to Munich, 29 September 1949, Washington 8879, OUT 90422, (S), and Cable, Munich to SO, 30 September 1949, Munich 751, IN 44572, (S), in DO Records,
CIA ARC. (S)

46Cable, SO to Munich, 29 September 1949, Washington 8879, OUT 90422, (S); Cable, Munich to SO, 7 October 1949, Munich 764, IN 45355, (S); Cable, SO to Munich, 7 November 1949, Washington 3146, OUT 92994, (S), all in DO Records,
J, Box 4, Folder 23. See also
J to Chief, FBM, "CARTEL 2 Debriefing Report, 16 December 1949, (S), and Chief, FDM to COS, Karlsruhe, "Transmittal of CARTEL 2 Debriefing Report," 23 December 1949, MGK-W-3676, (S), in DO Records,
J, Box 1, Folder 1, CIA ARC. (S)

47Chief, FDM to Office of the General Counsel, "Mikola Lebed @ Roman Turan," 23 November

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Lebed's arrival in New York did not go unnoticed within the large Ukrainian émigré community. He founded the Association of Friends of the Ukrainian Liberation Struggle, but soon encountered jealousies in New York. In November 1950, a Peter Jablon (also known as Peter Jary) told the FBI that he considered Lebed a "bandit" who had committed many assassinations. Lebed, in Jablon's words, was "no better than OUN leader Stephen Bandera." A New York-based special agent from the FBI subsequently interviewed Lebed about these allegations in early 1951. Lebed acknowledged that he had been active in Ukrainian groups in America and that he was currently working on a book about the Ukrainian resistance movement. Lebed held up his anticommunist credentials at the same time as he proclaimed Jablon as a "strange man" with numerous personality inconsistencies. ⁴⁹ (S)

Word that Lebed's arrival in America did not sit well among various immigrant factions in New York filtered back to the Washington bureaucracy. In 1951, the Agency undertook a research project to ascertain Lebed's role in the 1934 assassination of Bronislaw Pieracki, the Polish Minister of Interior. Because of his murder conviction in Poland, Lebed now faced deportation from the United States. On 1 June 1951,

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The Immigration and Naturalization Service soon informed the CIA about the case it planned against Lebed. The charges, as stated in 1951, remain controversial today and merit full citation:

For over a year several Ukrainian informants have mentioned the presence in this country of one MYKOLA LEBED. They all believed he had arrived here as a Displaced Person under an assumed name, and since his arrival, has been very active in Ukrainian Nationalistic activities, speaking on numerous occasions in different cities in the Eastern part of the United States. Lebed was well known in Ukrainian circles in Europe for years as one of the most important Bandera terrorists. He is known as one of the group of Bandera men that assassinated Bronislaw Pieracki, the Polish Minister of Interior during 1934. Lebed and his associates were tried and sentenced to death in January, 1936. However, it is believed that the death sentence was later commuted to a prison term. Lebed was in jail in Poland until the Germans overran that country, when he was either

DO Records. (S)

⁴⁹FBI Report, "Mikola Lebed," 2 February 1951, NY File No. 105-1504, (S), in Lebed, ~ DO Records. (S)

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released or escaped from jail in the confusion of a German air raid. Lebed then rejoined the Bandera group and began working for the Germans in organizing Ukrainian groups to aid the Germans in fighting the Russians. These Ukrainian groups are reported as having been trained in a Gestapo school later furnished with arms and equipment and worked with German Storm Troopers, suppressing local resistance, to the Germans, following the withdrawal of the Russian Army. Wholesale murders of Ukrainians, Polish and Jews usually took place. In all these actions, Lebed was one of the most important leaders. During the German occupation of Ukraine, Lebed and his terroristic group were known as 'Special Defense Service.' Their activities were directed by the Gestapo.⁵¹ (S)

Four months later, Col. Sheffield Edwards, CIA's Security Officer, told Mr. Wiggins at the INS that "we are not in possession of any information indicating that he [Lebed] is engaged in any activities prejudicial to the interests of the United States." Based on Lebed's own accounts, Col. Edwards rejected allegations that Lebed participated in the Pieracki assassination. The Agency even reviewed contemporary Polish newspaper accounts of the trial at the New York Public Library and concluded that the 1935-36 trial had been tainted for political reasons. Likewise, it also discounted the labeling of the OUN as "terrorist" because this designation had been employed by the Soviets as well as other groups with an anti-OUN bent. Similarly, CIA believed that many of the sources of the allegations against Lebed were "questionable and probably biased." (S)

⁵¹ Acting Assistant Commissioner, Enforcement Division, Immigration and Naturalization Service, James E. Riley to the DCI, 7 June 1951, SA-7320118, (S), in Lebed, C DO Records. (S)

^<sup>52Sheffield Edwards to the Commissioner of Immigration and Naturalization, ATTN: W.W. Wiggins, "Mykola Lebed, aka: Roman Turan," 3 October 1951, JL-668, (S), in Lebed, 1

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As far as Lebed's wartime activities were concerned, the Agency believed that the Ukrainian Insurgent Army had "fought with equal zeal against both the Nazis and the Bolsheviks." The CIA also cited a warrant issued by the Gestapo in October 1941 for Lebed's arrest as proof of his anti-Nazi activities. The Agency argued that Lebed's role as Foreign Minister of the Ukrainian Supreme Council of Liberation, an organization founded in 1944, placed him in an "influential position to render unique service to the United States and to this Agency in the furtherance of its intelligence mission." (S)

Despite these assurances, the Immigration and Naturalization Service remained doubtful about the Ukrainian. While the Service held no deportation hearings in 1951, the Agency fretted that the INS might refuse to allow Lebed to reenter the United States in the event that he traveled overseas for operational purposes. Lebed had already returned once to Germany in 1950 for a short visit and planned to do so again in the near future.⁵⁴ To preclude any problems concerning his status in the United States, CIA again examined Lebed's past.⁵⁵ (S)

^<sup>53Ibid. (S)

⁵⁴An Affidavit of Identity in lieu of a passport, issued in Washington, D.C., on 17 April 1950 and a pass for the Western Zone is included in Lebed, E , DO Records. (S)

^<sup>55ADPC to DCI, "Mykola Lebed," 28 March 1952, with attachments, (S) in Lebed, $\angle$

DO Records. A copy of the 8 April 1952 Questionnaire with Lebed's 18 May 1952 answers is located in Lebed, $\subset$ , DO Records. This document does not appear to have been translated from Ukrainian to English until 22 January 1986. The English-version translation is also located in Lebed's records. The depth of this 1952 background investigation appears shallow as most of the phrases employed by CIA officials to defend Lebed against the INS were simply adopted from previous CIA correspondence about him. For another report about Lebed, see Chief, Contact Division, O/O to ADSO, "Information Concerning Anti-Soviet Ukrainian Resistance," 13 March 1951, (S), in Lebed, $\subset$ , DO Records. (S)

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The CIA concluded that Lebed's activities on the behalf of American intelligence were of such "inestimable value" that the Agency could ill afford to lose him as an asset. Allen W. Dulles, then the Deputy Director of Central Intelligence, told the Commissioner of Immigration and Naturalization on 5 May 1952 that the Agency planned to sponsor Lebed in the United States under Section 8 of the CIA Act of 1949. This act, discussed later in greater detail, permitted the DCI, with the approval of the INS Commissioner and the US Attorney General, to admit up to 100 aliens per year for national security reasons regardless of their eligibility under normal immigration regulations. Dulles furthermore requested that Lebed's entry date under Section 8 be made retroactive to his initial arrival in the fall of 1949.⁵⁶ (S)

⁵⁷A 1957 Request for Investigation and Approval shows that Lebed, as a covert associate for Project AERODYNAMIC, performed the following tasks: "Principal agent in CIA exploitation of AECASSOWARY 1 [this refers to Hrinoich]; for CE, PP, and FI purposes. To be used in the United States, Western Europe, Latin America, and any areas where agent's emigre group can be profitably exploited. Activities include: Newspaper support; clandestine radio; leaflet campaign; poison pen letters; sending of letters and printed matter to the Soviet Union; recruitment, training dispatch, and interrogation of agent playback operations against the Soviets; doubling of

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however, have not stilled nagging suspicions about Lebed, and he remains a controversial figure to this day.⁵⁸ (S)

A Curious Anomaly (U)

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By the end of the 1940s, the CIA's initial reluctance to use pro-Nazi Germans and Eastern European collaborators as intelligence sources and, indeed, as operatives had waned considerably. The wartime roles of many of these individuals and groups became a negligible factor as the CIA began active operations behind the Iron Curtain. The Agency downplayed accounts of the brutality of many of the Eastern European émigré groups and their collaboration with the Nazis. DCI Hillenkoetter, for example, responding to an inquiry from the chairman of the Displaced Persons Committee in the spring of 1949 about the status of certain groups, stated:

A curious anomaly has developed since the end of the war. Several of these organizations (for example, the Melnik and Bandera groups and the Lithuanian Partisans) sided with the Germans during the war not on the basis of a pro-German or pro-Fascist orientation, but from a strong anti-Soviet bias. In many cases their motivation was primarily nationalistic and patriotic with their espousal of the German cause determined by the national interests. Since the end of the war, of course, these opportunistically pro-German groups remain strongly anti-Soviet and, accordingly, find a common ground with new partners. ⁵⁹ (S)

Two years later, CIA admitted to the Immigration and Naturalization Service that it had hidden Stefan Bandera and other Ukrainians from the Soviets. "Luckily the [Soviet] attempt to locate these anti-Soviet Ukrainians was sabotaged by a few farsighted Americans who warned the persons concerned to go into hiding." Citing the Ukrainian resistance movement's struggle against the Soviets, the Agency believed that "the main activities of the OUN in the Ukraine cannot be considered detrimental to the United

⁵⁹DCI to Ugo Carusi, Chairman, Displaced Persons Commission, 7 April 1949, (C), in DCI Records,

7, Box 13, Folder 538, CIA ARC. (C)

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States." The Agency in 1951, at the same time as it defended Mykola Lebed, excused the illegal activities of OUN's security branch in the name of Cold War necessity:

There are at least twenty former or active members of the SB of OUN/Bandera in the United States at the present time. Although the SB is known to have used extra-legal methods while investigating or interrogating suspected Soviet agents, there have been few cases to date where it was possible to pin a specific criminal activity on any individual belonging to the SB and take court action. Since the SB kept elaborate files and conducted investigations on Ukrainians and suspected Soviet agents of other nationalities, no serious attempt has ever been made by American officials in Germany to disband the SB.... Operating independently, the SB has upon occasion been more of a headache to American intelligence than a boon. Nevertheless in war-time a highly nationalistic Ukrainian political group with its own security service could conceivably be a great asset to the United States. Alienating such a group could, on the other hand, have no particular advantage to the United States either now or in war-time. ⁶⁰ (S)

