A Brief History of the Spy

by Simpson, Paul

  Former CIA operative F. Mark Wyatt was one of those involved in this new form of spying. As he told CNN in 1995:

  The run-of-the-mill operative in the [CIA] was hopeful that we could get into a [covert] operation . . . My colleagues in the CIA, in 1946–47, when I was involved, were gung-ho. We had been in the war; we didn’t question authority – ‘Should we do it this way, should we not?’ We definitely knew that the Soviet empire was, as Reagan said, the Evil Empire, and that was it. And when we were stationed abroad . . . whether we were in Sri Lanka or we were in Iceland, we knew what our target was: it was the Soviet target. We were interested in what was going on in that country, and the connections of that country with the pervasive expansionist Soviet power.

  DCI Hillenkoetter wasn’t convinced that the CIA had the authority to take an active role in the Italian election and was advised by the agency’s general counsel, Lawrence Houston, that he needed a specific mandate. This he received from the National Security Council in NSC directive 4a, which ordered the CIA ‘[to] initiate steps looking toward the conduct of covert psychological operations designed to counteract Soviet and Soviet-inspired activities’. The Special Procedures Group (SPG) was tasked with finding a way to do this.

  In reality, this meant working with the Christian Democrats to defeat the Popular Democratic Front, a coalition formed by the Italian Communist and Socialist Parties. In addition to letter-writing campaigns by Italian-Americans, propaganda broadcasts by the Voice of America warning of the dangers of a rerun of the Czechoslovakian fall into Communism, and food and grain assistance, the SPG undertook more covert operations. As Wyatt recalled:

  We had bags of money that we delivered to selected politicians, to defray their political expenses, their campaign expenses, for posters, for pamphlets, what have you . . . And we did many things to assist those selected Christian Democrats, Republicans, and the other parties that were completely reliable – that could keep the secret of where their funds came from. They were talked to by CIA experts: ‘What do you say if all of a sudden you have in Turin the greatest extravaganza of propaganda? Who pays for it? Does the Fiat Corporation pay for it, or what? You’ve got to have some reason for your munificence at this time, and we don’t want an indication that it’s young Americans that are passing the money to you . . . [in] black bags.

  It meant training the Italian politicians in tradecraft so that the money could be passed surreptitiously, but, perhaps to the surprise of some of the agents involved, it worked. The Christian Democrats won by a landslide – 48 per cent to 31 per cent for the Popular Democratic Front. How much of this can be ascribed to the CIA’s activities has been questioned over the years, but it was a rare victory for the early agents of the CIA to celebrate.

  4

  FIGHTING THE COLD WAR ON NEW FRONTS

  With the Soviet Union proving that they had the atomic bomb in August 1949, it was evident that the escalation between the two opposing forces could result in a third world war, and the fifties would see many proxy conflicts between West and East. Eastern Europe and China were held by the Communists – even if everyone in power in the countries didn’t necessarily bow down before Josef Stalin, they were of similar mindset, and to the Western intelligence agencies, they were a common foe.

  All three of the main agencies involved in that conflict – Britain’s MI6, the American CIA and the Russian KGB – would undergo major reorganization in the early years of the decade. The British had to reassess their entire set-up in the light of Donald Maclean and Guy Burgess’ defection to Russia – and MI5’s strong conviction that Kim Philby was the ‘Third Man’ who had persuaded them to leave. (Philby would continue to be a problem for MI6 until his eventual departure to Russia in 1963.) The death of Stalin in 1953 directly led to the restructuring of the Soviet State Security Service into the form in which it is best known. And the CIA had to deal with yet another failure of intelligence-gathering.

  A lack of confidence in the reports coming from the CIA’s Office of Reports and Estimates had been expressed as early as Spring 1949, and it was criticized heavily for not putting together the pieces regarding the Soviet atomic test. However, it was its failure to predict the invasion of South Korea by the North Koreans of the Democratic People’s Republic of Korea (DPRK) in June 1950, and the involvement of the Chinese People’s Army in October that year that led to the departure of Hillenkoetter.

