Spies: The Rise and Fall of the KGB in America (67 page)

"The source submitted info. on five occasions. The scope of information collected by the source is extremely varied (Bulgarian emigration, Papen's group
in Germany Hungary's peace intrigues, revolutionary movement in Europe,
Donovan's trip to Europe, the opening of an Amer. intelligence branch in
India, etc.), but mostly it deals with the situation in Europe. The information
is for the most part too vague. Of all the source's info. for this quarter, only two
reports have been used: one on contact between Amer. intelligence and the Bulgarian underground group `Link' (reported to the NKID [People's Commissariat of Foreign Affairs]), and one on Donovan's upcoming trip to Europe
(reported to the GRU)."49

Bentley told the FBI that Lee never lived up to the KGB's expectation, was very apprehensive about possible FBI investigations, and at
times appeared to regret his decision to cooperate and "to be troubled
with a severe conflict of ideas." KGB reports reinforce her judgment.
One noted:

"Characteristic of K's ["Koch"/Lee's] work is the fact that he only wants to give
info. to fellowcountrymen [CPUSA], under no circumstances to us. The least
hint about the fact that his info. ends up in our hands displeases him. For instance, in March 1944, he told Myrna [Bentley] the following: `The OSS received a report from Moscow that one of Donovan's representatives had spoken with Cde. Molotov about "Link" group and was surprised to learn that the
latter already knew about this and even mentioned Kuyumzhitsky's name.'
Based on this, K. concluded that the information he had reported earlier on
this matter had fallen into the hands of the Soviet gov't, which he does not
want because it `puts him in danger.' With this attitude of K's in mind, Myrna
tried to convince him that the info. he provides is meant exclusively for the
fellowcountryman leadership. But even this did not have the desired effect.
`Myrna' claims that the only reason for K's limited activity is his cowardice."

The KGB had hopes that once it had direct contact, its professional operatives could get more out of him than Bentley had. The chief of the
Washington station reported in March 1945 on a meeting between Lee
and Joseph Katz:

"`X' [Katz] held two rendezvous with K ["Koch"/Lee], and detailed reports on
them were sent home by mail on March 6th. K. came to both meetings so
frightened that he couldn't hold a cup of coffee in his hands b/c they were
shaking. K. said that gathering info. for fellowcountrymen [CPUSA], and possibly for us as well, filled him with terror. Every night he has nightmares. He
cannot for a minute believe that the FBI doesn't know about all fellowcountry-
men's work gathering info. in the USA. He thinks the FBI knows who all the
Amer. fellow countrymen informants are, but because overall conditions do
not favor taking harsh measures, they are not taking any measures for the time
being....

K. also said that Myrna's [Bentley's] big mouth and indiscretion did not inspire confidence that the latter had not told some outsider something about
him. According to K., Myrna once told him a number of details about Sound
[Gobs], although Koch refused to tell X what these details were. It should be noted that K. could have found something out from Dir [Mary Price], whom
he still sees and sleeps with. As a result, K. asked that he be left alone and accompanied this with various excuses (he realizes what a coward he is, how
ashamed he is of himself, how wrongly he is acting, etc). According to Myrna,
in one of his most recent conversations with Dir, K. spoke highly of X (Koch
knows X by an assumed name) and explained his decision to stop working with
us by the fact that he could not lead a `double life,' that he had a `guilty' conscience for `deceiving the USA,' that he was constantly having a crisis of conscience, and so forth."

Moscow Center briefly considered maintaining some contact with Lee,
but in April suggested that Gorsky deactivate him, a suggestion that became an order in November 1945, after Bentley's defection. There is no
indication that Lee provided information to the KGB after his March
1945 meeting with Katz. Bentley, echoing Golos, had argued that many
of the sources they had developed needed the illusion that they were
dealing with the CPUSA and not directly with Soviet intelligence officers. The KGB believed that concern overblown, convinced that most of
the sources were aware where their information went and welcomed direct Soviet contact. In most cases the KGB was right, but Bentley and
Golos had been on target about Lee. Putting him in direct contact with
a KGB agent had thoroughly spooked him and destroyed his usefulness.so

