A Look Over My Shoulder

by Richard Helms

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  In June 1946, Admiral Souers completed a final bit of business before retiring almost as quietly as he had arrived as the first director of CIG. He recommended Lieutenant General Hoyt S. Vandenberg, a nephew of the powerful Republican Senator Arthur Vandenberg, as his replacement. With prescience, and probably advice from Admiral Leahy and General Eisenhower, President Truman agreed.

  Hoyt Vandenberg was the personification of an Air Force general. Forty-seven years old, lean and handsome to the point of glamour, he was fresh from a brilliant wartime record in the Army Air Force, and commander of the Ninth Air Force. His ambition to be chief of staff of the independent Air Force was temporarily on hold. Pending the passage of the Reorganization Act, which would establish the Air Force as a separate branch of service, the honor of being the first Air Force commanding general was being held for General Carl A. Spaatz, the Eighth Air Force commander in World War II. On his return from France, General Vandenberg was named assistant chief of staff, G-2 in the Pentagon. This five-month assignment was enough for Vandenberg to confirm his wartime impression of the need to revamp the intelligence structure, to eliminate overlapping responsibilities, and to create an administratively and financially independent agency that could effectively collect and evaluate the political, economic, technological, and social aspects, as well as the military strengths, of world powers.

  With the sense of urgency of a pilot anxious to get his aircraft off the ground and on the way, and with the self-confidence of a man who in wartime had run an organization of 18,000 employees and 4000 aircraft, Vandenberg zipped through a series of briefings and a quick tour d’horizon of the European stations. It was only a few days after the new director of Central Intelligence had slipped out of uniform that one of our more sartorially perceptive observers noticed that the general had so many decorations he was always able to choose a buttonhole rosette that complemented his tie and shirt.

  Those of us in SSU soon learned that when General Vandenberg took over CIG, he was determined to turn what many insiders still considered to be a fragile bureaucratic curiosity, manned by a hotchpotch of civilian and military personnel, into a national intelligence service. In July he created an Office of Research and Estimates (ORE) to provide the White House and other agencies with daily and weekly current intelligence summaries and analysis. The thunder of the State Department’s furious objections was still shaking the walls when, without apparently pausing to catch his breath, Vandenberg simply absorbed the SSU, its responsibility for intelligence and counterintelligence abroad, its cadre of experienced personnel, foreign stations, and files into CIG. He also won access to the cryptographic product of the National Security Agency.

  The orphan Strategic Services Unit was then reborn as the Office of Special Operations (OSO), and Colonel Quinn was replaced by Colonel Donald Galloway, who assumed the title assistant director of special operations (ADSO). Coincidentally, Vandenberg convinced President Truman to pry responsibility for secret intelligence operations in Mexico and Central and South America from the iron grasp of J. Edgar Hoover.

  Along with others at my level, several rungs below the general, I was fascinated to watch our new boss tuck these accomplishments under his belt. Vandenberg was influential in convincing President Truman that CIG, as presently organized and staffed, was unworkable and that only a fully funded, formally established, independent intelligence service would suffice. It was a bravura performance, and one for which General Vandenberg has not been given enough credit. He served eleven months before returning to the Air Force in May 1947. His premature death in 1954 was a sad loss.

  In May 1947, President Truman appointed Rear Admiral Roscoe Hillenkoetter as the third director of Central Intelligence. “Hilly,” as he was known to his friends, had considerable intelligence experience. He had been a staff officer for intelligence under Admiral Nimitz in the Pacific theater during World War II and was serving as the naval attaché in Paris when he was appointed director of Central Intelligence. When the National Security Act was passed in July 1947, the Central Intelligence Group was made an independent department of the executive branch and renamed the Central Intelligence Agency, with Hillenkoetter as its first director. CIA’s mission was defined as advising the National Security Council on national security; making recommendations to the NSC on the coordination of intelligence activities of the various departments; correlating, evaluating, and providing for the dissemination of intelligence; and “perform[ing] such other functions and duties related to intelligence affecting national security as the NSC will from time to time direct.” The act was deliberately loosely written to avoid the dread words “espionage” and “counterintelligence.”

