While the debate was under way, the man was arrested and charged with war crimes by Austrian police. In due course, he was tried and acquitted. The question of using his services was then reconsidered, with the additional burden that, even though he had escaped the courts, a cloud of suspicion still hung over him: he perhaps fell into two of the four prohibited classes, membership in the SA and being a suspected war criminal. He submitted a sample report on Soviet troop deployments, but the CIC liaison officers with British and French Intelligence reported that he had also offered the report to each of them. This was too much for the three Allied services, and the man was told that he would not be employed by any of them.
A problem that occurs constantly in intelligence is judging the reliability of sources. Some of the Americans' new German recruits were reliable, steady, and competent intelligence officers. When they claimed they had contacts in Eastern Europe that could be brought together again as a new anti-Communist network, they were telling the truth. They were, after all, far better placed than the newly arrived Americans to open contact with the underground in Stalin's empire, because those contacts would necessarily consist, first of all, of people they had worked with during the war. But other agents were much less reliable. Their commodity was information, and they offered it for sale to the various American and Allied intelligence organizations. The problem was checking it. How could case officers decide whether a report was true, partly true, or wholly fictitious? How could they determine whether a new agent really had useful contacts in Eastern Europe or was simply concocting his reports from newspapers, books, and his own imagination?
The only solution was to check every report from a new agent most carefully. Milano also checked with his French and British colleagues, partly to enforce the rule that an agent can work for only one master. The former SA man was by no means the only operator who tried selling his wares in more than one market. Whenever one was detected, he was struck from the rolls. On one typical occasion, a German agent sold the same report on a Soviet tank factory to the Americans, the British, and the French. The British checked his report with their French colleagues, found the similarities, and then informed the Americans-who had been sold the same story. They suspected the man's claims of having an intelligence network inside Russia were hugely inflated or perhaps entirely bogus. It seemed much more likely that he had picked up some details of the factory from refugees or returning prisoners of war. These were the MIS's own best sources, so it was entirely possible that freelance German intelligence agents might be drawing water from the same well.
All information coming in was classified according to a standard grid. Sources were listed in order of reliability from A to F, and their reports in order of credibility on a scale of 1 to 6. The various German networks produced information that was usually classified C-3, though sometimes it fell to D-4. Nothing lower than that was considered trustworthy, though the information might be upgraded (from D-4 to D-3, for instance) if some corroboration came in.
One of the most difficult decisions the Operations Branch ever faced occurred at the height of the cold war, in 1949, when it became apparent that one of the German agents whose reports had been accepted as reliable was in fact a double agent. Paul Lyon had a network of six agents in the Soviet zone of Austria. The group was coordinated by one of them, who was Lyon's contact. Then the contact reported that one of his agents had disappeared, simply vanishing without trace. This was sufficiently disturbing to warrant a full-scale review, and the other agents were called on to investigate. After two weeks, two more agents disappeared. The contact investigated the matter himself and concluded that one of his two remaining agents must be a traitor. He told Lyon that he wanted to get out of the Soviet zone as quickly as possible, for fear that he would be next to vanish. By this time, Milano and his staff had analyzed all the reports the network had prepared and had discovered that the suspect's contributions were clearly superior to the reports of all the others. Some of his information included details of a Soviet military formation that would have been very difficult for anyone except an insider to obtain. In other words, the information had been given to him by the KGB in order to impress his American paymasters.
All the evidence pointed to this man as being the one responsible: he had identified the American agents, and the KGB had then eliminated them. Milano and his team then set up a conference with the contact agent and the suspect in the American zone, near the border. They were told that the Americans had a special task for the suspect that they wanted to discuss with him in person. He took the bait and arrived with the chief agent at the meeting place at Steyr. Lyon and one of his American agents who spoke fluent German then set to work interrogating him. After several hours, they were convinced that he was a double agent. They had him locked up by the Austrian police in a jail in a small town nearby.
The interrogations continued for several days. The suspect never confessed, but it became clear that he was playing games with his supposed superiors. They had excellent contacts with the Austrian police throughout the country, including in the Soviet zone, and established that there was no trace of the three missing men and no bodies. Presumably they had been hauled away into the Soviet Union, where they had been shot. The contact man and the sixth surviving agent were called back to the safety of the American zone, and the network was wound up. Milano and his closest associates had long, anguished discussions about whether or not they would be justified in having the man eliminated. In later years, of course, the CIA was much less squeamish, but in those early days intelligence officers were uncertain. On this occasion, finally, they concluded that they would be justified in finding a gunman and having the man shot. They were certain beyond a doubt that he was responsible for at least three deaths, but there was no other obvious way to punish him or to prevent further losses: he had thoroughly infiltrated their own networks.
A week after the interrogations began, Milano was called in the middle of the night by a CIC agent. The suspect had escaped from jail. It was a small, country facility, and two men had broken in, overpowered the jailer, and released their prisoner. Evidently, it had been a KGB operation. The Americans were thus spared making the choice of eliminating the man or setting him free, unpunished.
