Target (19 page)

In July 1941, as the U.S. became increasingly engaged in supplying the USSR with weapons and other lend-lease materials, Morganthau, playing on the Democrats’ built-up goodwill, asked
Soviet Ambassador to the U.S. Konstantin Umansky if his government’s spy agencies would provide Roosevelt and him with the identities of head German agents operating in America. The FBI was not doing the job, Allen Weinstein and Alexander Vassiliev quote Morganthau as telling the ambassador in
The Haunted Wood,
an acclaimed book on Soviet espionage in the wartime U.S. But the NKVD refused, one reason probably being, the two authors speculate, that the communists already had a strong spy apparatus in the U.S. and were working on infiltrating the new American intelligence organization which would soon become the OSS.
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Presumably they did not want to draw undue attention to their covert activities.

Perhaps, then, it was from Morganthau that Donovan first got the idea of approaching the NKVD. Despite different political affiliations (Donovan was a Republican; Morganthau a staunch Democrat), the two men, both New Yorkers, had a working relationship that would grow throughout the war and beyond. In fact, as Donovan was negotiating with Roosevelt to take the job as the nation’s first major intelligence chief, Morganthau was courting Donovan to run the New York state war bond drive, an administrative position, notes Joseph Persico in
Roosevelt’s Secret War
, that certainly did not offer the prestige, adventure, or potential personal power that heading America’s new intelligence agency would.
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Persico reports that Donovan demanded of Roosevelt three basic requirements before accepting the more exciting post, which, of course, he preferred. First, he would report only to Roosevelt. Second, he would have access to Roosevelt’s secret, off-the-books funds in order to pay for clandestine projects. Finally, all government agencies would be instructed to give him whatever support he requested—no questions asked. With Roosevelt’s agreement in the summer of 1941, America’s first major spy chief
was crowned, and, by 1943, Donovan had agents and a far-flung network of secret missions established throughout the war-torn world.

Early on he realized that the Soviets, if inclined, could aid his intelligence operations. Positioned between Europe and Asia, the Soviets had good spy networks throughout Germany, Eastern Europe, and China. The Japan network was especially attractive. The U.S., surprised by the attack on Pearl Harbor, had few, if any, spies there. Russia’s help could make a big difference. According to OSS files,
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Armand Hammer, the American industrialist who traveled extensively in the Soviet Union (and who some say was a spy for the Soviets)
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had sent Donovan his “book on my experiences in Russia” and offered his services as a consultant.
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Donovan had private discussions with a Soviet naval attaché in Washington and actually contacted members of the communist Party, USA (CPUSA) to try to learn about Axis agents in the U.S.
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U.S. civilians working in various occupations in the USSR were asked to become secret OSS operatives. But ultimately the idea of covert U.S. spies, military or civilian, operating on Soviet soil was discouraged. Not only was Roosevelt intent on showing good intentions to the USSR, and thus frowned on spying against them,
⁷
but “Russia has reputedly the best counter-espionage system in the world,” says a January 23, 1943, OSS memo. “Any undercover representative would probably be disclosed upon arrival.”
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The U.S. did not want to get caught with its hand in the cookie jar.

By fall 1943, after considerable exploration of the matter, and despite warnings from some in OSS that the Soviets were just waiting for Allied victory to “let loose a communist revolution,”
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Donovan, who is reported to have said, “I’d put Stalin on the OSS payroll if I thought it would help defeat Hitler,”
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had decided the possible gains of collaboration with the NKVD outweighed the
risk. And in late December, following the unfortunate loss of an envoy he was sending to Moscow who might have paved the way,
^ab
and with diplomatic channels widening with a new military liaison mission, headed by Major General John R. Deane, being established in Moscow, he decided to fly to Russia himself and plead his case in person. According to several sources, including an official memorandum
¹¹
of the event published in John Mendelsohn’s rare book,
The OSS-NKVD Relationship 1943-1945
, Donovan and U.S. Ambassador Averell Harriman were taken by Soviet Foreign Minister Vyacheslav Molotov to NKVD headquarters on Dzerzhinsky Street in Moscow right after Christmas, December 27, 1943. There, in a grim, forbidding, czarist-built structure housing the infamous Lubyanka prison, the two Americans, accompanied by Charles Bohlen of the U.S. embassy’s staff, were met by NKVD chief, Lieutenant General Pavel Fitin, and a man Fitin introduced as “Colonel Aleksandr P. Ossipov,” chief of the Soviets’ “subversive activities in Enemy Countries.” In actuality, the companion was Gaik Ovakimyan, a very productive NKVD spy of Armenian heritage who, according to researchers with access to NKVD files decades later, had been arrested and jailed as a Soviet spy in New York in early 1941. However, after Germany’s surprise invasion of Russia that summer, he had been ordered released by President Roosevelt—apparently a gesture of goodwill—and deported back to the USSR where he had been rewarded for his trouble by being put in charge of all NKVD spying in North America, including the U.S.
¹²

