The Chairman

by Kai Bird

  In either case, Riddleberger now knew that he was dealing with a delicate intelligence matter. Obviously, up until a week earlier, CIC agents had still had access to Barbie. HICOG had therefore already been put in the position of lying to the French, who had been told repeatedly since 1949 that Barbie could not be located in the American zone. There must have been a good reason why CIC had worked with Barbie and evidently had continued to work with him until very recently. In any case, for the rest of May, McCloy allowed the issue to drift, letting his HICOG public-affairs spokesman state merely that the Barbie case was under investigation. In fact, he had apparently been given intelligence information that led him to hope that the whole controversy would die down. From Paris, he and Riddleberger went to London for an Allied meeting with Acheson and other State Department officials. There he and Riddleberger took Henry Byroade aside and told him that the French government “no longer desire Barbier’s [sic] presence in France.”10 Exactly how McCloy acquired this impression is not clear, but the most likely source was CIC itself. That same week, the commander of the counterintelligence unit in Region XII, where Barbie was working, reported, “. . . this entire Hardy-Barbie affair is being pushed as a political issue by left-wing elements in France. No strong effort has been made by the French to obtain Barbie because of the political embarrassment his testimony might cause certain high French officials.”11 In other words, Barbie could finger any number of prominent French politicians who during the war had collaborated with the Gestapo. CIC also believed that the French resistance groups pressing for Barbie’s extradition were all left-wing organizations dominated by the Communist Party.12 If the whole controversy was just a political gambit on the part of the French left to attack their opponents, as McCloy indicated to Byroade in London in mid-May, perhaps it would blow over.

  He was wrong. On May 8, René Hardy was acquitted for the second time, and an enraged French public blamed the Americans for not allowing Barbie, the star witness against Hardy, to be extradited from Germany. By the end of May, under pressure from French resistance veterans, the French government had once again requested Barbie’s apprehension. They also sent another stiff note to the State Department, summarizing their “unsuccessful attempts [to] obtain Barbier’s [sic] extradition through HICOG.” Byroade promptly cabled McCloy, requesting guidance and pointing out the obvious, that the French were not going to give up.13

  McCloy now turned back to his political-affairs division and asked them to begin pressing the military chain of command for an explanation. As one of Riddleberger’s deputies explained to his counterpart in the Paris embassy, “Mr. McCloy directed that we smoke out EUCOM [European Command, U.S. military authority in occupied Germany] on the matter to see how far they would go in helping to find this character, and to get more details as to just how embarrassing it would be to them (CIC) if he were turned over to the French.”14 McCloy fully understood the problem. CIC had employed an accused war criminal, and now several tough questions had to be answered. Was HICOG willing to risk the damage to Franco-American relations if Barbie was not turned over to the French? Or was Barbie’s value as an agent, or his knowledge about CIC operations, such that he should be turned over to the French only as a last resort? McCloy knew enough about the intelligence business to realize that the bureaucracy now had to make a judgment on whether Barbie, if found, should be handed over to the French. By the end of May 1950, he had already accepted the possibility that there might be circumstances under which Barbie could never be transferred to the French, whatever his crimes. This set the stage for an internal cover-up of the whole affair by his own intelligence people.

  Actually, CIC had already made that judgment in a meeting on May 4, 1950, at CIC headquarters, where it was decided “that Barbie should not be placed in [the] hands of [the] French. . . .”15 As one CIC officer put it, “. . . due to his [Barbie’s] position as key agent in nets formerly employed, and due to his long association with C.I.C., SUBJECT [Barbie] knows more about C.I.C. targets, modus operandi, EEI’s, etc., than most C.I.C. agents.”16 Most embarrassing, he had personally directed CIC’s counterintelligence operations aimed at infiltrating French intelligence. This fact alone made it imperative for the CIC to keep Barbie out of French hands. Barbie knew, for instance, the names of dozens of CIC informants whom he had helped to infiltrate the communist parties in both Germany and France. CIC was convinced, based on information developed by Barbie from these agents, that the French police and intelligence bureaus had been thoroughly infiltrated by the French Communist Party.17 Under these circumstances, the highest-ranking CIC officers were easily persuaded that Barbie should never be turned over to French interrogators.

