A Brief History of the Spy (4 page)

Inevitably there were overlapping operations between the various groups, but it was only after the outbreak of war in Europe in September 1939 that President Roosevelt decided to regularize the situation. In June 1940, internal security was divided between the various parties: the FBI remained in charge of civilian investigations, while G-2 and the ONI dealt with those involving the military (including defence plants that had major Army or Navy contracts). They would also be responsible for the Panama Canal Zone, the Philippines and major Army reservations.

Despite the shutdown of the Cipher Bureau, code-breaking had continued to form a major part of the intelligence work of the US forces, and a debate continues to this day about how much was known by President Roosevelt about the impending attack on Pearl Harbor in December 1941. It seems probable that the president was not aware of the danger, but what is absolutely certain is that the men in charge in Hawaii
were not up to speed with everything that Washington knew and didn’t take the appropriate action. The code-breakers would redeem the reputation of their profession by breaking the Japanese code known as JN25, which prevented the invasion of Northern Australia and gave US Fleet Admiral Nimitz a vital edge before the Battle of Midway.

Five months before Pearl Harbor, President Roosevelt appointed William ‘Wild Bill’ Donovan, a successful Wall Street lawyer and Medal of Honor winner, as Coordinator of Intelligence (COI). Donovan had spent the previous year liaising with William Stephenson, the Scottish-Canadian millionaire who became an unofficial channel for British influence in the States following the outbreak of war in Europe. Donovan became convinced that a central coordinated American intelligence agency was required, and his appointment as COI, consulting with the heads of the existing agencies and reporting directly to the president, was a major stepping-stone towards that.

The declaration of war with Japan and Germany in December 1941 led to a division of the COI’s responsibilities, with its propaganda work transferred to the Office of War Information, and the rest incorporated into the new Office of Strategic Services (the OSS). Donovan remained in charge of this new organization, but instead of reporting to the president as formerly, he now answered to the military Joint Chiefs of Staff.

The OSS was split into three divisions: the Special Intelligence division gathered intelligence from open sources, and from agents in the field. Allen Dulles was in charge of a crucial station in Bern, Switzerland, which supplied a lot of vital information regarding the Nazi rocket programme, and the German atomic bomb project. The Special Operations group was an equivalent to the British Special Operations Executive, and carried out many of the same functions, sometimes in tandem with the British, but on other occasions, as in
Yugoslavia, working with different groups opposing the Nazis. The Morale Operations division used the radio station
Soldat Ensender
as a propaganda weapon against the German army. Many senior figures in American intelligence circles after the Second World War were OSS agents, including future CIA chiefs Allen Dulles and William Colby.

Although the FBI were involved with what might be termed traditional activities during the war years – dealing with potential saboteurs and other threats to national security – they did operate their own Special Intelligence Service (confusingly referred to as the SIS by the Bureau) in Latin America. According to the FBI’s own history its role ‘was to provide information on Axis activities in South America and to destroy its intelligence and propaganda networks. Several hundred thousand Germans or German descendants and numerous Japanese lived in South America. They provided pro-Axis pressure and cover for Axis communications facilities. Nevertheless, in every South American country, the SIS was instrumental in bringing about a situation in which, by 1944, continued support for the Nazis became intolerable or impractical.’

At much the same time as the heads of British Intelligence were contemplating what would happen once the Axis was defeated, William Donovan was considering the future for American Intelligence. In a memorandum to President Roosevelt on 18 November 1944 he wrote:

Once our enemies are defeated, the demand will be equally pressing for information that will aid us in solving the problems of peace. This will require two things:

1. That intelligence control be returned to the supervision of the President.

2. The establishment of a central authority reporting directly to you, with responsibility to frame intelligence objectives and to collect and coordinate the intelligence material
required by the Executive Branch in planning and carrying out national policy and strategy.

