Soldiers, Spies, and the Rat Line

by James V Milano

  The question of which side would win the cold war depended, from the very beginning, on American resolution. If the Americans pulled their last troops out of Germany, the Red Army would roll west to fill the vacuum. The men on the ground were concerned with Stalin's intentions, which they correctly believed were to Communize Central and Western Europe if the occasion presented itself. They understood that his tactics would be governed by the circumstances, and they believed that the best way to deter the Soviets from any attempt to push the Americans back was to be ready to fight them at all times. Stalin would not start a war unless he was certain he could win it.

  The diplomatic and political debate over Europe from 1945 to 1948 centered around the question of where the line would be drawn between East and West. The West reluctantly conceded that Poland and the Balkans (but not Greece) would fall into the Soviet sphere, for the simple reason that the Red Army was in unchallenged occupation there. They did not concede Central Europe or its greatest prize, Germany. What began as a debate over how best to administer Germany and restore its political system soon deteriorated into a naked power struggle. Relations between the two sides deteriorated rapidly because of Russian intransigence and hostility. By 1948, after the Communist coup in Czechoslovakia and at the time of the Berlin Airlift, it had become evident that a strong military response was needed to back up American political determination to stop any other European countries falling to communism. But in 1945, if the Soviets had behaved with more tact and restraint, the Americans would have seen no need to oppose them so vigorously.

  In the High Command, the majority view immediately after the war was expressed by Eisenhower, who said on his return to Washington that Russia "was determined to make friends with the United States, to raise its standard of living, and to live up to every agreement made." In the euphoric aftermath of V-E Day, most of the American government agreed with him, though there were at least two notable skeptics. General Patton complained, "We appear to be leaning over backwards to be nice to the descendants of Genghis Khan. We're letting them dictate to us when patently we could and should dictate to them, and do it now in no uncertain terms." Another skeptic was President Harry Truman.

  On the ground, in Europe, the Soviet hostility toward the West provoked an immediate reaction. American soldiers may have shown some naivete in expecting friendship from the Soviets and were quite possibly far too ready to forgive and forget the crimes of their former enemies, but they were also battle-hardened veterans who did not take kindly to Soviet obstructionism. They responded in kind. The pattern was set early, and in Austria the intelligence units of the U.S. Army led the way. Jim Milano and his colleagues had come into Austria with specific tasks in mind, starting with rounding up the Nazis and then concentrating on counterintelligence activities, but they very soon took up other objectives. Their observations of the real situation, as opposed to the theoretical one they had planned for so arduously in Caserta, led them within a few weeks of their arrival to turn their attention to the potential threat from the Soviet Union. The Soviet army of occupation in Austria was still on full battle alert, facing the Western Allies with granite hostility and obdurate noncooperation. General Mark Clark and his chief of intelligence needed to know, at once, what the Red Army was doing and what it was capable of doing. Army Intelligence was ordered to report on its former ally, and its first, ominous reports were sent back to Washington within weeks of the Americans' arrival in Austria. That initial assessment of the potential Soviet threat had a dramatic effect in the Pentagon. Whatever the Joint Chiefs of Staff and General George Marshall may have thought of Stalin and his troops, the hard-eyed colonels and generals in Intelligence immediately saw the value of the reports they were receiving, and demanded more. The cold war had not begun. President Truman had not yet left Washington to attend the Potsdam summit with Stalin and Winston Churchill, and the euphoria of victory was still strong in both America and Britain. But Jim Milano and his colleagues were sending back reports of quite different attitudes and behavior among the Soviet occupying forces in Austria. So were their colleagues in Germany, and the Pentagon sensed the coming of a new and differently dangerous era. Its first, overriding duty was the safety of its troops in Europe, and it was becoming apparent, or at least possible, that their safety was threatened by the Soviet Union.

  The occupation of Austria had been carefully planned in advance, but the situation that developed immediately after the end of the war was quite different from what the experts had so confidently expected. New objectives were set almost immediately, and that meant a fundamental reappraisal of the whole structure of the occupation. Instead of holding down a sullen and resentful enemy population in cooperation with their gallant Soviet allies, the Americans found themselves sustaining an enthusiastically supportive community and confronting their former ally as a potential enemy.

  The long German resistance, even after defeat was certain, had given the Americans plenty of time to get ready: the first systematic preparations had been made in Italy early in 1943. The American intelligence operations in Austria had developed naturally out of wartime organizations in Italy. It was then assumed that the Allied forces that would enter Austria first would be the U.S. Fifth and British Eighth Armies, which were fighting their way up the Italian peninsula. As the war in Italy had drawn to a close, they had organized as the Fifteenth Army Group, under U.S. General Mark Clark, whose headquarters was at Lake Garda in northern Italy.