Deciphered KGB cables released in the mid-199os contained an intriguing cover name, "Ruff," a Soviet source in the OSS, but the four
messages that mentioned him had too little information to allow identification. He is unambiguously named in a KGB report in Vassiliev's notebooks:

"Ruff'-Franz Neumann, b. lgoo in Germany, U.S. citizen. Lived in Germany till 1933, was a left social dem., and worked as a lawyer for trade unions.
In 1933, he emigrated to England, where he graduated from an econ. inst.
(The London School of Economics ... ). He came to the USA in 1936. Prior
to Feb. 1942, Ruff worked as a teacher, engaged in scientific work, and, in addition, worked as a consultant for the German division of the Board of Economic Warfare. He simultaneously wrote a book on Germany's econ. questions, which was published in the USA. In Feb. 1942, R. was transferred to
Cabin [OSS], where he began work as a consultant in the foreign division.

Ruff-Mary's [Massing's] lead; he is a good friend of his. Mary, Noah [unidentified], and Git [unidentified] give Ruff a positive reference, describing
him as pro-Soviet, with left views, and unaffiliated with any emigrant organizations. In 1942, R. was contracted with Mary's help. At the initial meeting, R.
promised to pass us all the information that came his way. According to him,
numerous copies of telegrams from Amer. ambassadors to Bank are sent to
him; in addition, he has access to materials on Germany in Cabin.

An August 1942 report from "Mary"/Massing stated:

Neumann said that he has seen three reports devoted to the Caucasus: from
the Board of Econ. Warfare, the Euro. Division of the Board of Military Info.,
and the OSS. The first two are not of interest. The report from the OSS contains a lot of valuable material and is excellently written. The author-Robinson, is Chief of the Russian Division at the OSS. The report is 124 pages long
and contains very detailed facts and figures about the Caucasus: railroads, stations, warehouses, workshops, the number of trains passing through in a particular year, etc. Neumann says that Robinson has an unfriendly attitude toward the USSR but is highly competent in matters pertaining to the USSR.

Neumann and Paul Massing were both participants in the exiled neoMarxist "Frankfurt School of Social Research," which had relocated from
Germany to Columbia University after the Nazis took power. Neumann
was best known for his impressive 1942 analysis of Nazi totalitarianism,
Behemoth: The Structure and Practice of National Socialism. In addition
to the Massings, Elizabeth Zarubin also met with Neumann.51

Neumann's position in the Research and Analysis Branch of the OSS
gave him wide access to OSS documents, and initially he was a productive source. An early report stated:

"The info. received this time from R. ["Ruff'/Neumann] amounts to the following:

i. The Amer. ambassador to Spain, [Carlton] Hayes, informed "Bank"
[State Department] that he spoke with the Duke of Alba, who recently returned from Germany and Italy. In both these countries, Alba-as he himself
put it-met with generals and industrialists who said they were willing to overthrow Hitler and Mussolini and make a deal with the Allies. R. says that Hayes
is a sworn enemy of the Sov. Union.

2. [Archbishop Francis] Spellman traveled to the Vatican with the intention of recruiting the Pope on the Allied side. The latter declared that the Allies must stop bombing civilian populations. The USA does not object to this,
but England turned down the Pope's suggestion, which Sp-n seconded as well.
Based on all the information that was obtained by R., it can be concluded that
Sp-n's trip did not meet its goal.

3. "Bank" received a report from [Ambassador William] Standley stating that he had informed Comrade Molotov about the upcoming meeting of Allied countries to discuss issuing provisions and proposed that the Sov. govt
send a delegate to this meeting. In response, Comrade Molotov supposedly
expressed a wish that in the future, questions of conducting this or that
meeting be discussed with the Soviet govt as well. According to Standley's
report, the Poles had told him that the Soviet gov't was not addressing their
complaints about the supposedly compulsory adoption of Soviet citizenship
for Poles living in the USSR, on pain of expulsion. According to R., not one
of the reports by Standley he had read betray any hint of anti-Soviet prejudice.

4. For now, Americans are not hiring any German immigrants. At the
same time, however, Cabin [OSS] has been asked to thoroughly study who
could be hired. Thus, a certain Walter Dorn, Chief of the Division of Foreign
Nationalities Groups at Cabin, was sent to Mexico to study the question of
German emigrants (including CP members).

