Among the Headhunters

by Robert Lyman

  Lee was one of these intellectuals. His personal epiphany occurred at Oxford when he met the woman who would become his first wife, the radically inclined Isabella (“Ishbel”) Gibb. The daughter of a British colonial civil servant, she had rebelled against the lazy assumptions of imperialism in the India of her upbringing. Together they went on an Intourist package holiday to Leningrad (St. Petersburg) and Moscow in August 1937 and fell hook, line, and sinker for the carefully packaged propaganda of the tour. These excursions were as notorious as the Red Cross tours for happy vacationers at Nazi concentration camps, but at the time they persuaded many thousands of Western visitors that a vast worker’s paradise had been created out of serfdom. If only, these converts believed, the means of production in the West were also collectivized, then workers in the West would enjoy the same fruits of the dramatic social change they thought they had seen on their closely guarded and carefully chaperoned tours of Russia. As Mark Bradley explained, Lee’s conversion came as the culmination of a lifetime of struggle to understand his own mind and the direction of his life—as distinct from his parents’ strongly held Christian beliefs—and to determine his role in saving both himself and the world. He believed that “the great Soviet experiment, with its promise to usher in a new kingdom on earth, was fighting for its very life. Chance and ability had brought Lee into the OSS. He could not pass on this stunning opportunity to help what he deemed the best hope for the future of mankind. The red star had replaced the Christian cross.”

  At the time that Lee clambered aboard Flight 12420, he had been passing material to Mary Price, his Soviet handler, since August 1942, only a month after he had joined the OSS. He was granted a military commission with the rank of lieutenant within a few days of joining, despite never having spent a day in military training of any kind. By September Moscow was jubilantly reporting that “Koch” would memorize secret OSS documents and feed them to Price for onward transmission. By February 1943 Lee had become the assistant chief in the secretariat, the very heart of the OSS. In this position he would see every signal, letter, paper, and other intelligence relating to the entire suite of OSS activities across the globe. He met Mary Price regularly, memorizing key documents and passing them to her verbatim at her flat. Ever careful, he refused to allow her to take notes; she had to learn his information by heart. The information, in abbreviated form, made its way to Moscow. Bradley recorded the import of these exchanges from the notes of Lee’s Moscow handler, which became available after the fall of the Soviet Union, revealing the full extent of Lee’s perfidy: “It ranged from Chinese Nationalist leader Chiang Kai-shek’s plans to meet with Chinese Communist Party leaders to a report from the US ambassador in Moscow about rumors circulating there that Churchill had told Stalin that the allies would not open a second front against Germany until the USSR declared war on Japan.”

  Duncan Lee had two reasons to be a passenger on Harry Neveu’s plane that day. In the first place he had been tasked by Wild Bill Donovan himself, his peacetime boss in the legal chambers of Donovan, Leisure, Newton & Irvine and now his wartime boss in the OSS,b with reporting on some of the complex intelligence-related politics that had been allowed to develop in the region. One of these, a major part of his trip, had arisen as a consequence of the arrival in the theater of Captain Milton “Mary” Miles of the US Navy and the subsequent April 1943 Sino-American Cooperative Organization (SACO) agreement. The agreement was an unusual treaty, driven by Miles’s advocacy and supported fully by the US Department of the Navy in Washington, authorizing the establishment of a US-funded and -supplied armed militia in China under the effective command of Dai Li, Chiang Kai-shek’s head of intelligence.

  Donovan was appointed coordinator of information (COI) on July 11, 1941. This agency became the OSS the following year.

  Miles had originally been sent to China in early 1942 by the Navy Department to secure Chinese agreement to establish a series of meteorological stations that would allow the navy to predict weather patterns across the Pacific and to secure intelligence about Japanese shipping movements along the Chinese coast. By the time a year had passed, the SACO mission had grown significantly, driven by Miles in close collaboration with Dai Li and excluding any other branch of American policy, including the CBI (in the form of Stilwell), the State Department (in the form of the US Embassy in Chungking), or the OSS. In exchange for US support, supplies, and training Dai Li promised Miles unparalleled access and cooperation within China in order to create a guerrilla army of 50,000 men. Miles leaped at this opportunity and persuaded the Navy Department to place its imprimatur on the venture. It became the means by which a formidable Chinese intelligence apparatus was built up, financed, trained, and supported by SACO. In all this, Miles was the willing subordinate to Dai Li. From the moment of his arrival in Chungking, it is clear that Miles’s priorities and allegiance were to his own mission—as he interpreted it—and to the new organization he began building up with Dai Li, above US military or political policy in the region. By the time the agreement was signed in April 1943 its aim was “by common effort, employing American equipment and technical training and utilizing the Chinese war zones as bases to attack effectively the Japanese navy, the Japanese merchant marine and the Japanese air forces in different territories of the Far East, and to attack the mines, factories, warehouses, depots and other military establishments in areas under Japanese occupation.” These offensive operations included provision for substantial armed units of guerrilla forces.

