The Chairman

by Kai Bird

  Truman was convinced by these arguments and the day after receiving McCloy’s memo, approved the concept of a European Defense Force. The EDF would have one supreme commander, and the chain of command at the top would be integrated, but the actual troops would function in national contingents. Germany was to contribute ten to twelve divisions. A few days later, Acheson and McCloy brought the package proposal to the ministers’ meeting in New York, where a storm of criticism greeted them. The French called it the “bomb at the Waldorf.” The worst feature of the plan, argued its critics, was that the Americans proposed to let the Germans begin assembling their ten divisions immediately, even before the European army had been established. The British were as opposed as the French. After a week of often bitter arguments, the foreign ministers adjourned and McCloy expressed his deep frustration to Acheson: the military threat was urgent, he thought, and time was of the essence. But uppermost in his mind was the “fear that Germany would drift away from the real desire of most people in West Germany to become incorporated into a Western community.” The French attitude in the talks was forcing a “neutrality complex” on the Germans. If the Germans didn’t get their army now, in the context of a European army, it would happen someday outside the context of NATO or an integrated European army. The French, of course, would strenuously oppose such an event, and traditional Franco-German animosities might easily lead to “the old dance of death.”43

  Arguments over McCloy’s EDF dragged on throughout that autumn, and the issue threatened to tear apart Adenauer’s own government. The popular and widely respected minister of the interior, Gustav Heinemann, resigned in protest, telling Adenauer, “God has twice dashed the weapons from our hands. We must not take them up for a third time.” McCloy did not underestimate the strength of antiarmament sentiment; in November he worried about those “in Germany who are striving to avoid any definite action aligning Germany with the West. . . . This group is very large—Heinemann, Noack [a pacifist and university professor], Niemoller—are not isolated figures by any means.” He felt the political balance was delicate enough so that he could no longer lightly issue any more public “diktats”—such as vetoing the chancellor’s tax bill—without severely undermining Adenauer’s position.44

  Though on occasion McCloy found Adenauer “querulous and uninspiring” as a leader, Adenauer was nevertheless a “thorough Westerner.”45 This could not be said for his equally irascible SPD rival. To McCloy’s distress, Schumacher—while supporting in principle the idea of an EDF—was still doing everything he could to keep the door open to reunification. In what was widely seen as an attempt to head off the rearmament of Germany, the Soviets that October once again proposed a four-power agreement on Germany, providing for both reunification and a formal peace treaty which would restore to Germany full sovereignty. The Soviets seemed to have only one condition: the fulfillment of the Potsdam agreement regarding the demilitarization of Germany.46

  Late that autumn, in one of their rare lunches, Schumacher told McCloy that he “was prepared to buy unification of Germany possibly at the cost of temporary neutralization, his argument being that once Germany was reunited, it would be strong enough to resist all Communist pressure.”47 Schumacher’s attitude was anathema to McCloy, not only because he had visceral doubts about the whole idea of a reunited Germany, but because even a “temporary neutralization” would spell the end of NATO.

  In public, Adenauer too fully supported unification, but in private he was telling McCloy that he “felt it much wiser and better from all points of view to renounce for a time the thought of a reunited Germany rather than provide for a united Germany under Soviet influence. . . .” A neutral, unarmed Germany would, he said, be attracted to the East just as “a giant magnet [would] draw a filing to it.”48

  The rearmament of Western Europe became an even more urgent priority after November 24, 1950, when thousands of Chinese troops crossed the Yalu River and pushed General MacArthur’s forces deep into South Korea. McCloy was now willing to concede a great deal of his powers as high commissioner in order to win agreement on a European defense. Late in November, he wrote Acheson that rearmament had to be accompanied by a renegotiation of the Occupation Statute. What he had in mind was to put Allied relations with the Germans on a “contractual” relationship, whereby the Germans would undertake certain obligations while Adenauer’s government in Bonn, for all practical purposes, would be treated as a sovereign power. As long as rearmament was carried out “within the framework of a European defense structure,” French fears of the Germans could be assuaged. And because German contingents would be accorded the same status as French units, such an approach might generate “a popular appeal to the German spirit of self-defense and loyalty to West European unity powerful enough to drown out Schumacher’s drum-beating. . . .”49

