Blowback (42 page)

The gradual merging of the Republicans' election campaign and the Crusade for Freedom reached its logical culmination on the eve of the 1952 election. The party's ethnic division under Lane approved and allocated money for a psychological warfare tactic that had earlier been used by the CIA in Italy and Eastern Europe. Millions of yellow leaflets were slated to be dropped from airplanes “over places such as Hamtramck,” the large immigrant community near Detroit, plugging Eisenhower and blaming Democrat Adlai Stevenson for the “betrayal” of the Slavic “Fatherland and relatives” to the Communists. The yellow paper was to dramatize the
leaflet's conclusion. “If you men and women of Polish and Czech descent can, after reading the above, vote for the Democratic candidate,” the handbill proclaimed, “you are as yellow as this paper.”
³⁹
Everything was ready to go “within 48 hours,” according to correspondence in Lane's archives, but Eisenhower's inner circle of election advisers canceled the plan at the last minute.

Eisenhower's election campaign was successful in any event. Lane's “ethnic” campaign produced mixed results: The Republicans did draw substantially more votes from ethnic districts than they had been able to do previously, according to contemporary reports,
⁴⁰
although the Democratic party's influence in these wards was by no means extinguished. In any case, the majority of American voters backed Eisenhower, at least in part because of his proliberation, “let's get tough with the Communists” foreign policy stance. In January 1953 the first Republican administration in twenty years entered Washington with a grand inaugural parade and a rhetorical commitment, at least, to a mission to liberate Eastern Europe from Communist rule.

Former Nazis and collaborators combined with right-wing elements within the U.S. intelligence community to bring another sort of pressure to bear on the U.S. political scene. The flood of government and private money flowing into anti-Communist political warfare programs during the early 1950s created a cottage industry, of sorts, for informers, professional ex-Communists of varying degrees of reputability, and “information bureaus” specializing in the blacklisting of Americans viewed as politically suspect. One of the least known but most important of these entrepreneurs was John Valentine (“Frenchy”) Grombach. He was, it will be recalled, the former military intelligence agent whose leaks to Congress had led to the purge of Colonel Alfred McCormack and McCormack's team of skeptical intelligence experts back in 1946 and 1947.

During the late 1940s Grombach had become a businessman who specialized in selling political and economic intelligence derived in large part from old boy networks of German SS officers, former Hungarian Axis quislings, and Russian nationalist NTS men to the State Department, the CIA, and corporate customers in the United States and Western Europe. Grombach's espionage network operated through, and was partially financed by, the N. V. Philips Gloeilampenfabrieken corporation of the Netherlands and its American affiliate, Philips North America, according to records found in
his CIC dossier.
⁴¹
This was the same major electronics manufacturer that had provided a channel for his clandestine wartime operations. One of Grombach's most important assets, according to U.S. naval intelligence records obtained under the Freedom of Information Act, was SS General Karl Wolff, a major war criminal who had gone into the arms trade in Europe after the war.
⁴²
A second primary component of Grombach's private intelligence apparat was a large group of Hungarians loyal to the former royal privy councillor Tibor Eckhardt, according to Ray Ylitalo, who handled liaison with Grombach's undercover service for State Department intelligence.
⁴³

Grombach worked simultaneously under contract to the Department of State and the CIA. The ex-military intelligence man succeeded in creating “one of the most unusual organizations in the history of the federal government,” according to CIA Inspector General Lyman Kirkpatrick.
⁴⁴
“It was developed completely outside of the normal governmental structure, [but it] used all of the normal cover and communications facilities normally operated by intelligence organizations, and yet never was under any control from Washington.” By the early 1950s the U.S. government was bankrolling Grombach's underground activities at more than $1 million annually, Kirkpatrick has said.

As the cold war deepened, Grombach had wheeled and dealed and tried to slide himself into a position where he would have a shot at the top spot in the American intelligence complex. He wanted to be director of the CIA or, better yet, chief of an entirely new U.S. espionage machine built on the ruins of that agency. “Grombach,” says Ylitalo,
⁴⁵
“never could figure out whether he was an employee [of the CIA] or a competitor. That was the problem in a nutshell.”