  Having made the decision, CIC now had to decide what to tell McCloy. Since the high commissioner had already been told that Barbie no longer worked for CIC, the easiest thing to do was to tell a second lie. So, on June 16, 1950, General Robert Taylor, the chief of army intelligence in Germany, sat down with several of his men and told McCloy’s personal representative, Ben Shute, that CIC had not used Barbie since May 1949. According to Shute’s notes of the meeting, Taylor also added that CIC had “not been in touch with him [Barbie] since late April 1950 and does not know his present whereabouts.”18

  Shute took CIC’s assurances back to McCloy and his new political-affairs officer, Sam Reber. On the critical question of whether Barbie’s extradition would prove to be a costly embarrassment, Shute concluded, “A complete disclosure by Barbie to the French of his activities on behalf of CIC would not endanger any present intelligence operations, but would furnish the French with evidence that we had been directing intelligence operations against them.” It is always awkward to be caught spying on one’s ally. Shute’s recommendation was nothing if not pragmatic: “. . . the policy question presented is of whether U.S.-French relations would be more damaged by delivery of Barbie, assuming we could find him, than by non-delivery. We are in a position to make a statement to the French about our termination of his employment and about our loss of contact with him and take a chance that the German police will not pick him up even though we make a formal attempt to have that done.” After consulting with Shute about all this, Reber and his deputy, E. Allan Lightner, Jr., suggested that HICOG should request the U.S. military to join in the search for Barbie “only as a last resort,” and then only if the French continued to press the issue.19

  Throughout the summer and autumn of 1950, HICOG routinely told the French that “continuous efforts to locate Barbie are being made.”20 But no search of any kind was conducted.21 German police and HICOG public-safety officers had long ago checked the obvious leads, and they were given no authority to search CIC installations or safe houses. All the while, Barbie continued to work for CIC, culling informants’ reports, largely on the activities of the German Communist Party, and for these services he continued to draw a salary.22

  For the moment, Barbie was safe, and with him CIC’s cover-up. But as long as extradition remained a possibility, Barbie’s handlers remained uneasy. Finally, in December 1950, CIC stumbled upon the existence of a “rat-line” occasionally used by its CIC counterpart in Austria to extricate informers and spent agents from Europe to Latin America. For a relatively small sum, Barbie was smuggled out of Europe in March 1951, and given a new life in Bolivia.25I

  When the Barbie affair became a scandal in the early 1980s, McCloy was interviewed about the case, both by the Justice Department’s Allan Ryan and by numerous journalists. He told everyone he had no recollection of Barbie or the French struggle to have him extradited. His closest aides, old friends like Robert Bowie, John Bross, and Ben Shute—whose names appear on many of the cables and reports associated with HICOG actions in the case—had a similar response. In their minds, the Barbie matter had been a truly minor piece of business, something that at the time was never resolved and had no consequences. Over the years, it simply faded from memory.

  The records they left behind, however, show that they were aware o
f the dilemma Barbie posed for army intelligence. McCloy did order his people to “smoke out” from the army just how embarrassing it would be to hand Barbie over to the French. But in the end, his closest advisers concluded that a thorough search for Barbie should be conducted only “as a last resort,” if the French demands became too onerous. Naturally protective of army intelligence, HICOG, under McCloy, made it easy for the CIC’s cover-up of Barbie to survive any scrutiny.26

  In retrospect, the Barbie case is a classic example of how policy-makers in the early postwar years overrated covert intelligence, something McCloy in particular had been prone to do ever since the Black Tom case. Most of Barbie’s intelligence consisted of secondhand gossip or gleanings from local newspapers. Some of it was certainly tainted information, fed to him by Germans with Nazi records who had been “turned” by the Soviets. Barbie wasn’t worth protecting. He was a war criminal who should have been brought to justice in 1950. McCloy must share some responsibility for the postponement of justice for more than thirty-three years.

