At 12:45 P.M., the appointed time, on the appointed day, Donovan arrived at the White House. The President presented him the Oak Leaf Cluster and made appropriate remarks about Donovan’s great service in “secret intelligence, research and analysis, and the conduct of unorthodox methods of warfare in support of military operations.” Donovan was credited with “intelligence and operational aid to theater commanders, the JCS, State Department, and other government agencies.”
Donovan had been given new honor by the President for the accomplishments of OSS, but the SSU, which had declined to perhaps a 20th of the dimensions of the OSS, was in trouble. Quinn and Magruder found themselves under heavy attack from J. Edgar Hoover, who claimed the SSU had been infiltrated by the communists.
“The problem became serious,” remembered Quinn. “It was a typical J. Edgar Hoover vendetta. SSU had obtained [information showing] the full armaments of the ships of the Soviet Baltic fleet. I went to the admiral in charge of Naval Intelligence with a satchel loaded with the details, but he wouldn’t accept the material.”
“It is probably a deception,” said the admiral. “You’re riddled with communists.”
Quinn telephoned J. Edgar Hoover. “My name is Quinn,” he said. “I’m director of the SSU.”
“I know,” said Hoover.
“May I come over and see you?”
“What is your problem?”
“I’ll tell you when I see you.”
Quinn met with Hoover at FBI headquarters the next morning, and he told him of the admiral’s remarks. “I want you to vet each of my principal officers,” he finished.
Hoover leaned back in his chair. “This is beautiful,” he said with satisfaction. “The Donovan days are over.”
“Hoover sent me a liaison officer,” said Quinn. “In other words he made a real penetration, but he was very nice about it. The FBI began vetting . . . fingerprints, photos, backgrounds. When he was finished, we were in the club. I took the satchel of Soviet Baltic fleet plans back to the ONI, and the admiral accepted them.”
Donovan was now engaged again in his law practice, but this did not keep him from following the travails of the SSU with more than passing interest. One day he asked David Bruce and Russell Forgan to meet with him. The men talked over dinner at Bruce’s Georgetown home. By now Magruder had resigned because of ill health.
“You’ve got to help Quinn,” Donovan said. “He is getting clobbered, and the concept of central intelligence is at stake.”
From that day on, a number of former OSS men met from time to time at the Bruce home and advised Quinn on problems that he chose to present to them. At the same time Donovan also asked Larry Houston to be his go-between with an administration committee working on a new plan for a central intelligence service.
“We’d breakfast at the Metropolitan Club or sit in the garden and talk about things,” said Houston.
The OSS might be part of the past, but this did not keep its former chief at home. John B. Okie, formerly of the OSS, who was to work for Donovan again in the forthcoming World Commerce Corporation, remembered a Donovan visit to Europe.
The General came through Paris after the war and asked me if I would go with him to Baden-Baden to visit General [Lucius] Clay. He wanted to go by car and wanted me to pick him up at the Ritz at 4:00 A.M., which I did. One can imagine that, after a late night, a cup of coffee was at the top of my list. Whenever I suggested we stop for coffee or go to a men’s room, the General would ask me one of his simple, early-morning questions to divert my attention from stopping; a question like, “Jack, how do you feel we should organize our intelligence network so as to be in a position to battle all the political and civil brush fires that will be set by the Russians in the underdeveloped countries of Asia and Africa?”
Clay gave a reception and dinner for Donovan, at which there were about ten other guests. Okie was relaxing over a drink at the reception. “After a shower, General Donovan came down and called me away from my hard-earned drink to inquire if I had found out who all the other people in the room were,” he recalled, “and why they were there. The General was most disappointed that I did not have a complete list of answers.”