Thus the first meeting of Donovan and the NKVD he was courting began with a deception by the Soviets. But Donovan, all
accounts agree, was unaware. In fact, he was quite pleased with the relative ease with which matters appeared to him to be unfolding and began his pitch, according to the meeting memorandum, by telling the two Soviet spy masters all about the OSS. “General Donovan . . . outlined the organization, aims, scope of operations, etc . . . giving details of specific types of operations, means of communication, organization of groups within enemy countries . . . .”
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However, he need not have done so, for by this time the NKVD already had in place covert agents inside the OSS sending back all manner of U.S. secrets. The disguised Ovakimyan had been the Soviet agent overseeing the early OSS penetrations, which was probably the reason Fitin brought him to the meeting. The West now knows all this to be true largely because of a top secret U.S. code-breaking operation recently declassified (1995). During the war, the army’s Signal Intelligence Agency, forerunner of today’s National Security Agency, broke Russian codes under a project codenamed “Venona.”
¹⁴
Because the project was so secret, few, even today, outside of World War II and Cold War historians are familiar with it. But decrypted Venona messages confirm the OSS penetration. Using the decrypts, and access to NKVD and recently released FBI files and Russian memoirs, researchers like
The Haunted Wood
’s Weinstein and Vassiliev have put together lists of OSS agents who spied for the Russians.
The Mitrokhin Archive
, co-authored with former KGB archivist Vasili Mitrokhin, who for years copied and secreted away Russian intelligence files, says the number of “Soviet agents at OSS headquarters [was] probably well into double figures,”
¹⁵
possibly as many as forty. Outside Washington, in various OSS installations throughout the world, the number was at least twelve.
¹⁶
The spies included secretaries, researchers, managers, economists, operatives in the field, even heads of major departments like Maurice Halperin who ran OSS’s
Latin America Division, and Franz Neumann, head of the German section, especially crucial in a war against the Nazis. Halperin’s NKVD codename was “Hare”; Neumann’s was “Ruff.”
¹⁷

Perhaps most important among these NKVD spies within the OSS was Duncan Lee, a young former member of Donovan’s New York law firm and one of the director’s trusted personal aides. He had access to practically everything Donovan did. Lee was a descendant of the famous Confederate general, Robert E. Lee, as well as a graduate of Yale University and a Rhodes Scholar at Oxford, England. He was a favorite of Donovan’s and joined OSS in 1942 at Donovan’s behest. While at Oxford he met his wife, said Betty McIntosh, a former OSS agent who knew him well. “They went to Moscow as students and then came back,” she said, explaining that Lee and his wife were good friends with her and her husband. “I think that’s where he became a communist. He was a ladies’ man. I know one girl who killed herself because of him. I never quite trusted the guy.” Elizabeth Bentley, another American NKVD spy who went to the FBI shortly after the war and began telling them about numerous Soviet spies within the American government, said Lee, who was in her charge, was a nervous spy—he was always worried he would be caught—but a valuable one.
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For instance, he forwarded to the Russians what amounted to advance word of the approximate date of the D-Day landings, perhaps the most important single tactical operation in the entire war. Had the information gotten into German hands, the invasion most probably would have been defeated.
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As a result of some of Lee’s forwards to the communists on secret OSS missions using behind-Soviet-lines anti-communists, those same anti-communists were later hunted down and killed by the NKVD.
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Bentley also told the FBI that Lee informed the Russians
that “something very secret was going on at Oak Ridge,” Tennessee, where, it later became known, American efforts to make enriched uranium for the Pacific war-ending atomic bomb project were taking place.
²¹