  Nor was Barbie an isolated case; he was merely a notorious one. Barbie may have been a captain in the SS, and a Gestapo chief in occupied France, but in the spring of 1950, HICOG was using men with far worse credentials. At the end of March 1950, McCloy was deciding whom he should appoint as head of the West German Secret Service. Benjamin Shute, as director of HICOG intelligence, recommended General Reinhard Gehlen, a man who had personally served Hitler as head of military intelligence for the Eastern front.27 During the war, Gehlen had conceived the idea of organizing right-wing, anti-Soviet Ukrainians and other Slavic nationalists into small armies and guerrilla units to fight the Soviets. Many of these partisans, including those who joined the notorious Belarus SS Brigade operating in Nazi-occupied Byelorussia, were involved in the grisliest of the mass killings on the Eastern front.28 He was also responsible for a brutal interrogation program of Soviet prisoners of war.29 In short, Gehlen was as guilty a war criminal as many of the men tried at Nuremberg. But as the war came to an end, he had the foresight to photograph the most important of his intelligence files and bury them in the Bavarian Alps. Upon his capture by U.S. Army CIC personnel, he convinced his interrogators that his files and the knowledge he possessed about anti-Soviet networks operating in the East could be invaluable. By August 1945, he was being interrogated in Washington, D.C., by a team of OSS officers headed by Frank Wisner. Eleven months later, he was back in West Germany, operating for Army G-2 intelligence what became known as the “Gehlen Organization,” collecting intelligence on the Soviets from networks of anticommunist informants in East Germany, the Ukraine, and elsewhere in Eastern Europe. In 1949, Gehlen signed a contract with the CIA—reportedly for a sum of $5 million a year—which allowed him to expand his activities into political, economic, and technological espionage.30 Gehlen’s “Org”—the “firm”—was now safely ensconced in a walled-off little community in the small town of Pullach, just south of Munich. Here Gehlen built a self-contained intelligence community, with its own homes, stores, and schools for the children of his analysts.

  The “Org” was riddled with former SS, SA, and Gestapo men. Some of these men, like the notorious Dr. Franz Six, were veterans of the SS’s Amt VI (Department 6), a section of Nazi Germany’s main security headquarters. Dr. Six and other officers recruited by Gehlen in 1946 had led Einsatzgruppen mobile killing squads on the Eastern front.31 Some of them, like Dr. Six, were almost by chance traced down as war criminals and tried by U.S. military tribunals. Dr. Six was convicted in 1948 and sentenced to twenty years’ imprisonment.32 Such were the “experts” Gehlen recruited for his intelligence net immediately after the war.

  In 1950, when McCloy accepted Shute’s recommendation and appointed Gehlen as an adviser to Adenauer on external intelligence, the Soviet Union was the number-one target of U.S. intelligence. Though McCloy never put much credence in the threat of a Soviet invasion of Western Europe, he did fear communist subversion of West German society. It seemed only logical to tap the knowledge of Germany’s top expert on the Russians.

  Ironically, years later, West Germany would be racked by more than one spy scandal when it turned out that some of Gehlen’s top intelligence officers, men with Nazi records, had all along been working for the Soviets.33 Still, in the spring of 1950, McCloy had heard only good things about General Gehlen, whom he thought of as a valuable CIA asset.34

  Intelligence collection was a booming business in Germany during the summer of 1950. Frank Wisner’s “mighty Wurlitzer,” which McCloy had helped to set in motion while serving on the Eberstadt Task Force on intelligence in 1948, was running at high speed, and nowhere was it more active than in Western Germany. Wisner had already absorbed the Gehlen Organization in 1949, but he also employed hundreds of his own German and exiled Slavic contract agents, whose mission was to provide human intelligence on the Soviet bloc. Many of these agents had Nazi backgrounds. In addition, the CIA was financing paramilitary units composed of anticommunist refugees from Latvia, Lithuania, the Ukraine, and other portions of Eastern Europe. These émigré guerrilla units—ready to be used in the event of a full-scale war—were disguised inside “Labor Service” units initially established after the war to assist the U.S. Army of Occupation.35

  Beginning in 1949–50, Wisner and Gehlen used one of these Labor Service units to train some 250 Albanian guerrillas for a series of miniinvasions of communist Albania, one of the more unfortunate covert operations carried out during McCloy’s tenure as high commissioner. His own CIA liaison officer, Lawrence de Neufville, came up with the idea of using a Labor Service unit as a cover. Gehlen selected the Albanians for the operation; not surprisingly, most of them were veterans of the Albanian fascist collaborationist organization, Balli Kombetar. These were men who had deported Albanian Jews to Auschwitz and served in the Nazi-sponsored Albanian SS Skanderberg Division. Their leaders—Midhat Frasheri, Xhafer Deva, Hasan Dosti, and others—had emigrated to the United States under CIA sponsorship in 1949, to use CIA money to organize the National Committee for a Free Albania.36