  By this time, Jean Monnet, again working behind the scenes, broke the deadlock with an alternative program for European defense. Eventually unveiled as the “Pleven Plan”—named after the French prime minister—this program proposed a thoroughly integrated European army of one hundred thousand men; the German and other national contributions would come in the smallest possible contingents. McCloy initially worried that the national units would be so small—as low as thousand-man battalions—that the military effectiveness of the army would be seriously compromised. But he nevertheless thought it was a step in the right direction and persuaded Adenauer to sign on to the plan. Negotiations stretched out many months, but in the meantime Washington agreed to increase its troop strength in Europe, and late in 1950 Dwight Eisenhower left the presidency of Columbia University to become supreme commander of NATO forces in Western Europe.

  Eisenhower was initially rather critical of the proposal for a European army, complaining that it included “every kind of obstacle, difficulty and fantastic notion that misguided humans could put together in one package.”50 But under McCloy’s gentle prodding, he changed his mind after six months in Europe. McCloy also realized that Ike’s presence in Europe could help sell the whole concept to the Germans. So, during a visit by Eisenhower to Bad Homburg, McCloy arranged for several German generals to attend a cocktail party in honor of the NATO supreme commander. Ike had once publicly vowed never to shake the hand of a German officer, but on this occasion he knew what was called for and strode up to a former German general and stuck out his hand. The gesture deeply impressed Adenauer and the other Germans in the room. Afterward, when the guests had departed, Ike turned to Mrs. McCloy and said rather sheepishly, “Ellen, I hope I did well.”

  CHAPTER 17

  McCloy and U.S. Intelligence Operations in Germany

  “Mr. McCloy directed that we smoke out EUCOM [European Command, U.S. Army] on the matter to see how far they would go in helping to find this character [Klaus Barbie], and to get more details as to just how embarrassing it would be to them (CIC) if he were turned over to the French.”

  HICOG LETTER TO U.S. EMBASSY IN PARIS JUNE 20, 195O

  In the autumn of 1950, occupied Germany was the primary domicile for a host of covert intelligence operations aimed at containing, if not rolling back, the Soviet empire in Eastern Europe. McCloy was a man ideally suited to oversee these operations: both his work on Black Tom and his supervision of U.S. intelligence activities during the war inclined him to approve a broad range of intelligence activities. As high commissioner, he authorized extensive intelligence collection from a network of agents in both West and East Germany, a variety of paramilitary operations behind the Iron Curtain, and a sophisticated and expensive propaganda campaign designed to persuade left-of-center European intellectuals to oppose communist political influence. Thousands of Germans from all walks of life—including numerous politicians, labor-union officials, schoolteachers, and journalists—were drawn into this intelligence network as informants, agents of influence, and propagandists. And as was the case with the Soviets—who were building a similar intelligence network—some of these agents had extremely unsavory ba
ckgrounds.

  A case in point is the controversial matter of one Klaus Barbie. That autumn, while McCloy was trying to find an acceptable means of rearming the West Germans, the U.S. Army’s Counter-Intelligence Corps (CIC) was preparing the escape from Europe of former Gestapo officer and convicted war criminal Klaus Barbie. In the years since, the Barbie affair has become a potent symbol of U.S. postwar collaboration with ex-Nazis for purposes of intelligence gathering. Barbie was a Nazi thug, who enjoyed whipping his victims, kicking them in the head, or stringing them upside down from hooks. As the Gestapo chief in Lyon, he had two tasks: break the resistance, and accelerate the deportation of French Jews to the death camps in the East. He had executed both tasks with cold efficiency. With the assistance of an informer, in 1943 he captured Jean Moulin, the most prominent French resistance leader. Soon afterwards, he tortured Moulin to death. In 1943–44, Barbie facilitated the deportation of some seventy-six thousand French Jews, including the infamous case of forty-one Jewish children, aged three to thirteen, from an orphanage in Izieu.