In summary, while American intelligence had contact with a number of groups in Western Europe in the years after World War II, it was not until after 1948 that the Central Intelligence Agency, still in its infancy, took steps to actually employ these groups in operations behind the Iron Curtain. The Office of Special Operations drew upon its Ukrainian contacts not only to fight the cold war in Germany and the Soviet Union, but brought one of the chief Ukrainian leaders, Mykola Lebed, to the United States to lead resistance efforts here. At the same time as OSO worked with the

⁶⁰Wyman to Commissioner, Immigration and Naturalization Service, "Vasyl GOGOSHA and the OUN/Bandera," 23 May 1951 (signed by B.F. Kelly, Assistant Commissioner Enforcement Division on CIA letterhead), (S), in DO Records, (\sigma) , Box 1, Folder 5, CIA ARC. A copy of this document is also located in OGC Records, (\sigma) , Box 1, CIA ARC. John Loftus claims that Frank Wisner had this memorandum written. See John Loftus, The Belarus Secret, ed. Nathan Miller (New York: Paragon House, 1989, rev. ed. 1982), pp. 106-107. (S)

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Ukrainians to penetrate the Iron Curtain, a new CIA organization, albeit a sometime rival, joined in the struggle against world communism. The formation of the Office of Policy Coordination in 1948 accelerated the use of Nazis and their collaborators by American intelligence. (S)

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Chapter Seven

DECLASSIFIED AND RELEASED BY CENTRAL INTELLIGENCE AGENCY SOURCES METHODS EXEMPTION 3828 NAZIWAR CRIMES DISCLOSURE ACT

Could He Not Be Brought to This Country and Used? (U)

During the first years after World War II, American intelligence, like the military itself, was in the throes of demobilization. Uncertainty in the wake of the disbandment of OSS was compounded by personnel turnover, a lack of funding, and, most importantly, confusion as to targets and missions. The Strategic Services Unit and the Central Intelligence Group had both been small, resource-starved organizations while the new Central Intelligence Agency, established by the National Security Act of 1947, still had to establish itself as the first civilian intelligence agency in the history of the United States. Over the next two years, the United States Government reevaluated the role of secret intelligence. Directives issued by the National Security Council (NSC) transformed the young CIA into an action-oriented, operationally minded agency. As the Cold War heated up with the outbreak of fighting in Korea in 1950, the Agency witnessed a tremendous expansion of agents and operations that broadened its overall thrust of

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NSC 4-A in December 1947 authorized CIA to conduct "covert psychological operations designed to counteract Soviet and Soviet-inspired activities which constitute a threat to world peace and security or are designed to discredit and defeat the aims and activities of the United States in its endeavors to promote world peace and security."

The National Security Council soon broadened CIA's responsibilities with NSC 10/2 in June of 1948.² Perhaps one of the most important documents in the CIA's history, NSC 10/2 authorized the Office of Policy Coordination (OPC) to conduct "covert operations," or "activities . . . which are conducted or sponsored by this Government against hostile foreign states or groups or in support of friendly foreign states or groups but which are so planned and executed that any US Government responsibility for them is not evident to unauthorized persons and that if uncovered the US Government can plausibly disclaim any responsibility for them." (U)

NSC10/2 authorized the OPC to handle such covert operations as:

^<sup>1A copy of NSC 4-A is found in US Department of State, Foreign Relations of the United States, 1945-1950, Emergence of the Intelligence Establishment (Washington, DC: Government Printing Office, 1996), pp. 649-51. In response to NSC 4-1, the CIA established a Special Procedures Group, whose duties were taken over by the Office of Policy Coordination. (U)

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Headed by Frank G. Wisner, the State Department official who had recommended the use of émigrés a few months earlier, OPC had virtual autonomy in the new field of covert operations. The new office received its guidance from the Departments of Defense and State, especially from the latter's Policy Planning Staff under George Kennan.⁴ (U)

OPC's Rapid Growth (U)

OPC left a deep mark on American intelligence during its brief life (it merged with the Office of Special Operations in 1952 to form the Clandestine Services of the Deputy Directorate of Plans, or D/DP). Under NSC 10/2, the Truman Administration gave Wisner the clear signal to proceed with his plans to utilize émigré groups in Europe. As he had originally conceived in SANACC 395, Wisner wanted to exploit the

^<sup>2A copy of NSC 10/2 is found in Sate Department, FRUS, Emergence of the Intelligence Establishment, pp. 713-715. (U)

$^{^{3}}$ Thid (II)

^<sup>4The composition of the State Department's Policy Planning Staff and its relationship with OPC is discussed in □

Clandestine Services Historical Series T.

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weaknesses in Soviet society by US covert support to resistance groups and by "black" propaganda. Some of the most notable Cold War legacies—such as Radio Free Europe (RFE), and the American Committee for Freedom for the Peoples of the USSR (later the American Committee for Liberation)—all had their genesis under OPC.⁵ (U)

OPC underwent rapid growth and transformation. In 1948, for example, Wisner had some 30-odd personnel in three bases in Germany. Within two years, it had swollen to 253 personnel in Germany handling 62 various projects and operations, many associated with German political parties, labor unions, and media outlets. OPC had so many widespread activities that it called for a budget of nearly (\sigma) in 1953. Of that amount, the office planned to spend nearly (\sigma) for operations in Eastern Europe. OPC also funded other psychological warfare missions. The National Committee for a Free Europe and its radio programming swallowed an additional (\sigma) while OPC wanted to spend another (\sigma) on the AmComLib. Projected expenses for paramilitary training, escape and evasion routes, and staybehind networks amounted to over (\sigma). (\sigma).

^<sup>6A summary history of OPC's early operations in Germany is found in ___

⁷Comptroller, "OPC Budget for Fiscal Year 1953 by Major Requirements," 7 December 1951, (S), in CIA History Staff Records, HS/CSG-768, ☐ ☐ Box 5, CIA ARC. (S)

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The veterans of SSU, CIG, and early CIA were amazed, and somewhat dismayed, by the growth of OPC. While the Office of Special Operations initially concentrated on exploiting those assets at hand in Germany and slowly built up its knowledge of the USSR, OPC had broader goals. OPC's rapid expansion caused confusion among US intelligence agencies in Germany because they competed for many of the same agents and operations. Gordon M. Stewart, OSO's chief of mission in Karlsruhe, recalled these heady days:

As a result of Korea [the conflict broke out in 1950] we found ourselves in the midst of a large military buildup and the hectic expansion of CIA's activities. Europe got more men and arms than the Far East; CIA's staff in Germany increased several fold. One cold war project was piled on top of another, agents were recruited by the hundreds. Any project which would contribute to the slowdown or harassment of invading Soviet or satellite forces got a hearing. The effect on CIA was too much money and too many people. By mid-1952 the nature of our organization had been radically changed and we were up to our hips in trouble. (U)

Frank Wisner's belief that Russian and other emigre groups could contribute to the defeat of Soviet communism added to the CIA's own organizational transformation and operational uncertainties. While expanding CIA's contact with the émigré groups in

^<sup>8For examples of the diversity of OPC's worldwide activities, see "OPC Daily Reports," 14 February 1951 through 23 April 1952, (S), in CIA History Staff Records, HS/CSG-716, ☐ ∃Box 5, CIA ARC. (S)

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Psychological Fission (U)

The German experience in the Soviet Union during World War II intrigued the Office of Policy Coordination. Frank Wisner, in particular, sought to learn the lessons of the German defeat in the East—a defeat that he felt was due in large measure to Nazi failure to capitalize on the anticommunist sentiment of the Russian people. Reviewing the Nazi experience on the Eastern Front, Wisner felt that the United States "should stop thinking of the Soviet Union as a monolithic nation and investigate the internal strains." He advocated the use of consultants, in some cases Americans and others of foreign backgrounds, who had firsthand knowledge of the Soviet Union, its peoples, and political system. ¹¹ (S)

For political insight, OPC drew upon the services of Gustav Hilger, a Russianborn German, who had served with the German Foreign Ministry in the Soviet capital. OPC also employed Nicholas Poppe, a Russian social scientist, who possessed an

¹⁰ According to a 7 September 1949 memorandum from Robert P. Joyce to George F. Kennan, "OPC was advised to undertake plans and preliminary operations looking forward to the organization of the Russian non-returnees and DPs presently in US Zone of Occupation in Germany and Austria." As early as January of that year, Kennan told Wisner that "as the international situation develops, every day makes more evident the importance of the role which will have to be played by covert operations if our national interests are to be adequately protected." See Joyce to Kennan, 7 September 1949, TS 41303, (S), in CIA History Staff Records, HS/CSG-761, Day Dox 5, CIA ARC; and Kennan to Wisner, 6 January 1949, TS 29143, (S), in CIA History Staff Records, HS/CSG-759, Day Dox 5, CIA ARC. (S)

11 See Wisner to Office et al, "C Dox Baserds (S)

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encyclopedic knowledge of the various nationality groups in the USSR. Both men had worked in the Soviet Union and, as it turned out, both Hilger and Poppe played leading roles in Nazi Germany. American diplomats, in fact, valued Hilger's expertise even before the war. His capture by American forces after Germany's collapse was seen as fortuitous. While Poppe had more esoteric value to American intelligence, the combination of Frank Wisner's interest in the "psychological fission" of the Soviet Union and the mandate of NSC 10/2 impelled OPC to exploit both men. (S)

The Agency's use of Hilger and Poppe reveals the extent to which the OPC appropriated German wartime expertise for its own purposes. Just as the Agency had expressed reluctance to become involved with the Ukrainians, CIA officials initially rejected the use of foreign experts. The Agency's reluctance, however, withered in the face of the growing need to prepare for war with the Soviet Union. In the end, CIA became deeply involved with both Hilger and Poppe. (S)

A Fabulous Scholar (U)

^12"209" to Stewart, "Visit of Mr. Richard N. Frye," 26 August 1946, L-003-826, (S), in DO Records. ____________________________________

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Following a meeting with Poppe, both Frye and Henry Hecksher "were quite impressed with his abilities," according to Gordon Stewart in early 1947.¹³ As it turned out, the Soviets also knew that Poppe was hiding in western Germany, and they requested his arrest in a memorandum to Lt. Gen. Clay in November 1946. Colonel General P. A. Kurochkin, the deputy commander of the Soviet Military Administration, noted that Poppe "took an active part in betraying Soviet citizens who participated in the fight against the German-Fascist invaders in the occupied Soviet territory." The Soviet officer added, "it was established that N.N. Poppe was an active agent of the Gestapo and personally cooperated with members of the Gestapo in the interrogation, often attended by cruel beating, of arrested Soviet citizens." ¹⁴ (U)

After a preliminary investigation, Maj. Gen. Frank A. Keating, the Assistant

Deputy Military Governor, reported back to his Soviet counterpart that American officials had been unable to locate Poppe, but promised that the search would continue. In fact, the German Mission sent

To northern Germany to locate Poppe while the Army's CIC searched for him in the American zone.