  Vandenberg’s concept of CIA as an executive agency controlling all other intelligence components of the government was fiercely opposed by the Department of Defense intelligence services, the Department of State, and the FBI. As a rear admiral and a relative newcomer in Washington, Hillenkoetter was in no position to force the issue, which President Truman ignored. During his three-year tenure, Hillenkoetter concentrated on establishing the young Agency as senior to the military services and the FBI. In this he was successful.

  It was in these years that the period of intense reorganization, personnel problems, and turf struggles ended, and postwar operations began to take shape. Some of these remain of interest, not merely because of the role they played as we learned our trade.

  *In 1950, Senator Kenneth Wherry, GOP floor leader, found “homosexuals and other sex perverts” were “not proper persons” for government jobs. Wherry was equally known for his malaprops—“Chief Joints of Staff,” “Indigo China,” “my unanimous opinion,” etc.

  *Quoted in Robert Asprey, The Panther’s Feast (New York: Putnam’s, 1959).

  Chapter 8

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  THE GEHLEN ORGANIZATION

  The day after Allen Dulles signed his OSS discharge documents in December 1945 and returned to civilian life, he reminded a meeting of the Council on Foreign Relations that a too rigidly enforced denazification policy in Germany would mean that many of the people essential to getting Germany running again would be barred from any such activity. By definition more than 500,000 Germans might legally be classified as war criminals. It was obviously essential, he said, to bring leading Nazis and war criminals to trial. It would, however, be quite another matter to imprison half a million people for months while attempting to sift the criminals from the run-of-the-mill Nazi Party members whose experience and skills were needed. He added, “We’ve already found that you can’t run the railroads without taking in some Nazi Party members.”

  Dulles’s appearance at the council meeting was a signal that his work as a partner in the New York law firm of Sullivan and Cromwell did not mean that he was stepping out of foreign affairs. Within six months, Dulles was beckoned back into the intelligence world. When General Vandenberg replaced Admiral Souers as director of Central Intelligence, he asked Dulles to form a board of consultants to advise him personally on the problems of “central intelligence.” Dulles did not delay in forming a distinguished group—Kingman Douglass, William H. Jackson, Robert Lovett, Paul Nitze, Frank Wisner, and Admiral Souers. Along with his Sullivan and Cromwell responsibilities, his work with the Foreign Relations Council, drafting several articles on Germany, and writing a book-length manuscript,* Dulles found ample time to consult with General Vandenberg and to draft proposals for the shape and organization of what was to become the Central Intelligence Agency in 1947.

  It was with Dulles that my first official brush with Pentagon operation, code name RUSTY, came in 1946. Dulles invited Colonel Donald Galloway, my boss in the operations element of CIG, and me to a New York town house, where General Edwin L. Sibert, chief of staff, G-2, the senior G-2 officer in the American occupation zone in West Germany, briefed us on Operation RUSTY. At the time, it was one of the most ambitious and complex G-2 operations.

  Several U.S. military officers played important
roles in establishing the RUSTY operation, but the project was essentially the responsibility of General Sibert and the creation of Major General Reinhard Gehlen, a German General Staff Corps officer, who for the last three years of the war served as Hitler’s intelligence chief on the Russian front. As commanding officer of Fremde Heere Ost (FHO, Foreign Armies East), Gehlen was the equivalent of chief of staff, G-2, on the eastern front. In April 1945, Hitler had had enough of what he called Gehlen’s “defeatist” estimates of Soviet strength and intentions. He ordered Gehlen’s retirement, and replaced him with a presumably more optimistic officer.

  Within a month Hitler committed suicide, the Thousand Year Reich had collapsed, and General Gehlen was holed up in the Bavarian Alps.

