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“The Gehlen Organization was the one group that did have networks inside Eastern Europe, and that is why we hired them,” international affairs expert Arthur Macy Cox says. “[But] hiring Gehlen was the biggest mistake the U.S. ever made. Our allies said, ‘You are putting Nazis at the senior levels of your intelligence,' and they were right. It discredited the United States.” According to Cox, the Gehlen Organization was the primary source of intelligence that claimed that “the Soviets were about to attack [West] Germany.… [That was] the biggest bunch of baloney then, and it is still a bunch of baloney today.”
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The crucial period of 1945 to 1948, when East-West relations moved from a wary peace to an intense political war, provides one case study of the damage that Gehlen's intelligence and analysis could produce. Among the most basic elements in the American interpretation of European events during the early cold war years was the evaluation of the Red Army. That subject, it will be recalled, was Gehlen's specialty.

In mid-1946 U.S. military intelligence correctly reported that the Red Army (then in control of most of Eastern Europe) was underequipped, overextended, and war-weary. Its estimate of the number of Soviet troops in Eastern and Central Europe was quite high—some 208 divisions—but the U.S. Army concluded that these forces were almost entirely tied down with administrative, police, and reconstruction tasks in the Russian-occupied zone. Soviet military aggression against Western Europe was highly unlikely for at least a decade, if only for logistical reasons, the army determined.

Particularly intriguing were 1946 U.S. Army reports concerning railroads in eastern Germany. The Red Army, it was well known, lacked the motorized strength of Western forces and relied heavily on the railroads to move troops to the front and for logistic support.
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The U.S. Army intelligence reports drawn from military attaches inside the Soviet zone, from the U.S. strategic bombing survey research teams in Eastern Europe and from other on-the-spot reports prior to the Soviet decision to close its occupation zone to
the West made it clear that the Russians were
tearing up
much of the German railroad network and shipping it back to the USSR as war reparations. The Soviets uprooted about a third of the entire German railway system, including such strategic lines as Berlin-Leipzig and Berlin-Frankfurt, seizing train yards, switches, and thousands of miles of track.
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Whatever else may be said of this form of Russian industrial development, it was clearly not the behavior of a military power contemplating a blitzkrieg attack.

Over the next two years, however, the U.S. appraisal of the capabilities and intentions of the Red Army fundamentally shifted, and this change was pushed along by misleading reports and mistaken warnings from the Gehlen Organization. By the time the reappraisal was over, it had become an article of faith in Washington, D.C., that the war-weary Soviet
occupation
forces were actually fresh
assault
troops poised for an attack on the West. The Americans' new estimate of the number of those troops, furthermore, was also greatly exaggerated because it did not take into account the large-scale demobilization of Soviet forces after 1945. As U.S. intelligence's primary source of information on the Soviet military during this pivotal period of the cold war, Gehlen's organization played an important role in the creation of the American evaluation—or rather misevaluation—of Soviet power in Europe that has not been adequately appreciated until recently.

Important changes took place within the U.S. intelligence community in the course of those years that reinforced the overall drift toward open hostilities with the USSR. Colonel John V. Grombach of the Pentagon's Military Intelligence Service (MIS), who appears later in these pages, played a significant role in one such change: the U.S. purge of the foreign intelligence analysis teams at the Pentagon and the Office of Strategic Services (OSS). This self-imposed purge, which appears to have been carried out primarily for political reasons, helped lay the foundation for Gehlen's growing influence within the U.S. intelligence community.

Grombach served during the war as chief of espionage for MIS, the War Department's in-house secret information gathering group. His department maintained an intense and sometimes vicious rivalry with America's more glamorous spy agency, the OSS. The competition revolved around funding, access to policymakers, manpower levels, control of agents, long-term strategy, and a myriad of other minor irritants. This contention grew so severe that each group accused the other—apparently with some justification—of
actually revealing its contract agents to the enemy.
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When World War II drew to a close, the tug-of-war between the two agencies escalated sharply. The fight against the common enemy that had united them in an uncomfortable alliance was over. Both organizations saw their budgets cut deeply. Both believed—accurately, it turned out—that they were fighting for their institutional lives.