J did not find Poppe in the British zone, but did meet with his son. Gordon Stewart, the chief of the Intelligence Branch, told Richard Helms in Washington that "in view of the fact that the British are

From 1948 until his death six years later, Penrose was the president of the American University in Beirut. (S)

13 Stewart to Helms, "Nikolai N. Poppe," 22 January 1947, MGH-003-122, XARZ-29325, (S), enclosing to Chief, Intelligence Branch, "Poppe, [Nikolai]," 15 January 1947, (S), in DO Records, South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South South So

enclosing ( \subseteq ) to Chief, Intelligence Branch, "Poppe, [Nikolai]," 15 January 1947, (S), in DO Records, ( \subseteq \subseteq ), Box 3, Folder 20, CIA ARC. (S) ( \subseteq ) to Frye, 30 April 1947, in response to Frye to ( \subseteq \subseteq ) 22 April 1947, XARZ-29326 in DO Records, ( \subseteq \subseteq \subseteq ), Box 3, Folder 25, CIA ARC. (U) ( \subseteq ) 18Cable, Special Operations to Heidelberg, 19 May 1947, Washington 2434, OUT 2434, (S), in DO Records, ( \subseteq \subseteq \subseteq ), Box 4, Folder 26, CIA ARC. (S)

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Estonian D.P." Frye told ( \subseteq \subseteq \text{that he would try to get Poppe a job at Harvard} )
University if CIG would facilitate his immigration to the United States. "In such a case your people, who seem to fear taking responsibility on a possible 'gold brick,' would be soothed & could use his services, as he is most willing." (S)

Later in May 1947, Frye wrote another member of CIG for assistance. "The problem is Nikolai Nikolaievitch Poppe, a friend, and the greatest living authority on Soviet Siberia and Outer Mongolia," Fyre explained. According to Frye, Poppe was "born in Shanghai in 1897, speaks twelve languages, prof. in the University of Leningrad 1923-28, and Moscow 1930-41. The two years in between mark the time when he was in Outer Mongolia organizing proper USSR-Mongol relations. He has done the same for Chinese Turkestan, and has lived in various cities of Asiatic Russia." Frye glossed over Poppe's wartime activities, noting only that he "joined the Germans, returned to Germany and his friends." Now living as a displaced person in the British Zone, Frye appealed, "could he not be brought to this country and used?" In Frye's opinion, Poppe "is of importance to our gov't, and also to the scholarly world," and he pleaded "that such a person not be allowed to perish, but to serve a function." (S)

Frye's efforts sparked yet another round of talks within the Central Intelligence
Group as to Poppe's usefulness for American intelligence. The German Mission reported\nin early June that it could not assess Poppe's value to American intelligence because of
his "peculiar background." The field stated that it could arrange his interrogation at
Oberursel, if Headquarters desired, but felt that Poppe "would be far greater value in

¹⁹ Frye to C ☐ 15 May 1947, XARZ-29325, in DO Records, C ☐ ☐, Box 3, Folder 20, CIA ARC. (S)

20 Frye to C ☐ 28 May 1947, (S), in Nicholas Poppe, C ☐, DO Records. (S)

²¹ Ibid. (S)

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US"²² Headquarters, in turn, asked Heidelberg to consult with the British about Poppe.²³ Richard Helms, FBM's chief, reported British sentiments to Col. Galloway, the Assistant Director of Special Operations, in August 1947. "There has been considerable investigation of the Poppe case dating back some months. He lives in the British Zone of Germany, the British know all about him, and would, in fact, be glad to get rid of him because of his nuisance value."²⁴ Despite Poppe's credentials, Helms maintained "we can see no compelling reason to go to all the trouble of getting him to the United States. It is granted that he is a Far Eastern scholar of distinction, but, aside from his background," Helms added, "he has little present or future usefulness to a secret intelligence organization." Helms commented that if Frye "wants the man to come to this country so badly . . . . he should have him apply as any other DP would apply, then do what he can to get the State Department to grant a visa." Col. Galloway agreed with Helms's assessment.²⁵ (S)

Two months later, the British requested that the US Army take control of Poppe. Helms reiterated, "Poppe has no operational interest to OSO" and cut right to the heart of the matter: "Does the United States Army or CIA desire as a courtesy to the British to dispose of Poppe? If it is decided that this courtesy be afforded the British, the decision will involve as a corollary necessary arrangements to bring Poppe to the United States." ²⁶

²²Cable, Heidelberg to Special Operations, 3 June 1947, Heidelberg 912, In 15664, (S), in DO Records,
Box 4, Folder 28, CIA ARC. (S)

23Cable, Special Operations to Heidelberg, 5 June 1947, Washington 2947, OUT 2947, (S), in DO Records,
J, Box 4, Folder 28, CIA ARC. (S)

24Helms to Galloway, "N. Poppe," 13 August 1947, (S), in Poppe,
J, DO Records. (S)

25Galloway to
J"N. Poppe," 18 August 1947, (S), in Poppe,
J, DO Records. (S)

26Helms to Galloway, 17 October 1947, (S), enclosing Gen. Lethbridge's 6 October 1947 letter

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The Agency agreed to take Poppe from the British after mid-October 1947, although the actual transfer itself did not occur until May 1948. (S)

Poppe arrived in the American Zone at the instigation of Carmel Offie, a State Department official assigned to the Office of the US Political Adviser in Germany (POLAD).²⁷ In an operation known as FATHER CHRISTMAS, Poppe moved from the British Zone and met Offie at a Frankfurt office of the Counter Intelligence Corps on 12 May 1948. A member of OSO, who attended the meeting observed, "Offie said he had come specifically from Washington to deal with his case among other specific problems." Interestingly, Offie told Poppe that "State Department permission would not [original emphasis] be necessary for Poppe to immigrate and that it could be arranged through him."²⁸ (S)

Following the interview in Germany, Offic returned to Washington and called on Larence R. Houston, CIA's General Counsel. After Offic urgently asked Warner to arrange for Poppe's transfer to the United States, Warner discussed the case with Frank Wisner. OPC later asked the Joint Chiefs of Staff and the Joint Intelligence Objectives Agency to expedite Poppe's immigration.²⁹ By January 1949, Poppe had received a CIA

^2/Born in 1909 in Pennsylvania, the son of Italian immigrants, Carmel Office was a colorful, if not unusual CIA officer. He joined the State Department in 1931 as a clerk and rose through the ranks after his assignment to US Embassy in Moscow. Outgoing, fluent in several foreign languages, Office made quick friends in high society circles. He joined OPC in 1949, but served only briefly when he resigned in May 1950. By this time, Congressional investigators and the FBI had pinned Office as a homosexual. Charges of corruption and other scandalous affairs hounded Office until his death in a plane crash in Paris in 1972.

See also various entries on Carmel Office in Hersh, The Old Boys. (U)

3. Special Operations Section to ADSO, "Poppe Nikolaus - Operation "Father Christmas," 13 May 1948, (S), in Poppe, Do Records. (S)

29 Lawrence R. Houston to ADPC, "Nikolai Poppe," 10 December 1948, (S), in Poppe, Do Records. (S)

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pseudonym, Stewart G. Waite, while he waited at the European Command Interrogation Center for the Agency to complete its investigation. In the meantime, Wisner approved Offie's proposal to employ Poppe.³⁰ (S)

Not until mid-February 1949, however, did the chief of station in Karlsruhe transmit to Washington copies of the British reports of Poppe's interrogation in 1946.³¹ These reports discussed Poppe's anticommunist activities and his work with the Nazis after the German occupation of the Caucasus in mid-1942. Poppe admitted that he had worked for the Germans as a translator, and claimed to have saved the "Mountain Jews" from German retribution prior to the retreat of Nazi forces from the region. He went from there to Berlin as a researcher on Soviet matters at the RSHA's Wannsee-Institut, and later worked at the German Ost-Asien Institut in Czechoslovakia. While Poppe tried to make his work with the Germans seem harmless, both institutes in reality conducted research on the "Jewish problem" in order to perfect the Nazi killing machines.³² (S)

³¹British reports on Poppe were sent from Germany to Headquarters in Chief of Station, Karlsruhe to Chief, SPG, "Nikolas Poppe," 11 February 1949, MGK-A-6169, (S), in Poppe, (\subseteq) , DO Records. (S)

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scientific subjects but even as teacher on other subjects familiar to me. I must live in hiding as if I were an escaped criminal. Is there any justice, I mean human justice." Comparing his situation with the Bolshevik revolutionaries of World War I, Poppe said, "why people who had plotted against the lives of the Czars and their Ministers were allowed to live openly in Switzerland and in other countries? Or are there two justices, one concerning murderers of the Czars and another concerning fugitives from Russia? Is justice a Janus-faced being?" The British generally accepted Poppe's melodramatic presentation and concluded that while he worked for the RSHA, he was simply a traitor and not a war criminal.³³ (S)

Despite this admission, neither the British nor the Americans returned Poppe to Soviet hands. The fact that the Soviets wanted Poppe made him an even greater asset for OPC as it scoured Europe for Soviet experts. Bringing Poppe to the United States, however, proved to be a slow process and one that tested Offie's patience. He complained bitterly to ( \subseteq ), CIA's acting Executive Director, in April 1949 about the length of time that the Agency took to process Poppe's immigration. ( \frac{34}{5} )

Offie's complaint apparently hastened the procedure because Poppe arrived on a US Air Force transport at Westover Field, Massachusetts, on 16 May 1949. Entering the United States as a displaced person under the sponsorship of John Davies of the State Department's Policy Planning Staff, Poppe immediately went to Washington, to learn that he would earn \$500 a month as a consultant to OPC.³⁵ Within weeks, Poppe (who also was referred to in official correspondence as Karl H. Bergstrom or "Professor"

³³ Ibid. (S)