  In January 1950, the CIA reported their analysis of the troop movements in North Korea:

  The continuing southward movement of the expanding Korean People’s Army toward the [border at the] thirty-eighth parallel probably constitutes a defensive measure to offset the growing strength of the offensively minded South Korean Army . . . Despite this increase in North Korean military strength, the possibility of an invasion of South Korea is unlikely unless North Korean forces can develop a clear-cut superiority over the increasingly efficient South Korean Army.

  They believed that the invasion would have to be ordered by Russia: ‘The DPRK is a firmly controlled Soviet satellite that exercises no independent initiative and depends entirely on the support of the USSR for existence,’ the CIA stated on 19 June, six days before the North Koreans did indeed act independently.

  Once the war was under way, the CIA believed that the Chinese would not intervene in the situation, despite numerous coded and open warnings from the Chinese authorities. The authorities in Beijing made it clear that they would take action as they saw fit to protect their country as General MacArthur and his troops pushed the DPRK Army back towards the 38th Parallel and then across it, entering North Korean territory on 1 October. ‘While full-scale Chinese Communist intervention in Korea must be regarded as a continuing possibility, a consideration of all known factors leads to the conclusion that barring a Soviet decision for global war, such action is not probable in 1950,’ stated the CIA report on 12 October. The next day, the Communist Chinese army entered North Korea. By mid-November, they were in full operation.

  In light of these errors – and even before the Chinese intervention in the Korean War was confirmed – in October 1950, President Truman appointed General Walter Bedell Smith to the post of DCI with instructions to shake up the three-year-old agency and make it fit for purpose.

  Smith created three directorates – intelligence (CDI); plans (DP); and administration (DA) – and the Korean War became a baptism of fire for the newly reorganized CIA. Turf wars between them and the Army’s intelligence units continued, reaching as high as the President, who backed the CIA, although he required them to liaise with the Joint Chiefs of Staff. The Agency carried out a number of successful operations. Both they and the Army created units for special ops, and the CIA trained thousands of Koreans for infiltration into the DPRK for intelligence gathering and sabotage, as well as setting up escape and evasion networks. Missions, such as Operation Bluebell, were run by an operational arm known by the acronym JACK (Joint Advisory Commission, Korea), and, while the Agency acknowledged that some of the North Koreans and Chinese who volunteered for service were simply using them as a way of getting transport back home, many provided intelligence which helped the war effort.

  In addition, the CIA also tried to continue its mission of subverting Communism by carrying out missions in China. The Agency created a cover airline, Civil Air Transport Co. Ltd (CAT), which was used to drop agents and supplies into China, not always successfully. America still officially backed the nationalist government of China, which had been replaced by the Communists in 1949 and had moved to Formosa, and the CIA’s Operation Paper supported invasion attempts from Burma by the Kuomintang, which it was hoped might draw some troops away from the Korean conflict.

  Not every mission was a success, and misjudgements could have catastrophic consequences. Details of one such, in which agents John T. Downey and Richard G. Fecteau were shot down on their first mission over northern China in 1952, were only released under the Freedom of Information Act in 2011. Believing that they were extrac
ting an undercover agent, they were actually walking into a trap. Their plane was shot down, and both men were captured alive, tortured and put on trial by the Chinese, and then held prisoner for the next twenty years. Although the CIA initially told their families that they had been lost in a CAT plane crash, back channel diplomacy would eventually lead to their release. Jack Downey refused to return to the Agency, pointing out, ‘I don’t think I’m cut out for this line of work!’ Both men were able to retire with full pensions from the CIA and were awarded the Director’s Medal for Extraordinary Fidelity at a special ceremony at CIA Headquarters in 1998.

