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Von Bolschwing left the Gehlen Organization in late 1949 but retained his U.S. sponsorship in a new operation under even deeper cover. He managed to convince American authorities for a time that rival powers were using the Nazi and Wehrmacht old boy networks to infiltrate the Org.

“The French, British and also Russians had gotten hold of a large number of [German] General Staff officers,” von Bolschwing recalled later. “Each one of them was using them in intelligence work. Recognizing the traditional closeness of most German intelligence personnel and General Staff personnel, I feared that we were being penetrated by the East, rather than penetrating them.” He obtained U.S. funding to establish yet another (though much smaller) secret German intelligence organization, which operated parallel to Gehlen's. It continued infiltrations into Eastern Europe, at the same time discreetly keeping an eye on Gehlen's work for his American sponsors.
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In 1953, for reasons that are as yet unclear, the CIA decided to bring Otto von Bolschwing to the United States. Von Bolschwing—as a former SS man, Nazi party member, and Nazi SD agent—was clearly ineligible for a visa to the United States or American citizenship, and the CIA knew it. As in the Lebed, Shandruk, and Stankievich cases, the CIA did not attempt to bring von Bolschwing into the country “legally” under the special authority it enjoyed through the 100 Persons Act. Instead, at least two high-ranking CIA officers—including Everett C. O'Neal, who is most recently reported to be CIA chief of station in a plum assignment—engineered a complicated scheme to spirit the former Nazi illegally into this country.
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According to the CIA's own records, von Bolschwing's supervisory agents concluded prior to his departure from Europe that they would have to quash the routine character inquiries ordinarily made of prospective U.S. citizens if they expected to get him into the country. The “Department of State's background investigation,” the CIA resolved, “would have to be controlled.”
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The agency set out to do just that.

First, it supplied the former Nazi with a false police report and military background check that claimed that no derogatory information was known about him. Next, a senior CIA officer personally accompanied von Bolschwing to the U.S. Consulate in Munich and convinced the visa officer there to provide all the necessary travel paperwork virtually overnight.

Later agency headquarters in Washington directly intervened again, this time with the State Department and the INS, to ensure that von Bolschwing's entry into the United States went smoothly. In its letter to the INS the CIA falsely claimed that it had “conducted a full investigation of the subject [von Bolschwing]” and
“had no reason to believe him inadmissible.”
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In reality, of course, the agency knew perfectly well he was inadmissible; that is why it had fabricated the military and police clearance forms for him in the first place.

Von Bolschwing's travel documents at the time he arrived in this country were full of inconsistencies, but the immigration authorities admitted him nonetheless. His passport—actually a “Temporary Travel Document in Lieu of Passport” issued by the U.S. State Department in Berlin—contradicted his immigration visa on at least five points. He did have at least one thing going for him, however. His visa listed his destination as “Washington 25,” a Department of State post office known to intelligence insiders as a mail drop for the CIA and other U.S. security agencies. The U.S. sponsor on his visa application was Colonel Roy Goggin, a career U.S. Army Counterintelligence Corps officer who had worked closely with von Bolschwing for almost a decade.
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CIA spokesmen will say nothing official about the von Bolschwing affair. Key aspects of the case, however, have been pushed onto the public record by a criminal prosecution of the former Nazi during the late 1970s, a government General Accounting Office study of Nazi immigration to the United States, and investigative reporting by Peter Carey of the
San Jose Mercury News
and by this author.
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The more that is known about this episode, the more serious its implications become.

To put the most positive possible face on the matter, the CIA's “official” version of events is that yes, it did bring von Bolschwing into the United States in early 1954 and it did know at the time that he was an SS man, a former Nazi party security service (SD) agent, and a Nazi party functionary, among other things. But no, it did not know he was a war criminal. This is the classified account that the CIA provided to U.S. General Accounting Office (GAO) investigator John Tipton on the condition that the GAO keep von Bolschwing's identity secret.

