Legacy of Ashes (The History of the C.I.A.)

by Tim Weiner

  The Pentagon frantically commanded the CIA to place its agents in Moscow in order to steal the Red Army’s military plans. “At the time,” Richard Helms reflected, “the possibility of recruiting and running any such sources was as improbable as placing resident spies on the planet Mars.”

  Then, without warning, on July 25, 1950, the United States faced a surprise attack that looked like the start of World War III.

  6. “THEY WERE SUICIDE

  MISSIONS”

  The Korean War was the first great test for the CIA. It gave the agency its first real leader: General Walter Bedell Smith. President Truman had called on him to save the CIA before the war broke out. But after serving as the American ambassador in Moscow, the general had come home with an ulcer that almost killed him. When the news of the Korean invasion arrived, he was at Walter Reed Army Hospital, where two-thirds of his stomach was removed. Truman implored him, but he begged off for a month to see if he would survive. Then that call became an order, and Bedell Smith became the fourth director of central intelligence in four years.

  The general’s task was to learn the secrets of the Kremlin, and he had a good idea of his chances. “There are only two personalities that I know of who might do it,” he told the five senators who confirmed him at an August 24 hearing where he wore a newly acquired fourth star, a prize from the president. “One is God, and the other is Stalin, and I do not know that even God can do it because I do not know whether he is close enough in touch with Uncle Joe to know what he is talking about.” As for what awaited him at the CIA, he said: “I expect the worst, and I am sure I won’t be disappointed.” Immediately upon taking office in October, he discovered that he had inherited an unholy mess. “It’s interesting to see all you fellows here,” he said as he looked around the table at his first staff meeting. “It’ll be even more interesting to see how many of you are here a few months from now.”

  Bedell Smith was fiercely authoritarian, devastatingly sarcastic, and intolerant of imperfection. Wisner’s sprawling operations left him spluttering with rage. “It was the place where all the money was spent,” he said, and “all the rest of the Agency was suspicious of it.” In his first week in office, he discovered that Wisner reported to the State Department and the Pentagon, not to the director of central intelligence. In a towering fury, he informed the chief of covert operations that his freebooting days were over.

  “AN IMPOSSIBLE TASK”

  To serve the president, the general tried to salvage the analytical side of the house, which he called “the heart and soul of CIA.” He overhauled the agency’s procedures for writing intelligence reports, and he ultimately persuaded Sherman Kent, who had fled Washington in the dismal first days of the Central Intelligence Group, to return from Yale to create a system of national estimates, pulling together the best available information from across the government. Kent called the job “an impossible task.” After all, he said, “estimating is what you do when you do not know.”

  Days after Bedell Smith took over, Truman was preparing to meet with General Douglas MacArthur on Wake Island in the Pacific. The president wanted the CIA’s best intelligence on Korea. Above all, he wanted to know whether the communist Chinese would enter the war. MacArthur, driving his troops deep into North Korea, had insisted that China would never attack.

  The CIA knew almost nothing about what went on in China. In October 1949, by the time Mao Tse-tung drove out the Nationalist forces of Chiang Kai-shek and proclaimed the People’s Republic, all but a handful of the American spies in China had fled to Hong Kong or Taiwan. Already hobbled by Mao, the CIA was crippled by MacArthur, who hated the agency and did his best to ban its officers from the Far East. Though the CIA worked frantically to keep an eye on China, the chains of foreign agents it had inherited from the OSS were far too weak. So was the agency’s research and reporting. Four hundred CIA analysts worked on daily intelligence bulletins for President Truman at the start of the Korean War, but 90 percent of their reporting was rewritten State Department files; most of the rest was weightless commentary.

  The CIA’s allies in the theater of war were the intelligence services of two corrupt and unreliable leaders: South Korea’s president, Syngman Rhee, and the Chinese Nationalist chief, Chiang Kai-shek. The strongest first impression of the CIA officers upon arriving in their capitals of Seoul and Taipei was the stench of human feces fertilizing the surrounding fields. Reliable information was as scarce as electricity and running water. The CIA found itself manipulated by crooked friends, duped by communist foes, and at the mercy of money-hungry exiles fabricating intelligence. Fred Schultheis, the Hong Kong station chief in 1950, spent the next six years sorting through the trash that Chinese refugees sold the agency during the Korean War. The CIA was supporting a free market of paper mills run by con artists.