The most important of all West German espionage networks was the one set up by General Reinhard Gehlen, a former senior officer in the Abwehr, the German military intelligence agency. He had been in charge of all German Army intelligence on the eastern front in the latter part of the war. Just before the final Soviet offensive against Berlin in early 1945, he had moved his office and his files westward: the future Allied zones of occupation were known, and Gehlen had no intention of being caught by the Red Army. On the contrary, he had decided to offer his services to the Americans as soon as the war was over and spent the last weeks of the dying Reich getting ready for his change of allegiance. He had surrendered to the Americans and in due course had been recruited by Army Intelligence. He had been established in offices in Pullach, near Munich, that had been used by Martin Bormann in his capacity of Reichsminister, or head of the Nazi Party.
Gehlen then set about reactivating his networks. Those of his agents who had been less nimble than he and had been left behind Soviet lines in the Soviet zone were the first candidates. East Germany, which later became the German Democratic Republic, was the main Soviet army base in Central Europe and the chief target for Gehlen's operations, just as West Germany was the main target of the GDR's intelligence operations. Some of Gehlen's former Abwehr colleagues were already building up their own secret service in the East that later developed into the Stasi, one of the most efficient of all Communist spy systems. Then there were the surviving Abwehr agents in the Baltic states, Poland, Czechoslovakia, Hungary, the Balkans, and the Soviet Union itself who might be brought back into a reconstituted intelligence network. No doubt many of them were very unsavory people, men and women who had spied for Hitler against their own countries. Perhaps Kauder Kopp'
s secret source, if genuine, was one of them: Gehlen, as commander of the Abwehr's eastern office, had of course known about Kopp and his source, and if the Americans needed a skilled operative to revive the Kopp network, once the inscrutable Bulgarian had been picked up in Austria, then Gehlen was the obvious man to do it. His other agents were intelligence officers who had worked for the Nazis out of Fascist conviction or detestation of the Russians. Gehlen employed many Latvian, Lithuanian, and Ukrainian Fascists and war criminals in Munich. They best knew the names of their former comrades and friends who had been left behind in what was now the Soviet bloc and might be called to arms again. At any event, Gehlen set about building an intelligence network to serve the Americans against the Soviets who occupied Eastern Europe. He quickly became the most important of American intelligence assets in Central Europe, and the fact that he employed a considerable number of SS, Gestapo, and similar officers was not held against him. When the Federal Republic of Germany was set up and recovered its sovereignty, he transferred his allegiance again, to the new government. The service he had set up, of course, remained closely allied to the CIA.
Milano, as a senior American intelligence officer in Austria, knew all about Gehlen, though he did not deal with him directly. A friend of his, Colonel James Critchfield, was seconded from the Army to work for the CIA in Pullach as head of liaison with the Gehlen organization. Before that, Critchfield had been on the G-2 (Intelligence) staff of Army Headquarters in Vienna, which is how Milano had met him. Critchfield and Milano had worked very well together: it was Critchfield who had recommended to Colonel Bixell, chief of staff in the G-2 section, that Milano be given operational control of the CIC in Austria. When Critchfield had been posted to Pullach, they had stayed in contact.
This was more than a social relationship. While Gehlen's chief preoccupation was with Eastern Europe, particularly the Soviet zone, he also occasionally ran agents through Austria. That meant that he had to clear things with Milano, or sometimes with the British and later with the Austrian authorities. Critchfield had a captain on his staff whose duties were to liaise with Army Intelligence, and once a week this officer would present himself in Milano's office to brief him on Gehlen's operations. These briefings never included the details but covered anything in which the Operations Branch might have an interest. Milano also helped with any problems that arose with the Austrian police or the British. He maintained the closest possible relations with both parties, and if one of Gehlen's runners were picked up by them and found to have inappropriate papers, Milano could usually arrange matters.
Over the months of this association, Milano came to acquire a great respect for the Gehlen organization. They were professionals who had been engaged in European intelligence far longer than any of the Americans or British and might have much to teach. He asked Critchfield if he could arrange for him to visit Gehlen at Pullach, and he made the visit in 1950. He had three topics he wanted to discuss with the Germans: First, he wanted to compare notes with them on some German networks that had offered their services or that Army Intelligence had come across. Milano was particularly interested in the "Stockholm Abwehr" of Karl-Heinz Kramer. Second, he wanted to learn how the Germans had operated some of their best-known agents during the war, such as the celebrated Elyesa Bozna, who worked as valet to the British ambassador in Ankara, Sir Hughe Knatchbull-Hughessen. Bozna had been able to make duplicates of the ambassador's keys and copy the dispatches in his safe and dispatch box. It had been one of the Abwehr's most successful coups. Third, Milano wanted to know how the Abwehr had checked on its agents' reliability. How could it be sure that its own agents had not been caught and turned, and how could it check the bona fides of agents who offered their services? How could it be sure that such people had not been planted by the other side? At the time, he did not know that during the war the British had succeeded in capturing and turning every single agent the Abwehr had sent into Britain and had used their radios to send false information back to Abwehr headquarters. If he had, he might have been less impressed by the Abwehr's skills at counterintelligence.