  It was clear to Jack Davies that Dai Li was taking Miles for a ride, securing for the secretive Chinese official the promise of vast US resources for an unaccountable Chinese secret army. William Donovan also looked on at this dangerously anomalous situation with anxiety. The OSS was being deliberately kept at arm’s length by Miles, who seemed to want to take control of all guerrilla activity—and intelligence gathering—against the Japanese. Under Miles, the Americans and US interests were entirely subordinate to Dai Li, at least within the geographical confines of China. SACO allowed an OSS presence in China, but only under Dai Li’s strict control. Miles entirely concurred with this and pressured Donovan in late 1943 to make him OSS head of station in Chungking. Miles began to develop Kurtzlike tendencies early on. He eschewed direct control by the State Department, American Embassy, CBI theater officials, or OSS—though he was attached to the embassy and as a US serviceman should have reported directly to Stilwell—and began to work directly with Dai Li to create a Kuomintang guerrilla force. In June 1943 Donovan instructed Lee and another OSS officer, Lieutenant Colonel Richard Heppner, to travel to China to meet General Dai Li and to attempt to negotiate a better deal for the United States. On June 29 Lee climbed aboard a USAAF aircraft bound for London, the first stop on a journey that would take him on to Cairo, New Delhi, Chabua, and then Kunming.

  At the same time the OSS was attempting—in the teeth of opposition from Stilwell, who never saw the need for irregular forces, and from Miles, who saw the OSS as competition—to create its own guerrilla force to harry the Japanese across northern Burma. Donovan was keen to demonstrate that his newly formed organization—Detachment 101—could contribute to the war against Japan. Even before Stilwell had walked out of Burma in May 1942, Donovan had established a team to lead an insurgency-style campaign against the Japanese, building on the natural antipathy of the Naga and Kachin hill people. At the outset neither Donovan, Stilwell, nor Colonel Carl Eifler, whom Donovan had placed in charge of Detachment 101, had much idea of what the unit could or should achieve, apart from the general goal of building up an intelligence picture of the Japanese and perhaps harrying their forward patrols and bases. But as 1943 went on, and as Eifler built up his Kachin forces, it became clear that Detachment 101 could both engage in sabotage work against the Japanese garrisoning northern Burma in conjunction with indigenous Kachin tribespeople and gain tactical-level intelligence about Japanese operations and plans. It could also coordinate the rescue of downed air crews. A pattern bega
n to emerge. Before any operations could be conducted in a particular territory, intelligence about Japanese strengths, movements, and intentions was required. After that, selected sabotage operations could take place. If these went well, sabotage was a natural segue into guerrilla warfare.

  The presence of two competing guerrilla organizations—SACO and Detachment 101—was the outcome of competing political imperatives. Nevertheless, given the prickly relationship between US officials on the ground in China and the Kuomintang, Stilwell considered the strong relationship between Miles and Dai Li to be one of the positives in the Sino-US relationship and advocated a policy of leaving well enough alone on the basis that he could ill afford another debilitating internal battle with the vested interests in Washington. However, Miles’s position rankled with Donovan, especially when it became clear that for the OSS to have any influence with China, Miles would need to be appointed the local (that is, CBI) OSS chief. But he had no choice, even though the official SACO agreement meant that Donovan never really controlled anything in China: US intelligence operations existed by sufferance, in effect, of Miles and the Navy Department.

  Miles’s imperious politicking at the expense of wider US interests irritated Jack Davies. Few Americans in the theater really knew what Miles was up to—even his protectors back in Washington—enabling him to make promises and commitments on behalf of the United States only because Stilwell refused to pick an argument with the Navy Department. But Davies regarded Miles’s alliance with Dai Li as stupendously naive.c “Dai Li’s function was the familiar one of secret police chief in an authoritarian regime threatened by domestic dissent,” he argued. “It was surveillance, spying and repression. His primary concern was internal enemies, not the external foe.” Miles seemed entirely unaware, or disbelieving of, the possibility that Dai Li was using him—and the US government—on a grand scale to prop up Chiang Kai-shek’s government by providing the instruments of a police state. The only intelligence Miles ever received from Dai Li was given in exchange for the provision of war materiel—tommy guns, for instance, and signals equipment. “Support” eventually extended to FBI-trained experts in police work, skills that Davies observed were not required for fighting the Japanese. Miles never appeared to appreciate that the intelligence exchange was one-way and in Jack Davies’s estimation rather enjoyed and boasted of the association he had created with the head of Chiang Kai-shek’s gestapo. Here was a senior navy officer, also appointed to a senior rank in the Kuomintang, not merely running a guerrilla force in competition with Donovan but also indulging in political work to the exclusion of the US Embassy in Chungking and secret intelligence work also to the detriment of Washington. It was this fundamental dysfunction at the heart of US policy regarding the management of intelligence in China that infuriated Donovan, and he tasked Lee with reporting back on the situation as best he could. Even Donovan knew that Lee would not be able to rein in Miles, but understanding what he was up to was the first step in attempting to exert a measure of control over the wayward sailor.

  Miles’s approach is described in his book A Different Kind of War.