  During the war, the intelligence services had consisted of a number of separate agencies. The best known and best remembered was the Office of Strategic Services (OSS), the forerunner of the CIA. A second organization was the Signals Intelligence Service (SIS), which, with its British counterpart, played an enormous role in the war. Its mission was to listen to enemy broadcasts and decipher their codes. The British success, based on the work of Polish intelligence officers, in deciphering the most secret German codes ("TopSecret Ultra"), and the American success in deciphering Japanese naval codes had contributed hugely to the victory. The two greatest enemy surprises of the war, Pearl Harbor and the 1944 Ardennes offensive (which developed into the Battle of the Bulge) had been achieved because, in the former case, the Japanese fleet sailing to Hawaii had preserved absolute radio silence, while, in the latter, Field Marshal Gerd von Rundstedt had refused to allow any radio communications with Wehrmacht headquarters.

  Third, and far less glamorous than the other two, the CounterIntelligence Corps (CIC) was concerned with the security of American forces in the field. The CIC's mission, first in North Africa and then in Italy, was identifying all organizations or groups of people among the civilian populations who might be hostile to U.S. forces. That chiefly concerned Fascist groups, but very early on it was extended to Communist organizations, including partisan groups that were fighting against the Fascists and the German Army. The CIC was also concerned with treason, sedition, subversion among Allied forces, and protecting those forces against espionage and sabotage. There were a number of CIC units, each operating with a different Army formation. Milano's unit, the 430th CIC, served with the Fifth Army.

  Next, there was the Military Intelligence Service (MIS), which was concerned directly with the activities of enemy forces. This was classic military intelligence, which interrogated prisoners to discover the enemy order of battle and measure its strength and intentions. MIS was in charge of photoreconnaissance, which during the war developed into one of the major sources of intelligence on enemy movements, and it also ran the prisoner-of-war camps. The unit operating in Italy, that moved to Austria, was the 7769th MIS.

  There were also specialized agencies devoted to mail censorship. One of them concerned itself with prisoners' mail, both letters received by prisoners and those they sent home. Many a military secret was revealed by an unsuspecting Italian prisoner. Another censorship bureau dealt with civilians' correspondence. The mails, obviously, were not functioning normally and there was no communication across the front line
s, but the mails were progressively restored in occupied territory as it expanded northward, and Allied censors searched for information, particularly in the correspondence of people whom they knew had been important, or wellinformed, members of the Fascist regime or its armed forces. A third group dealt with the mail of American servicemen, who were quite capable of betraying military secrets through carelessness or ignorance.

  The SIS unit in Italy was sent back to the United States on the ground that the war was over and there was no further need to monitor the airwaves. When that policy was reversed, the Army Security Agency in Germany took up the task. Army Headquarters in Austria had no control over its operations, which is why Jim Milano started his own signal intelligence unit (see Chapter 15). Later, the National Security Agency (NSA) was set up to direct worldwide telecommunications intelligence gathering. In due course, the NSA became the most secret, most expensive, and most important of all U.S. intelligence agencies.

  When the staff planning the occupation of Austria examined future needs, they decided to streamline this large wartime system of intelligence and counterintelligence. The censorship organizations were merged and put under the MIS. Its task was not merely to censor mail; it had the authority to tap any telephone in the American zone, and it watched over telegraph traffic as well. This enlarged MIS operation operated parallel to the CIC, and both were put under the supervision of the intelligence staff in U.S. Army Headquarters in Austria, together with the Civil Censorship Detachment. Major Jim Milano, who commanded the 7769th MIS, was also in charge of the Operations Branch of the Intelligence Directorate and was thus at the heart of all Army Intelligence operations in Austria. To begin with, only the MIS and censorship units answered to him; later, at the urging of Colonel James Critchfield of the G-2 staff, Milano's Operations Branch was given control of the CIC in Austria. Milano thus became de facto operations head of all Army Intelligence. Critchfield was subsequently employed by the CIA as liaison officer with the revived German intelligence agency in Germany (see Chapter 14). Milano's headquarters, along with the rest of U.S. headquarters, were provisionally set in Salzburg because the Russians were delaying the American entry into Vienna. Later, when the commanding general and his staff moved to the capital, it was decided that Milano should remain in Salzburg because it was much more secure than Vienna, but that there should be an intelligence station in the capital that answered to him. To start with, he had a headquarters staff of fourteen, six administrative and eight special agents. The MIS battalion that moved to Salzburg had about fifty enlisted men.

  The business of counterintelligence, mail censorship, and interrogating POWs and DPs had always been coordinated with the gathering of "positive intelligence," information on enemy forces. This collaboration was continued into the occupation of Austria, under the direction of Milano's Operations Branch and was extended to eavesdropping on Soviet radio communications and recruiting agents and deserters. It also investigated the intelligence resources already available in Austria, meaning former German intelligence officers, as well as spies and specialists of other nationalities who offered their services.

  To begin with, however, the main need was for local personnel to man the censorship office and to perform various other tasks. Within two weeks of its arrival in Salzburg, the Civil Censorship Detachment had recruited about two hundred Austrians to read and censor mail, listen to telephone communications, and watch telegrams. The censors monitored communications within the American zone and with the Soviet zone. The other Austrians hired in the first days were secretaries, cleaners, and drivers. The Americans noted with pleasure that when they advertised for such help, the response was immediate and enthusiastic. People wanted to work for them and showed no resentment at their new status as employees of their conquerors.