³⁴Carmel Offie to ☐ ☐ "Nikolai Poppe," 11 April 1949, (S), in Poppe, ☐ ☐ ☐ DO Records (S)

^<sup>35Poppe worked as a consultant for OPC under Project QKJIBOA. This project was solely dedicated as a research project for Poppe and was canceled on 20 February 1950. (S)

Bergstrom), began producing reports, such as "Ethnic and Religious Frictions in Chinese Central Asia" and "Broadcasting to Asiatic Peoples in the USSR in their Native Languages," for American intelligence.³⁶ Poppe's case officer in June also desired information about "Soviet mass desertions in the summer of 1941 and the welcome by peasants and townspeople of the Germans as liberators."³⁷ (S)

Handled on a Classified Basis (U)

Poppe's arrival in 1949 complemented the studies being written by Gustav Hilger, perhaps OPC's most prized Soviet expert. While Poppe fell out of Offie's favor later that year and left to take up a teaching position at the University of Washington, Hilger's star shone bright at both OPC and the State Department.³⁸ Hilger had a notable career in the

³⁶Poppe resumed his real identity in June 1949 after his identity papers had been retrieved from INS. He had surrendered all of his documentation when he arrived at Westover Field. Copies of Poppe's reports are found in his 201 file. Robert P. Joyce told Carmel Offie on 8 June 1949 that "it appears obvious that the fruits of the good professor should be made available not only to key persons in Dept. of State, but also to key posts in the field." (S)

37

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German Foreign Ministry, serving in the German embassy in Moscow and later as personal secretary to Joachim von Ribbentrop, Germany's Foreign Minister (who was convicted of war crimes and executed at Nuremberg). During the war, Hilger helped to bring Soviet defectors into the German ranks and organized the Vlasov Army. His firsthand experience with both Soviet officials and anticommunist groups was considerable; a fact quickly recognized by both the Americans and the Russians. (S)

Hilger surrendered to the Americans in the spring of 1945 and underwent extensive debriefings in the United States about his knowledge of the Soviets.³⁹ He even produced a study, "Diplomatic and Economic Relations between Germany and the USSR, 1922 to 1941," for the Department of State.⁴⁰ Upon his return to Germany, Hilger worked as the chief of the political section in the evaluation side of the nascent West German intelligence service.⁴¹ While working for the Gehlen Organization, the US Army facilitated the escape of Hilger's wife, daughter, and two grandchildren from Soviet hands and brought them to the American sector in Berlin. Lt. Col. John R. Deane, Jr., the US Army officer responsible for the Gehlen Organization, supervised the removal of Hilger's family and commented that "the Russians have a great interest in the people we are attempting to evacuate in this case and therefore it is urgently requested that they be

IMS/FPLG/Appeals and Litigation Branch to Acting Chief, FPLG, "DOJ Trace Request: Alleged Nazi War Criminals: Nicola Poppe, OSI #789," 23 April 1985, XAN-1117, (S), see DO Records,

Box 2, Folder 10, CIA ARC. (S)

³⁹Capt. Halle, "Report of Interrogation: No. 5854, 5856, 5857, 5858, 5859, 5860," 9 November 1945, (S), in Hilger, "( \sum ) DO Records. (S)

^40"Diplomatic and Economic Relations Between Germany and the USSR, 1922 to 1941," 15
October 1946, enclosure to United States Office of the Political Adviser, Despatch No. 7576, 5
November 1946, (S), in Hilger, 7, DO Records. (S)

⁴¹Donald G. Huefner to Chief of Station, Karlsruhe, "RUSTY Evaluation Group," 2 December 1948, MGK-W-1040, (S), in Hilger, (\subseteq) DO Records. (S)

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Hilger's reputation and his reports on the Soviet Union stirred interest at OPC as well as the State Department. Both organizations wanted to bring Hilger to the United States. Indeed, George Kennan at State arranged for Hilger and his family to travel to America using an Office of the Military Government of Germany (OMGUS) Temporary Travel Document on 18 October 1948. Hilger and his wife also possessed nonimmigrant visas issued by the US Consul in Germany. Lawrence Houston, CIA's General Counsel, asked the INS that Hilger's "examination at the port of entry be waived, and that the case be handled on a classified basis." Hilger and his wife remained in the United States and received extensions to their Military Government permits through May 1951. At the same time, the State Department explored ways to legalize the status of the Hilger family as Russian immigrants—both Hilger and his wife had been born in Russia, although they were German citizens. 44 (S)

A Resident Expert (U)

⁴²Lt. Col. John R. Deane, Jr., to Office of the Director of Intelligence, "Operation FIREWEED, 21 July 1947, (S), and Deane to Col. Skinner, "Operation FIREWEED," 31 July 1947, (S), both in Hilger, (\sigma) DO Records. (S)

43Lawrence R. Houston, CIA General Counsel, to W.W. Wiggins, Chief, Investigation Section, INS General Counsel, "Dr. Gustav Hilger," 18 October 1948, (S), in GAO Notes of CIA documents, Gustav Hilger file, DO Records, (\sigma) Box 3, Folder 55, CIA ARC (hereafter cited as GAO Notes, Hilger file). Houston wrote this document the same day that Hilger arrived in the United States. (S)

44For examples of Kennan's and CIA's intercessions on Hilger's behalf, see (\sigma) Memorandum to Special Assistant to ADPC, "Dr. Gustav Hilger and his Wife Marie—Immigration Status," 3 January 1950, (S); George F. Kennan to Cecil F. Cross, American Consulate General, Montreal, Canada, undated [c.1949]; and H.J. L'Heureux to Mr. Schwartz, 3 January 1950, in Hilger, (\sigma) DO Records. (S)

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The Agency soon established Hilger at its headquarters in Washington. By April 1949, he had produced 16 reports on topics ranging from "Strategy and Tactics of Bolshevism" to "The Ukrainian Problem as it Showed up in the War between Germany and the Soviet Union (1941-1945)." In the latter report, Hilger described Germany's failure to take advantage of Ukraine's situation during the war and some of the resultant difficulties. In light of the overall weakness of Ukrainian nationalism in the face of Soviet repression, Hilger felt that there was little hope for the Ukrainians to confront the Soviets. In the event of war, the Ukrainians, in Hilger's opinion, could be expected to support Russia's adversary if that country could "guarantee the Ukrainians the abolition of collectivization and a raising of their standard of living."45

Hilger's access to raw as well as finished intelligence products did not sit well with officials within the CIA. OPC's Executive Officer, (\subseteq \subseteq_1), who had returned to Washington from his assignment as the deputy chief of the German Mission, requested in November 1948 that the Agency's Inspection and Security branch conduct a "covert" investigation of Hilger after his arrival in the country. (^{46}) Col. Sheffield Edwards, (^{11})A's Security Officer, in fact, refused to extend Hilger's clearance a year later. (^{47}) (S)

⁴⁵ For a list of Hilger's reports, see ☐ ☐, Acting DADPC, to ☐ ☐ Office of Operations, "Reports by Dr. Hilger," 26 April 1949, (S), in DO Records, ☐ Box 1, Folder 1, CIA ARC. Copies of some of these reports are located in Folder 2 of this same job. Hilger's report on the "Ukrainian Problem" has been declassified and is located in the Records of the National Security Council at the Harry S. Truman Library. (S)

46 ☐ ☐ ☐ ☐, Inspection and Security Branch, "Dr. Gustav Hilger," 4 November 1948, (S), in GAO Notes, Hilger file. (S)

47: ☐ ☐, Acting Chief, Special Staff, to Chief of Programs and Planning, "Clearance of Gustav Hilger," 20 October 1949, (S), in Hilger, ☐ ☐ DO Records. (S)

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Tensions developed between OSO and OPC regarding Hilger's use of classified material. In September 1949, nearly a year after Hilger's arrival, Frank Wisner appealed to the DCI to permit Hilger "access to certain categories of classified information which is needed for Dr. Hilger to perform his job." Wisner warned Adm. Hillenkoetter that "we will have to dispense Dr. Hilger's assistance if information can not be accessible to him to perform his valuable task." By this point, OPC had hired Hilger for a yearly salary of \$8000.49 OSO, however, did not want Hilger to use raw intelligence, especially the intelligence reports from the Gehlen Organization. 50 (S)

The situation appeared to have been resolved by late 1949, when ADSO Robert A. Schow, insisted that "no OSO information, or OSO-developed information, be made available to Hilger without the specific concurrence of this office." Wisner agreed to Schow's request and noted, "it is proposed that he [Hilger] shall instead receive certain finished intelligence reports, studies, periodicals, and summaries with a classification of no higher than Secret." By January 1950, the Inspection and Security Branch reached a

⁴⁸Wisner to the DCI, "Dr. Gustav Hilger," 12 September 1949, (S), in GAO Notes, Hilger File. (S)

49Note in GAO Notes, Hilger file (S). OPC employed Hilger in Project PBSTEAM, which became Project AEFORD in April 1953. See __________________________________

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similar agreement with OPC about Hilger's presence in government buildings and his access to classified material.⁵³ After a polygraph interview, a CIA security officer noted, "Hilger's account of his dealings with people, countries visited, and time was such that he accounted for all periods of time and his actions satisfactorily." Security also approved Hilger because "there was no evidence of past activities, future intentions, and or, connection with the Communists or Bonn government in the form of deception on the polygraph test." (S)

Taking Stock (U)

in Hilger, $\square$ , DO Records. (S)

54 Memorandum for the File, $\square$ Chief, Security Control Staff, "Gustav Hilger," 3

February 1950. (S) in GAO Notes, Hilger file. (S)

⁵⁵See Wisner's comments about Hilger and Poppe at the ADPC staff meetings. Both men are mentioned at the meetings on 6 January 1950, 26 May 1950, 21 June 1950, 19 July 1950, and 15 November 1950. ADPC Staff Meeting Minutes, 1949-1951, (S), in DO Records, Box 1, Folder 6, CIA ARC. (S)

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that the Commissioner of Immigration and Naturalization present the CIA's application to the Attorney General.⁶⁵ In less than four months, the INS notified the Agency that Hilger and his wife were now permanent residents as of the date of their initial arrival at Westover Field in 1948.⁶⁶ (S)

Despite this new status, Hilger and his wife left the United States in late 1953 after the new West German Government offered him a substantial pension if he returned to work as an adviser for Soviet affairs.⁶⁷ According to one official, Hilger (under the pseudonym of Arthur T. Latter) "is leaving the US with great reluctance, since he has made many friends here and has enjoyed living here. He is also extremely grateful to KUBARK [CIA] for having looked after him so well for the last five years. He is willing and anxious to continue a liaison contact in Bonn after his return." Hilger, indeed, maintained a steady relationship with American intelligence until his death in 1965. (S)