Donovan returned from his foray into Germany with a better knowledge of the Soviet attitudes toward their presumed allies. Then on March 1, 1946, he made an impassioned speech before the Overseas Press Club in New York. Truman had announced a new Central Intelligence Group. Donovan pointed out that faulty intelligence had seriously injured the nation in the past, and now he said that the CIG would fail since it lacked both civilian control and independence. The United States must have a coordinated, centralized, and civilian-directed intelligence service that would be independent of other departments. The CIG was responsible to the National Intelligence Authority, which Donovan in a speech on April 10 in New York characterized as “a good debating society but a poor administering instrument.”
At the same time that Donovan played an important role in the debate on a peacetime intelligence for America, he directed the new International Rescue Committee, which was formed to aid refugees from Soviet conquest. In addition, together with Edward Stettinius and Sir William Stephenson, he founded the British American Canadian Corporation, with the purpose of starting up commerce and industry in countries devastated by the war or in the path of Soviet subversion. Donovan registered the corporation in Panama to give it certain tax advantages and by April was pressing his associates for action. On April 23, he wrote to Stettinius, “This country has emerged from the war as a dominant economic power. It is the only significant creditor nation and can capture at will almost any export market from which it is not artificially barred. While the movement is temporarily held in check by lack of shipping space and uncertainty as to possible political restrictions in certain areas, soon we shall be exporting in great volume credit, commodities, technique, and specialist manpower.”
Donovan also told Stettinius that American business with few exceptions was “unprepared by experience and ill-equipped in personnel to make a complete success of foreign commerce under postwar conditions. The mechanisms and structure of foreign trade are obsolete. They date from clipper ship days and are cumbersome and anachronistic in these days of air freight and radio telephone.” Donovan and Stettinius both had farms in Virginia, and during the summer of 1946 they met first at Stettinius’s Horseshoe Farm and then at Donovan’s Chapel Hill Farm to continue the discussions.
Meanwhile Donovan was establishing a secret office in uptown Manhattan, which he made the center of a private intelligence web. For years before World War II and immediately after the war, he had directed his own agents from his 2 Wall Street law offices, but now he put a brilliant young Armenian refugee at the head of a staff whose responsibility was to keep in touch with undercover representatives located in strategic places. Donovan was no longer director of the OSS, but he had no intention of letting his knowledge of what was going on in the world be reduced to what he read in the newspapers.
Periodically the uptown office would provide Donovan with books, articles, and reports to read. He perused these at his usual breakneck speed, underlining what he considered to be important points that the staff should investigate at greater length. The passages that Donovan marked off were typed on cards and filed in top-secret cabinets. Donovan not only wanted to understand the world around him, but he had decided to write a vast history of intelligence in the western world since the Byzantine Empire.
After the Central Intelligence Agency was created in Washington in 1947, a CIA liaison officer was appointed to maintain contact with the former OSS chief, who in the shadow world of postwar conflict continued to be America’s master spy. Top government officials concerned with the conduct of America’s foreign policy asked Donovan for his opinions and confidential information, since in many cases he seemed to be better informed than the CIA. Strikingly, Donovan did not tell his law partners of his intelligence network, except Richard Heppner. Heppner, who had served Do
novan as director of OSS Detachment 202 in China, acted as Donovan’s alter ego in the undertaking. From time to time Donovan met his agents either on his trips abroad or in clandestine rendezvous in New York, Washington, or Chicago.
“On such trips, he had a passion for anonymity,” observed one of his agents. “He above all refused to have his picture taken. ‘I just want to seem to be an aging little fat man,’ he would say.”
In July 1946 Donovan visited the Command and General Staff School in an effort to persuade them to “set up a chair on irregular warfare,” and he corresponded with Allen Dulles about the safety of former German OSS agents in Berlin in the light of Russian hostility. He involved himself in mining properties in Nova Scotia and considered building hotels, which would be managed by Hilton, in Egypt and Guatemala. At the conclusion of the war Donovan had been awarded a number of honors, including honorary knight commander of the Order of the British Empire, commander of the French Legion of Honor, and first class rank in Thailand’s Most Exalted Order of the White Elephant. Now in August, he was retained as legal counsel by Thailand in a border dispute with French Indochina.