  The one true source of intelligence on the Far East from the final days of World War II until the end of 1949 had been the wizards of American signals intelligence. They had been able to intercept and decrypt passages from communist cables and communiqués sent between Moscow and the Far East. Then silence fell at the very hour that the North Korean leader Kim Il-sung was consulting with Stalin and Mao on his intent to attack. America’s ability to listen in on Soviet, Chinese, and North Korean military plans suddenly vanished.

  On the eve of the Korean War, a Soviet spy had penetrated the code-breakers’ nerve center, Arlington Hall, a converted girls’ school a stone’s throw from the Pentagon. He was William Wolf Weisband, a linguist who translated broken messages from Russian into English. Weisband, recruited as a spy by Moscow in the 1930s, single-handedly shattered the ability of the United States to read the Soviets’ secret dispatches. Bedell Smith recognized that something terrible had happened to American signals intelligence, and he alerted the White House. The result was the creation of the National Security Agency, the signals-intelligence service that grew to dwarf the CIA in its size and power. Half a century later, the National Security Agency called the Weisband case “perhaps the most significant intelligence loss in U.S. history.”

  “NO CONVINCING INDICATIONS”

  The president left for Wake Island on October 11, 1950. The CIA assured him that it saw “no convincing indications of an actual Chinese Communist intention to resort to full-scale intervention in Korea…barring a Soviet decision for global war.” The agency reached that judgment despite two alarms from its three-man Tokyo station. First the station chief, George Aurell, reported that a Chinese Nationalist officer in Manchuria was warning that Mao had amassed 300,000 troops near the Korean border. Headquarters paid little heed. Then Bill Duggan, later chief of station in Taiwan, insisted that the Chicoms soon would cross into North Korea. General MacArthur responded by threatening to have Duggan arrested. The warnings never reached Wake Island.

  At headquarters, the agency kept advising Truman that China would not enter the war on any significant scale. On October 18, as MacArthur’s troops surged north toward the Yalu River and the Chinese border, the CIA reported that “the Soviet Korean venture has ended in failure.” On October 20, the CIA said that Chinese forces detected at the Yalu were there to protect hydroelectric power plants. On October 28, it told the White House that those Chinese troops were scattered volunteers. On October 30, after American troops had been attacked, taking heavy casualties, the CIA reaffirmed that a major Chinese intervention was unlikely. A few days later, Chinese-speaking CIA officers interrogated several prisoners taken during the encounter and determined that they were Mao’s soldiers. Yet CIA headquarters asserted one last time that China would not invade in force. Two days later 300,000 Chinese troops struck with an attack so brutal that it nearly pushed the Americans into the sea.

  Bedell Smith was aghast. He believed that the business of the CIA was to guard the nation against military surprise. But the agency had misread every global crisis of the past year: the Soviet atom bomb, the Korean War, the Chinese invasion. In December 1950, as President Truman declared a n
ational emergency and recalled General Eisenhower to active duty, Bedell Smith stepped up his own war to turn the CIA into a professional intelligence service. He looked first for someone to control Frank Wisner.

  “A DISTINCT DANGER”

  Only one name presented itself.

  On January 4, 1951, Bedell Smith bowed to the inevitable and appointed Allen Dulles as the CIA’s deputy director of plans (the title was a cover; the job was chief of covert operations). The two men quickly proved to be a bad match, as the CIA’s Tom Polgar saw when he observed them together at headquarters: “Bedell clearly doesn’t like Dulles, and it’s easy to see why,” he recounted. “An Army officer gets an order and he carries it out. A lawyer finds a way to weasel. In CIA, as it developed, an order is a departure point for a discussion.”