The NKVD therefore was already well versed about the OSS. But Fitin and Ovakimyan acted ignorant as Donovan laid out the reasons the two intelligence agencies should collaborate. They could exchange important information, keep each other informed about matters special to each, cut down on duplicate missions and research, and warn each other of intentions to operate in one another’s territories, thereby minimizing duplication of effort and the possibility of clashes. Donovan went all out trying to persuade his audience. He told them things only known at the highest echelons of his own government. At one point, Fitin, dubious that Donovan could really be offering such important secrets, questioned whether the OSS director had an ulterior motive for coming to Moscow. Donovan assured him he did not. He was sincere. He wanted cooperation opened between U.S. and Soviet intelligence, something that had never happened before. Fitin then seemed to test him, asking how the OSS got covert agents into enemy countries, what kind of training and equipment they received? Ovakimyan, who is described as saying little during the meeting, inquired about American plastic explosives. Donovan answered both as completely and truthfully as possible. He wanted the cooperation badly.

From the Soviet standpoint, the Russians stood to get even more than they would have from their embedded spies. For instance, they were interested in intelligence from European countries where, because of the war, they had fewer agents, such as France or Italy, where the OSS was strong. They considered vital any intelligence about Nazi peace feelers that did not include
them. Stalin was paranoid about possible end-of-war collaboration between the U.S., Britain, and Germany. He feared that Germany, seeing the inevitable and preferring the U.S. to Moscow as rulers and captors, might try to jump sides. They wanted to know what contacts America was having with anti-Soviets, like the Ukrainians, who were of special concern to Stalin. He knew such dissident nationalists were a potential spear in his side. He was always looking to crush them. And they were interested in scientific and technological secrets of which Donovan seemed to have many. For instance, Donovan told them about a suitcase radio, smaller than anything yet used, which was making communication much easier and safer for OSS operatives in the field.

By the end of the meeting, the two sides had agreed that exchanges should begin quickly and be sent only between the two agencies and their designated representatives, not through normal diplomatic channels already existing between the two countries. They would keep the relationship to themselves and their own higher authorities, which meant the White House and Stalin. Representatives from each organization would be stationed in Washington and Moscow in order to facilitate the cooperation; in effect, reciprocal spies would be admitted to each other’s vital lair. Lee later reported to his handler, Bentley, “Donovan was very pleased that he and Moscow agreed to exchange missions and information . . . . The Soviet government made an enormous impression on Donovan, and he is fascinated by it. He considers Stalin the most intelligent person among all [those] heading today’s governments....”
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Donovan, mindful of the USSR’s increasing stock in Washington as the Red Army began halting and pushing back their German invaders, obviously thought he had scored a major coup. And possibly he would have, had his intentions been only to milk the
Soviets for what he could get, and had the Soviets not been in near control of the venture by already having their spies in the OSS—and elsewhere in the American government—who, in effect, could verify what Donovan was giving them. Stalin, according to Persico,
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was briefed personally on the plan and immediately, if not gleefully, okayed the project. He knew his intelligence service had the upper hand. But American opposition quickly materialized. Roosevelt, it appears, always fascinated with the cloak and dagger, was, at first, receptive. But the FBI’s J. Edgar Hoover, realizing communist agents would be given free reign in America, was livid.

Donovan and Hoover went way back. Hoover had served under him when Donovan had been a federal prosecutor in President Herbert Hoover’s (no relation) administration. They had clashed. He had not liked Donovan then and he certainly did not like him now. Hoover regarded Donovan’s OSS as an upstart intruder on FBI territory. Although separate bailiwicks had been set up for both organizations—the FBI was given all domestic spy and enforcement duties; the OSS was to operate only in foreign countries—Donovan, Hoover knew, had taken liberties with that restriction and ordered projects on domestic soil. A break-in by OSS agents of the Spanish embassy in Washington was but one example.
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Now he was proposing to let Russian agents come into the country and operate at will? Hoover, a dedicated anti-communist dating back to the teens and twenties, was determined to stop the liaison and won over Roosevelt by making the president realize the political implications in the coming election (1944) of his willingly granting communist spies sanctioned access to operate on U.S. soil. They were already secretly here, he told FDR. He was battling them. Now they would be given a passport? It would be handing the Republicans a winning issue. Voters would retaliate.