  Lee also had another task. Reports arriving in Washington in mid-1943 indicated that Detachment 101 was failing to secure any of the secret intelligence work expected of it. Donovan, desperate for the OSS’s first venture to be a success, tasked Lee with reporting back on the situation. Donovan should not have been surprised that Detachment 101 seemed to have created many enemies in Burma other than just the Japanese, with an ambivalent Stilwell at the helm and an antagonistic Miles sniping at it from Chungking. When Stilwell had first given Eifler his orders, they had been to disrupt “Japanese communications, shipping, and to bring about Japanese reprisals on the native population which will result in discouraging native aid to the Japanese.” In particular, Eifler was to “deny the use of the Myitkyina aerodrome to the Japanese” and in “the vicinity of the aerodrome [to] destroy the railroad cars, and sink river vessels carrying fuel.” By the end of 1943 the groundwork had been effectively laid by the small OSS team, using locally recruited Kachin helpers, and valuable lessons had been learned:

  By the end of the year six base camps had been established behind the lines in northern Burma, three east of the Irrawaddy River and three to the west. Each of these had recruited and trained a small group of indigenous Kachin personnel for local protection and to perform limited operations, principally simple sabotage and small ambushes. Each also trained a few native personnel as low-level intelligence agents, who reported their information by means of runners or via the bamboo grapevine. From the field bases this information was forwarded to the base camp in India by radio. By the end of the year it was possible to assemble a fairly comprehensive picture of Japanese strengths and dispositions in northern Burma.

  However, none of the limited operations conducted that year could be considered a success. Perhaps Eifler was trying to secure success too early in order to vindicate the trust placed in him, and indeed in the entire Detachment 101, and as such the fact that some operations went off half-cocked was understandable. It was reports of these failures getting back to Washington that prompted Donovan to tell Lee to pack his bags and travel to the war zone. Lee’s conclusion—after he had survived the crash and returned to work—was that “the criticism of Eifler’s SI [Secret Intelligence] reports is well founded.” He believed the trouble was due to the fact that “[Eifler] does not have on his staff either trained SI staff officers or trained instructors” and that he had started out to “run a [Special Operations] show and is now being called upon by General Stilwell for principally SI work.”d Keen to ensure that these apparent failings didn’t lead to the entire operation shutting down, Donovan determined to visit Burma and China personally; he arrived in December 1943. Eifler was replaced. Donovan also met Dai Li in Chungking but found to his chagrin that there was nothing he could do to wrest control of SACO from Miles. He had to accept that, in China at least, because of the political groundwork established by Miles in Washington and Stilwell’s reluctance to fight this particular battle, the OSS would play second fiddle to Miles’s and Dai Li’s private—US-funded—army.

  Quoted in Brown, Wild Bill Donovan, pp. 173, 413.

  Jack Davies’s role was to ensure that effective political relationships were maintained between Stilwell’s headquarters and the vast array of political and ambassadorial relationships across the CBI. It helped that he liked and admired his boss, although he recognized the other man’s weaknesses only too clearly. More importantly, he could see with the same clear-sightedness as Stilwell the political and military issues at stake in the region, and he concurred with Stilwell on every one of them. Davies did as much as he could to articulate Stilwell’s evaluation of the Chinese situation for consumption within the State Department in order to counter the insidious effects of pronationalist propaganda evident from the White House to the media in the United States. In a briefing note for Clarence Gauss, the US ambassador to Chiang Kai-shek, in early 1943, he observed that the Chinese “have a more highly developed political sense than we. Political considerations loom larger in their evaluation of situations (including the military situation) than they do for even the Russians and the British.” In other words, short-term military imperatives were of less importance to the Kuomintang than the long-term preservation of its political situation. Stilwell’s role was to enable the Chinese to utilize US lend-lease supplies for the purpose of defeating the immediate threat posed by the Japanese, but most Chinese officers, Davies suggested, had no great interest in fighting the Japanese:

  Venality in the Chinese Army goes along naturally with the apathy. Chinese troops have traditionally had to shift for themselves. Most units have lived off the localities in which they have been stationed. This situation has further deteriorated in most regions bordering Japan-occupied territory. Chinese commanders in these areas have settled down with their wives and families and gone into trade. They control and profit enormously from the contraband tra
ffic across the “fighting” line. . . . The Japanese are as corrupt as the Chinese. The difference, however, is that the Japanese can be depended upon to fight when the orders come from the top. Corruption has not yet enervated them.

  Commenting specifically on Stilwell’s position, he observed that “it would be naïve in the extreme to suggest that all he has to do to make China an aggressive factor in the war against Japan is to place lend-lease arms in Chinese hands and in consultation with the Generalissimo issue orders for the attack.”

  All he can do, in fact, is argue, plead and bargain, with lend-lease material and the Ramgargh project as the inducement to follow his lead. It follows that the intemperate eulogies of the Chinese Army which appear in the American press and over the American air (largely inspired by the Chinese pressure groups in the United States and uninformed American sinophiles) only play into the hands of the Chinese factions wishing to obtain lend-lease equipment without restriction to its use (or non-use). It is scarcely necessary to note that anyone whom the Chinese might suggest as a replacement of General Stilwell could likely be a man whom the group in power in Chungking believe they could use to their own advantage. In feeling this way the Chinese are neither contemptible nor vicious—merely political.