  Wisner’s operations had multiplied fivefold since the start of the war. Bedell Smith saw that the United States had no strategy for conducting this kind of struggle. He appealed to President Truman and the National Security Council. Was the agency really supposed to support armed revolution in Eastern Europe? In China? In Russia? The Pentagon and the State Department replied: yes, all that, and more. The director wondered how. Wisner was hiring hundreds of college kids every month, running them through a few weeks of commando school, sending them overseas for half a year, rotating them out, and sending more raw recruits to replace them. He was trying to build a worldwide military machine without a semblance of professional training, logistics, or communications. Bedell Smith sat at his desk, nibbling the crackers and warm mush on which he survived after his stomach surgery, and his anger mingled with despair.

  His second-in-command, the deputy director of central intelligence, Bill Jackson, resigned in frustration, saying that the CIA’s operations were an impossible tangle. Bedell Smith had no choice but to promote Dulles to deputy director and Wisner to chief of covert operations. When he saw the first CIA budget the two men proposed, he exploded. It was $587 million, an elevenfold increase from 1948. More than $400 million was for Wisner’s covert operations—three times the cost of espionage and analysis combined.

  This posed “a distinct danger to CIA as an intelligence agency,” Bedell Smith fumed. “The operational tail will wag the intelligence dog,” he warned. “The top people will be forced to take up all their time in the direction of operations and will necessarily neglect intelligence.” It was then that the general began to suspect that Dulles and Wisner were hiding something from him. At his daily meetings with the CIA’s deputy directors and staff, recorded in documents declassified after 2002, he constantly cross-examined them about what was going on overseas. But his direct questions received unaccountably vague responses—or none at all. He warned them not “to withhold” or “to whitewash unfortunate incidents or serious errors.” He ordered them to create a detailed accounting of their paramilitary missions—code names, descriptions, objectives, costs. They never complied. “In exasperation, he visited upon them more violent manifestations of his wrath than he did upon anybody else,” wrote his personal representative on the NSC staff, Ludwell Lee Montague. Bedell Smith was not afraid of much. But he was angry and frightened by the thought that Dulles and Wisner were leading the CIA to “some ill-conceived and disastrous misadventure,” Montague wrote. “He feared that some blunder overseas might become public knowledge.”

  “WE DIDN’T KNOW WHAT WE WERE DOING”

  The classified CIA histories of the Korean War reveal what Bedell Smith feared.

  They say the agency’s paramilitary operations were “not only ineffective but probably morally reprehensible in the number of lives lost.” Thousands of recruited Korean and Chinese agents were dropped into North Korea during the war, never to return. “The amount of time and treasure expended was enormously disproportionate to attainments,” the agency concluded. Nothing was gained from “the substantial sums spent and the numerous Koreans sacrificed.” Hundreds more Chinese agents died after they were launched onto the mainland in misconceived land, air, and sea operations.

  “Most of these missions weren’t sent for intelligence. They were sent to supply nonexistent or fictitious resistance groups,” said Peter Sichel, who saw the string of failures play out after he became station chief in Hong Kong. “They were suicide missions. They were suicidal and irresponsible.” They continued into the 1960s, legions of agents sent to their deaths chasing shadows.

  In the early days of the war, Wisner assigned a thousand officers to Korea and three hundred to Taiwan, with orders to penetrate Mao’s walled fortress and Kim Il-sung’s military dictatorship. These men were thrown into battle with little preparation or training. One among them was Donald Gregg, fresh out of Williams College. His first thought when the war broke out was: “Where the hell is Korea?” After a crash course in paramilitary operations, he was dispatched to a new CIA outpost in the middle of the Pacific. Wisner was building a covert-operations base on the island of Saipan at a cost of $28 million. Saipan, still riddled with the bones of World War II dead, became a training camp for the CIA’s paramilitary missions into Korea, China, Tibet, and Vietnam. Gregg took tough Korean farm boys plucked from refugee camps, brave but undisciplined men who spoke no English, and tried to turn them into instant American intelligence agents. The CIA sent them on crudely conceived missions that produced little save a lengthening roster of lost lives. The memory stayed with Gregg as he rose through the ranks of the Far East Division to become the CIA’s station chief in Seoul, then the U.S. ambassador to South Korea, and finally the chief national-security aide to Vice President George H. W. Bush.