Grombach promoted himself as the most pro-“liberation,” most anti-Communist of all of Washington's competing spy chiefs. His organization stood ready, he said, to purge the State Department and the CIA of Communist dupes, homosexuals, and liberals of all stripes. High on the list of his targets were the men who had articulated and implemented Truman's containment strategy: George Kennan, Charles Thayer, Charles Bohlen, and their allies at State and the CIA. In Grombach's eyes, these officials were like his old nemesis Colonel McCormack: too soft on communism and the USSR; too favorable to liberal elements in the CIA; too closely tied to the elitist eastern establishment that had been running the State Department for generations.

Grombach banked on his close connections with Senators Joseph McCarthy, William Jenner, and other members of the extreme Republican right to propel him to national power. He believed that the McCarthyite right was on its way to the White House, and he intended to be there when it arrived. Grombach's outfit effectively became the foreign espionage agency for the far right, often serving as the overseas complement to McCarthy's generally warm relations with J. Edgar Hoover's FBI at home.

Through a quirk of fate Frenchy Grombach found himself in a position where he could exercise enough influence in Washington to help derail the government careers of his rivals. U.S. government contracts bankrolling a network of former Nazis and collaborators gave him much of the ammunition he needed to do the job. Grombach used his networks primarily to gather dirt. This was the American agent's specialty, his true passion: political dirt; sexual dirt; any kind of compromising information at all. “He got into a lot of garbage pails,” as Kirkpatrick puts it, “and issued ‘dirty linen' reports on Americans.”
⁴⁶
Grombach collected scandal, cataloged it, and used it carefully, just as he had done during the earlier McCormack investigation. He leaked smears to his political allies in Congress and the press when it suited his purposes to do so. Grombach and congressional “internal security” investigators bartered these dossiers with one another almost as though they were boys trading baseball cards.

One of Grombach's most important weapons in his struggle for power was a series of blackmail type of dossiers that his men had compiled on his rivals inside the U.S. intelligence community. He had retailed much of this data piece by piece to the CIA over the years but by 1952 had decided to make use of his network of former SS men and collaborators on behalf of Senator Joseph McCarthy. Grombach's primary targets included a number of current and former U.S. intelligence officials—Charles Thayer, Carmel Offie, William Bundy, Colonel Alfred McCormack, and a half dozen others—whom he regarded as vulnerable liberal targets.

Grombach leaked these “dirty linen” files to Senator McCarthy, according to both Kirkpatrick and Ylitalo. Soon an anonymous letter went the rounds on Capitol Hill, charging Thayer with sexual promiscuity, homosexuality, and a series of vague security violations during Thayer's tenure as chief of the Voice of America, which was a frequent target of McCarthy's attacks.
⁴⁷
Other charges soon flowed out of McCarthy's offices about William Bundy, then a member
of the CIA's elite Office of National Estimates, and John Paton Davies, who had been Kennan's right-hand man in Bloodstone.

Lyman Kirkpatrick handled the matter for the CIA. “As I studied the names [on McCarthy's list of suspects],” Kirkpatrick says, “and particularly the comments made about them, I became more and more convinced that I had read those comments before.… We went back and checked the files, and sure enough some of the phrases were identical to the so-called dirty linen reports that the subsidiary organization [Grombach] had fed to us about our own people, and some of the names were identical with those that [he had] regarded as sinister.” It was Grombach, Kirkpatrick then knew, who had fed this collection of rumors—some of them gathered at the CIA's own expense—to McCarthy.