Hilger," 3 May 1951, (S); and DCI to Argyle R. Mackey, Commissioner of Immigration and Naturalization, "Gustav Hilger and Wife, Marie Hilger," 4 May 1951, JL-567, (S), both documents in Hilger,

66Peyton Ford, Deputy Attorney General to the DCI, 23 August 1951, granting admittance to Hilger and his wife under Section 8; and W.F. Kelly, Assistant Commissioner, Enforcement Division, to DCI, 30 August 1951, noting that the INS had backdated Hilger's admission for permanent residency to 18 October 1948. See GAO Notes, Hilger file. (S)

67Peer de Silva for

Chief, SR Division, to DD/P, "Gustav Hilger," 8 October 1953, (C), in DO Records,

Box 12, Folder 11, CIA ARC. (C)

68Chief, EE, to Chief of Mission, Frankfurt, "Arthur T. Latter," undated [probably 1953], EGQ-W-11845, (S), in Hilger,

Chief, SR Division, to DD/P, "Gustav Hilger," 8 October 1953, (C), in DO Records, (S)

69Hilger's presence in America later attracted some attention. The Jewish War Veterans of the USA, for example, protested to Attorney General Robert F. Kennedy in 1963 about Hilger's work for the Federal government. Col. Edwards responded to the Department of Justice and stated that Hilger "was not an employee nor a consultant of CIA at this time." As the Attorney General's Office knew, the CIA and the State Department had used Hilger "because of his wealth of information concerning the USSR." See Morton L. London, National Commander, Jewish War Veterans of the USA, to Robert F. Kennedy, Attorney General, 23 January 1963, in Hilger,

Chief, Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park Total Park

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The fact that the Office of Policy Coordination wanted Nicholas Poppe and Gustav Hilger as consultants and brought them to the United States for permanent residence is a significant step. It indicated that American intelligence had expanded its idea of what constituted insightful perspectives on the Soviet Union. German diplomats and Russian social scientists with Nazi records, in addition to German wartime intelligence officers and agents, were now regarded as valuable assets in the struggle against the Soviet Union. While the use of Poppe and Hilger turned out to be rather benign, OPC had other, more sinister plans to develop "secret armies" by utilizing émigré groups. Inevitably, these plans brought Wisner's OPC into greater contact with other collaborators of the Third Reich. (C)

requested information on the present residence of Hilger and his family from the CIA. After a search of various Agency components, the Agency reported no information as to where Hilger lived after he left the United States. See Jeffrey N. Mausner, Trial Attorney, OSI to ___________________________________

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DECLASSIFIED AND RELEASED BY CENTRAL INTELLIBENCE AGENCY SOURCES METHODS EXEMPTION 3828 FAZIWAR CRIMES DISCLOSURE ACT DATE 2007

Chapter Eight

Cooperation Was an Unavoidable Evil (U)

The National Security Council's charter granted the Office of Policy Coordination considerable leeway to support anticommunist groups. OPC's expansion brought it into contact with thousands of men and women throughout Europe. In particular, OPC's interest in black propaganda, paramilitary groups, and staybehind forces in the event of a third world war drove it to seek out Europeans with anticommunist credentials. If these same individuals also had military experience combined with knowledge of Eastern or Southeastern European geography, language, and culture, so much the better. Many of the people that OPC desired shared another common link: their anticommunism had led them to support the Nazis during the war. (U)

The ⊂ ☐ Study (U)

^<sup>1For an overview, see , Hearts and Minds: Three Case Studies of the CIA's Covert Support of American Anticommunist Groups in the Cold War, 1949-1967 (Washington, DC: Central Intelligence Agency, 1999), (S).

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lukewarm assistance that Vlasov received from the Nazis and the overall history of the Russian Liberation Army (ROA) and the Committee for the Liberation of the Peoples of Russia (KONR), formed in Prague in 1944, the American study offered several conclusions about the Vlasov movement. Despite Hitler's opposition to using Vlasov, (\sigma) and his group were impressed by the fact that thousands of Russians voluntarily joined his "army" in the last months of the war. Likewise, the Americans realized that Vlasov's presence on the battlefield spurred unrest within Soviet ranks until the final battle of Berlin in 1945. Lastly, (\sigma) noted the overwhelming anticommunist sentiment among the Vlasov supporters, many of whom had been fully indoctrinated in the Bolshevist teachings. "The transformation, in a short period of time and under extremely adverse conditions, of trusted Soviet workers into staunch anticommunists is a phenomenon of great significance." (\sigma) wrote. (\frac{6}{3})

OPC justified its support for Russian and other Eastern European groups on the basis of their anticommunist record during World War II. This record, of course, included varying degrees of collaboration with the Nazis and participation in the roundup and murder of the Jews on the part of some of the nationality groups.

¬ summarized OPC's view about the Russian liberation movement, with many of its leaders now in the American zone in Germany:

ristir, noristrictors of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control

^<sup>6Ibid., pp. 22-24. (S)

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An Almost Instinctive Urge (U)

The ____________________________________

the American Committee for the Liberation of the Peoples of Russia, in 1951.¹⁰ This

^<sup>7Ibid., p. 22. The Agency has a collection of primary material from World War II on the Vlasov Army obtained from the Berlin Documents Center in 1948. A brief description of this material in English and the documents themselves (in Russian) are found in Chief of Station, Karlsruhe to Chief. FBM, "Vlassov Documents," 23 April 1948, MGB-A-1669, (S), in DO Records,
□ The Lie College (S) and College (S) are considered to Chief. FBM, "Vlassov Documents," 23 April 1948, MGB-A-1669, (S), in DO Records, □ College (S) are considered to Chief. FBM, "Vlassov Documents," 23 April 1948, MGB-A-1669, (S), in DO Records, □ College (S) are considered to Chief. FBM, "Vlassov Documents," 23 April 1948, MGB-A-1669, (S), in DO Records, □ College (S) are considered to Chief. FBM, "Vlassov Documents," 24 April 1948, MGB-A-1669, (S), in DO Records, □ College (S) are considered to Chief. FBM, "Vlassov Documents," 24 April 1948, MGB-A-1669, (S), in DO Records, □ College (S) are considered to Chief. FBM, "Vlassov Documents," 25 April 1948, MGB-A-1669, (S), in DO Records, □ College (S) are considered to Chief. FBM, "Vlassov Documents," 25 April 1948, MGB-A-1669, (S), in DO Records, □ College (S) are considered to Chief. FBM, "Vlassov Documents," 26 April 1948, MGB-A-1669, (S) are considered to Chief. FBM, "College (S) are considered to Chief. FBM, "College (S) are considered to Chief. FBM, "College (S) are considered to Chief. FBM, "College (S) are considered to Chief. FBM, "College (S) are considered to Chief. FBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. FBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S) are considered to Chief. TBM, "College (S)

^<sup>8 □ p. 6-2. (S)

^<sup>9Ibid., pp. 6-2 through 6-3. (S)

^<sup>10Ibid., pp. 7-1 through 7-5. (S)

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group of prominent Americans, formed by Frank Wisner, ostensibly promoted the ideals of democracy among refugees and exiles from the USSR. In reality, the group served as cover for OPC's relationship with the Russian emigre groups under Project QKACTIVE. This project, approved by OPC in September 1950, called for "the political organization and activation of the Russian emigration with a view to securing the cooperation of the peoples of Russia in the struggle of the Western democracies against the present rulers of Russia." [S]

With $[ ] ]$ serving as political adviser and $[ ] ]$ as its acting principal agent, Project QKACTIVE sought to rally the Russians into a "United Front" organization. OPC, in turn, planned to use this group to funnel funds and resources to the various organizations within the front. In addition, Project QKACTIVE sought to establish an institute for Russian studies in Germany as well as to develop newspapers, radio broadcasts, and other propaganda tools. After many discussions and arguments over the formation, ideals, and membership of this "United Front," ten Russian and other nationality groups finally convened in Munich in October 1952 to form a Coordinating Center of Anti-Bolshevist Struggle (KTAB). 12 (S)

¹¹Project QKACTIVE (initially known as CINDERELLA) Project Outline Clearance Sheet, Project Number EE-53, approved 28 September 1950, (S), in DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In DO Records, In

^12"History of Project QKACTIVE," 15 March 1953, pp. 1-19, (S), in DO Records,

¹³For membership of the Coordinating Center, see ibid., pp. 18-19; for a review of other nationality groups with German affiliations, see "Caucasian and Turkestani Émigré Activities 1945-1952," (S), in DO Records, — ___________________________________

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objectives, the project's radio work proved the most successful aspect of the entire plan. ¹⁴ Radio Liberation went on the air in March 1953 and quickly drew attention in the Soviet Union when it broke the news of Stalin's death. ¹⁵ The CIA continued to support the radio program (later renamed Radio Liberty) until 1974. (S)

NTS (U)

The Coordinating Center, however, failed to attract support from any of the major Ukrainian groups or the Russian solidarists, or groups that believed in a greater Russia. The lack of unity among all of the anticommunist groups proved to be fatal for the Coordinating Committee. OPC's work to bring the Narodno-Trudovoy-Soyuz, the National Labor Union or NTS, into the Center's fold, for example, is significant and illustrative in this regard. NTS represented the best organized Russian resistance movement in Western Europe, and, like virtually every Eastern European anticommunist group, had a long history of rightwing tendencies and was tainted by collaboration with the Third Reich. ¹⁶ (S)

¹⁴The radio aspect of Project QKACTIVE grew more important because the political effort failed to unify the various groups. The British also undercut the Coordinating Center by supporting their own groups, which increased rivalry among the Russians and other nationalities for money and prestige. By August 1952, the CIA began to emphasize radio broadcasts and downplaying the emigre aspect of the project—a move confirmed by the President's Committee on International Information Activities (headed by William H. Jackson) in 1953. By this time, the Coordinating Committee had dissolved.

