Wild Bill Donovan

by Douglas Waller

  In Donovan’s rush to build up, early applicants were hired with no more security check than someone vouching for their family connections. It resulted in Nazi sympathizers slipping in, who had to be weeded out later when they were more carefully screened. Communists were a dilemma. Donovan wanted them to work with him but not necessarily for him. With Roosevelt’s blessing he had Buxton meet regularly with Eugene Dennis, the leader of the Communist Party USA, who fed him intelligence on Axis agents in the United States and abroad. Donovan relayed the tips on the agents to Hoover, but didn’t tell him from where the information came. Yet when he discovered employees in his own agency with communist sympathies, Donovan could be ruthless in getting rid of them, particularly when they were outed by Hoover or congressional witch hunts. When forty-two members of his propaganda staff signed a letter protesting that his firing of two writers was based on flimsy evidence of communist affiliation, Donovan indignantly threatened to fire the petitioners as well.

  But handing out pink slips posed its own dangers, Donovan soon realized. The discharged left angry and more willing to spill secrets they had learned. With thousands needed for a worldwide intelligence organization, Donovan began screening applicants more carefully at the outset so he wouldn’t have to fire them later. In addition to security checks, he eventually set up assessment units on the East and West Coasts, where teams of psychiatrists and psychologists put applicants through an exotic battery of tests to determine if they were suitable for clandestine work.

  By June 1942, Donovan had set up espionage and sabotage schools at vacant Civilian Conservation Corps and National Parks Service camps in Maryland and Virginia. After a sixteen-week espionage course, the students took final tests called “schemes.” They fanned out to cities to try to infiltrate defense plants with false identities to steal secrets—and also to practice talking their way out of a jam if guards caught them. The trainers usually alerted the local police or military authorities when a scheme was in their area. Even so, Hoover became incensed when he found one of Donovan’s students in San Diego posing as an FBI Academy graduate. He threatened to prosecute any impostors his agents nabbed. Donovan ignored the threat and continued the schemes.

  From the beginning Donovan recognized he was starting from “minus zero,” as he put it. To launch sabotage and guerrilla attacks, he set up what was code-named the “L activity,” run by Lieutenant Colonel Robert Solborg, an Army intelligence officer born in Warsaw who had fought in czarist Russia’s cavalry during World War I. But L was a unit in name only; Solborg had no saboteurs or guerrillas to command. Fortunately the military was willing to dump what little espionage capability it had on Donovan. In October 1941, the Navy gave him American businessman Wallace Banta Phillips and the thirteen agents he controlled around the world gathering information on foreign shipping the sea service found only occasionally useful. A longtime London resident, Phillips became the chief of “K activity” to collect intelligence and counter Axis spying.

  By mid-November 1941, Phillips had forty-two agents scattered in a dozen countries, but they were an odd lot with questionable spying skills: an ex-Treasury officer in Bulgaria, a museum curator in Iran, a National Geographic editor in Afghanistan, an American roaming France whose only qualifications were that he had lived there many years and spoke “perfect French,” Phillips told Donovan. But the only espionage operation Donovan had overseas was Phillips’s and he gave him a blank check to draw from a $2.5 million secret account Roosevelt’s Bureau of the Budget eventually agreed to set up for it.

  Like a player in a pickup basketball game, Donovan looked for other amateurs he could use for now. The Philips Company, which sold lamps overseas, agreed to have its representatives in neutral and Axis-controlled countries feed him information they ran across on their sales calls that might be militarily useful. The Eastman Kodak Company canvassed its five thousand amateur camera clubs around the country for photos of enemy installations its members might have taken on foreign trips before the war. Pan American Airways loaned employees at its hubs throughout Africa; one sent reports, code-named “Cigar,” on German U-boats prowling off the Ivory Coast. Working through his old friend, Francis Cardinal Spellman, the archbishop of New York, Donovan also cast lines out to the Catholic Church. An apostolic delegate in Washington secretly promised that Vatican envoys posted in Axis countries would discreetly supply him with political intelligence they collected.