  The CIC divided its operations into Counter-Intelligence, which tried to protect American military operations against Soviet subversion, Positive Intelligence, which gathered intelligence on the Soviets, Technical Intelligence, which concerned itself with Soviet scientific progress (this became enormously important as the cold war developed), and Political Intelligence, which concerned itself with politics in Austria. The Operations Branch gathered together all information provided by the other sections and itself ran the most sensitive cases, such as double agents, deserters, and eventually the Rat Line.

  Milano and his team reported to the senior intelligence officer at Army Headquarters, first in Salzburg, later in Vienna. That officer was known as the G-2, or Assistant Chief of Staff, Intelligence. Other branches of the staff were G-1, Personnel; G-3, Operations; G-4, Logistics; and G-5, Military Government. The G-2 was the contact with the Pentagon and passed on to the Operations Branch in Salzburg a steady stream of requests for information, known as Essential Elements of Information (EEIs). This was the heart of Milano's operation. The EEIs he received were demands for information on the Soviet order of battle, armaments, training, and all aspects of the Red Army's organization and procedures. The Pentagon also wanted precise and detailed information on Austrian politics, particularly the local Communist Party. Furthermore, Austria was the best listening post available for news of Soviet activities and intentions in Eastern Europe, especially Hungary and Czechoslovakia.

  All this had been in the organizational chart and the overall plan laid down at Caserta during the war. But when the Americans found themselves face to face with the Red Army, the whole balance of the operation changed. Positive intelligence became the most important part of their work; instead of chasing Nazis, they had to ferret out information on the Red Army. Their overriding task very quickly became evaluating the Soviet order of battle just as studying the German order of battle had been their prime objective a few months earlier. This sudden shift of perspective led to promotion and success for those young officers who saw what was needed and seized the opportunity to provide it, even if they did not yet know precisely that they were the first warriors in the new, cold war.

  On the wall in Jim Milano's conference room hung a Flap Meter, lovingly constructed by one of his subordinates out of white cardboard and brightly colored with crayons from a child's coloring box. The words FLAP METER ran across the top, and in the center, fastened by a brass tack, was an arrow that could be swiveled around to all the points of the compass. The rim was marked and colored in degrees of panic: NORMAL was light green; CALM was light blue; STORMY was a mixture of blue and pink; FLAP was red; FRANTIC was scarlet; DISASTER was purple. The arrow would be swung around by anyone who came into the room to warn his colleagues of troubles to come. It was seldom set to CALM, never to NORMAL. Life at Intelligence headquarters was exciting, and the Flap Meter usually fluctuated between STORMY and DISASTER.

  One morning in the summer of 1947, two years after the Operations Branch began its secret operations against the Soviet armies, the Flap Meter was set to STORMY and the question of the moment was what to do with the defectors who had been crossing the borders in a steady stream, or who had been culled from the DPs in the camps. As each arrived, alone or in groups of two or three, he was installed in a safe house, usually in a small town or a village in western Austria, with an intelligence officer to mind him and reliable Austrian civilians to provide for his needs. Then he was interrogated. It was a process that could last for weeks. Milano never had enough Russian-speaking officers, let alone ones fluent in Ukrainian, Lithuanian, or any other of the myriad languages of Eastern Europe and the Soviet Union. The interrogators would take the deserter through his life history, particularly his military experience, to establish that he was, in fact, a genuine deserter. They were always on the lookout for KGB agents in disguise, men who would present themselves in the West as refugees from com munism and would learn every detail they could of American intelligence proceedings, the identities of American officers, the places they used for their business. The KGB would be particularly anxious to learn what happened to deserters when the interrogation was over, and this was a secret Milano was determined to hide-
though so far he did not know the answer himself.

  After a defector's first interrogation, he was grilled in detail on his knowledge of the military units he had belonged to or had knowledge of. Reports on these preliminary findings were then prepared and sent off to the Pentagon, where intelligence specialists pored over them-and invariably came up with lists of additional questions or further clarifications the deserter might provide. The second interrogation, based on the Pentagon questionnaires, would last longer than the first and might produce further leads, and the answers might produce further questions from Washington. The first question put to a deserter always concerned the Soviet order of battle. What had his unit been, how did it fit into the larger military organization, what was its logistical and administrative support system? Next, the interrogators would question the defector on his unit's armaments. What was its equipment, in every last detail? What was its capability, its maintenance facilities, its supply structure? How were its fire control centers managed? After that, he would be questioned about industrial sites, in Eastern Europe and in the Soviet Union itself, that produced armaments or serviced weapons systems. Political questions, which were often the concern of the CIC in Austria, were seldom raised by the Pentagon.

  Sooner or later every man was pumped dry, every piece of useful information he could provide was finally extracted from him. Then the problem was what to do with him.

  Milano and his four most senior colleagues gathered under the Flap Meter to consider the question. Captain Paul Lyon, who was chief of operations for Headquarters, 430th CIC, was in charge of the defectors. He opened the session with a succinct account of the position.