^<sup>16Like many pro-Nazi groups in Europe, the NTS tried to spread its own message while supporting the general principles of the Germans. Although the Germans had mixed feelings about groups such as the NTS and OUN, they still tolerated them and even promoted them as the Soviets pushed the Nazis out of Russia. See Steenberg, Vlasov, pp. 42-44 and 163-164. (S)

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Treport summarized the history and philosophies of the NTS. According to
The NTS traced its roots back to a youth organization in the early 1930s. By
1933, the group took up its identity as the National Labor Union and molded its political program based on authoritarianism coupled with Russian expansionist ideals. The Germans drew from NTS members scattered throughout Europe, to act as interpreters and propagandists in their campaign against the Soviets during World War II. The NTS also supported the Vlasov movement and formed a cadre for German-sponsored Russian military units. Relations between the Nazis and the NTS nevertheless were unstable because of differences in political agendas and disagreements about defeating communism. While the Gestapo cracked down on the NTS in mid-1944 and arrested most of the leaders, the organization nevertheless survived the war. Indeed, the Germans continued to support the NTS in a limited manner until 1945. ¹⁷ (S)

The NTS thrived in the disarray of postwar Germany and soon controlled many of the Russian DP camps. By 1947, the NTS had established Russian-language schools and published three newspapers in the western zones of Germany. The organization actually increased its membership by providing false documentation for Vlasov Army veterans to protect them from forced repatriation. While the NTS suffered from internal divisions as well as from the worldwide dispersal of Russians from the DP camps after 1948, it still formed the largest single Russian anticommunist group in Western Europe. 18 (S)

^<sup>18Ibid., pp. 34-36. (S)

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OPC's efforts with the NTS met with mixed results. The anticommunist group put some pressure on the Soviet regime, both internally and externally. NTS members also served as a hot war reserve in the event of a Soviet invasion. In retrospect, however, inadequate operational planning and poor security marred the CIA's relationship with the NTS.²⁰ (S)

The Will to Fight and the Will to Lead (U)

Not only did OPC organize emigre groups for both propaganda tools and operational purposes, Frank Wisner also launched a program to train Eastern Europeans for clandestine operations against the Soviet Union. Wisner approved ZRELOPE in late July 1950 because "the acceleration of extensive OPC operations in the Soviet Union and its satellites, and further pursuance of resistance activities elsewhere abroad require the utilization of strong numbers of specially-trained personnel native to the area concerned." OPC estimated that it needed to train some 2,000 personnel over the next year in such fields as political warfare operations, resistance operations, escape and evasion

¹⁹The CIA's first contact with NTS, for example, started in 1950 when OPC supported a NTS anticommunist paper in Germany under Project QKDROOP. OPC expanded its contact with NTS in 1951 with airdrops in Soviet Union under Projects CACCOLA and AENOBLE. Project AESAURUS was formalized in January 1953. For further information, see "Transmittal of AESAURUS Report," 19 August 1953, EGMA-7379, (S), in DCI/HS Records, HS/CSG-2326,

———————————————————————————————————

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operations, communications, and "the will to fight and will to lead."²¹ OPC's use of emigres coincided with mounting interest among the US government agencies to organize displaced persons into paramilitary formations.²² (C)

Given the poor security environment in Germany (the Russian Intelligence Services had targeted virtually every emigre group there), OPC proposed to train these personnel in the United States. Prior to launching ZRELOPE, OPC formed a special task group to contact both Federal agencies and private individuals about the feasibility of this project. By November 1950, this group presented its report and recommended that OPC train a "diverse group" of foreigners in the United States for covert operations and establish a civilian cover committee "in order to sponsor trainees and disburse funds." The group also recommended that the DCI approve ZRELOPE and obtain similar approbation from the National Security Council (neither level of approval was mandatory for OPC projects at the time). In December 1950, OPC decided to initiate a pilot program with 100 trainees at a budgeted cost of $\Box$ $\Box$ ²³ (C)

While OPC sought a suitable facility for ZRELOPE (it selected Grand Bahama Island in Florida after examining 70 sites), a number of unforeseen problems arose.²⁴ ZRELOPE, for example, suffered from splintered command and control within OPC. Whereas

headed up Task Group BOULDER (which formulated overall planning and delivery of the candidates to the United States), OPC's Eastern

^<sup>21Project Outline, "Project ZRELOPE," (C), DO Records, ☐ ☐, Box 5, Folder 35, CIA ARC. (C)

^<sup>22James Jay Carafano, "Mobilizing Europe's Stateless: America's Plan for a Cold War Army," in Journal of Cold War Studies (Spring 1999), pp. 61-85. (U)

^23"Program to Train Foreign Agents in US," undated, (C), in DO Records, . Box 5, Folder 35, CIA ARC. (C)

^"ZRELOPE—Current Negotiations for Training Facilities," 24 May 1951, (C), in DO Records

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Europe Division (EE) ran the selection, recruitment, and clearing of ZRELOPE trainees. The Training Division (TRD), a joint OSO/OPC element, trained the candidates and provided for cover and security of the project and its personnel.²⁵ (C)

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OPC had selected nearly 800 candidates. OPC had five case officers to do the screening, although a native Russian speaker handled the initial interviews and conducted the records checks. Candidates then traveled to Munich for psychological assessments. The actual recruitment occurred after the psychological assessment.²⁹ (C)

ZRELOPE's Problems (U)

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intelligence officer with the Germans during the "malodorous Tamara Operation" in the Caucasas, but had not undergone any significant investigation into his World War II background. According to — — —, he also apparently worked with the Gehlen Organization.³³ (C)

Lt. Col. William R. Peers, an OSS veteran and Army officer serving as TRD's chief, found OPC's selection of ZRELOPE candidates to be less than adequate.³⁴ Peers told Wisner that "although the foreign division concerned will be responsible for the selection of the students, including the checking of their security and political affiliations, it is readily apparent that if these matters are not given full consideration and properly handled initially, the Training Division later may be faced with the situation of having numerous security problems on its hands which by that time it will be powerless to correct." (C)

After great discussion and even greater expense, ZRELOPE proved to be a short-lived program.³⁶ It failed because OPC could not recruit and vet candidates to meet its goal of 2,000 trained resistance fighters. The paramilitary aspect of ZRELOPE (known as

²¹ February 1951, (C), in DO Records, ( \sum_{3}) Box 5, Folder 35, CIA ARC. (C)

34William R. Peers was born in 1914 and attended the University of California at Los Angeles.

Commissioned in the US Army in 1938, Peers joined the Coordinator of Information in 1941 and was assigned to OSS's Detachment 101 in the China-Burma-India Theater of Operations as its commander from December 1943 until its disbandment in July 1945. He transferred to the China Theater as the commanding officer of the OSS Southern Area until September 1945 and then became the Deputy Strategic Services Officer in the China Theater. Peers returned to the United States in December 1945 and returned to normal staff duties with the Army and later was an instructor at the Command and General Staff College. In July 1949, Peers was assigned to the CIA as the chief of the Training Division. He later held numerous command and staff assignments with the Army and commanded the 4th Infantry Division in Vietnam. (U)

35Peers to ADPC, "ZRELOPE," 1 March 1951, (C), in DO Records, ( \subseteq \subseteq \subseteq \text{Box 5}, )

Folder 35, CIA ARC. (C)

36For a review of the project, see the Monthly Project Status Reports for 7RELOPE and variety

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ZRCORSET) was the first subproject to be discontinued because of a lack of recruits. In turn, CIA soon abandoned efforts to procure a "suitable" training area in the United States for the project. The political action element of ZRELOPE, or ZRDAMSEL, conducted a class in 1952 for a dozen-odd students at a hotel near Winchester, Virginia, utilizing the cover of the Franklin Development Foundation of Philadelphia. Despite plans to bring a new class to the training site, CIA canceled the entire program in November 1952. TRD estimated that the political action portion of ZRELOPE alone cost \$30,000 per student—an incredible expense for little gain.³⁷ (S)

Hot War Cadre Programs (U)

Despite the disappointing results of ZRELOPE, CIA continued to believe it could fashion the emigres into a potent fighting force in the event of a Soviet invasion of Western Europe. Several CIA projects concentrated on the recruitment of foreigners for paramilitary or insertion training in the United States. Even as OPC dropped ZRELOPE, it expanded an earlier project, WSBAKERY. In January 1952, OPC (with OSO's consent) organized Project AEACRE, which called for the establishment of a Domestic

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Like ZRELOPE, AEACRE encountered problems in recruiting knowledgeable instructors as well as in finding suitable agent candidates.³⁹ This project, however, had no difficulties in the "black" entry and exit processing of agents thanks to the cooperation of the US Air Force and the INS. This aspect of CIA's covert training seems to have rarely posed a problem.⁴⁰ The majority of personnel trained at DOB participated in REDSOX missions.⁴¹ These operations declined after the mid-1950s as CIA realized their futility, but the Soviet suppression of Hungary in 1956, however, rejuvenated DOB because the Joint Chiefs of Staff assigned new unconventional warfare tasks to the CIA.⁴² (S)

AEACRE Basic Plan," 10 December 1951, (C), and Joint Memorandum to DD/P, "Project AEACRE, Amendment No. 1," 25 March 1952, (C), in DO Records,

Box 3, Folder 13, CIA ARC. Monthly Project Status Reports for AEACRE, WSBAKERY, and other subprojects are also included. (C)

39A description of the problems encountered with Project AEACRE can be found in

Clandestine Services

Historical Series

(S)

40ZRELOPE had a subproject,

7, to handle the covert air transportation of its candidates. Responsibility for airlift was transferred from ZRELOPE to EE/AM on 30 September 1952.

