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Roosevelt agreed, especially when some of his military advisors did not like the idea either.
^ac
The army and navy’s individual intelligence services felt encroached upon by what they regarded as the unproven, amateurish OSS and no one but the enemy wanted more foreign spies in the homeland. Roosevelt wrote Donovan that “an exchange of O.S.S. missions between Moscow and Washington is not appropriate at the present time . . . .”
²⁵
But Donovan was not going to be denied. Some in the joint chiefs liked the idea of cooperating with the NKVD. Above all, they wanted the Russians to declare war against Japan and this seemed a way of possibly influencing that, if only, perhaps, as part of a larger tit for tat? He dropped the mission idea but quietly, with FDR’s acquiescence, went ahead with establishing a relationship of mutual cooperation on his own. Moscow, in view of the fact they already had their people covertly ensconced in Washington anyway, did not have a problem with the mission exchange falling through. Thus, a covert alliance began between the OSS and NKVD, two rival intelligence services that were inherently in conflict. The communists, as all those opposed to the liaison stressed, were on record as vowing to overthrow the U.S. government.

Nevertheless, for the next year and a half at least, the collaboration between the two services grew, although all sources agree that the Soviets, holding the better cards, got the best of it. “Throughout the Second World War the NKVD knew vastly more about OSS than OSS knew about the NKVD,” write the authors of
The Mitrokhin Archive
.
²⁶
An anonymous CIA analyst reviewing “OSS-NKVD Liaison” documents called the cooperation an “ill balanced” exchange, with the OSS heaping important secret
information on the Soviets, including fresh field reports, targeting data, and captured German papers, and the Soviets in return providing, among other meager offerings, a forty-three-page “less comprehensive” paper on Bulgaria, a seventy-six-page listing of German industrial targets compiled from “casual” POW interrogations “rather than a directed intelligence effort,” and “unenlightening” answers regarding sabotage operations.
²⁷
There were other exchanges but the disparity continued. Bradley F. Smith, in
Sharing Secrets with Stalin
, says simply, “The Soviets certainly had any advantage that did occur. . . .”
²⁸
Regardless, Donovan, fighting an uphill battle, was unfailingly enthusiastic and nurtured the venture. For instance, while advising Fitin that forwarded NKVD documents about German industry were incomplete and “production figures appear to us to be excessive,” he thanked Fitin vociferously and asked in an August 23, 1944 communication if they could get even closer by exchanging technicians. “I am sure that [closer] cooperation would result in mutual benefit,” Donovan wrote, “and would make more effective our common efforts to defeat the enemy.”
²⁹

And so it went—even when, in September 1944, a major conflict arose.

As explained in
Shadow Warriors
,
³⁰
OSS had been operating in the Balkans mainly to help downed American flyers escape. When the Red Army entered the Balkans, pushing the occupying Germans back toward their homeland, the rescue efforts were less needed. But a few OSS units stayed on primarily to collect whatever intelligence they could that had been left behind by the Nazis. Stalin got suspicious of the foreign activities in his newly acquired area and the Soviets ordered both the OSS and SOE (Special Operations Executive), the British spy agency also operating out of Bulgaria. Donovan, upset, contacted Fitin and got a reprieve for
both intelligence services. But in return, Fitin demanded a heavy price—the names of all OSS personnel in Bulgaria and in any other territories occupied by the Soviets. Donovan surprisingly agreed, handing over lists of agents in not only Bulgaria, but Romania and Yugoslavia, and those planning to enter Czechoslovakia.

Identifying covert agents to anyone outside an organization is heresy in secret operations; treasonable in the eyes of most. It could lead to agents being neutralized or even worse, murdered. Yet Donovan did it, probably with the approval of his superiors, the Joint Chiefs and FDR. In addition, Fitin got Donovan to agree that future agents would be attached to the American sections of any Allied Control Commissions, the official bodies to be sent into conquered territories to administer them. In effect, those agents, officially listed, would be easily identifiable. OSS agents were also required, if operating in any Soviet occupied territory, to do so “in cooperation with the corresponding Soviet organizations.”
³¹
In other words, they were to check in with the nearest Soviet office, certainly connected to the NKVD, and reveal basically what they were doing—an act not exactly conducive to secret operations. Clearly Donovan, either naively or recklessly, was treating the NKVD as a special and trusted partner. One could say he was solicitous in the highest degree. And if by chance he strayed, he was cuffed by FDR and other Soviet sympathizers in the administration for doing so.

Early in the fall of 1944, as the OSS-NKVD relationship grew, OSS in Finland got wind of a treasure trove of Russian documents including Soviet military and diplomatic decryption materials that would enable the breaking of Soviet codes. Most sources
^ad
state
that the materials were captured and/or developed by the Finns who, afraid of Russian domination as a result of World War II, had joined with the Axis against the Soviets, with whom they share a common border. There are mentions of partially burned code books retrieved by the Finns after early battle victories over the Russians and also separate decryption documents, approximately 1,500, which a crack corps of Finnish code busters generated later. Exactly what was offered for sale is not clear. But towards the end of the war, after the Finns, realizing the Nazis had lost, left the Axis and were marketing the materials, Donovan offered to buy them. However, when he proposed doing so to Secretary of State Edward R. Stettinius he was told that since the USSR was an ally, the U.S. should do no such thing. Donovan, always aggressive and a risk-taker, went ahead anyway and bought the papers. Then FDR, whom Donovan himself advised of the purchase, protested and ordered all of it given back to the Russians “at once.”