This central authority would be led by a director reporting to the president, aided by an Advisory Board consisting of the Secretary of State, the Secretary of War, the Secretary of the Navy, and such other members as the President might subsequently appoint. Its primary aim would be to coordinate all intelligence efforts and the collection ‘either directly or through existing Government Departments and agencies, of pertinent information, including military, economic, political and scientific, concerning the capabilities, intentions and activities of foreign nations, with particular reference to the effect such matters may have upon the national security, policies and interests of the United States’.

The memo was leaked to the press, and caused an uproar. Columnist Walter Trohan said that it would be ‘an all-powerful intelligence service to spy on the post-war world and to pry into the lives of citizens at home’ which ‘would operate under an independent budget and presumably have secret funds for spy works along the lines of bribing and luxury living described in the novels of [British spy novelist] E. Phillips Oppenhem’.

Roosevelt took no action on Donovan’s suggestion, and, following the president’s death, his successor Harry S. Truman decided not to allow the OSS to continue post-war, fearing that it would become an ‘American Gestapo’. The order to disband was given on 20 September 1945, and the OSS ceased functioning a mere ten days later, with some of its key capabilities handed over to the War Department as the Strategic Services Unit.

Yet only four months after he had seen fit to shut down America’s key central intelligence-gathering organization, President Truman signed an executive order establishing the Central Intelligence Group to operate under the direction of the National Intelligence Authority. What had changed?

‘I can say even today that I do not think any insoluble differences will arise among Russia, Great Britain, and the United States,’ President Roosevelt informed the American people in his ‘fireside chat’ broadcast around the world on Christmas Eve, 1943, following meetings with his counterparts – British Prime Minister Winston Churchill, Soviet leader Josef Stalin, and the Chinese Generalissimo, Chiang Kai-shek – in Cairo and Tehran. He went on to say:

In these conferences we were concerned with basic principles – principles which involve the security and the welfare and the standard of living of human beings in countries large and small.

To use an American and somewhat ungrammatical colloquialism, I may say that I ‘got along fine’ with Marshal Stalin. He is a man who combines a tremendous, relentless determination with a stalwart good humour. I believe he is truly representative of the heart and soul of Russia; and I believe that we are going to get along very well with him and the Russian people – very well indeed . . .

The doctrine that the strong shall dominate the weak is the doctrine of our enemies – and we reject it.

Roosevelt certainly seemed prepared to accept Stalin’s assurances that people in the Baltic states (Lithuania, Latvia and Estonia) would be free to choose whether they stayed under Soviet domination. Although Stalin made it clear that he wanted a far western border for Poland, bringing much of the country under Soviet control, the discussion was postponed. However Stalin’s appetite for increasing Soviet hegemony was noted by Roosevelt’s adviser Charles Bohlen, who told the US ambassador to the Soviet Union that ‘the Soviet Union would be the only important military and political force on the continent of Europe. The rest of Europe would be reduced to military and political impotence.’ It has been suggested that Roosevelt agreed to Stalin’s plans in return for the Soviet leader’s support for the establishment of the United Nations. (It’s worth noting that the NKVD had the US delegation’s property bugged, and that the Soviets regarded another of Roosevelt’s advisers, Harry Hopkins, almost as one of their own – Hopkins wasn’t a Communist by conviction, but he accepted that the Soviets would inevitably be the dominant power in Europe after the end of the war, and advised the president accordingly.)

When the leaders met at Yalta in 1945, following the successful invasion on D-Day, the war was all but over. Russian and Allied troops were virtually in Berlin, and great swathes of Eastern Europe were now to all intents and purposes governed by Moscow. As one of Roosevelt’s advisers Bernard Baruch pointed out, it would be futile ‘to demand of Russia what she thinks she needs and most of which she now possesses’. Poland would be under Soviet rule, although Stalin promised there would be elections. Germany would be divided into four zones, with Berlin itself divided, an island within the Soviet zone.

Charles Bohlen felt that Stalin was hoodwinking the president. ‘What [Roosevelt] did not understand was that Stalin’s enmity was based on profound ideological convictions,’ he wrote. ‘The existence of a gap between the Soviet Union and the United States, a gap that could not be bridged, was never fully perceived by Franklin Roosevelt.’ Roosevelt himself said, ‘I think that if I give him everything that I possibly can and ask nothing from him in return, noblesse oblige, he won’t try to annex anything and will work for a world of democracy and peace.’