⁴¹See Winston M. Scott, Chief, Inspection and Review to DD/P, "Inspection of AEACRE in 1953," 2 October 1953, (S), in DO Records, ☐ ☐ ☐, Box 14, Folder 1, CIA ARC. (S) ☐ ☐ pp. 16-20. (S)

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AEREADY came into existence to build up a force of personnel, native to various target areas of Eastern Europe, the Soviet Union, and the Middle East, who possessed area knowledge, language skills, and paramilitary training. Following basic training under CIA auspices, these agents returned home to their civilian jobs and held themselves ready for emergency callup and annual refresher training. Unlike either ZRELOPE or AEACRE, AEREADY did not require overseas recruitment or transportation to the United States. Rather, the new project identified these specialized individuals from INS rosters of immigrants and displaced persons already in America. AEREADY, however, also suffered from a lack of suitable personnel. After extensive nationwide searches, CIA ended up assessing 27 candidates for each successful agent that completed training. Members of the US armed forces with foreign language skills provided the initial cadre of AEREADY trainees. 43 (S)

The Army provided cover for Project AEREADY at Fort Meade, Maryland, where it established Material Testing Unit No. 1. Similar units were also organized for specialized training at Army posts in North Carolina, Virginia, and New York. 44 By 1961, AEREADY (known as AEDEPOT after 1958) had produced a pool of 63 reserve agents from 13 ethnic groups. Ukrainians formed the largest single body of agents with 17 personnel, followed by Russians, Latvians, and Lithuanians. 45 CIA integrated teams

Clandestine Services Histories Series

Clandestine Services Histories Series

3. Yury Lopatinsky, one of the main ZPUHVR leaders in the American zone in Germany, later trained at AEACRE and served as a "spotter" for Project AEREADY. In addition to his service as an officer in the Ukrainian Nachtigall Legion, the Germans dispatched Lopatinsky by aircraft into the Ukraine to establish contact with the OUN in December 1944. He made his way back to the American Zone of Western Germany one year later and claimed to be a lieutenant colonel in the UPA. Yury Lopatinsky,

1, DO Records. (S)

4:

1, DO Records. (S)

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The need to maintain a reserve cadre of European agents, however, diminished in the 1960s as the threat of Soviet invasion of Europe receded. In its place, communist insurgencies in Latin America and Southeast Asia posed new challenges that prompted CIA to reconsider its reserve hot war program. In 1966, the Agency deactivated WUDEPOT (as AEACRE and AEDEPOT had been redesignated two years earlier). While a handful of the reserve agents served in Latin America and Vietnam, the cancellation of WUDEPOT effectively ended the CIA's paramilitary training of Eastern Europe emigres. 46 (S)

In the sixteen years that followed OPC's Project ZRELOPE, the Central Intelligence Agency had contacts with thousands of Europeans from all backgrounds concerning paramilitary training. While a number of these individuals had proven both their anti-Nazi and anticommunist ideals (such as the Polish and Czech contract employees who flew air missions behind the Iron Curtain), the bulk of the CIA's resistance candidates and trained agents came from other areas of Eastern Europe where collaboration with the Nazis tended to be regarded as a positive sign of anticommunism.⁴⁷ (S)

Altogether, OPC's efforts to use emigre groups and to organize "secret armies" failed. None of these efforts had much impact on the Cold War, at least, in terms of

^<sup>46Ibid, pp. 34-46. (U)

⁴⁷For a review of the Polish pilots and crewmen of the 1045th Operational Evaluation and Training Group (OETG) who flew missions in Europe and later in Central America, see "Personal Characteristics, Motivation, and Reliability, of the [deleted] Group," 1 June 1960, (S), and 11 April 1961 Supplement in CIA History Staff Records, HS/CSG-818, _______, Box 5. CIA ARC. (S)

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defeating Soviet communism. The Agency's operations resulted from the belief in the likelihood of war in Europe and the need to be prepared for a Soviet invasion of western Germany and other states. Consequently, the CIA approached these projects with a "can do" attitude where time was of the essence. As it turned out, war did not break out in Europe and, after a more reflective examination, the Agency dropped most of its "hot war" projects and reduced its levels of involvement with the various emigre organizations. But the impact caused by the Agency's almost overnight entry into covert action and paramilitary affairs lingered for decades. (C)

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DECLASSIFIED AND RELEASED BY CENTRAL INTELLIGENCE AGENCY SOURCES METHODS EXEMPTION 3 #24 WAZI WAR CRIWES BISCLOSURE AGENCY BATE 2887

Chapter Nine

America's Seeing-Eye Dog on a Long Leash (U)

In 1949, just as the Office of Special Operations began to use emigre groups (such as the ZPUHVR) and the Office of Policy Coordination entered into covert action, the CIA assumed responsibility for the nascent West German intelligence service. More than any single project, this action linked the Central Intelligence Agency with veterans of Nazi Germany's intelligence services, some with notorious wartime reputations. The Agency, however, reached this decision only after a long-running debate with the US Army about the wisdom of supporting a resurrected German General Staff and a quasi-independent national intelligence organization. (U)

^<sup>2For a somewhat radical view regarding the CIA's link with the West German intelligence service, see Carl Oglesby, "Reinhard Gehlen: The Secret Treaty of Fort Hunt," Covert Action Information Bulletin (Fall 1990), pp. 8-14. (U)

^<sup>3For an "open" history of the American relationship with the German intelligence service after World War II, see Mary Ellen Reese, General Reinhard Gehlen: The CIA Connection (Fairfax: George Mason University Press, 1990). Other books, of varying degrees of reliability, include E.H. Cookridge (nom de plume for Edward Spiro), Gehlen: Spy of the Century (London: Hodder and Stoughton, 1971); Heinz Hohne and Hermann Zolling, Network: The Truth about General Gehlen and His Spy Ring, trans. by Richard Barry (London: Secker and Warburg, 1972); and lastly, Reinhard Gehlen, The Service: The Memoirs of General Reinhard Gehlen, trans. by David

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Gehlen's Saga (U)

The story behind the CIA's involvement with the Gehlen Organization actually started during the final hours of World War II. With the Soviets fighting in the streets of Berlin and the British and Americans racing across the shell of the Third Reich in the spring of 1945, many German officials realized the desperation of their cause. Reinhard Gehlen, the former chief of the German Army's intelligence branch dealing with the Eastern Front and Soviet forces, planned to survive Hitler's Gotterdammerung as the Third Reich crumbled in the spring of 1945. Like most Germans, Gehlen preferred surrender to the Western Allies as opposed to an uncertain fate at Russian hands. (U)

Born in 1902, Gehlen entered the Reichswehr, the Weimar Republic's small army, shortly after the end of the World War I. He joined the General Staff as a captain in 1936. During the invasion of Poland three years later, he served as a staff officer in an infantry division, where his organizational planning and staff work attracted the attention of senior officers. By mid-1942, Gehlen took charge of the German Army High Command's Fremde Heer Ost (FHO or Foreign Armies East), with responsibility for preparing intelligence assessments on the Soviet Union. Gehlen's work in this position eventually incurred Hitler's wrath, and he rejected Gehlen's pessimistic reports about the strength and capabilities of the Soviet Army. Hitler summarily dismissed Gehlen, now Generalmajor, in April 1945. (U)

Irving (New York: World Publishing, 1972). A draft manuscript (June 1996) by James H. Critchfield, entitled Germany: From Enemy to Ally 1946-1956, promises to add significantly to the literature on this topic. (U)

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Gehlen did not leave Berlin emptyhanded. He knew that the FHO contained some of the most important files in the Third Reich and that the possession of these records offered the best means of survival in the post-Hitler period. As the Soviets drew closer to Berlin, Gehlen dispersed his staff and transferred the FHO's intelligence files from the capital to secret locations in Bavaria. There, Gehlen and his handpicked officers waited to surrender to American forces. Gehlen believed that the Western Allies and the Soviet Union, while wartime allies, would soon become peacetime rivals. With his knowledge about the Russians, combined with the FHO's collective resources, Gehlen felt he could influence relations between East and West and Germany's role in postwar Europe. (U)

On the Lookout (U)

Even before Germany's capitulation, Allied forces were on the lookout for German intelligence officers and enlisted men. Indeed, as the Americans looked for Gehlen, he tried to find an American unit in order to surrender. After a circuitous route, the US Army finally delivered Gehlen and his men to the Twelfth Army Group Interrogation Center near Wiesbaden in June 1945. Interned at the "Generals' House," Gehlen reassembled his staff and files under the overall direction of Army Capt. John R. Boker, Jr. (U)

Boker, who had previously interrogated other German officers and Vlasov Army members, expressed his feelings as he started his interrogation of General Gehlen. "It was also clear to me by April 1945 that the military and political situation would not only give the Russians control over all of Eastern Europe and the Balkans but that, as a result of that situation, we would have an indefinite period of military occupation and a frontier

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contiguous with them."⁴ Thanks to his interrogation of German officers who had fought on the Eastern Front, Boker quickly became the Twelfth Army Group's resident expert on the Soviets. (S)

Gathering Gehlen's staff and records required some subterfuge on Boker's part. He was aware, from previous experience, that "there existed in many American quarters a terrible opposition to gathering any information concerning our Soviet Allies." He did, however, gain the support of Brig. Gen. Edwin L. Sibert, G-2 for the Twelfth Army Group and later head of intelligence for USFET, to employ the former FHO staff members to produce reports on the Soviets. Gehlen also wanted Boker to establish contact with some of his frontline organizational elements, such as Oberstleutnant Herman Baun, who commanded Stab Walli I, which conducted espionage work against the Soviets using Russian defectors and provided raw intelligence to Gehlen's FHO. Gehlen insisted that he had access to still-existent agent networks in the Soviet Union through Baun's sources. (S)

⁴Boker's account of his role during 1945-46 is found in John R. Boker, Jr., "Report of Initial Contacts with General Gehlen's Organization," 1 May 1952, in DO Records, Box 2, Folder 2, CIA ARC. (S)

5A general history of this early period is found in Chief, EE to EE/G, "History of the Gehlen Intelligence Organization," 28 March 1960, (S), enclosing , "History of the Gehlen Intelligence Organization," September 1953, DO Records, Box 1, Folder 5, CIA ARC (hereafter cited as "Gehlen History").

7 Clandestine Services Historical Series
6Further details about Stab Walli are found in Baun's interrogation in Counter Intelligence War Room London, Situation Report No. 154, "Leitstelle - I OST (Walli), 15 January 1946, (S), in

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analysis of the FHO records, not in its personnel. Boker, who had become quite attached to his project, resented losing control of Gehlen and his staff after their secret departure for Washington on 21 August 1945. Placed as virtual prisoners in a classified building at Fort Hunt, Virginia, (known simply as P.O. Box 1142), the Army planned to use Gehlen in conjunction with a larger project being conducted at Camp Ritchie, Maryland, to compile a history of the German army on the Eastern Front. (S)

Through Boker's efforts (he had accompanied Gehlen's group to the United States), and officers at the Eastern European Order of Battle Branch at the Pentagon, the situation for the Germans gradually improved. The BOLERO Group, as Gehlen's team became known, served under the direction of Army Capt. Eric Waldman until its return to Germany in June 1946. Gehlen's men prepared reports based on German records, and the general himself also had access to and commented on American intelligence reports.