By August Donovan also was taking a serious interest in possibly becoming the Republican candidate for U.S. senator from New York. A boom for Donovan for U.S. senator swelled in New York City, and a headquarters was opened in the Hotel Lexington. His supporters ranged from solid Republicans to Eleanor Roosevelt. Nancy Fogarty, who had worked for the OSS in London, was now working for the State of New York, but this did not keep her from volunteering for the Donovan campaign.
“I worked in Governor Dewey’s office,” she explained. “After hours, I’d go to Donovan headquarters. The women there were nuts about General Donovan. Society ladies would come in after dinner to help out.”
Ernest Cuneo had been responsible for swinging Eleanor Roosevelt behind Donovan, and he went to the Donovan Sutton Place apartment to tell him about it. While he was explaining the situation to Donovan, the phone rang.
“It was Tom Dewey,” said Cuneo. “He said he would back Donovan if Donovan would back him for the presidency in 1948.”
“I don’t think you’re qualified for president now,” said Donovan to Dewey, “and you won’t be qualified then.” He hung up.
“What job would you like other than being the senator from New York?” Cuneo asked him.
Dewey angrily opposed Donovan, accusing him of being big business and antilabor and antiunion, and when the Republicans met in Saratoga to choose a senatorial candidate, Dewey was instrumental in denying the nomination to Donovan.
Donovan spent many happy weekends at Chapel Hill Farm in 1946. Ruth and he usually stayed in a two-bedroom cottage on the grounds, since David and Mary and their five children lived in the big house. At Easter the five children and their grandfather colored eggs together. Whenever Bill Donovan arrived at the farm, the children would dash to grab him by the hand and lead him to the stables, where there were ponies to ride. The Donovans were members of the Blue Ridge Hunt Club, and Mary, at least, rode to the hounds on every possible occasion.
The happy family life was tragically marred on New Year’s Eve 1946. The hunt club ball that was to take place that night was to be especially lively in honor of Maj. Gen. William J. Donovan, who would celebrate his 64th birthday on the morrow. Preparing for the evening’s festivities, Ruth Donovan placed some jewelry in a glass of liquid silver polish in the kitchen. Five-year-old Sheila was playing with the other children outdoors and, feeling thirsty, dashed indoors for a drink. Hastily, she gulped down the glass of what seemed to be water and went into immediate convulsions. The polish contained cyanide of potassium, one of the deadliest of poisons, and Sheila was soon unconscious. David and Mary rushed the child to the hospital in Winchester, 12 miles away, but she was pronounced dead upon arrival. The Donovans insisted that the hunt club ball go on, but the tragedy made it the most cheerless in the history of the club.
37
Donovan’s Last Missions
THE BRITISH AMERICAN CANADIAN Corporation, as might be expected of the creature of Donovan, Stephenson, and Stettinius, plunged into developmental projects worldwide. In Guatemala thick stands of white oak were studied as a source of barrel staves for American National Distillers. Representatives explored the prospects of shoe manufacture in Venezuela, where the bottleneck was the lack of tanning facilities for local hides. In Egypt efforts were made to raise the standard of living through such industries as food canning and the manufacture of fertilizers, caustic soda, chlorine, and penicillin. Donovan and Stephenson approached Paul McNutt, who in May 1947 was retiring as governor general of the Philippines, about entering a partnership with BAC to develop industry in the islands. In many cases, former OSS men who were citizens of countries in which BAC had projects acted as principals. Notably, Pridi Phanomyong, who had led the Thai underground in the war, now was working with Donovan again to help create a brighter economic picture for his nation. Prince Waithayakon also was participating.
On September 24, 1947, the British American Canadian Corporation changed its name to World Commerce Corporation. By that time the company was “exporting from the United States heavy machinery, textiles, excavators, earth-moving equipment, motor cars and tractors, fine and heavy chemicals, and certain drugs.” It also was importing “botanical drugs in bulk, waxes, gums, seeds, spices, and oils.” It was represented in 47 countries.