  After the war, Barbie eluded arrest, though he was listed as early as 1945 in the Allies’ CROWCASS directory of suspected war criminals. In February 1947, he climbed out a bathroom window as U.S. Army intelligence agents kicked down his front door. But later that same year, a former Abwehr officer, Kurt Merk, persuaded a regional branch of the army’s CIC that Barbie could be of use in running a string of agents in occupied Germany. In short order, he was supervising CIC’s most productive network of agents, the “Petersen Bureau.” He impressed his American handlers by infiltrating the Bavarian branch of the Communist Party with an agent recruited by an SS friend who had served as a concentration-camp guard. If his CIC recruiters were initially ignorant of his background, it was not long before they were told of Barbie’s reputation in Lyon. Nevertheless, his CIC superiors decided that his “value as an informant infinitely outweighs any use he may have in prison.”1 By 1949, he had become so knowledgeable about CIC operations, including some operations he was running to infiltrate French intelligence, that his CIC handlers could not risk having him extradited to France. His background as a war criminal became a public embarrassment in 1949–50, so the CIC allowed Barbie to escape from Europe through a “rat-line” organized by a Croatian priest and former Nazi collaborator operating out of the Vatican. Barbie and his family quietly made their way to Bolivia, where he established himself as “Klaus Altmann,” a well-to-do businessman with close connections to the intelligence services of both countries. Only in the 1970s was his true identity revealed by the Nazi-hunter Beate Klarsfeld, and finally, in 1983, he was extradited from Bolivia and returned to France, where he eventually stood trial for crimes against humanity.

  Only then were hard questions asked about how McCloy as high commissioner could have allowed his intelligence apparatus to harbor such a man. A U.S. Justice Department investigation exonerated McCloy of any direct responsibility for Barbie’s escape to Latin America. The Justice Department probe, however, led to a formal U.S. apology to the French government. Washington admitted that Barbie had worked for U.S. intelligence, that he was a known war criminal, and that he had nevertheless been allowed to escape French justice. The Justice Department’s chief investigator, Allan A. Ryan, Jr., concluded that Barbie was an isolated ease, that he had been employed by U.S. Army counterintelligence without the knowledge of McCloy, and that his escape was the result of a cover-up by a few intelligence officers.

  However, that a man like Barbie could be used and protected by U.S. intelligence in occupied Germany was a matter of policy, not accident. Nor was he an isolated case. In the context of the Cold War, at a time when McCloy and his colleagues felt themselves to be field commanders on the front line of the ideological battle to contain the communist political challenge, the disagreeable character of agents like Barbie was usually of small consequence. Indeed, that some of these men had once worked for the German enemy and had specialized in anti-Soviet work on the Eastern front was precisely why they were assets to U.S. intelligence. What mattered in the intelligence game, as McCloy knew all too well from his Black Tom work, was whether these agents were producing hard intelligence.

  In the spring and summer of 1950, just as the Barbie case was becoming a sensation in the French press, McCloy had become concerned about communist infiltration of the Bavarian police force and various other West German governmental institutions. In a number of his weekly staff meetings that summer, he emphasized the importance of monitoring communist subversion and cited in one instance how HICOG intelligence had “intercepted a Communist communication running from KPD [the German Communist Party] headquarters to a local unit. . . .”2 This was precisely the type of intelligence on KPD subversion of the Bavarian police force that Barbie was then providing his CIC handlers. Though he had no idea who the agent was who had provided this material, McCloy was ill-disposed to allow anything to jeopardize the collection of such intelligence. He regarded clandestine information of this sort as the first line of defense against the very real threat of Soviet political subversion and psychological warfare.