Milano spent a large part of the day with Dr. Schaaft, Gehlen's chief of operations. He spoke excellent English and briefed Milano extensively on his activities and methods. Then Gehlen appeared, and Milano spent the rest of the afternoon with him. They discussed Gehlen's wartime activities, including his contacts with Hitler and other senior Nazi officers and officials, but dealt chiefly with the Germans who were still working in intelligence, either in the West or, under cover, in East Germany. They discussed counterintelligence operations and the problems of operating in Berlin and communicating with that city. Milano faced much the same problem in Austria, where Vienna, like the German capital, was isolated behind Soviet lines.
The Germans were as suspicious as Milano himself of Karl-Heinz Kramer, who later became known as the Stockholm Abwehr. For several years he had sold reports to the Americans on the Soviet air frame industry. He claimed that he had contacts inside the Soviet Union who had access to that particular and important target. His information appeared accurate, and could sometimes be checked against other sources. Milano was very doubtful of the Kramer network. Gehlen, too, expressed great skepticism. Much later, an analyst in the Pentagon noticed that all Kramer's reports had come from newspapers and aircraft manuals available in Sweden. His "Russian" network turned out to be the catalog of a bookstore in Stockholm.
A more reliable American agent was the archbishop of Salzburg. He was nothing so vulgar as a spy, nor did he attend secret meetings in safe houses or plot with the Americans to send defectors down the Rat Line. Indeed, he never met American officers at all. Instead, he lent his name to clandestine purposes when the need arose. Early in the occupation, the CIC established a trucking firm in the Soviet zone of Austria. It was in every way a respectable and legitimate outfit, moving goods around Austria with all the proper permits, using respectable drivers, its every action apparently open and aboveboard. Best of all, it was listed as the property of the Archbishopric of Salzburg. The accommodating prelate had agreed to the subterfuge when the CIC explained to him the urgent need they had of reliable informants in the Soviet zone and how important it was for them to be able to move around freely. The company was based in Melk, a small town in northeast Austria, and was therefore known as the Melk Trucking Company. The archbishop designated a Franciscan friar, a member of his staff, to sit on the board of the company to look after his interests. The Americans who secretly controlled the company at times had difficulty explaining to the holy friar the rather peculiar actions and financial transactions that were occasionally made necessary by the exigencies of espionage, but in general both sides found it a satisfactory arrangement.
There were occasions when American Intelligence was less successful. The Military Intelligence Service (MIS) was one of the keys to the entire American operation. During the war, MIS units had been attached to every division and regiment to interrogate prisoners and then to run the temporary POW camps. They provided crucial tactical information on enemy formations and capabilities. After the war, three MIS detachments were set up, in Vienna, Linz, and Salzburg, to interrogate POWs in order to find the important Nazis and SS men and to screen refugees and displaced persons from the East. They also screened Austrian prisoners of war returning from the Soviet Union.
The commander of the MIS in Austria, who reported to Jim Milano, was Ed Gestaldo, who had served with Milano in Italy. He had left the army as a major after the war and had been hired as a civilian. Late in 1949, he had the unenviable duty of reporting to Milano, and then to the general officer commanding U.S. forces in Austria, that one of his officers had deserted to the Soviets.
The deserter was Captain Samuel Blazen, who was supply and transportation officer with the MIS group in Vienna. Gestaldo had already reported Blazen to Milano as a possibly disruptive element. He belonged to a poker club and regularly lost much of his pay there. He had appealed for money to his wife in Macon, Georgia,
and she had written to Gestaldo about the problem. Blazen had not told her why he needed the money, and though she had sent off all she could raise, $900, he had demanded more. She was worried about him and had appealed to his commanding officer.
Gestaldo found out that Blazen was playing far above his class, losing constantly and seeking consolation in the bottom of a bottle of bourbon. He was a stupid man: his colleagues wondered how he had managed to earn a commission in the first place. He had risen to the rank of captain during the war and had a good war record. But MIS standards were high: most of its members were linguists and intelligence specialists, and they were good poker players. Blazen would have done better in an infantry regiment. His poker partners complained to Gestaldo that Blazen was not paying his debts, an unforgivable sin, and then Gestaldo looked into the state of the supply stores and discovered serious discrepancies. Blazen was in charge of "special" supplies, meaning the unit's stock of whiskey and other booze, and was helping himself. Gestaldo called him in and told him to confess his sins to his wife-and to stop playing poker and hitting the bottle. Blazen admitted his problem and complained that half his pay went to his wife's allotment, leaving little for himself and his Austrian girlfriend. The story might have ended there if Blazen had listened to his superior's advice. But when he had paid off the bulk of his poker debts, he went back to playing for high stakes and was soon deep in the hole again.
Soldiers, Spies, and the Rat Line Page 20