Kirkpatrick—by then confined to a wheelchair with a nearly fatal case of polio he had picked up on an inspection tour in Southeast Asia—confronted the burly Grombach in a Washington hotel room a few days later. “I went alone with a copy of Senator McCarthy's report, handed it to [Grombach] … and told him that he had given it to Senator McCarthy,” Kirkpatrick writes. “After a bit of blustering and blowing, he admitted that he had done this and claimed that it was not only his right, but his responsibility.” Grombach “went on to say that he had proposed to Senator McCarthy that his entire organization work for the Senator in doing nothing but investigating employees of the United States government.”
⁴⁸

McCarthy let it be known that he intended to call Thayer for hearings on his supposed fitness for office, perhaps at the same time that the nomination of Thayer's brother-in-law, Charles Bohlen, as ambassador to the USSR was up for consideration. The hearings, like most McCarthy events, would probably receive live national TV coverage. Thayer resigned a few days later.

A simple resignation was not enough for McCarthy, however. The State Department had permitted Thayer to maintain the fiction that he had voluntarily resigned “to pursue a writing career” and had even put out a press release to that effect. But McCarthy insisted on making Thayer's public humiliation complete. Under intense questioning by the senator, a department spokesman admitted that Thayer had been “separated on the basis of morals charges”—a 1950s euphemism for homosexuality.
⁴⁹
Newspapers headlined the case from coast to coast.

That was one down. Next on McCarthy's list—and on Grombach's—was John Paton Davies. Davies, a China policy specialist
and close friend of George Kennan's, had frequently served as the Policy Planning Staff's point man in Bloodstone cases. He had been instrumental in the immigrations of Nazi Foreign Office specialist Hilger and the SS Wannsee Institute defector Poppe, in the exploitation of former Nazi agents Ulus and Sunsh, and in much of the rest of the clandestine side of State Department affairs during the Truman administration.
⁵⁰
Davies generally favored a hard-line attitude toward Moscow and even went so far as to advocate a “preventative war against the USSR,” as the
New York Times
described it, following the detonation of the first Soviet atomic bomb in 1949. (In a more recent interview, however, Davies denied that he called for war with the Soviets, preferring instead to term his strategy a “showdown.”)
⁵¹

Ironically, though, Davies had become the whipping boy of the right-wing China Lobby during the late 1940s because of his controversial opinions on American strategy in the Far East. He had once (in 1945) favored a de facto U.S. alliance with Mao Zedong in order to undermine Soviet influence in Asia. Davies's advice on this matter was largely rejected, but after Mao's victory in 1949, the far right in the United States scapegoated Davies and other State Department China hands as the supposed cause of Chiang Kai-shek's defeat.

The sacrifice of John Paton Davies at McCarthy's hands is a vivid illustration of the influence of the radical right on American political affairs. Davies, as it turns out, had suggested an intelligence project code-named Tawney Pippet to a CIA/OPC liaison officer named Lyle Munson. Tawney Pippet was to be a fairly straightforward variation on the ongoing Nazi utilization projects, but it had a twist. This time Kennan's PPS wanted OPC to fund secretly a think tank of
left
-wing and pro-Communist scholars, who could be tapped without their knowledge as sources of information on China. Some of them might also be available as deep-cover channels for U.S. government communication with the Chinese Communists.

OPC Agent Munson, however, was alarmed over the prospect of the U.S. government's having any contact with left-wing scholars, even those being unwittingly used for ulterior purposes. He leaked word of Tawney Pippet to J. Edgar Hoover, and from there it found its way through unknown channels into the hands of Grombach and eventually McCarthy.
⁵²
Munson billed the Tawney Pippet project as a plan to infiltrate Communists into the CIA.

It was Munson, not Davies, who had spilled CIA secrets and sabotaged Tawney Pippet. But it was Davies who was hounded and dragged before no fewer than eight separate State Department and congressional “loyalty” investigating committees on the basis of Munson's allegations. The radical right in general, and McCarthy in particular, made the dismissal of Davies an acid test of the Eisenhower administration's determination to get rid of supposed subversives in the State Department.

In the end, there was very little that the loyalty inquests could pin on Davies. Grombach had failed to turn up any real dirt on him beyond the Tawney Pippet affair and early China gaffes. Davies had had a reasonably distinguished career, and his loyalty to the United States was clearly strong. His real problem was that he had favored a rapprochement with China twenty-five years before it became politically acceptable to do so, and he refused to grovel about it.