Not only were Donovan and Stettinius seeing one another regularly on their respective farms in Virginia, but they also met frequently at Stettinius’s suite at the Savoy Plaza in New York, where they abstemiously sipped orange juice instead of cocktails at the cocktail hour or breakfasted on bacon and eggs while they made their plans.
“Our purpose,” said Donovan, “is to break the logjams that are preventing the renewal of free trade among the nations of the world. Private initiative can achieve more lasting beneficial development in the impoverished nations of the world than can intergovernmental assistance programs. The best way to oppose Communist expansionism is by materially strengthening the challenged societies.”
At the same time Donovan favored the program of economic aid to Europe that came to be called the Marshall Plan. He conferred with George C. Marshall, who had replaced James Byrnes as secretary of state, concerning how U.S. government help might be employed to avert the threatening economic collapse of Europe. Throughout the year Donovan worked for the establishment of a central intelligence organization in Washington. He gave talks, worked through former OSS men who were active with the interim Central Intelligence Group, testified before congressional committees, and otherwise supported the creation of such an agency. When on September 18, 1947, almost two years to the day after his OSS had been abolished, the Congress authorized the Central Intelligence Agency, Donovan was delighted. The new CIA in most important respects followed the blueprint that he had submitted to Franklin Roosevelt three years before. The continued turmoil in the world and the hostile actions of the Soviet Union had convinced most Americans of the need for a central intelligence organization. President Truman had long since come around to that view.
Some of Donovan’s friends suggested that he should by all rights be the first director of the CIA, but Truman still did not like him personally, and it was common knowledge that Donovan was not exactly fond of the President. In 1953 Donovan was again talked about as CIA director as an alternative to Allen Dulles, but he was by then 70 years of age and beginning to slow his activities. Even so, a CIA historian noted that “although Donovan was certainly getting on in years, he had a mind which exploded all over the place, whether it was clandestine collection, covert action, or analysis. Bill Donovan would have brought to the CIA the knowledge of certain aspects of the intelligence business that Allen Dulles may have seen and recognized, but never understood.”
Donovan may have been slowing down, but in addition to his law practice and World Commerce Corporation activity, he still managed in the postwar years to chair the Ameri
can Committee on United Europe, which he had formed to bring Europe together as a basis for the reintegration of Germany into Europe and therefore its eventual rearmament.
Donovan’s suspicions of the Russians were increased when the Soviets overthrew the government of Czechoslovakia in 1948 to install a puppet Communist regime. He testified concerning the European Recovery Act before the Foreign Relations Committee of the Senate on January 22. Senator Tom Connally asked Donovan to comment on the advisability of a positive approach to rebuilding Europe.
“I think that is right, Senator,” said Donovan. “But we do not want to err on the other side and show that we still want to genuflect to appeasement.” In dealing with the Russians, said Donovan, it was very important to have their respect.
Donovan, who had early recognized the seeds of World War II, now became an aging Cassandra telling the American people that the Soviet Union’s policies were already creating World War III. He told the senators:
These evidences of Soviet antagonism might have strengthened our understanding of Soviet intentions. But this antagonism should not have caught us off guard. Rather, it should have prompted our leaders to integrate the facts and interpret them, so that the American public could be told what we were called upon to do and why we were called upon to do it. This should have been done long ago. Only now in America and in Europe are we awakening to the existence of the hard fact that the Stalin challenge to our world is indistinguishable from the Hitler challenge—except that the Stalin attack is more thorough and more ruthless.
At the time the proposal of the Marshall Plan became concrete, on December 19, 1947, we learned of the determination of the Cominform to fight it to the death. Our government must have known this just as the man in the street in Italy and France knew that ammunition and supplies were being sent from Russia or its satellite countries to Communists in France and in Italy to be used, if necessary, for the overthrow of the duly constituted governments of these countries.
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