  While the CIA was concentrating on the conflict in south-east Asia, the FBI was having more success winding up Russian networks. The arrest in Britain of atomic scientist Klaus Fuchs as a result of the Venona project would lead to many more agents coming to light. Interrogated by MI5’s James Skardon, Fuchs tried to conceal his contacts’ identities, but Skardon did learn about a courier named ‘Raymond’, to whom Fuchs had passed top secret information about the atom bomb in June 1945, on the Castillo Street bridge over the river in the small town of Santa Fe near the Las Alamos base. ‘Raymond’ had made contact with Fuchs through the scientist’s sister and the descriptions given by her and Fuchs tallied with someone the FBI had already interrogated as a result of Elizabeth Bentley’s testimony: Harry Gold. Faced with evidence found at his own apartment that placed him in Santa Fe (which he had denied visiting), Gold confessed.

  However, parts of Gold’s story didn’t add up, in particular why he had stopped in Albuquerque on one of his trips to Santa Fe. Eventually he admitted that he had visited a soldier who gave him technical drawings from Los Alamos – and this turned out to be Fuchs’ colleague, David Greenglass. In turn, Greenglass broke under interrogation, and confessed that his wife Ruth and brother-in-law Julius Rosenberg were spies. This tallied with further Venona transcripts, which identified Rosenberg as a key agent known as ‘Antenna’ or ‘Liberal’, David Greenglass as ‘Kalibr’, and his wife as ‘Osa’. Another agent, radar engineer Morton Sobell, was also taken into custody in Mexico when he tried to flee.

  Julius Rosenberg and his wife Ethel were arrested and charged with espionage, but unlike the other members of their spy ring, they refused to admit their guilt. Accordingly they, along with Sobell, were brought to trial, where the FBI had to rely on the testimony of David Greenglass, which included details of the way the side piece of a box of Jell-O was used as a means of identification between agents Harry Gold and Elizabeth Bentley. Sobell was sentenced to thirty years’ imprisonment. The Rosenbergs were sentenced to death. They were executed at Sing Sing Prison in June 1953, after multiple legal appeals and pleas for clemency.

  President Dwight D. Eisenhower, who succeeded Harry S. Truman in January 1953, summed up the general public’s revulsion at the Rosenbergs’ activities:

  These two individuals have been tried and convicted of a most serious crime against the people of the United States. They have been found guilty of conspiring with intent and reason to believe that it would be to the advantage of a foreign power, to deliver to the agents of that foreign power certain highly secret atomic information relating to the national defence of the United States. The nature of the crime for which they have been found guilty and sentenced far exceeds that of the taking of the life of another citizen; it involves the deliberate betrayal of the entire nation and could very well result in the death of many, many thousands of innocent citizens. By their act these two individuals have, in fact, betrayed the cause of freedom for which free men are fighting and dying at this very hour.

  The Rosenbergs’ trial concluded in April 1951; a month later, Guy Burgess and Donald Maclean defected to the USSR. Questions were asked about the strength of the British security vetting that had been taking place: Fuchs had gained clearance from MI5; Maclean and Burgess had similarly passed muster. There was much talk of a ‘Third Man’ in the British set-up who had warned Burgess and Maclean, and many in MI5 were convinced it was Kim Philby. The mistrust didn’t prevent the two countries working together, though.

  Two of the most important joint operations took place in continental Europe – the Vienna-based Operation Silver, and its Berlin equivalent, Operation Gold. The Russians were increasingly using landlines for phone calls and teletype traffic. This presented a problem for intelligence-gathering, as it was no longer a case of monitoring radio frequencies.

  Like Berlin, Vienna was partitioned into different sectors in the immediate post-war period, and Operation Silver was the brainchild of the MI6 head of station in 1949, Peter Lunn, who realized that they were in a position to tap into the Soviet landlines. A tunnel was dug from a house seventy feet away from the lines, and to provide cover for the project, MI6 opened a store selling Harris Tweed – which proved to be almost too successful!

  The CIA were also interested in gaining access to the Soviet’s landlines, particularly after they realized that Moscow’s encoding machines had a flaw which sent a faint echo of the uncoded message along with the encrypted version. When the CIA’s Carl Nelson visited Vienna, he came across the MI6 operation, and the two sides joined forces – although it seems that Nelson didn’t share the information about the clear versions with his allies.