  Since the entire operation was being warehoused out of a Labor Service unit stationed outside of Heidelberg, McCloy’s authorization was required before any of the guerrillas could be parachuted into Albania. The CIA’s Lawrence de Neufville and then a CIA contract officer named Michael Burke cleared the operation with McCloy. The high commissioner was well aware of the sensitivity of running such a program from German soil, so he instructed his close aide and friend Colonel Al Gerhardt to stipulate that, once the Albanian commandos arrived on German soil, they were to be kept in complete isolation. If ever caught, they had to be unable to tell their interrogators where they had been trained. Burke found a large, walled villa outside Heidelberg where the Albanians could prepare for their mission in complete seclusion. A veteran OSS officer, Burke had been recruited by one of McCloy’s Wall Street colleagues, Franklin Lindsay, who in 1950 was the European director for the CIA’s covert-action arm, the Office for Policy Coordination. Burke was a colorful individual who later ran the New York Yankees baseball club when they were owned by CBS, and later still became head of Ringling Brothers Barnum & Bailey Circus. He had excellent rapport with McCloy, played softball with him, and socialized frequently in the high commissioner’s rarefied circle. Once a month, he briefed McCloy and Ben Shute on active intelligence operations. “McCloy was cued into the intelligence world,” Burke recalled later. “You could talk to him in shorthand about operations. . . . He always had questions, but they tended to be about policy things, rather than operational details.” The high commissioner “didn’t want to know when you were dropping an agent,” but he was always familiar with the broad outlines of an operation.37

  Burke vividly recalled discussing the Albanian operation with McCloy, who easily gave his authorization for both the paratroop drops and similar, even more dangerous, overflights of the Soviet Ukraine.38 These latter overflights were used to test Soviet radar defenses and to parachute agent
s into the Ukraine with the intention of stimulating an eventual uprising. As with the Albanian agents, many of the Ukrainian agents were former Nazi collaborators. All of these paramilitary operations were ill-fated. If the missions were not compromised by the Soviet double agent Kim Philby, the Soviets were tipped off by one of the many men they had infiltrated into the Gehlen Organization. Dozens of the guerrillas were picked up by the Albanian police, almost as soon as they landed. In 1954, the Albanian communists tried and executed over four hundred agents and individuals who had come into contact with the operation. The Ukrainian operation ended in the same fashion, and many agents lost their lives before the CIA finally concluded that penetration of the Soviet bloc in this manner was not, as Gehlen had estimated, a feasible venture. McCloy learned the lesson too. “We didn’t know how tough the Soviets were,” Burke said. “McCloy came back [from Germany] as a sensible advocate of secret intelligence activity, but not whole networks of resistance.” It was obvious the Soviets could easily penetrate such large networks and roll them up anytime they wished.

  There were other intelligence fiascos. Burke had been brought in to replace de Neufville because there were too many covert operations without any oversight. “It was a hell of a mess,” Burke claimed. “They had a lot of relatively inexperienced people running a lot of lousy operations.”39 For instance, in 1950 the CIC began training a hundred members of a neofascist group called the League of Young Germans. Led by a former Luftwaffe officer named Gerhard Peters, these Young Germans were mostly Waffen-SS and Wehrmacht veterans. These men were provided with machine guns, grenades, and other light arms and schooled in guerrilla techniques that would enable them to stay behind Soviet lines in the event of a full-scale invasion. Then, in 1952, German police by happenstance arrested one of Peters’s men and discovered a hit list of two hundred Social Democratic Party politicians, all targeted for assassination in the event of a Soviet invasion. Embarrassed U.S. officials had to admit to The New York Times that they had been funding the paramilitary training of these “young Germans, many of them former soldiers. . . .” A German Bundestag investigation later revealed that the CIC had actually paid the Peters group an extra 12,000 deutsche marks per month for political activities such as the infiltration of SDP conventions.40