Grombach was not one to ignore a challenge. A beefy, barrel-chested man, he had once been an Olympic heavyweight boxer and an award-winning decathlon athlete. Victories—in professional life as well as in sport—had come easily to him in his early years. As he matured, however, Frenchy Grombach, as he was known to his friends, became “an opportunist of the first order,” according to his army intelligence file, “a man who lives on his contacts and one who would cut the throat of anyone standing in his way.”
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One of Grombach's clearest targets in this bureaucratic firefight was the OSS's Research and Analysis (R&A) branch, which specialized in making overall sense of the thousands of fragmentary reports on foreign activities that flooded into Washington each day. OSS R&A was skeptical of reports that the USSR was massing troops for a military attack on the West and was not afraid to say so inside the secret councils of government. R&A singled out Grombach's espionage reports as unreliable and even as pro-Fascist. His reply to these accusations was a countercharge that the R&A branch had been infiltrated by Communists and that this accounted for both its low opinion of his efforts and its supposedly soft line on the USSR.

Grombach turned a squad of his men loose in captured German espionage files in 1945 to search for evidence proving that R&A's wartime reports were “soft on communism” as the result of penetration by Soviet agents. Not surprisingly, he found some evidence to support his suspicions. His investigation discovered that one mid-level R&A employee had probably joined the U.S. Communist party more than a decade previously and then had failed to admit it on his application for a government job. In a second case, he used uncorroborated reports from the state-controlled newspapers of Francisco Franco's Spain to “prove” that State Department official Gustavo Duran was not only a Communist but supposedly a Russian spy as well. A handful of university professors who had been recruited to R&A during the war had connections with a wide variety of liberal or left-wing organizations, though not with the Communist party itself. Finally, both Pentagon and OSS intelligence analysts
had
downplayed negative reports on the USSR during the war. The Germans' revelations of the Soviet NKVD's massacre of Polish officers in the Katyn Forest, for example, had been largely ignored in the interest of preserving Allied solidarity.

Grombach argued, according to army intelligence records obtained through the Freedom of Information Act, that the minimization of Soviet war crimes by U.S. analysts was not simply a political decision but rather part of a Communist plot. The analysis groups at both the OSS and the Pentagon “seemed to have ‘liberal' tendencies,” he asserted. They “consistently eliminated all anti-Communist information” that his unit had developed. “Pro-Communist or pro-Marxist personnel and actions” had been permitted to proliferate inside the U.S. intelligence analysis teams, he contended.
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One Communist inside R&A was enough to prove his premise. Grombach leaked the results of this search—code-named Project 1641 inside the Pentagon—to Republican members of Congress and the press in the midst of a sensitive and difficult showdown over budget appropriations for American intelligence agencies. Right-wing senators on Capitol Hill, armed with Grombach's leaks, succeeded in breaking the R&A branch into some seventeen subcommittees, virtually ensuring the demise of the OSS's analytic group. The American capability to make sense of intelligence reports from Eastern Europe and the USSR, never strong in the first place, was deeply wounded. The R&A director, Colonel Alfred McCormack, who had also served with distinction during the war as director of U.S. military intelligence analysis in the War Department, soon resigned in disgust.
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As intelligence veteran and historian William Corson notes, both the acceptance of the theory of “ten-foot tall Russians” among U.S. intelligence specialists and the beginnings of what was later called McCarthyism may be dated from the destruction of McCormack's organization of skeptical experts on the USSR. The purge of the R&A branch served as clear warning to analysts all over the government that hard-line hostility toward the USSR was necessary for
professional survival during the Truman administration.
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Colonel McCormack's downfall, moreover, became an opportunity for Reinhard Gehlen to expand his influence, which was more in tune with the precepts of U.S. intelligence agencies in the new administration.