  The Vienna project was the inspiration for a similar operation in Berlin, which would in the end produce over forty thousand hours of telephone conversations and six million hours of teletype traffic. Ironically Operation Gold is best known because of the nature of its discovery by the Soviets.

  The Berlin Tunnel would be deemed ‘one of the most valuable and daring projects ever undertaken’ by then-DCI Allen Dulles who gave the go-ahead for the digging in conjunction with the British in December 1953. The tunnel was a major engineering feat, travelling nearly 1,500 feet beneath the ground to reach a cable that was only 27 inches from the surface. The cable’s location had been provided by an agent inside the East Berlin post office, and the construction of an Air Force radar site and warehouse was used as a cover for the work which began in February 1954. The tunnel itself was completed in February 1955, and taps were in operation until April the following year when it was discovered, with the Soviets trying to make a great propaganda coup from it. (This backfired: Time magazine commented that ‘It’s the best publicity the US has had in Berlin for a long time.’)

  As far as the CIA were concerned at the time, ‘Analysis of all available evidence . . . indicates that the Soviet discovery of the Tunnel was particularly fortuitous and was not the result of a penetration of the agencies involved, a security violation, or testing of the lines by Soviets or East Germans.’ It seemed as if the Soviets had got lucky – but in fact, they were aware of the tunnel all the time, thanks to yet another KGB spy within MI6’s ranks, this time George Blake (see chapter 5), who had been present at the initial briefing in October 1953, two months before Dulles had approved the project. It seemed, though, that the KGB was more concerned with protecting Blake than keeping the secrets that would be revealed via the wiretaps, so didn’t act sooner.

  The CIA’s successful involvement in the Italian election of 1948 was just the start of their intervention in the affairs of other countries. Sometimes this was by invitation of some of the parties involved – such as in China, where the nationalist government of Chiang Kai-shek welcomed the CIA assistance – but by no means was this always the case.

  Operation Ajax was a case in point. The CIA’s actions in Iran helped keep the Shah in power until the coup of 1979, but as its instigator, Kermit Roosevelt, would later note: ‘If we, the CIA, are ever going to try something like this again, we must be absolutely sure that the people and the army want what we want. If not, you had better call in the marines.’ The problem was: the CIA was acting against what a democratically elected government had decided.

  The problem arose when the concession that granted oil rights in Iran to the British-run Anglo-Iranian Oil Company (AIOC) came up for review in 1950. The Iranian parliament, the Majlis,
called for the terms to be renegotiated so they weren’t so favourable to the AIOC. One member of the Majlis, Mohammed Mossadegh, a Europe-educated lawyer in his early seventies, became the focal point for the opposition, and in March 1951, the AIOC’s holdings were nationalized. Mossadegh was then elected prime minister on 29 April. The British didn’t take kindly to this: describing it as ‘a series of insensate actions’, they claimed that ‘Unless this is promptly checked, the whole of the free world will be much poorer and weaker, including the deluded Iranian people themselves.’ The Iranian people themselves, however, considered Mossadegh to be a hero for standing up to the British.

  Although the Americans wouldn’t initially assist the British with removing Mossadegh, the Iranian’s unwillingness to deal with the increasing influence of the Communist party meant that he came into focus for the CIA as a potential enemy, and so Project Ajax was born. In March 1953, an Iranian army general approached the Americans about backing an Army-led coup, and there was concern that the Communists would step in during the chaos. DCI Allen Dulles approved the operation to ‘bring about the fall of Mossadegh’ on 4 April. General Zahedi was seen as the ideal figurehead for the new regime, and CIA and MI6 agents discussed how best to run the operation (with the CIA not trusting the British with details of their own assets inside the country).

  The operation came close to collapse because of the weakness of the Shah of Iran, whose role was to dismiss Mossadegh and appoint Zahedi. After much vacillating, he eventually did so on 13 August, but the coup was very nearly a disaster. On more than one occasion, Roosevelt was advised to leave Tehran, the operation a failure, but, more by luck than judgement, it was eventually successful.