OSS and SSU Kept in the Dark (S)

The Office of Strategic Services played little role in the interrogations of Gehlen and his staff in Germany and in Washington. In the throes of dissolution during the fall of 1945, OSS declined the Army's invitation to employ Baun in Germany. The new Strategic Services Unit also expressed some reluctance about using the German FHO for American intelligence purposes. SSU, however, did try to determine the nature of the relationship between Gehlen and Army intelligence. On 25 October 1945, Crosby Lewis in Germany informed Winston N. Scott in London:

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For your information only, Baun and a group of other members of Fremde Heere Ost, experts in the GIS on espionage against the Russians, are being collected by two officers of the G-2 section, USFET, who are responsible only to Gen. Sibert. It appears likely that Sibert got an OK from Washington on this when he was in the US last month, at which time it appeared that OSS might fold up. Von Gehlen and several high-ranking staff officers who operated for Fremde Heere Ost and for some of the Army Group staff on the Eastern Front during the war have been flown to the US-all this without any contact with the OSS here.⁸ (S)

In November 1945, Lewis responded to a request by Gen. Sibert that SSU take over Baun's operation from the Army. After reviewing Baun's plans, Lewis rejected them outright, calling them "rather grandiose and vague suggestions for the formation of either a European or worldwide intelligence service to be set up on the basis of wartime connections of Oberst Baun and his colleagues, the ultimate target of which was to be the Soviet Union." Lewis found a number of shortcomings with Baun's employment, including cost, control, and overall poor security measures. The fact that the Russians wanted to question Baun and Gehlen, as well as other German intelligence figures, did not sit well with Lewis. (S)

In early January 1946, SSU in Germany reported to Headquarters what it had learned "through discreet inquiries" about the Army's activities. SSU described the flight of Gehlen and his FHO staff from Berlin and their activities with the Americans. The report also stated that Gehlen had recommended that Herman Baun be contacted to

Crosby Lewis to Winston M. Scott, 25 October 1945 (S), in Baun, DO Records. See also Scott to Lewis, 30 October 1945, (S), in Baun DO Records (S)

"Gehlen History," pp. 14-15 (S). SSU's objections to takeover in 1945 are outlined in Lewis to Col. Galloway, "KEYSTONE Operation," 22 September 1946, (S), in DO Records, Document and Science of Col. ARC. A copy of this same memorandum with an attachment is also located in DO Records, Document Col. ARC. (S)

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States. Baun, in fact, had been arrested by the 80th CIC Detachment as a "mandatory arrestee" (members of Nazi party organizations and high-ranking German Army and SS officers were subject to immediate apprehension by the Allies) in late July 1945 and interrogated at the Third Army Interrogation Center the following month. The announcement of his arrest and the distribution of Baun's Preliminary Investigation Report raised great concern at Army G-2 because the Soviets now demanded the extradition of both Baun and Gehlen. ¹⁰ (C)

While the Army refused to accede to the Soviet demands, it secluded Baun and several other FHO personnel at the Military Intelligence Service Center (MISC) at Oberursel on the outskirts of Frankfurt (also known as Camp King and later officially designated the 7700th European Command Interrogation Center). The small group, including Gerhard Wessel, who had succeeded Gehlen as the head of FHO in 1945, was quartered at the "Blue House," where Baun developed his plans to launch a full-scale intelligence organization. The Army's G-2 planned to use Baun to resurrect his Abwehr network against the Soviets, but SSU "advised them [the US Army] to interrogate Baun at length and have nothing to do with his schemes for further intelligence activity." ¹¹ (S)

Meanwhile, SSU's Bill Holtsman in Munich had interrogated another officer of Stab Walli, Oberst Heinz Schmalschlager, about German intelligence activities against the Russians. SSU, in fact, considered Schmalschlager more valuable than Baun.¹²

¹⁰Preliminary Interrogation Report, 16 August 1945, (C), in Baun, DO Records. (S)

¹²SAINT, AMZON to SAINT, "Russian Experts of German Intelligence Service," 8 January 1946, (S), and untitled note to "Reg Phelps," in Baun, , in DO Records. (S)

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Despite SSU's advice that the Army dismiss Baun and reduce its reliance on FHO-derived intelligence, the opposite took place. Baun continued to operate and even thrived under US Army auspices. In January 1946, he established a service to monitor Soviet radio transmissions in the Russian zone and, two months later, the Army authorized him to conduct both positive and counterintelligence activities within Germany. 13 (S)

Operation RUSTY (U)

In the summer of 1946, the Army returned Gen. Gehlen and the remaining FHO members to Germany. At this point, Lt. Col. John R. Deane, Jr., the operations officer at the Military Intelligence Service Center published his plans to merge Gehlen's BOLERO group with Baun's already existent staff, known as KEYSTONE. Gehlen would coordinate the functions of both elements of the German organization while he had direct responsibility for the Intelligence Group, which provided evaluations to economic, military, and political reports obtained by agents of Baun's Information Group. The Army designated the entire organization Operation RUSTY, under the overall supervision of Col. Russell Philp, Lt. Col. John R. Deane, Jr., and Capt. Eric Waldman, who preceded Gehlen's return to Germany from Washington. 15 (S)

^13"Gehlen History," pp. 15-16. (S)

^<sup>14For a roster of the Intelligence Group (also known as the Evaluation Group) and the Information Group, see "Gehlen History," pp. 21-22. Gustav Hilger, for example, is listed as a member of Baun's Information Group. (S)

¹⁵Lt. Col. John R. Deane, Jr., Operations Officer, USFET MISC, to G-2, USFET, "Plan for the Inclusion of the BOLERO Group in Operation RUSTY," 2 July 1946, (S), in DO Records, Box 2, Folder 2, CIA ARC. The operation is variously described as gaining its designation from either a nickname given to Deane's young son or that given to Col. Russell Philp, commanding officer at "Basket," the secure facility at Blue House. See Reese, General Reinhard Gehlen, p. 207, and Chief of Station, Karlsruhe to Chief, FBM, "Bi-Weekly Letter," 4

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The Army planned to provide Operation RUSTY with US intelligence reports for comments and insight. Gehlen's Evaluation Reports, Deane expected, "will be of great value to the G-2 Division in that they will furnish the closest thing to finished intelligence that can be obtained from sources other than US." Deane's optimistic outlook indeed spurred the Army to submit more requests to Operation RUSTY, and Baun quickly expanded his collection efforts to meet the Army's insatiable appetite for information on the new threat in Europe. By October 1946, Gehlen and Baun claimed to have some 600 agents operating throughout the Soviet zone of Germany, providing the bulk of intelligence on the Russian Order of Battle. 17 (S)

As the Army increased its demands on Operation RUSTY, the group was transformed from a select group of German General Staff officers to a larger group that suffered from poor cohesion and mixed allegiances. In addition to covering eastern Germany, Operation RUSTY took on new missions in Austria and other areas of Europe as well as broadened earlier wartime contacts with emigre groups in Germany and with members of the Vlasov Army. The few American officers assigned to the Blue House

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barely knew the identities of RUSTY agents, thus making it difficult to confirm the validity of German reporting. Baun's recruiting and training of his agents proved haphazard while their motivation also raised questions. Throughout the Western Allied zones of Germany, men and women openly claimed to be working for American intelligence, leading to many security breaches and undermining RUSTY's overall effectiveness. To make matters worse, the US Army also assisted RUSTY's agents to avoid the established denazification procedures in Germany. ¹⁹ (S)

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people have till now been acting as subsources for either us or CIC, but now their informant days are over because they have 'at last contacted top American intelligence which has a lot of money.'" The Army's Counter Intelligence Corps, it appeared, was helpless, "because they are afraid of interfering with work of the 'higher Headquarters.'21 (S)

Hecksher, in turn, reported to CIG's contact at Army headquarters about the state of affairs. "In line with our standing complaint that talent scouts working for 'Operation Rusty' in the Munich area are cornering the market by offering monetary incentives far out of proportion to the potential intelligence yield they can expect," Hecksher stated, "we are passing on to you the well-substantiated account." While Hecksher observed that "we are not directly affected by this practice inasmuch as we try to recruit our agents from circles less susceptible to the lure of exorbitant rewards. Hardest hit, so far," the CIG counterintelligence officer commented, "has been CIC, Munich. At the same time, we on

Danes. The Danish Government tried Issel and sentenced him to death for war crimes. The Military Government's Office of the Director of Intelligence in Berlin expressed its dissatisfaction with the Issel case in a note to the Army officials responsible for the Gehlen Organization. "It is strongly recommended that increased effort on your part be made to complete your central file of agents," wrote the Deputy Director. "The Issel case can be used as a warning to those who are reluctant to submit names to your central file, because it must be emphasized that no effort will be made to protect them if they cannot be identified as working for a US agency." Army headquarters furthermore declared that "it will also prevent statements as follows, allegedly said by one of your agents to the British who arrested Issel: "if the SOB Americans won't protect us, we won't work for them." See Deputy Director, Intelligence Division to Commanding Officer, 7821 Composite Group, "List of Agents," 15 March 1949, 350.09 (GID/OPS/IS), (S), in Horst Paul Issel, ————————————————————————————————————

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principle regret to see an inflationary spiral set off in rewarding agents and informants."²²
(S)

The situation had only grown worse by 1948 when Hecksher reported that RUSTY "took over some of the informants dropped by Munich Operations Base after it had been conclusively established that the intelligence they furnished was of no value whatsoever." The Army's Counter Intelligence Corps and the Military Intelligence Service also picked up agents when they had been dropped by SSU or CIG. As early as December 1946, Headquarters told OSO's Security Control in Germany that "we believe our best policy would be to steer clear of it and let such agents and informers who are being lured away by higher inducements, go their merry way. It seems a shame that anyone is willing to pay so much for very low grade and mostly unverifiable information." (S)

The Army Pitches RUSTY to CIG (U)

Operation RUSTY turned out to be an expensive project and, by mid-1946, Army G-2 found itself running out of funds. The Army once again tried to persuade SSU to take over the operation following Gehlen's return to Germany. On a tour of SSU installations in Germany, Col. William W. Quinn conferred with Gen. Sibert and Crosby Lewis, now SSU chief in Germany, about the Army's proposal. Lewis repeated many of

²² Ibid. (S)

^<sup>23Hecksher to Helms, "Operation RUSTY," 18 March 1948, (S), in DO Records, ⊂ ☐. Box 5, Folder 8, CIA ARC. (S)

²⁴SC, FBM to SC, AMZON, "Operation RUSTY," 27 January 1947, X-9213, (S), in DO Records, C , Box 6, Folder 128, CIA ARC. A copy of this same memo is found in DO Records, C , Box 5, Folder 168, CIA ARC. (S)

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his objections that he had made earlier in the fall of 1945, and he suggested that SSU make a "thorough study" prior to any decision by Headquarters. In early September 1946, Lewis specified in writing to Gen. Sibert the conditions under which SSU would be prepared to assume responsibility for Gehlen, emphasizing the need for US intelligence to have complete access to all German records and identities of leading personalities and agents for initial vetting. In his review in the fall of 1946, Lewis summarized his thoughts: