Legacy of Ashes (The History of the C.I.A.) Read online

  “His imagination was unlimited,” said his right-hand man, David K.E. Bruce, later the American ambassador to France, Germany, and England. “Ideas were his plaything. Excitement made him snort like a racehorse. Woe to the officer who turned down a project, because, on its face, it seemed ridiculous, or at least unusual. For painful weeks under his command I tested the possibility of using bats taken from concentrations in Western caves to destroy Tokyo”—dropping them into the sky with incendiary bombs strapped to their backs. That was the spirit of the OSS.

  President Roosevelt always had his doubts about Donovan. Early in 1945, he had ordered his chief White House military aide, Colonel Richard Park, Jr., to conduct a secret investigation into the wartime operations of the OSS. As Park began his work, leaks from the White House created headlines in New York, Chicago, and Washington, warning that Donovan wanted to create an “American Gestapo.” When the stories broke, the president urged Donovan to shove his plans under the rug. On March 6, 1945, the Joint Chiefs of Staff formally shelved them.

  They wanted a new spy service to serve the Pentagon, not the president. What they had in mind was a clearinghouse staffed by colonels and clerks, distilling information gathered by attachés and diplomats and spies, for the benefit of four-star commanders. Thus began a battle for control of American intelligence that went on for three generations.

  “AN EXTREMELY DANGEROUS THING”

  The OSS had little standing at home, and less inside the Pentagon. The organization was barred from seeing the most important intercepted communications from Japan and Germany. Senior American military officers thought an independent civilian intelligence service run by Donovan, with direct access to the president, would be “an extremely dangerous thing in a democracy,” in the words of Major General Clayton Bissell, the assistant chief of staff for military intelligence.

  These were many of the same men who had slept through Pearl Harbor. Well before dawn on December 7, 1941, the American military had broken some of Japan’s codes. It knew an attack might be coming, but it never imagined Japan would take so desperate a gamble. The broken code was too secret to share with commanders in the field. Rivalries within the military meant that information was divided, hoarded, and scattered. Because no one possessed all the pieces of the puzzle, no one saw the big picture. Not until after the war was over did Congress investigate how the nation had been taken by surprise, and not until then was it clear that the country needed a new way to defend itself.

  Before Pearl Harbor, American intelligence covering great swaths of the globe could be found in a short row of wooden filing cabinets at the State Department. A few dozen ambassadors and military attachés were its sole sources of information. In the spring of 1945, the United States knew next to nothing about the Soviet Union, and little more about the rest of the world.

  Franklin Roosevelt was the only man who could revive Donovan’s dream of a far-seeing, all-powerful American intelligence service. When Roosevelt died on April 12, Donovan despaired for the future. After sitting up half the night grieving, he came downstairs at the Ritz Hotel, his favorite haunt in liberated Paris, and had a gloomy breakfast with William J. Casey, an OSS officer and a future director of central intelligence.

  “What do you think it means for the organization?” Casey asked.

  “I’m afraid it’s probably the end,” Donovan said.

  That same day, Colonel Park submitted his top secret report on the OSS to the new president. The report, fully declassified only after the cold war ended, was a political murder weapon, honed by the military and sharpened by J. Edgar Hoover, the FBI director since 1924; Hoover despised Donovan and harbored his own ambitions to run a worldwide intelligence service. Park’s work destroyed the possibility of the OSS continuing as part of the American government, punctured the romantic myths that Donovan created to protect his spies, and instilled in Harry Truman a deep and abiding distrust of secret intelligence operations. The OSS had done “serious harm to the citizens, business interests, and national interests of the United States,” the report said.

  Park admitted no important instance in which the OSS had helped to win the war, only mercilessly listing the ways in which it had failed. The training of its officers had been “crude and loosely organized.” British intelligence commanders regarded American spies as “putty in their hands.” In China, the nationalist leader Chiang Kai-shek had manipulated the OSS to his own ends. Germany’s spies had penetrated OSS operations all over Europe and North Africa. The Japanese embassy in Lisbon had discovered the plans of OSS officers to steal its code books—and as a consequence the Japanese changed their codes, which “resulted in a complete blackout of vital military information” in the summer of 1943. One of Park’s informants said, “How many American lives in the Pacific represent the cost of this stupidity on the part of OSS is unknown.” Faulty intelligence provided by the OSS after the fall of Rome in June 1944 led thousands of French troops into a Nazi trap on the island of Elba, Park wrote, and “as a result of these errors and miscalculations of the enemy forces by OSS, some 1,100 French troops were killed.”

  The report personally attacked Donovan. It said the general had lost a briefcase at a cocktail party in Bucharest that was “turned over to the Gestapo by a Rumanian dancer.” His hiring and promotion of senior officers rested not on merit but on an old-boy network of connections from Wall Street and the Social Register. He had sent detachments of men to lonely outposts such as Liberia and forgotten about them. He had mistakenly dropped commandos into neutral Sweden. He had sent guards to protect a captured German ammunition dump in France and then blown them up.

  Colonel Park acknowledged that Donovan’s men had conducted some successful sabotage missions and rescues of downed American pilots. He said the deskbound research and analysis branch of OSS had done “an outstanding job,” and he concluded that the analysts might find a place at the State Department after the war. But the rest of the OSS would have to go. “The almost hopeless compromise of OSS personnel,” he warned, “makes their use as a secret intelligence agency in the postwar world inconceivable.”

  After V-E Day, Donovan went back to Washington to try to save his spy service. A month of mourning for President Roosevelt was giving way to a mad scramble for power in Washington. In the Oval Office on May 14, Harry Truman listened for less than fifteen minutes as Donovan made his proposal to hold communism in check by undermining the Kremlin. The president summarily dismissed him.

  All summer long, Donovan fought back in Congress and in the press. Finally, on August 25, he told Truman that he had to choose between knowledge and ignorance. The United States “does not now have a coordinated intelligence system,” he warned. “The defects and the dangers of this situation have been generally recognized.”

  Donovan had hoped that he could sweet-talk Truman, a man he had always treated with cavalier disdain, into creating the CIA. But he had misread his own president. Truman had decided that Donovan’s plan had the earmarks of a Gestapo. On September 20, 1945, six weeks after he dropped America’s atomic bombs on Japan, the president of the United States fired Donovan and ordered the OSS to disband in ten days. America’s spy service was abolished.

  2.“THE LOGIC OF

  FORCE”

  In the rubble of Berlin, Allen Dulles, the ranking OSS officer in Germany, had found a splendid and well-staffed mansion for his new headquarters in the summer of 1945. His favorite lieutenant, Richard Helms, began trying to spy on the Soviets.

  “What you have to remember,” Helms said half a century later, “is that in the beginning, we knew nothing. Our knowledge of what the other side was up to, their intentions, their capabilities, was nil, or next to it. If you came up with a telephone book or a map of an airfield, that was pretty hot stuff. We were in the dark about a lot of the world.”

  Helms had been happy to return to Berlin, where he had made his name as a twenty-three-year-old wire service reporter by interviewing Hitler at the 1936 Olympics. He w
as dumbstruck by the abolition of the OSS. At the outfit’s operations center in Berlin, a commandeered sparkling-wine factory, the anger and alcohol flowed freely on the night the order from the president arrived. There would be no central headquarters for American intelligence as Dulles had envisioned. Only a skeleton crew would stay on overseas. Helms simply could not believe the mission could come to an end. He was encouraged a few days later when a message arrived from OSS headquarters in Washington, telling him to hold the fort.

  “THE HOLY CAUSE OF CENTRAL INTELLIGENCE”

  The message came from Donovan’s deputy, Brigadier General John Magruder, a gentleman soldier who had been in the army since 1910. He adamantly believed that without an intelligence service, America’s new supremacy in the world would be left to blind chance, or beholden to the British. On September 26, 1945, six days after President Truman signed away the OSS, General Magruder stalked down the endless corridors of the Pentagon. The moment was opportune: the secretary of war, Henry Stimson, had resigned that week, and Stimson had been dead-set against the idea of a CIA. “Seems to me most inadvisable,” he had told Donovan a few months earlier. Now General Magruder seized the opening left by Stimson’s departure.

