Only later did Donovan’s men discover they had been victims of an old-fashioned swindle. The Vatican, which wanted to throw Scattolini in jail when it learned of his scam, let the Americans in on a little secret. Fabricating papal documents was a lucrative business in Rome that dated back to 1883. Scattolini was a fairly successful pornographic novelist who found religion, then went to work for the semiofficial Vatican newspaper Osservatore Romano until the editors discovered he had written dirty books and fired him. But Scattolini left the paper with a warehouse of Vatican political trivia in his head, a playwright’s talent for concocting dialogue, and a vivid imagination. To feed his family, he penned Vatican political documents and reports, which he began selling to such news outlets as the New York Times, Agence France-Presse and TASS, the Russian press service. Scattolini soon had a collection of middlemen, such as Dubinin and Setaccioli, who found the British, Polish, Argentine, and Spanish embassies also eager to shell out money for his phony intelligence reports and transcripts of papal conversations. Donovan eventually determined that the only reason his agency became one of Scattolini’s suckers was that Dubinin had mistakenly approached Scamporino with material that was intended for another client.
Vessel arrived at Donovan’s doorstep around the time he was dealing with the Legendre scandal. Fortunately, he was able to keep her embarrassing case in-house. But many top people in Washington’s national security community knew about the Vessel debacle—including the president of the United States. Curiously, Roosevelt had been intrigued by the Vatican memos but not particularly bothered when it became clear to him later that they were bogus. He may have simply read the Vessel reports and ignored their information. By January when these memos began pouring in, Roosevelt was in desperately poor health with heart disease and distracted by preparations for Yalta. When he returned from the Crimea he was physically exhausted, in no condition to pay much attention to a Donovan gambit gone haywire. Whatever the reason, Roosevelt never reacted one way or the other to the memos the OSS sent him throughout the Vessel episode. Vessel, however, did not help Donovan with another more important initiative he wanted Roosevelt and other top administration officials to approve—a future CIA.
Chapter 29
The Leak
EARLY FRIDAY MORNING, February 9, 1945, was frigid and dark outside as a servant padded down to the front of the driveway of the Georgetown house to scoop up the newspapers and deliver them to Donovan, who was eating his breakfast. He had kept a light schedule since arriving in Washington Wednesday from his grueling Asia trip. There had been meetings through Thursday to catch up with senior aides and branch chiefs. He found time to phone Ruth, who was in Buffalo with her family. Donovan also phoned Grace Tully at the White House for the latest news from the Yalta conference at Livadia Palace. The Big Three had settled on demilitarization of Germany and occupation zones after the war. Stalin promised to join the Far East campaign, but his concessions came with a price. He won postwar territory in Asia and two extra votes for the Ukrainian and Belorussian Soviet Socialist Republics in the new United Nations General Assembly. Stalin also agreed to eventual democratic governments in Poland and the other Eastern European countries his army occupied, but there was no enforcement mechanism to guarantee that the communist regimes he had installed would allow free elections. Conservative Republicans later denounced Yalta as a “sellout” and Donovan privately disparaged the accord when he reviewed its details. “The Russians have robbed us blind,” he complained to friends. Donovan was being unfair. Stalin’s extra votes mattered little in the large General Assembly and he was accorded in Eastern Europe what he had already won on the battlefield. Churchill and Roosevelt were not prepared to fight another war to take it back. The Yalta sellout came only later, when Stalin reneged on what he had agreed to for Eastern Europe.
What the three leaders could not agree on at their Crimea meeting was a coordinated final offensive against Germany. As the Allied armies raced across West Germany, the Eastern Front collapsed and the Red Army advanced toward Berlin, where Hitler had moved his headquarters to his Führerbunker under the New Reich Chancellery for the final siege. Dulles cabled Donovan Berlin updates he received from Fritz Kolbe and Swiss intelligence, which Donovan relayed to the White House. Hitler is “suffering from depression and works only at night,” Dulles cabled. He has “opposed any evacuation measures for Berlin.”