5. According to the Polish ambassador to the USA, [Jan] Ciechanowski,
the politics and claims of the Polish people are not supported by "Radio Station" [Office of War information] supposedly because the people working
there are for the most part Jews (both local and immigrant). C. intends to conduct a campaign against "Radio Station" if it does not rethink its line of conduct. R. explained that Radio Station has instructions not to respond to the
`Poles' complaints' in its propaganda work."52

But Neumann's productivity did not continue. A KGB report from
late 1943 complained, "R. ["Ruff '/Neumann] does practically nothing."
One of the Massings met with him and asked if he had reconsidered assisting the KGB and reported: "`R. answered the following: `I have not
changed my mind. If anything truly important comes up, I will tell you
without hesitation.' He then gave the usual explanation that he did not
have anything worth telling us about."' The KGB wasn't happy with this
explanation, but it took what it could get, and occasionally Neumann
handed over material of interest:

On 1o June 1944, R. ["Ruff'/Neumann] informed Mary [Massing] that a
Cabin [OSS] representative at the Amer. embassy in Bern (Switzerland),
Dulles, whom we know, telegraphed the following info. to Bank [State Department]: Supposedly, General [Walther] von Brauchitsch came to him personally
from Germany and said that on behalf of a group of servicemen, he was offering peace on the following terms:

i. This group of military men would overthrow Hitler.

z. A military govt would be established, which would agree to unconditional
surrender.

3. Sov. forces should not take part in occupying any German territory.

To this message, the director of Bank replied to Dulles that without the involvement of its allies, the Americans would not conduct any peace negotiations with Germany.

Around the z5th-26th of May, R. reported the following to Mary: Dulles
informed Bank that he had been approached by a representative of a German
group. This group is made up of prominent military men, including Zeitzler,
industrialists, and right-wing socialist democrats who had remained in Ger.
The group offered to conduct peace negotiations on terms that occupied territories in W. Europe would be cleared of German forces and they would have
freedom to operate in the East in order to continue the war against the USSR.

The dir. of Bank supposedly informed Gromyko of this offer. The bureau
is checking this information through oth. sources. The bureau adds that in
spite of the fact that R. gives little information, all of his previous reports have
been corroborated by reports from oth. probationers [sources] at "Cabin." s3

But in July 1944 a Moscow Center analyst called Neumann's recent
material "`superficial"' and suspected disinformation in his report on
Allen Dulles's contact with anti-Hitler Germans. However, in the spring
of 1945 a Moscow Center evaluation reconsidered: "`R's ["Ruff"/Neu-
mann's] report on Dulles' negotiations in Bern is of great interest.... At
one time, this info. was labeled disinformation by the operational department. However, subsequent agent materials have confirmed that
Amer. intelligence had conducted negotiations with representatives from
the German opposition in Bern at that time."' The report went on to note
that Elizabeth Zarubin's sudden recall to Moscow in July 1944 cut off
contact with Neumann but that liaison could be reestablished via the
Massings. There is, however, nothing indicating that contact was reestab-
lished.54

Neumann went on to serve on justice Robert Jackson's prosecutorial
staff at the Nuremberg War Crimes trials. He also plunged into German
politics and supported a merger of the German Social Democratic Party
with the Communists. But heavy-handed Soviet repression in East Germany soon disillusioned him about cooperation with Communists. He
helped found the Free University of Berlin and in 1948 accepted a professorship at Columbia University before he died in an auto accident in
1954. He never publicly disclosed his clandestine wartime cooperation
with the KGB, and no congressional investigating committee called him
to testify. His name, however, was included among State Department security risks by Senator McCarthy in 1950.

Helen Tenney, cover name "Muse," appears in numerous KGB documents. Tenney had excellent language skills and in late 1942 got a job in
the OSS's Spanish section but later shifted to its Russian section. Bentley identified her as a useful and productive source recruited by Golos on
the recommendation of CPUSA contacts. "Muse" appears in the Venona
deciyptions as a KGB source in the OSS, but NSA/FBI analysts were unable to attach a real name to the cover name. The deciphered cables and
Bentley, who met with Tenney to pick up her material, showed that she
provided copies of State Department diplomatic messages on topics of interest and monitored the extent of OSS knowledge of Soviet matters from
her post in the OS Ss Russian section."