  He sat down with an old friend of Donovan’s, the assistant secretary of war, John McCloy, one of the great movers and shakers of Washington. Together, the two men countermanded the president.

  Magruder walked out of the Pentagon that day with an order from McCloy that said, “the continuing operations of OSS must be performed in order to preserve them.” That piece of paper kept the hope for a Central Intelligence Agency alive. The spies would stay on duty, under a new name, the Strategic Services Unit, the SSU. McCloy then asked his good friend Robert A. Lovett, the assistant secretary for air war and a future secretary of defense, to set up a secret commission to plot the course for American intelligence—and to tell Harry Truman what had to be done. Magruder confidently informed his men that “the holy cause of central intelligence” would prevail.

  Emboldened by the reprieve, Helms set to work in Berlin. He purged officers who had plunged into Berlin’s black market, where everything and everyone was for sale—two dozen cartons of Camels, purchased for $12 at the American military PX, bought a 1939 Mercedes-Benz. He searched for German scientists and spies to ferret out to the West, with the aim of denying their skills to the Soviets and putting them to work for the United States. But these tasks soon took second place to the struggle to see the new enemy. By October, “it was very clear our primary target was going to be what the Russians were up to,” remembered Tom Polgar, then a twenty-three-year-old officer at the Berlin base. The Soviets were seizing the railroads and co-opting the political parties of eastern Germany. At first the best the American spies could do was to try to track the movement of Soviet military transports to Berlin, giving the Pentagon a sense that someone was trying to keep an eye on the Red Army. Furious at Washington’s retreat in the face of the Soviet advance, working against the resistance from the ranking American military men in Berlin, Helms and his men began trying to recruit German police and politicians to establish spy networks in the east. By November, “we were seeing the total takeover by the Russians of the East German system,” said Peter Sichel, another twenty-three-year-old SSU officer in Berlin.

  The Joint Chiefs of Staff and the forceful secretary of the navy, James V. Forrestal, now began to fear that the Soviets, like the Nazis before them, would move to seize all of Europe—and then push on to the eastern Mediterranean, the Persian Gulf, northern China, and Korea. One false move could lead to a confrontation no one could contain. And as the fear of a new war increased, the future leaders of American intelligence split into two rival camps.

  One believed in the slow and patient gathering of secret intelligence through espionage. The other believed in secret warfare—taking the battle to the enemy through covert action. Espionage seeks to know the world. That was Richard Helms. Covert action seeks to change the world. That would be Frank Wisner.

  Wisner was the charming son of land-rich Mississippi gentry, a dashing corporate lawyer in a tailored military uniform. In September 1944 he had flown into Bucharest, Romania, as the new OSS station chief. The Red Army and a small American military mission had seized control in the capital, and Wisner’s orders were to keep an eye on the Russians. He was in his glory, conspiring with the young King Michael, plotting the rescue of downed Allied airmen, and requisitioning the thirty-room mansion of a Bucharest beer baron. Under its sparkling chandeliers, Russian officers mingled with the Americans, toasting one another with Champagne. Wisner was thrilled—he was one of the first OSS men to bend an elbow with the Russians—and he proudly reported to headquarters that he had made a successful liaison with the Soviet intelligence service.

  He had been an American spy for less than a year. The Russians had been at the game for more than two centuries. They already had well-placed agents within the OSS and they quickly infiltrated Wisner’s inner circle of Romanian allies and agents. By midwinter, they took control of the capital, herded tens of thousands of Romanians who had German bloodlines into railroad cars, and shipped them eastward to enslavement or death. Wisner watched twenty-seven boxcars filled with human cargo rolling out of Romania. The memory haunted him all his life.