It was only a matter of time before the German capital fell, Donovan knew. But he now became convinced that the Nazis would never surrender and instead would fight on with an underground force left behind in Austria and southern Germany. The Alpine redoubt turned out to be a German-inspired myth—and an intelligence failure Donovan’s OSS shared with most other Allied spy agencies. By February, however, Donovan was trumpeting the redoubt theory as one of many reasons Roosevelt needed the OSS or some type of spy and subversion service after the cease-fire—to combat not just a German guerrilla threat but also future international dangers to the United States.
But when he read the front page of the Washington Times-Herald at his breakfast table the morning of February 9, he realized his vision of a future central intelligence agency had taken a serious body blow. Eleanor “Cissy” Patterson, who published the Times-Herald, was as rabidly anti-Roosevelt as her cousin, Colonel Robert McCormick, who ran the Chicago Tribune, a sister paper in the McCormick-Patterson chain along with the New York Daily News. Donovan stared in disbelief at a headline blaring from the front page of the Friday Times-Herald: “Donovan Proposes Super Spy System for Postwar New Deal.” The story, which also ran in the Tribune and Daily News that day, was written by Walter Trohan, the chain’s White House correspondent, who shared his publishers’ contempt for Roosevelt. Trohan had crossed paths with Donovan after his 1940 trip to England for Roosevelt, and in the four years since he had not been impressed with the Republican lawyer or the spy agency he had created for the Democrats.
Donovan knew from the first sentence of Trohan’s story that he was in for a hatchet job. “Creation of an all-powerful intelligence service to spy on the postwar world and to pry into the lives of citizens at home is under consideration by the New Deal,” the reporter declared. The New Deal reference made it sound as if this was another intrusive government scheme cooked up by Roosevelt liberals McCormick and the conservatives hated. Donovan, the story alleged, wanted to create a “super-intelligence unit” after the war ended, not only to spy on America’s “good neighbors throughout the world” but also to snoop on citizens “at home,” commandeering the “police powers” of the FBI and other law enforcement agencies “whenever needed.” The plan Donovan had drafted for a postwar espionage organization would give him “tremendous power” over how intelligence was gathered and analyzed, Trohan darkly wrote, with a hidden hand “to determine American foreign policy by weeding out, withholding or coloring information gathered at his direction.” In sentences he knew would inflame Republicans who hated FDR loyalist Felix Frankfurter, Trohan claimed unnamed Washington “high circles” had dubbed Donovan’s postwar intelligence organization “Frankfurter’s Gestapo” because the Supreme Court justice’s sister, Estelle, worked for the OSS and was picking “key personnel” for the new agency “at the suggestion of her brother.”
Equating the postwar intelligence agency Donovan wanted to create with the dreaded German Gestapo was as incendiary an attack as Trohan could make—sure to spark panic in Washington and across the country. But the Trohan article had two other bombshells that jolted Donovan as he read the piece. The newspaper had printed verbatim a secret memo Donovan had written to Roosevelt on November 18 proposing the postwar central intelligence agency along with an executive order he had drafted for the President to sign setting up the service. This was a major leak of two highly classified OSS documents. It exposed, not only to Americans, but also to the Germans, the Soviets, and other foreign governments a secret initiative Donovan had been formulating since the previous fall.
Donovan had been inf
ormally brainstorming ideas with his staff for a postwar intelligence agency since May 1943. By the end of September 1944, he had firmly in his mind the type of postwar service he wanted, which was not much different from what he envisioned when he got into the spy business in 1941. It should be an independent organization reporting directly to the president, collecting foreign intelligence and conducting secret operations for the entire government, and focused on the big picture to help the future leader of the free world make sound foreign policy decisions. The military services could still collect intelligence for their battlefield needs, but Donovan would coordinate their activities and those of other civilian agencies like the FBI—although he was emphatic that this new spy outfit not operate at home or have police functions.
