JCS 1067 detailed an FDR-style antitrust policy as the centerpiece of U.S. strategy for the reorganization of the German economy. The approach was very similar to that which had been the legal backbone of the U.S. Department of Justice Antitrust Division’s criminal indictments of major American companies during the 1930s, though with the added feature that former Nazi officials would be barred from any substantial business role in the future.
Each of the economic reforms was well within the framework of American-style capitalism, and (with the exception of the political review of business executives) sometimes imposed fewer restrictions on German business than many U.S. companies then faced under American law.11 The order prohibited German economic cartels and other industrial combinations designed to divide up markets, set monopoly prices, and squeeze out competitors. It set a policy of “dispersion of ownership and control” of German industry by breaking up interlocking corporate directorates.12
JCS 1067’s denazification requirements were quite tough-minded, however. The U.S. planned to question under oath each senior executive of the German economic ministries and major banks to determine his (or, in rare instances, her) activities during the Nazi regime. Persons who had denounced Jews or dissenters to the Nazis, who had authorized violence in connection with their corporate activities, disseminated Nazi propaganda, or joined any of several Nazi cult organizations (such as the “German Christian” and neo-pagan movements favored by the SS) were to be regarded as “ardent supporters of Nazism” and removed from all positions of authority.
The U.S. regulations declared that the corporate leaders of the Deutsche Bank, Dresdner Bank, and four other large banks had been central to Nazi rule, and ordered them removed from their positions not only at those institutions but also at hundreds of other major German companies interlocked with the banks. Lower-level banking officials—branch managers, vice presidents, department chiefs, etc.—were to be vetted as well, but removed from their posts only if they were found to be “ardent Nazis.” The U.S. promulgated roughly similar denazification policies for officials of the major insurance companies, stock exchanges, private banks, and similar institutions.13
Taken as a whole, then, official U.S. policy in the spring of 1945 favored strict measures to remove ideologically committed Nazis and their diehard supporters from positions of influence; a limited economic reform similar to U.S. antitrust measures intended to break up German cartels; and preservation of a competitive, private-enterprise economy.
The remaining officials of the Roosevelt administration, and Morgenthau himself, abandoned Morgenthau’s earlier proposals to destroy German mines and shoot senior Nazis on sight. Nevertheless, Washington remained committed to punishment of a broad spectrum of German leaders—not just the Nazi party’s elite—and to thoroughgoing economic reform that would hold Germany’s corporate leaders accountable for the actions of their companies.
But a written policy is one thing; its implementation is quite another. Robert Murphy took personal charge of the political oversight of U.S. denazification work in Germany almost immediately, and he made little secret of his inclinations. Meanwhile, the sensitive task of overseeing U.S. intelligence evaluations of German business and political leaders fell to an enterprising OSS man who was stationed in Berlin shortly after Hitler’s suicide. It was Allen Dulles.
* The Nazis had pledged to wipe out the existing social structure in these countries in order to increase German Lebensraum (“living space”), and were thus much less willing to encourage collaboration from prewar elites in either state.
14
Sunrise
Shortly before he took up his OSS post in Berlin, Allen Dulles guaranteed de facto asylum to SS Obergruppenführer Karl Wolff—the highest-ranking SS officer to survive the war—and to a collection of Wolff’s most senior aides. The details of Dulles’s deal with this particular Nazi have remained buried in classified U.S. government files for more than forty years.1 But the record is clear. Whether Dulles intended it or not, his strategy for exploiting former Nazi leaders to advance purported U.S. interests had sweeping implications for U.S.-Soviet relations, U.S.-German relations, for war crimes prosecutions and the UN War Crimes Commission, and even for world peace.
Allen Dulles’s pivotal role in this hidden but crucial phase of European politics is at the core of Operation Sunrise—the secret negotiations in 1945 for a German surrender in northern Italy. This stepping-stone for Dulles’s postwar intelligence career was his covert diplomacy bringing together Western intelligence agencies, fugitive Nazis, and certain leading Vatican officials of the day.