But Stalin had no intention of following through on his promises. Roosevelt told Congress that he hoped the Yalta agreement would ‘spell the end of the system of unilateral action, the exclusive alliances, the spheres of influence, the balances of power, and all the other expedients that have been tried for centuries – and have always failed’. It was a naive view, at best. Stalin refused to allow Western observers in for the elections, and Roosevelt realized, less than three weeks before his death, that: ‘We can’t do business with Stalin. He has broken every one of the promises he made at Yalta.’

On 12 April 1945, Roosevelt died of a cerebral haemorrhage. His successor, Harry S. Truman, was a great deal blunter than Roosevelt had ever been: when the Soviet Foreign Minister complained that he had never been addressed in such a way, after a dressing-down by the president, Truman replied, ‘Carry out your agreements and you won’t get talked to like that.’ It was Truman who sat down with Churchill – and then new British Prime Minister Clement Atlee, whose Labour Party took power in the post-war election that occurred mid-conference – and Stalin at Potsdam, a suburb in the south-west of Berlin, and discovered that most of the important decisions had already been taken and Stalin had no intention of accepting any decisions that didn’t directly benefit the Soviet Union’s plans. Truman’s priority, initially, was the still-continuing war in the Far East, and gaining Soviet
support for that. In the end, though, the use of the atom bomb, first at Hiroshima and then Nagasaki, prompted the Japanese surrender – and Truman could focus on the Soviet duplicity that he saw. Duplicity that would be revealed in detail when a cypher clerk at the Soviet embassy in Ottawa, Canada, defected to the West that September.

Just as the record executive who turned down the Beatles has gone down in history as missing one of the great opportunities of the twentieth century, in espionage terms so did the night editor at the
Ottawa Journal
in failing to take adequate notice of the nervous Russian standing in the offices on the evening of 5 September 1945.

Igor Gouzenko had decided to defect from his post at the Soviet embassy in Ottawa. Although he was officially employed as a cypher clerk, he was in fact a lieutenant in Soviet Army intelligence, the GRU, and became determined to claim asylum when he learned that he and his family were due to return to the Soviet Union. He was well aware that anyone who served overseas was regarded with suspicion by the Soviet secret police, and he knew that life in Canada, even with the inevitable austerity post-war, would be better than in his homeland. In order to ensure that the Canadians would allow him to stay, rather than simply returning him to the embassy, he appropriated a packet containing more than a hundred decrypted messages that provided details of recent Soviet espionage against both Canada and the US.

Gouzenko tried to interest both the
Ottawa Journal
and the Canadian Ministry of Justice in his story, but no one listened. Eventually his neighbour, a Canadian Air Force officer, took pity on him, and allowed Gouzenko to hide on his property. He then contacted the Royal Canadian Mounted Police (RCMP), who watched from Dundonald Park as NKVD agents searched Gouzenko’s apartment, desperately looking for the defector.

The papers that Gouzenko brought with him were
dynamite. Although they referred to agents by code-names, there was enough in plain language to reveal a string of Soviet informants in all manner of places. ‘The amazing thing,’ Canadian Prime Minister Mackenzie King wrote in his diary after he had been briefed on the information Gouzenko provided, ‘is how many contacts have been successfully made with people in key positions in government and industrial circles.’

In their official history, the Canadian Security Intelligence Service (CSIS) credits Gouzenko’s revelations with:

. . . usher[ing] in the modern era of Canadian security intelligence. Previously, the ‘communist menace’ had been viewed by authorities in terms of its threat to the labour movement. Gouzenko’s information showed that the Soviets of the day were interested in more than cultivating disaffected workers: they were intent on acquiring military, scientific, and technological information by whatever means available to them. Such knowledge had become the key to advancement, and the Soviets intended to progress.