The radical shift in U.S. and Soviet attitudes toward each other during this period was a product of a very complex, politicized process, of course, one that has been the subject of considerable debate ever since. To put it briefly, the U.S. government desired to stabilize events in Western Europe and expand American political and economic interests in Eastern Europe. This aim, however, ran headlong into Stalin's intention to draw new Soviet borders at the outer edges of the czars' old empire and to solidify the USSR's control over the same Eastern European countries that the United States viewed as allies and potential trading partners. This collision was aggravated by a multiplicity of ideological and cultural factors, not the least of which was the sometimes violent disputes between Communist party activists and Catholic church officials.

American officials made their own decisions concerning how to cope with the cold war, and it is evident that many factors in both domestic and international politics played a part in those decisions. Within that framework, however, it is enlightening to draw new attention to the influence of the covert operations and espionage agencies of both East and West, which played a powerful but largely overlooked role in the evolution of these tangled conflicts. Undercover organizations considered themselves the frontline armies of the cold war, and in several cases discussed in this book they appear to have been the proximate cause of dangerous incidents in East-West relations. The same clandestine agencies that had an evident interest in this clash were frequently the primary or even the sole source of information used by senior policymakers in evaluating the intentions of foreign governments. This privileged access of covert organizations to senior officials is, after all, the reason for having a
central
intelligence agency in the first place.

Gehlen's perspectives on the cold war are of interest because of his relatively influential role in defining U.S. policymakers' understanding of the capabilities and intentions of the Red Army. “Gehlen's approach, particularly during those [early cold war] years, took as its premise, first, that Moscow intended to control and/or disrupt all of Europe in the relatively near term, through military force if need be,” says a retired Office of National Estimates
(ONE) staff member, “and, second, that every Communist in Europe was working in concert on that plan. He provided us with very detailed information along these lines for many years, and we made use of it in numerous ways. There is some truth to the theory. In the final analysis, however,” he concludes, “he was mistaken.”
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U.S. officials became convinced, writes Professor John Lukacs in
Foreign Affairs
, that “communism was a fanatical ideology and that, contrary to the wartime illusions about [Stalin's] nature, Stalin was wholly dedicated to it. But this seemingly logical, and seemingly belated, realization was not accurate. It concentrated on ideology, not geography. What mattered to Stalin was the latter, not the former.… There was no communist regime (with the minor and idiosyncratic exception of Albania) beyond the occupation sphere of the Soviet armies; and there would be none, either.” However brutal Stalin may have been in the areas under his control, Lukacs concludes, he had no intention of invading Western Europe, and he even gave short shrift to the then powerful French and Italian Communist parties in the West.

By late 1947, however, Gehlen had become “an alarm signal” (as Höhne of
Der Spiegel
puts it) in a series of secret conferences with General Lucius Clay, then the U.S. commander in Germany. He reported to Clay that there were no fewer than 175 Red Army divisions in Eastern Europe, that most of them were combat-ready, and that quiet changes already under way in Soviet billeting and leave policies for these troops suggested a major mobilization could be in the wind. The Soviets' behavior should be interpreted as a prelude to military aggression, he argued.
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Then, in February 1948, two important events took place. The coalition government that had governed Czechoslovakia since the end of the war collapsed, in part because the United States declined fully to support Czech President Edvard BeneÅ¡ (a Social Democrat) on the ground that he was insufficiently anti-Communist. The Czech Communist party took power with Red Army backing, thus strongly reinforcing Western apprehensions about the possibility of an eventual Soviet military attack on Western Europe. Within days of the Czech events, the U.S. Army general staff chief of intelligence, General Stephen J. Chamberlin (who had earlier been instrumental in the scientists' affair) met with General Clay in Germany. In these encounters Chamberlin stressed “the fact that major military appropriations bills were pending before congressional committees,” as Jean Edward Smith, the editor of Clay's papers,
has noted, “and the need to galvanize American public opinion to support increased defense expenditures.” The public in the United States was unwilling to finance the military adequately, Chamberlin argued, unless it was thoroughly alarmed about an actual military attack from the USSR.
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