In late 1944, Pope Pius XII and Ildefonso Cardinal Schuster of Milan had contacted the SS, the German military command in Italy, and OSS agent Dulles in Switzerland, offering to serve as intermediaries in negotiations to ease the surrender of German forces in northern Italy. In a confidential memo, Cardinal Schuster stressed that the Italian Communist party would likely gain from continued fighting between the U.S. and the Germans on the Italian peninsula. “The Catholic Church regards the systematic destruction of public utility installations [gas and electric works, etc.] together with that of industrial plant [that would come from fighting in northern Italy], as a prerequisite of Bolshevik infiltration into Italy. This threat to living conditions on the one hand and industrial potential on the other is intended to create disorder and unemployment. This is the basis upon which [the Italian Communists’ hope] the masses are to be won, first for Communism and then for Bolshevism,” Schuster wrote. He stated that a negotiated German withdrawal, on the other hand, would stabilize the economic situation, undermine the popularity of the Communist resistance, and reduce the possibility that German military leaders would be tried for war crimes once the conflict was over.2 Schuster and his senior assistant, Monsignor Don Giuseppe Bicchierai, stood ready to help negotiate a suitable agreement between the Germans and the Americans, the note concluded.
There was more to the Vatican initiative, strategically speaking, than simply the rescue of factories in northern Italy. The Vatican proposal would give U.S. and British forces control of the important port city of Trieste on the border of Italy and Yugoslavia. This position would permit them to rapidly enter Yugoslavia, Hungary, and Austria in advance of the Red Army, which was then approaching from the east. These historically Catholic territories had been Axis strongholds for much of the war, but anticipating Germany’s defeat, many people in this heartland preferred to surrender to American or British troops rather than be overrun by the Red Army.
Dulles viewed Schuster’s proposals as a means to dramatically outflank both Germany and the USSR in Central Europe, reduce Western casualties in Italy, and begin what would later come to be known as the “dual containment” of both Germany and the USSR.3 Meanwhile, Axis leaders willing to surrender despite Hitler’s standing war-to-the-death orders saw the Vatican initiative as a means to head off a probable Soviet military occupation of Central Europe, reduce casualties among their own forces, dramatically split the U.S. and Britain from the USSR, and, not least, win asylum for themselves and their families.
Cardinal Schuster and Monsignor Bicchierai had long been among the most prominent clerical supporters of fascism in Italy, according to SS Colonel Eugen Dollmann, who handled negotiations with the Vatican for the SS during the last days of the war. “His Eminence [Schuster] had been very favorably inclined toward Fascism in general and Benito Mussolini in particular,” Dollmann noted. “Like Pope Pius XI, another native of the Milan area, he too had looked upon the Duce as a man sent by providence.”4 Dollmann, who had made his career as a liaison between Hitler and Mussolini on a number of sensitive issues, including the recurrent SS campaigns to deport Italian Jews to Auschwitz, had by 1945 lost his enthusiasm for the Führer, and preferred a role as an “interpreter and social butterfly,” as he put it, in the declining days of the Third Reich.5
The SS-Vatican initiative was joined by the prominent Milanese industrialist and playboy Baron Luig
i Parrilli—a papal chamberlain, leading Knight of Malta, and a man with strong contacts in the banking and intelligence communities of Switzerland, just north of the Italian border, where Dulles made his headquarters.6
This unlikely foursome—the gaunt, severe cardinal in ceremonial robes and peaked hat; his aide, Bichierrai; the foppish SS man with a closet full of Italian suits of the latest cut; and the skirt-chasing industrialist with a charming smile and a manner “like a character in a late-nineteenth-century French novel,” as Dollmann put it7—became the core of a group determined to deliver Central Europe to the Western Allies before the Soviet troops arrived.