  Gehlen had reasoned as early as 1943 that when the democracies finally became aware of Stalin’s expansionist intentions, the Allied coalition would fall apart. More significantly, he assumed that the need to defend the West would eventually “force the Western allies to make common cause with [Germany] against communism.”† Several highranking Nazis had the same notion, but Gehlen’s view was somewhat more realistic. Unlike the others, he accepted as fact the probability that the Allies would insist on Germany’s unconditional surrender. Gehlen was prepared to wait until the post-surrender dust had settled before making his move.

  Because Hitler considered any planning based on Germany’s possible defeat to be a capital crime, Gehlen took care to keep his post-retirement plans to a handful of his closest associates. In preparation for leaving his command, Gehlen supervised the transfer of some fifty steel containers of the FHO files from the eastern combat area to safety in Germany. His plan was to offer American intelligence a unique body of research and order-of-battle data, and a ready-made, thoroughly experienced organization—in effect a reconstructed FHO—prepared to provide a wide spectrum of intelligence on the USSR and its activity in Eastern Europe.

  Two weeks after the surrender, an American lieutenant took Gehlen into custody. The former general was astonished to find that he was just another POW. American intelligence had extensive knowledge of the German forces it faced, but had paid scant attention to German intelligence activity on the Russian front. Gehlen remained an unknown quantity until Soviet officers working on a joint commission sorting out German POWs approached a British officer and expressed a strong interest in finding the former FHO chief and some of his staff. When G-2 was informed, they realized that if the Russians were so keen to locate a mere one-star general among the hundreds of high-ranking officers and war criminals in the POW cages, Gehlen might be worth a close look.

  A few days later a group of G-2 officers listened as an interpreter translated Gehlen’s glowing account of the FHO’s competence, its files, and the experience and ability of the officers, analysts, and operatives. When he was sure of G-2 interest, Gehlen added a bit more bait: if the Americans acted promptly, the German network of agents in the USSR could be reactivated.

  General Sibert knew that by allowing his staff even to listen to Gehlen’s views on the USSR he was running well ahead of General Eisenhower’s policy of not soliciting help or advice from former Nazi authorities. He decided that an exception should be made, and that Gehlen’s proposition be given a closer examination. It was soon clear that the FHO had been a competent military intelligence organization. From prisoner interrogation, low-level, across front-line agent activity, analysis of aerial photography and radio intercept, to the study of captured documents and soldiers’ letters from home, German efficiency, record-keeping, and analytical skills were of a high order. As Sibert saw it, Gehlen’s initial proposal seemed tailored to help fill a near vacuum in the American military intelligence establishment.

  When Gehlen expanded his offer to collect tactical intelligence with the suggestion that he might also “reactivate” some of the Nazi agents allegedly active within the USSR, the American listeners might have drawn a deep breath. Tactical military intelligence is a far stretch from strategic intelligence collection. Gehlen’s FHO operated on a tactical level, along the eastern military fronts. Strategic intelligence was handled by the Abwehr, with responsibility for intelligence collection abroad. The RSHA (Reichssicherheitshauptamt, Reich Main Security Office) encompassed the Gestapo, the Sicherheitsdienst, the SS security service, and the criminal police. Under the command of Heinrich Himmler and Walter Schellenberg, the RSHA also collected foreign intelligence. Aside from occasional cryptographic breakthroughs, telephone intercepts, and a well-placed agent (code name CICERO) in Turkey, none of these organizations was effective. Senior British and American counterintelligence officers knew that every one of Germany’s wartime agents in England—and many of those active in other areas—had operated under Allied control throughout most of the war. The false information these agents reported had convincingly deceived Hitler as to Allied invasion plans and strength in Europe. Moreover, as postwar study of the NKVD and GRU took shape, it began to look as if the Russians had also been highly effective in deceiving German intelligence on the eastern front. If this proved to be true (and it was) German strategic intelligence—east and west—had been duped. Tactical military intelligence is important; strategic intelligence is vital.