  “We were following in the footsteps of the OSS,” Gregg said. “But the people we were going up against had complete control. We didn’t know what we were doing. I asked my superiors what the mission was and they wouldn’t tell me. They didn’t know what the mission was. It was swashbuckling of the worst kind. We were training Koreans and Chinese and a lot of other strange people, dropping Koreans into North Korea, dropping Chinese into China just north of the Korean border, and we’d drop these people in and we’d never hear from them again.”

  “The record in Europe was bad,” he said. “The record in Asia was bad. The agency had a terrible record in its early days—a great reputation and a terrible record.”

  “CIA WAS BEING DUPED”

  Bedell Smith repeatedly warned Wisner to watch out for false intelligence fabricated by the enemy. But some of Wisner’s officers were fabricators themselves—including the station chief and the chief of operations he sent to Korea.

  In February, March, and April 1951, more than 1,200 North Korean exiles were gathered on Yong-do Island, in Pusan Harbor, under the command of the operations chief, Hans Tofte, an OSS veteran with a greater talent for deceiving his superiors than his enemies. Tofte formed three brigades—White Tiger, Yellow Dragon, and Blue Dragon—with forty-four guerrilla teams. Their missions were threefold: to serve as intelligence-gathering infiltrators, as guerrilla-warfare squads, and as escape-and-evasion crews to rescue downed American pilots and crews.

  White Tiger went ashore in North Korea at the end of April 1951 with 104 men, reinforced by 36 more agents dropped by parachute. Before leaving Korea four months later, Tofte sent back glowing reports on his accomplishments. But by November, most of the White Tiger guerrillas were killed, captured, or missing. Blue Dragon and Yellow Dragon met similar fates. The few infiltration teams that survived were captured and forced on pain of death to deceive their American case officers with phony radio messages. None of the guerrillas made it out alive. Most of the escape-and-evasion teams were lost or slaughtered.

  In the spring and summer of 1952, Wisner’s officers dropped more than 1,500 Korean agents into the North. They sent back a flood of detailed radio reports on North Korean and Chinese communist military movements. They were heralded by the CIA station chief in Seoul, Albert R. Haney, a garrulous and ambitious army colonel who boasted openly that he had thousands of men working for him on guerrilla operations and
intelligence missions. Haney said he personally had overseen the recruitment and training of hundreds of Koreans. Some of his fellow Americans thought Haney was a dangerous fool. William W. Thomas, Jr., a State Department political intelligence officer in Seoul, suspected the station chief had a payroll filled with people who were “controlled by the other side.”

  So did John Limond Hart, who replaced Haney as the Seoul chief of station in September 1952. After a series of stinging experiences with intelligence fabricators in Europe during his first four years at the CIA, and his stint running Albanian exiles out of Rome, Hart was intensely aware of the problems of deception and disinformation, and he decided to take “a hard look at the miraculous achievements claimed by my predecessors.”

  Haney had presided over two hundred CIA officers in Seoul, not one of whom spoke Korean. The station depended on recruited Korean agents who supervised the CIA’s guerrilla operations and intelligence-gathering missions in the North. After three months of digging, Hart determined that nearly every Korean agent he had inherited had either invented his reports or worked in secret for the communists. Every dispatch the station had sent to CIA headquarters from the front for the past eighteen months was a calculated deception.

  “One particular report lives in my memory,” Hart recounted. “It purported to be a recapitulation of all Chinese and North Korean units along the battle line, citing each unit’s strength and numerical designation.” American military commanders had hailed it as “one of the outstanding intelligence reports of the war.” Hart determined that it was a complete fabrication.

  He went on to discover that all of the important Korean agents Haney had recruited—not some, but all—were “con men who had for some time been living happily on generous CIA payments supposedly being sent to ‘assets’ in North Korea. Almost every report we had received from their notional agents came from our enemies.”