  America’s foreign-born and first-generation population—some 46 million—became a pool for information and agent recruitment. While the Oral Intelligence Unit he had set up in New York interviewed thousands of newly arrived refugees, Donovan cultivated a number of the high-profile émigrés. Prince Serge Obolensky, a tall and handsome former White Russian cavalryman who had worked his way up the New York National Guard, offered his expertise on the Soviet Union. Donovan’s kind of guy, the prince was hired immediately. Count Carlo Sforza, an aristocratic Italian antifascist and occasional Ickes dinner partner, became an informant. Donovan was also captivated by Eve Curie, the enchanting daughter of Nobel Prize–winning scientists Marie and Pierre Curie. She had dark almond eyes and spoke with a sultry French accent. Donovan helped her arrange a world tour as a newswoman and from the North Africa war zone and Russian front she sent him private reports, which he passed on to FDR.

  Many of Donovan’s early amateur spies ended up a waste of money. He convinced Roosevelt to approve $5,000 to send explorer and nature filmmaker Armand Denis to roam central and southern Africa to spy on German espionage and military activity, using the cover that he was scouting a future movie on primates. The Belgian American shot a lot of footage on apes, caught several tropical diseases, and filed what amounted to a long travelogue with no useful military or political intelligence. He finally admitted in a letter to David Bruce that he was a hopeless secret agent: “I cannot see the forest for the trees.”

  But at least Donovan’s unit was going on the offensive, fanning out across the country and around the world to begin collecting intelligence. In wartime Washington that was something new. By mid-1942, he had organized his agency into four branches: Secret Intelligence, to send undercover spies abroad collecting information on Axis forces and the economies that sustained them; Special Operations, to spread propaganda and organize sabotage and guerrilla warfare in occupied countries; Foreign Nationalities, based in New York to mine ethnic groups in the United States for political intelligence abroad and recruit foot soldiers for covert operations; Research and Analysis, which became known as the “Chairborne Division,” to make sense of the fire hose of information pouring in. Donovan realized the mundane business of intelligence would be the most important, the gathering, analyzing, and interpreting of “many minute bits of evidence,” he said. “A half hour spent with the brakeman of a freight train running into occupied France would produce more useful information than Mata Hari could learn overnight.”

  The administrative chores of running an intelligence organization, however, bored Donovan. He brought more men into his inner circle for that: Duncan Lee, a tightly strung lawyer from Donovan’s firm, to be an executive secretary and troubleshooter; Edwin Putzell, another law firm colleague, to manage Donovan’s schedule and the paper flow to him; Ernest Cuneo, a Democratic Party operative who took over Jimmy Roosevelt’s job cajoling cooperation out of the FBI and other agencies; and Otto “Ole” Doering Jr., the son of a top Sears, Roebuck executive who also left Donovan’s law firm and ended up his chief of staff. Self-effacing yet meticulously efficient, Doering’s principal job became making sure Donovan’s agency survived, which was not a given with the State Department, military, and FBI lined up against him. Donovan wanted $135 million for the 1943 fiscal year. The Budget Bureau’s Smith wanted it slashed to $50 million. Donovan, he groused, had “sold the President a bill of goods.”

  DONOVAN ALSO NEEDED front companies to hide parts of his organization. Stephenson transferred to him Western Continents Trading, a phony export-import firm Bri
tish intelligence had used, along with its head agent, George Muhle, who had been the American representative for a German-controlled pharmaceutical before Pearl Harbor. From an office in the RCA Building at Rockefeller Plaza, Muhle and five staffers collected intelligence on companies important for the Nazi war machine, such as I. G. Farben, and tracked German business activity in Latin America, which Donovan knew treaded on Hoover’s and Rockefeller’s turf. He kept Western Continents secret even from many in his own organization. “Project George,” as the operation came to be called, compiled index cards on thousands of German businessmen linked to espionage and prepared hundreds of reports for the State Department and other agencies on Berlin companies in Latin America and elsewhere. Among its odd jobs: finding a bottle of German Bayer Aspirin the Navy wanted so it could be imitated and reproduced.