(Tipton was making an official inquiry into von Bolschwing's arrival in the United States following a congressional request for information on Nazis who worked for U.S. intelligence. Tipton respected the CIA's request for confidentiality in his report to the House Judiciary Committee and used an anonymous designation, “Subject C,” to refer to von Bolschwing in his account of relations between U.S. intelligence agencies and former Nazis.
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The CIA even officially cleared Tipton's study before it was released to the
public. Despite this attempt to keep von Bolschwing's identity secret, however, it is without doubt that the anonymous man called “Subject C” in Tipton's report to the Congress is, in fact, Otto von Bolschwing.
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)

The CIA's cryptic admission is, by itself, shocking. Since when, it might be asked, was it considered acceptable to smuggle SS men, SD agents, and Nazi party veterans into the United States as long as “we didn't know” that they were war criminals? What exactly was the standard of proof used at the time to determine who was, and who was not, a “suspected” war criminal? Considering that Otto von Bolschwing had spent most of his adult life working full-time as a salaried executive of the Nazi party security service and SS police apparatus, the CIA's refusal even to
suspect
that he might have committed crimes against humanity appears to give him a presumption of innocence of truly munificent proportions.

In reality, however, the agency's assertion that it “didn't know” that von Bolschwing was a criminal at the time he entered the United States is most likely a lie. His involvement in the Bucharest pogrom, for example, would be evident to anyone making a routine check of captured SS files at the Berlin Document Center, not to mention the much more extensive group of records concerning the Bucharest events that were then in CIA hands.

And if the agency had simply missed this evidence through some fluke, why, then, did it set out deliberately to obstruct any
other
investigation into the former SS man's bona fides? Its suppression of the routine visa inquiry into von Bolschwing's affairs clearly suggests that something more than a naïve presumption of innocence was at work here. For one thing, muzzling the State Department's visa examination was itself highly irregular. For another, why would the CIA go out of its way to “control” State's review unless there was some concern about what it might uncover? The implication is inescapable: The CIA believed that von Bolschwing was
guilty
of war crimes, not innocent, and was worried that even a brief study of his visa application might reveal that fact.

The cases of SS veterans like Alois Brunner and Otto von Bolschwing provide a small but documented glimpse into a broad trend of events in U.S. intelligence relations with the former “assets” of Nazi Germany's intelligence services. By the time von Bolschwing entered the United States in 1954, his former patron, Reinhard Gehlen, had parlayed his American backing into de facto recognition
as the official intelligence service of the emerging Federal Republic of Germany. CIA Director Allen Dulles liked Gehlen for the simple reason that he seemed to produce useful results. Gehlen's intelligence assets in Eastern Europe appeared to be solid, and his contacts in the German-speaking enclaves in South America, the Middle East, and Africa were second to none. His Org also helped the United States collect signals intelligence, though his work in that area was still not up to the British standard. All these services and more, and all at what seemed a reasonable price.

If there were former SS and Gestapo men at Gehlen's Pullach headquarters, senior members of the American intelligence community didn't want to know enough about them to be forced to do something about it. “I don't know if he's a rascal,” Dulles said of Gehlen. “There are few archbishops in espionage.… Besides, one needn't ask him to one's club.”
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One incident vividly illustrates the power of the Gehlen Organization in Washington during Allen Dulles's tenure as director of Central Intelligence. In October 1954 West German Chancellor Konrad Adenauer visited the United States in the midst of sensitive negotiations to enlist West Germany as a full member of the NATO alliance. At a diplomatic reception the then chief of U.S. Army intelligence, General Arthur Trudeau, personally told the chancellor that he did not trust “that spooky Nazi outfit at Pullach.”
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He suggested that it would be wise for the Germans to clean house before they were admitted to NATO. Word of the incident was leaked to the press, infuriating Allen Dulles.

In the ruckus that followed, General Trudeau was backed by the turf-conscious Joint Chiefs of Staff, while Dulles rallied his brother, John Foster Dulles, then secretary of state, to Gehlen's defense. When the dust cleared, Gehlen had been appointed chief of West Germany's new official intelligence agency, the Bundesnachrichtendienst (BND), and Trudeau had abruptly left intelligence work for a less visible command in the Far East. He quietly retired from the military a few years later.
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The frailty—from a strictly practical point of view—of Gehlen's heavy reliance on former Nazi intelligence operatives did not become clear until almost a decade later, when the chief of Gehlen's counterespionage division was revealed to be a Soviet spy.