  In August 1945 the War Department brought Gehlen and four colleagues to Fort Hunt near Washington for a closer look. After weeks of debriefing and discussions, they were returned to Germany. No one in Washington appeared anxious to make any decisions about the future of Fremde Heere Ost, or with the possible building of a future German intelligence service. The Pentagon was content to leave the specifics to G-2 in Germany. Pending final Pentagon approval, it was informally agreed that under G-2 sponsorship, Gehlen was to establish a clandestine intelligence organization that would collect information in East Germany and elsewhere in Eastern Europe. The organization would be financed by G-2, and work “jointly” with but not for American authorities. When a sovereign German government was established, that government would decide whether the organization should remain in being or not. Although RUSTY would receive its directives from the Americans, and would furnish G-2 with its reports, the American officers working with Gehlen in Washington neglected to insist upon being given the names of and biographic data on the RUSTY staff personnel. Nor did G-2 demand this information on the agents and sources employed by RUSTY and paid by G-2. Even in the confusion of the immediate postwar intelligence picture, this oversight violated one of the fundamental rules of secret intelligence, and helped to set the stage for the security disasters that in time all but destroyed the entire effort.

  There is no principle in the espionage canon more important than that an intelligence service must know—or at the least continuously strive to know—exactly with whom it is dealing. In fairness, we must remember that in the months after Germany’s defeat the United States was removing its forces from Western Europe and, in effect, disarming at the moment the USSR was reinforcing its troops and consolidating its strength behind what was rapidly becoming the Iron Curtain. In the early months of the occupation, the military, political, and social conditions in Germany verged on the chaotic. As the Soviet position became clear and its intentions began to clarify, the Pentagon, the State Department, the intelligence services, and the White House realized that the United States was ill prepared to deal with its new antagonist. In comparison with the depth and mass of the political, military, and economic data that had been collected on Germany and Japan, the intelligence files on the USSR were all but empty. The demand for military and political intelligence increased exponentially and on what sometimes seemed to be a daily basis. For the moment RUSTY seemed to offer a quick fix.

  It was in this atmosphere that G-2 authorized RUSTY to begin operations on an ad hoc basis. In occupied Germany’s distressed condition, RUSTY’s ample budget and access to commissary supplies were a powerful beacon to potential recruits. Although Gehlen agreed with the G-2 rule that no former SS, Gestapo, or Sicherheitsdienst personnel would be employed in RUSTY, the fact that t
he German staff did not disclose the names of its personnel or agents meant G-2 could not check its own files or the captured Nazi Party, SS, Gestapo, Sicherheitsdienst, and Wehrmacht records for war criminals or other compromised Nazis. As a result, RUSTY’s own security and background checks on new employees were minimal; an oral recommendation by a staff employee would often suffice. Former German intelligence officers were recruited, and they in turn promptly hired old colleagues, former agents and informers, relatives and friends. To my knowledge none of the Gestapo, SS, or Sicherheitsdienst veterans were taken into senior positions, but some who wriggled in at lower levels would in time make their way ahead.

  The RUSTY intelligence product on the Soviet forces in East Germany was soon recognized as valuable. Other solid reporting came from the effective interrogation of POWs returning from the USSR and the numerous refugees from Eastern Europe. One of the most valuable activities was a radio intercept station operated from Schloss Kransberg near Frankfurt. The radios were handled by experienced operators who had learned their trade in months of around-the-clock service on the eastern front. During the Berlin airlift, these reports—taken from intercepted voice traffic of the Soviet Air Force—supplied General Curtis LeMay, the Air Force commander in Germany, with a running account of which MiG-17s were up, which were down, and the airfields from which they were operating. General LeMay considered this “real time” reporting an essential element in the success of the airlift.

  Within a few months it became apparent that the cost and the problems of managing the ever-burgeoning effort were more than G-2 had expected. There was intense rivalry within the organization as members jostled for position. Worse, the political aspects of intelligence cooperation remained explosive. There was no public enthusiasm and even less official tolerance for anything smacking of Germany’s military revival. The black shadow of the Gestapo and the SS hung heavily on any whisper of renewed German intelligence or security work. The British and French, each interested in developing independent activity with Germany’s former intelligence operatives, were not above suggesting that Gehlen’s organization was a nest of Nazis mothered by otherwise unemployable former General Staff officers.