In October, Donovan began quietly lobbying the White House for his plan. He assigned two aides, Louis Ream and Joseph Rosenbaum, to begin shopping his plan with key FDR staffers. Harold Smith, the Budget Bureau chief preoccupied with shrinking postwar agencies, not expanding them, was hostile. Harry Hopkins, the most powerful adviser, was noncommittal. But other senior White House aides were more encouraging. The most important ally became Isadore Lubin, a small, bespectacled, and bald New Deal economist close to Roosevelt who had been his point man on labor and war production issues. Lubin had been appalled by the worthless military intelligence reports piled on his desk, but the OSS product impressed him. “Bill Donovan’s Office of Strategic Services has been doing some swell work,” he wrote FDR on October 25, strongly endorsing the postwar plan. Lubin convinced the president to request a memo from Donovan on his proposal, then advised Donovan on Roosevelt’s hot buttons to push when he wrote it—for example, that the plan would “eliminate a lot of duplication between agencies” (Roosevelt was obsessed with downsizing after the war). Lubin joked with Donovan that when Roosevelt approved his program, “I want 10% of your salary increase.”
Lubin should not have been so cocky. Roosevelt was far from sold on Donovan’s idea. Correctly sensing the mood of the country, he wanted government to contract after the war and the military to demobilize. FDR had already ordered Smith to think about agencies to cut and the budget czar had the OSS high on his list. As he prowled the White House lobbying, Rosenbaum also sensed that Roosevelt had become disenchanted with his spy chief. Donovan had accumulated too many political enemies to lead a central intelligence service in peacetime, White House aides whispered to Rosenbaum, and there was still the problem that he was a Republican, which made him suspect.
On November 18, Donovan finally sent his memo to Roosevelt outlining his arguments for “an intelligence service for the postwar period” along with a draft executive order to set it up. FDR would pick the intelligence director and supervise him. The State Department, Navy, and Army, which would keep their own intelligence operations, would lend Donovan men and equipment when he needed them and form a board to advise him. But the central intelligence service, drawn from what already existed in the OSS, would coordinate the spying of other agencies, collect and evaluate intelligence of strategic value to the government, and perform any other “subversive operations abroad” that a president wanted done. Roosevelt sent Donovan’s draft order to the Army, Navy, air force, and State Department and asked for their opinions on it. He was tossing it into the shark tank.
Donovan, it turned out, was not the only one thinking ahead. The Army, Navy, and State Department were hatching their own plans for postwar intelligence services. Major General Clayton Bissell had been a young pilot and acolyte of air maverick Billy Mitchell in the 1920s. But by the time he pinned on his second star and replaced Strong as the Army’s military intelligence director in early 1944, Bissell had grown more conservative and as hostile to Donovan as George the Fifth. Grombach already was plotting to have the Pond take over postwar espionage. Frenchy fretted that Roosevelt would promote Donovan to lieutenant general and his OSS would be controlled by the British and Soviets after the war.
John Franklin Carter, who had picked up rumors the month before that Donovan was preparing a postwar intelligence plan, launched a preemptive strike, sending Roosevelt a poison-pen memo on October 26, which warned that the British had “already penetrated the Donovan organization” and would control the OSS if it ran intelligence after the war. Instead, Carter proposed that his tiny and less expensive outfit be the spy agency of the future sending out “look-see agents in special circumstances” to steal secrets overseas and report back to the State Department, FBI, and the military. Roosevelt sent Carter’s memo to Donovan for his reaction, which he could have already guessed. Donovan, who did not appreciate being called a British dupe, fired back that Carter was “in the horse and buggy stage of intelligence thinking.” Roosevelt never followed up on the newsman’s plan.