Ironically it was precisely the camaraderie and trust found among the old Nazis in the Gehlen Org that the USSR used to do
its penetration job. This particular case stands out because of the far-reaching damage this spy did to Western intelligence, though it is possible to cite many lesser examples. The name of the Soviet double agent—a former SS
Obersturmführer
who had once led Nazi gangs during the 1938 night of looting and temple burnings known as the
Kristallnacht
—is Heinz Felfe.

Felfe never would have gotten into the Gehlen Organization in the first place had he not been a Nazi and an SS man. He was recruited in 1951 by SS veteran Hans Clemens, who in turn had been picked up by ex-SS
Oberführer
Willi Krichbaum, one of the Org's original circle of Nazi officers personally enlisted by Gehlen back in 1946. Krichbaum was at the time Gehlen's chief organizer in Bad Reichenhall, and he relied heavily on references from SS and SD veterans to locate and clear new agents. But SS man Clemens was a Soviet spy, as it turns out, and once Clemens was on board, he recruited Felfe.
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Felfe's motivation for spying for the Russians appears to have been primarily ideological support for communism combined with a desire for money, although the complex psychological forces at work in any double agent's mind are notoriously hard to discern.

Felfe traded on his Nazi credentials to win the trust of other Gehlen Organization leaders. The Soviets carefully cultivated their inside man and kept him well supplied with doctored information that permitted him to capture supposedly important Russian spies as well as to gather what seemed to be detailed information on East German intelligence. Felfe's sterling performance soon made him one of Gehlen's favorites, and he was promoted to chief of the organization's anti-Russian counterintelligence section. Later Gehlen gave Felfe extensive responsibilities for liaison with the CIA and other Western espionage groups and even placed him in charge of Gehlen's own effort to spot East bloc spies inside the Org itself.

Every aspect of West German intelligence was open to Felfe. If there were any secrets at all that he missed, it was only because there is a human limit to how much spying one man can do in ten years. By the time he was finally exposed through the decoding of an intercepted radio message, Felfe's espionage had destroyed hundreds of the Org's remaining agent networks inside Eastern Europe. His treachery led to the arrest of almost 100 senior Gehlen agents as well as revealed codes, communications, and courier channels on which both Gehlen and the Americans depended, according
to evidence brought out at Felfe's espionage trial.
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Finally, Felfe had funneled so much half-accurate and suspect information concerning Soviet agents into Western hands that significant parts of both West German and American counterintelligence had to be uprooted and begun all over again.

The Felfe case, along with the Philby affair in England, which broke open about a year later, sent a shock wave of panic through the CIA. The internal German damage assessment detailing agents and information Felfe had compromised ran to tens of thousands of pages, and the money necessary to rebuild the networks he had sold out to the Soviets certainly totaled tens of millions of dollars. The supposedly secure brotherhood of German intelligence specialists on which the CIA had spent so much to build turned out to be a house of cards, and the American decision to look the other way when the Gehlen Organization had gone about enlisting SS men was an important part of the blunder. The Felfe affair is an important indicator that even when one leaves aside all questions of morality, the CIA's Nazi utilization programs never did produce the practical benefits to the United States that their sponsors once claimed they would.

By the time Felfe was arrested, however, the CIA's commitment to Gehlen had become a matter of high policy. The skinny German general was ensconced as chieftain of the secret service of one of America's most important allies. There was very little that the CIA could do about the Felfe affair except to ride it through and use whatever revelations it produced to improve U.S. counterintelligence practices. Gehlen himself remained sacrosanct despite the Felfe revelations. He was not removed from office. A brief purge shook out a handful of ex-Nazis who were in on the Felfe affair, along with a few others, like Brunner, whose records as mass murderers were simply too grotesque to ignore.
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