  Initially, McCloy did not take much personal interest in the Barbie case; in the spring of 1950, the problems of de-Nazification had taken a back seat to the priority of establishing a viable West German state aligned with the West. The French allegations against Barbie were just one more irritant in Franco-German relations. But as the year progressed, McCloy was to become more aware of the special kind of controversy the Barbie case was generating in France. There Barbie was known as the “Butcher of Lyon.”

  HICOG officials began to realize the gravity of the matter in March 1950, when the French high commissioner wrote that Franco-American relations would be severely damaged if Barbie was not handed over. Then, in April, a French court put on trial René Hardy, the man most Frenchmen suspected of having betrayed Jean Moulin to Barbie. In the course of the trial, Hardy’s defense lawyer let loose a bombshell: it was “scandalous,” he said, but nevertheless a fact, that U.S. military authorities in Germany were protecting Barbie from extradition for “security reasons.”3 French newspapermen now rushed to the Americans for comment. Was it true that Barbie was under the protection of HICOG? A U.S. Army press spokesman tried to fend off the reporters with a terse “no comment,” but this naturally made the allegation seem all the more plausible.

  With the French repeatedly demanding his extradition, Barbie had become a minor but annoying matter of intelligence administration. Both Washington and the U.S. Embassy in Paris cabled McCloy for guidance on what the French should be told. HICOG had to come up with some answers. McCloy met repeatedly in late April and early May with the men in his office handling the Barbie cable traffic: Benjamin Shute, his old Cravath colleague who was then serving him as director of HICOG intelligence; James D. Riddleberger, his chief political-affairs officer; General Counsel Robert R. Bowie; and Assistant General Counsel John A. Bross. These men were his closest advisers, particularly on intelligence matters.

  HICOG’s standard line up to this point was that Barbie’s whereabouts were unknown. The French knew otherwise, since French police officials had interviewed Barbie in the presence of CIC officials on several occasions. In the midst of the Hardy trial, it was now a common assumption among the French public that U.S. authorities in Germany were protecting Barbie. The U.S. Embassy in Paris was almost frantic for any information to counter what they knew was rapidly becoming an anti-American propaganda bonanza for the French left. In response, HICOG’s legal office prepared a warrant for Barbie’s arrest; this document was ready for Bowie’s signature on May 1, 1950, but he never signed it. On May 2, 1950, HICOG’s Public Safety Branch cabled the U.S. Embassy in Paris to say that the allegations that Barbie was being protected were “unjustified and unwarranted.”4 The next day, however, HICOG cabled that this information “may possibly be inaccurate or incomplete.” New, unofficial information had been passed through the U.S. Army chain of command that CIC had known where
Barbie was as recently as April 28. HICOG accordingly advised the Paris embassy to say nothing more about the case “until we communicate with you further.”5 HICOG was in considerable disarray, and at least one official refused to believe that CIC had been in contact with Barbie for almost three years and had just now conveniently lost track of him. James McGraw, HICOG’s chief public-safety officer, was so incredulous that he told his superiors on May 5,1950, that he wouldn’t have anything more to do with the case.6

  Over the next several weeks, McCloy’s close advisers tried to figure out how to respond to the French extradition request. On May 5, John Bross was informed of “rumors that Barbie has been seen in Munich.”7 A day or two later, Bross’s boss, Robert Bowie, drafted a letter to the French in which he reported that HICOG had “recently received clues which may enable us to find him [Barbie].”8 This letter was never sent to the French, because Bowie and Bross had second thoughts about whether they wanted to encourage the French government. Instead, it was decided that Riddleberger would verbally brief the U.S. embassy in Paris over the weekend. Riddleberger evidently had learned a great deal more about CIC’s employment of Barbie, for that Monday, May 8, 1950, the Paris embassy cabled Washington, “Secret information brought by Riddleberger indicates Barbier [sic] case has highly embarrassing possibilities to put it mildly.”9 But the official records do not make it clear just how much Riddleberger knew. Had he learned that Barbie was still in a CIC safe house, or had he merely conveyed the almost equally embarrassing news that CIC had known of his whereabouts as recently as April 28?