Dollmann’s superior, Karl Wolff—the highest-ranking SS officer in Italy—opened secret negotiations with Dulles during the early spring of 1945, talks that would have a destructive effect on sensitive U.S.-Soviet relations.8 SS Obergruppenführer Wolff was a tall, bulky man with thinning blond hair and the erect bearing characteristic of a career SS officer. He had big hands, expensive tastes, and a weakness for heavy gold and diamond rings, which he brandished so expressively that they became a standing joke among his SS rivals. Loyal and ideologically committed, Wolff had joined the Nazi party well before Hitler’s ascent to power. For more than a decade, he had served as SS chief Himmler’s most senior executive officer, adjutant, and chief of staff. He managed Himmler’s personal slush fund of gifts from German financiers; handled the sensitive contacts that arranged SS transfers of slave laborers to IG Farben, Kontinentale Öl, and other major companies; and became the chief sponsor and cheerleader within the Nazi bureaucracy for the mass extermination center at Treblinka.
It had been Wolff who lobbied the German transportation minister to ensure that the SS had an ample supply of railroad cars to ship Jews to the death camp at Treblinka, in spite of competing demands from the Wehrmacht, which wanted the freight cars to move military supplies to the front. Wolff was successful in that effort and wrote of his “special joy (besondere Freude) now that five thousand members of the Chosen People are going to Treblinka every day.”9
When Dulles opened contacts with Wolff in early 1945, the British military command in Italy notified the Soviets that new peace negotiations had begun for a rapid German surrender of northern Italy. The Soviets replied that they were glad to hear this; all that was required under standing Allied agreements on negotiations with the enemy was for a handful of senior Soviet military representatives to monitor the progress of the talks.
The U.S. ambassador to Moscow, Averell Harriman, vetoed that. Inviting the Soviets to the negotiations would make the Germans nervous, he contended, and would only encourage the Soviets to insist on participation in other upcoming decisions about the former Axis territories already held by U.S. and British troops. His was one of the most important voices on U.S.-Soviet relations, and his opinion carried the day.10
Roosevelt and Stalin exchanged increasingly bitter notes as negotiations continued in Switzerland among Dulles, the SS representatives, and a crew of senior U.S. military officers that included Major General Lyman Lemnitzer and General Hoyt Vandenberg. A week after the talks began, Soviet Foreign Minister Molotov sent a note to Harriman in Moscow expressing “complete surprise” that Soviet representatives were still barred from the talks. He said that the situation was “inexplicable in terms of the relations of alliance” between the U.S. and the USSR.11 If the U.S. refused to permit Soviet representatives to participate, Molotov contended, the talks had to be abandoned.
Roosevelt wrote directly to Stalin a few days later. The USSR misunderstood what was taking place, he insisted. The talks in Italy were basically a local matter, comparable to that in which the Baltic coast cities of Konigsberg and Danzig had earlier surrendered to the Soviets. Roosevelt seemed to approve Soviet participation in the talks (“I will be pleased to have at any discussion of the details of surrender … the benefit of the experience and advice of any of your officers who can be present …”), but he insisted that the talks in Switzerland were an “investigation” of a local German commander’s surrender offer, not a “negotiation.”12 Time was of the essence, he continued, and the U.S. representatives could not be faulted for being eager to accept the surrender of the German troops they were facing on the battlefield.
Stalin escalated the argument. His foreign minister, Molotov, suddenly had new commitments in Moscow and would not attend the founding of Roosevelt’s most cherished postwar project, the United Nations Organization. This was a calculated slight, and both sides knew it. In a new note to FDR, Stalin replied that he was “all for profiting from cases of disintegration in the German armies,” but in this case, the Germans were using the talks to “maneuver” and to transfer troops from Italy to the Eastern Front.13 Roosevelt replied that Soviet actions in Poland and Romania had not lived up to the commitments made at the Yalta Conference less than two months previously. U.S.-Soviet relations had moved rapidly to an “atmosphere of regrettable apprehension and mistrust” owing to the confrontation over Dulles’s talks with the SS, Roosevelt commented, and again insisted to Stalin that the talks were for “the single purpose of arranging contact with competent German military officers and not for negotiations of any kind.”14 Meanwhile, FDR cabled Dulles in Switzerland and ordered him to present the SS representatives with a take-it-or-leave-it offer of an unconditional surrender. No further negotiation would be permitted, the President said.