  Setting up dummy corporations, however, could get complicated, Donovan quickly discovered. He had to evade nosy inquiries from Dun & Bradstreet, which wrote profiles on companies. Workers had to waste time pretending to do what the sign at the front door said they were supposed to do. No guards or night watchmen could be posted to protect secrets in the office; it would be a tip-off that the company was conducting more than just routine business.

  Donovan also began to have a bad feeling about a major the Army’s Military Intelligence Service had loaned him for another one of his front companies, FBQ Incorporated, which was setting up two radio listening stations in New York and California. John “Frenchy” Grombach was a burly West Point graduate and former boxer. He had left the service during the interwar years to dabble in radio broadcasting but had returned to the Army in 1941. Donovan thought he was a gabby conspiratorial type, not the kind of man he wanted organizing these highly sensitive stations. They would be intercepting not just German and Japanese propaganda broadcasts but also coded military messages and Gestapo dispatches that Donovan hoped his men could decipher. That decryption work would give him a capability like Magic’s, whose raw take his agency was not allowed to see. He knew Marshall would not appreciate the overlap. Grombach also had gotten his wife a job at FBQ as a radio technician, which raised nepotism alarm bells with agency lawyers. Frenchy and Mrs. Grombach were soon edged out of FBQ, which left the major nursing a bitter grudge against Donovan. He would soon become a troublesome rival.

  DONOVAN’S HEADQUARTERS quickly became frenetic with activity. Julia Child, a young public relations woman from New York who joined the agency as a file clerk in Donovan’s outer office and later would transfer to Chungking, remembered the boss as little more than a blur, who “constantly passed by our door as he saw people in or out of his office. And when in it his door was usually open and we could overhear an occasional loud remark or command.” The aging headquarters building itself soon began to strain under the hectic pace. An incinerator exploded in the basement because too many classified documents had been stuffed into it for destruction. Another day, aides scrambled to save valuable papers when pipes burst, flooding the first floor. Even Donovan began to complain that half-eaten late-night meals piling up in trash cans gave the place a malodorous pall when he arrived in the morning.

  Donovan found that putting secret agents in the field posed a host of practical problems. They all had to have code numbers, but so many were passed out (one memo called it a “numbers racket”) headquarters soon had difficulty keeping track of who was who on documents that just listed the numbers. Spies wanted life insurance, understandable considering their profession’s hazards. But insurance companies refused to write policies unless they knew a client’s name and what his job was, which would blow an agent’s cover. Donovan decided to pay death benefits from his unaccounted-for money.

  Transportation became a hassle. With military support personnel pouring into Europe, space on ships and planes for Donovan’s agents became scarce. He had hired Ruth Shipley’s brother, hoping it would make the State Department’s top passport official friendlier to his agency. It didn’t. The officious Mrs. Shipley balked at allowing Donovan’s agency to make its own American passports for agents with phony details on them. In the beginning, she had stamped on the ones she issued for Donovan’s men that the passport holder was traveling abroad “on Official Business” for the Coordinator of Information. They might as well wear buttons on their lapels reading “American Undercover Agent,” a memo to Donovan complained. He finally got the policy rescinded.

  Even riding around town could be a problem. Interior Secretary Ickes, who had a quick temper, sent Donovan an angry letter in September after his National Parks police caught an overeager agency courier speeding forty-six miles per hour on the Arlington Memorial Bridge to rush film to the airport for a West Coast flight. It was a “reprehensible” offense, Ickes wrote. Donovan apologized. But Ickes continued to send the spy chief angry notes when his park police caught couriers speeding, which started Donovan’s aides wondering if the cabinet officer had anything better to do than play traffic cop.