  He was a deeply shaken man when he arrived at OSS headquarters in Germany, where he and Helms became uneasy allies. They flew to Washington together in December 1945, and as they talked during the eighteen-hour journey, they realized they had no idea whether the United States would have a clandestine service after they landed.

  “AN APPARENTLY BASTARD ORGANIZATION”

  In Washington, the battle over the future of American intelligence was growing fierce. The Joint Chiefs of Staff fought for a service firmly under their control. The army and the navy demanded their own. J. Edgar Hoover wanted the FBI to conduct worldwide espionage. The State Department sought dominion. Even the postmaster general weighed in.

  General Magruder defined the problem: “Clandestine intelligence operations involve a constant breaking of all the rules,” he wrote. “To put it baldly, such operations are necessarily extra-legal and sometimes illegal.” He argued, convincingly, that the Pentagon and the State Department could not risk running those missions. A new clandestine service would have to take charge.

  But almost no one was left to fill its ranks. “The intelligence collection effort more or less came to a standstill,” said Colonel Bill Quinn, General Magruder’s executive officer at the Strategic Services Unit. Five of every six OSS veterans had gone back to their old lives. They saw what was left of American intelligence as “transparently jerry-built and transient,” Helms said, “an apparently bastard organization with an unpredictable life expectancy.” Their number fell by nearly 10,000 in three months, down to 1,967 by the end of 1945. The London, Paris, Rome, Vienna, Madrid, Lisbon, and Stockholm stations lost almost all their officers. Fifteen out of twenty-three Asian outposts closed. On the fourth anniversary of Pearl Harbor, convinced that Truman had run American intelligence off the rails, Allen Dulles returned to his desk at Sullivan and Cromwell, the New York law firm where his brother John Foster Dulles was a partner. Frank Wisner followed his lead and went back to his own New York law firm, Carter, Ledyard.

  The remaining intelligence analysts were dispatched to form a new research bureau at the State Department. They were treated like displaced persons. “I don’t suppose there had ever been or could ever be a sadder or more tormented period of my life,” wrote Sherman Kent, later a founding father of CIA’s directorate of intelligence. The most talented soon left in despair, back to their universities and newspapers. No replacements appeared. There would be no coherent intelligence reporting in the American government for many years to come.

  President Truman had relied on his budget director, Harold D. Smith, to oversee the orderly dismantling of the American war machine. But demobilization was turning into disintegration. Smith warned the president
on the day he dismembered the OSS that the United States was at risk of returning to the state of innocence that had prevailed before Pearl Harbor. He feared that American intelligence had become “royally bitched up.” At a hastily convened White House meeting on January 9, 1946, Admiral William D. Leahy, Truman’s crusty military chief of staff, bluntly told the president that “intelligence had been handled in a disgraceful way.”

  Truman saw he had created a snafu and decided to set it straight. He summoned the deputy director of naval intelligence, Rear Admiral Sidney W. Souers. A reservist, Souers was a Democratic Party stalwart from Missouri, a wealthy businessman who made his money in life insurance and Piggly Wiggly shops, the nation’s first self-service supermarkets. He had served on a postwar commission studying the future of intelligence created by Secretary of the Navy James Forrestal, but his sights were set on nothing grander than a swift return to Saint Louis.

  Souers discovered to his dismay that the president was going to make him the first director of central intelligence. Admiral Leahy recorded the moment of the investiture in his office diary for January 24, 1946: “At lunch today in the White House, with only members of the Staff present, RAdm Sidney Souers and I were presented with black cloaks, black hats, and wooden daggers” by Truman. The president then knighted Souers as chief of the “Cloak and Dagger Group of Snoopers” and “Director of Centralized Snooping.” This vaudeville act placed the flabbergasted reservist in command of the misbegotten and short-lived organization called the Central Intelligence Group. Souers was now in charge of nearly two thousand intelligence officers and support staff who controlled files and dossiers on some 400,000 individuals. Many of them had no idea what they were doing, or what they were supposed to do. Someone asked Souers after his swearing-in what he wanted to do. “I want to go home,” he said.