Stalin seemed to know many of the details of the Dulles-SS talks even before Roosevelt did. When FDR tried to soothe Stalin with a declaration that the Swiss talks were without political significance, Stalin shot back that “apparently you are not fully informed.” Stalin’s military intelligence agents in Switzerland were “sure that negotiations did take place and that they ended in an agreement with the Germans, whereby the German commander on the Western Front, Marshal Kesselring, is to open the front to the Anglo-American troops and let them move east, while the British and Americans have promised, in exchange, to ease the armistice terms for the Germans. I think my colleagues are not very far from the truth,” he continued. If this perception was wrong, he asked, why were his men still being excluded from the talks?15
Stalin may have overstated his case, but he was not far off. These were in fact exactly the terms that Cardinal Schuster had proposed and that Dulles had discussed with Wolff. No final deal had been struck, though, and by early April both sides in Switzerland were once again seeking guidance from their respective home offices.16 By then, though, the German front had begun to collapse throughout Europe, the Red Army was at the gates of Berlin, and Dulles’s grand plan to take Central Europe by way of Trieste had failed. “The Bern incident,” as Roosevelt described it in a last letter to Stalin written only hours before his death, “… now appears [to have] faded into the past without having accomplished any useful purpose.”17
The talks had not been successful from either Allen Dulles’s or SS General Wolff’s points of view, largely because Roosevelt had ruled out any formal agreement with the Germans other than unconditional surrender. But FDR’s ban on a formal agreement did not preclude Dulles from making more limited “gentlemen’s agreements” with his SS counterparts for concessions that he saw as advantageous to the OSS or to U.S. geopolitical strategy. The SS delegation, the Swiss intelligence envoys who were serving as go-betweens, and the Soviet agents secretly monitoring the talks each came away from the talks convinced that Dulles had agreed to provide protection and assistance to General Wolff and his SS entourage in exchange for a quick surrender of German troops in Italy, although Dulles would deny this later.18
Wolff’s ultimately empty promises of a dramatic German surrender that would advance U.S. and British forces far to the east captivated Dulles and his OSS colleagues in Switzerland. Dulles intervened on a half-dozen occasions in an effort to keep the Operation Sunrise negotiations on track, even after the joint U.S.-British military command in Italy ordered him to desist. By the last week of April, senior U.S. and British military commanders in Ita
ly concluded that the Sunrise project was little more than a desperate SS effort to fracture Allied unity, and told Dulles to cut off all contact with Wolff and his emissaries. Nevertheless, Dulles’s top aide Gero von Gaevernitz kept the negotiations open and acted with Dulles’s tacit cooperation to rescue Wolff from Italian partisans.19 The U.S.-British Combined Chiefs of Staff are known to have opened an investigation into Dulles’s alleged dereliction of duty and refusal to obey orders in connection with the Wolff rescue, but the records of this inquiry have disappeared from OSS and military files and have yet to be rediscovered.20
The unofficial truce in Italy that took hold as the negotiations went on probably saved lives, if only because ground combat is so brutal that even a few hours’ respite can reduce casualties. But Roosevelt’s conclusion that the negotiations failed to achieve a genuine German surrender in Italy is accurate. As a practical matter, Operation Sunrise contributed considerably more to souring U.S.-Soviet relations, and to enhancing Allen Dulles’s carefully cultivated reputation as a spymaster, than it ever did to winning the war in Europe.
Making use of splits in the enemy camp is, of course, among the most basic military tactics, and fundamental to almost any effort to recruit spies. But Operation Sunrise was seriously counterproductive from strategic and political points of view. The U.S. and its allies had formally agreed to forgo use of separate peace negotiations with the Germans in order to more fully ensure the solidity of their coalition. That policy did not make relations with the Germans easier, obviously, but any other approach would likely have facilitated Hitler’s central strategy and last hope in the final years of the war, which was to conquer the Allies by dividing them. Roosevelt’s demand for an unconditional surrender had not sprung from naïveté or starry-eyed idealism, as some critics have argued, but rather from a tough-minded appraisal of just how much blood would be required to defeat the Axis. The unconditional-surrender policy did not “cost” U.S. lives; it saved them, perhaps by the hundreds of thousands, by guaranteeing that the Soviet Union would carry most of the weight in the war against Hitler.
The Splendid Blond Beast Page 24