But J. Edgar Hoover was a more formidable foe. The FBI director also wanted to be the spy czar after the war, expanding his Latin America intelligence operation to the rest of the world. Hoover’s informants in the White House, Pentagon, and Congress kept him posted on Donovan’s plan and every move he made to sell it in the administration. The director did not like what he saw. Donovan’s expensive worldwide intelligence organization would be accountable to no one and run out of the White House by a “party man,” he complained to Attorney General Biddle. Hoover did not believe for one minute that Donovan’s new agency wouldn’t be a secret police force operating in the United States like a Gestapo and taking over the FBI. The only agents Hoover wanted spying on Americans were his.
Hoover’s most powerful ally became Harry Hopkins, who had grown increasingly disenchanted with Donovan and irritated by his secretiveness. Hoover, meanwhile, had edged closer to Roosevelt’s consigliere. Hopkins slipped the FBI director all the memos Donovan had submitted to the White House on his postwar plan, while Hoover alerted Hopkins to the publicity campaign Donovan was planning to promote the OSS. By the end of November, Hoover was on the phone with his important friend or dropping by the White House for private chats with him practically every week.
Donovan spent the month of December 1944 fighting for his plan behind closed doors, compromising where he had to. The Pentagon adamantly opposed an independent intelligence organization reporting directly to the president. But feeling confident the military would bend to his will and Roosevelt would eventually back him, Donovan had boarded his plane for his Asia trip the day after Christmas. He left Magruder and other senior aides in Washington to thrash out the final wording of an executive order. Administrative chores and bureaucratic dickering still bored him to tears. Donovan possessed a restless energy and an almost evangelical conviction that on the big things, like a new central intelligence agency, his ideas would be accepted. But flying to Asia, with the future of his organization at stake in a white-hot Washington war, was a tactical blunder.
Magruder kept his boss posted as best he could by cable on the bureaucratic haggling. As he prepared to leave Europe for the Far East, the Joint Chiefs’ staff came up with a counteroffer for the White House. Roosevelt could still pick a spy director, but a National Intelligence Authority (made up of the Army, Navy, and State Department secretaries plus a Joint Chiefs representative) would control his espionage operations and his budget. Donovan hated the plan. Instead of the president, he would be reporting to a committee, and one that could keep him on a very short leash. But Magruder cabled him that it was the best they could get out of the Pentagon. He advised Donovan to accept the military’s plan for now. At least the Pentagon recognized that the intelligence system needed overhaul. When Donovan returned to Washington he could maneuver to have some of its more offensive provisions changed as the White House considered the measure.
But as Donovan sat at his breakfast table on February 9 reading the Times-Herald with his November 18 memo and draft executive order printed on a back page, he knew his plan for a central intelligence agency was in mortal danger of never making it out of the Pentagon, much less being approved by the White House. Donovan phoned Doering at 6 a.m., orderin
g him to begin an immediate investigation into who leaked the sensitive documents and to report back to him in three hours. He then rushed to the office and huddled with his senior staff on damage control. Donovan had good relations with many Washington reporters so he cleared his afternoon schedule and began phoning them while aides set up dinner roundtables with bureau chiefs.
Donovan’s media blitz worked to a degree. The Copley newspaper chain, a McCormick-Patterson rival, declared Donovan’s plan one of the most “important postwar programs under consideration by President Roosevelt.” The New York Times ridiculed the notion that Donovan was setting up an American Gestapo, while the Washington Post hailed him as “one of the trail blazers in our war organization.” After the fighting ended, the United States will need “reliable intelligence from all over the world” with an agency like Donovan’s, his friend, Ed Murrow, told radio listeners.
But Trohan wasn’t finished. On February 11, he dropped his second bombshell, printing verbatim the intelligence plan the Joint Chiefs had drafted as an alternative for Roosevelt along with a Pentagon memo trashing the Donovan proposal. The Tribune’s editorial page charged that Roosevelt needed his secret spy service to play his “dirty” political games “all around the world,” while the Times-Herald ran a cartoon with the caption “Life in the Brave New World” showing FDR peeling off dollars for greedy, black-bearded spies to snoop on American taxpayers.
Wild Bill Donovan Page 37