  Donovan hired a banker to manage the secret funds he received from the White House. Spies had to have money to live on while in the field. Dollars obviously would give them away so a complex system had to be set up to quietly buy foreign currencies. The Treasury Department had over $175,000 worth of foreign gold coins available, while Paramount Pictures held foreign currency reserves for their overseas films, which Donovan could purchase. German marks and French francs were bought on the black market. So they wouldn’t stand out for an agent using them, new bills had to be aged by spreading them out on an office room floor and walking on them for a day. Donovan also scoured the country for engravers, printers, graphic artists, and special paper stocks to produce difficult-to-find currencies as well as foreign passports, rations cards, and other documents agents needed in the field. The Treasury Department, nervous about this collection of forgers, demanded that they all be drafted into the Army and closely watched so they didn’t counterfeit on the side.

  Donovan became a stickler about holding employees accountable for the White House’s unvouchered funds. He set up detailed expense account rules; a station chief overseas was allotted $300 a month to wine and dine sources. Donovan, however, had looser rules for his own spending. He always kept $2,000 in the top right drawer of his desk to buy information from his personal sources.

  WITH A FERTILE MIND Donovan was willing to launch practically any project, no matter how unconventional. Roosevelt approved $15,000 for a confidential geographic study Donovan wanted Arctic expert Vilhjalmur Stefansson to prepare on Alaska, northern Canada, Greenland, and Iceland, where the United States might have to fight Germany or Japan. He hatched an idea for an air-conditioned, high-tech briefing room at his headquarters with situation maps and the latest audiovisual gadgets (including a new one called television), which FDR could visit daily for a picture of the worldwide war. Roosevelt was intrigued and approved $2 million, but the Budget Bureau complained it was a useless toy and the Secret Service, horrified at the thought of carting a wheelchair-bound president to it daily, objected. The military brass eventually grabbed the project so they could watch the war through multimedia.

  Ideas poured in from outsiders and Donovan entertained them all. A New York art appraiser proposed flooding Germany with counterfeit marks to create economic chaos. (Donovan worried Berlin would retaliate and flood the U.S with phony bills.) John Steinbeck wrote suggesting air-dropping tiny grenades over occupied countries so children could toss them from rooftops at German soldiers. (Donovan didn’t reply to the novelist.)

  Yet he was willing to try almost anything—even if it had little to do with spying—and to stick his nose into anyone else’s business. Donovan agreed to have his agency sponsor an Australian dental officer making a U.S. speaking tour on “Dentistry in Total War.” He sent memos to FDR proposing that a road be built to Alaska to truck in supplies for new military bases there to attack Japan—with a route he thought the road should take. Another memo to FDR proposed that he declare a national day “of fasting, humiliati
on and prayer.” Stimson told him to butt out; the War Department already had its own route for the Alaska road project. Roosevelt joked that the fasting and prayer day would do his overweight press secretary, Steve Early, more good than it would the American people.

  STANLEY P. LOVELL was a short, round-faced, and unpretentious man, orphaned since childhood, who was fifty-two when Donovan hired him in early 1942. Lovell had already established himself as a respected commercial chemist and New England inventor. Donovan called him his “Professor Moriarty.” From a cramped basement room in the headquarters building, Lovell headed the Office of Scientific Research and Development, with free rein to develop any spy gadget he could dream up.

  For that mission, Lovell had a mind even more creative than Donovan’s. Thousands of pistols with silencers, lightweight submachine guns, miniature cameras, agent radios, exotic knives, and special explosives were manufactured and shipped out to operatives. Invisible ink was developed to write secret messages on paper or even an agent’s shirt. Explosives shaped like lumps of coal (nicknamed “Black Joe”) and pocket-sized incendiaries with time-delayed fuses to start fires were sent to Europe. Bombs fashioned with explosive powder made to look like flour, which could be kneaded and baked into bread, were produced and sent to Asia.