Was that the enigmatic Donovan’s intention in the first place—returning the crucial papers to the Soviets as a way of engendering gratitude from them? The answer is currently not available in accessible documents—at least not those I have been able to find. While some accounts say he kept copies of the purchased material, Donovan, nevertheless, did as he was instructed. But in his letter concerning the return he made no mention of the controversy surrounding the purchase and sounded as if his first and only intention was to watch Russia’s back. “I wish General Fitin to know at once,” his classified letter states, “that we have obtained from enemy sources papers which we wish turned over... to a designated, highly trusted Russian at the earliest possible moment.... I am certain that these documents are of the utmost urgent importance to the Soviets. Please cable me at once [who in Washington] these papers should be turned over to.”
³²
Fitin, of course,
was not only surprised and thankful, but probably amazed at the OSS director’s seeming magnanimous gesture. Had the situation been reversed, he certainly would not have notified Donovan, let alone returned the material. (He was, at the very moment, receiving all kinds of stolen secret U.S. material from his spies in America.) After receiving it, he wrote Donovan, “I am very grateful to you for the information . . . relating to military codes . . . my sincere thanks for the aid given us . . . in this very essential business.”
³³

Whatever Donovan’s motivation, the give-back—which Smith in
Shadow Warriors
³⁴
says was akin “to giving an opponent the scientific formula for an important secret weapon”—did Donovan little perceptible good. Shortly after returning the code-breaking material in late February of 1945, Fitin, according to documents, denied Donovan’s request to send an OSS team into Warsaw, Poland, where the Soviets were endeavoring to elevate a puppet regime—something they accomplished, in part, by keeping their allies uninformed.
³⁵
Similarly, in April, Fitin declined to meet with Donovan in Paris
³⁶
where the OSS head hoped to outline further cooperation, or give Donovan permission to visit Bucharest, Romania, another Eastern European capitol the Russians had occupied and were yoking.
³⁷
In May, barely a week after the war in Europe ended, OSS was notified its four-month-old request to send a team into Soviet-occupied Hungary as well was denied. George F. Kennen, Charge d’Affairs at the American embassy in Moscow, who had been asked to handle the request, wrote resignedly that a silence lasting that long amounted to a “refusal,” and they were withdrawing the request.
³⁸

Donovan was, by this time, hat-in-hand to Fitin. But the strangest episode involving the two occurred in the spring of 1945.

Shortly after the conclusion of the code-book matter, OSS entered into clandestine dealings with Major Wilhelm Hoettl, an
enigmatic, high-placed German intelligence officer. Dr. Hoettl, who had earned advanced degrees in history and philosophy and held a professorship at the University of Vienna before the war
³⁹
had been an aide to SS-commander Heinrich Himmler, a top Nazi. Hoettl supposedly had been the mastermind behind the daring German rescue of deposed Italian dictator Benito Mussolini, had been involved in a sweeping plot to counterfeit allied money at the end of the war, and was the Axis spymaster in the Balkans where the Russians, by this time, were banning OSS agents. He claimed to be a not-so-fanatical Nazi, a Catholic, who joined the party mainly because he was anti-communist. Through the OSS office in neutral Switzerland, headed by sophisticate-spy Allen Dulles, who would later helm the CIA, he offered the U.S. an intact network of operatives, some actually in Russia, who could spy on the Soviets throughout the Balkans and eastward.
⁴⁰
In return, he asked for his freedom and volunteered his services to run the network for America. Apprised of this, Donovan had his men assume control of the spy ring in order to test it and see if, in fact, it was still in place and as good as Hoettl claimed. Making contact with the operatives, the probers judged Hoettl’s spies indeed to be well situated and providing good intelligence. The Nazi operatives readily agreed to work with OSS. But rather than inform his bosses, FDR or the Joint Chiefs, of the intriguing possibilities, Donovan went instead to the European Theater G-2 (chief intelligence officer), General Edwin Sibert, who, according to Cave-Brown in
The Last Hero
,
⁴¹
advised that he double-cross both Hoettl and his operatives and inform the NKVD—one of the entities that would be the subject of the spying—about the offer.

Why Sibert would do this is not clear. However, Cave-Brown notes that Sibert was among those currently in talks with General Reinhardt Gehlen, Hitler’s chief of intelligence on the entire Soviet
Union.
⁴²
Gehlen, subject of a 1971 biography entitled
Spy of the Century
, was a bigger fish. He would become the CIA’s main spymaster against the USSR once the Cold War was declared. But at this time—summer 1945—negotiations with Gehlen were only in the beginning stages. They could have fallen through. Perhaps, to be generous, Donovan’s intention in accepting Sibert’s plan was for Hoettl’s ring to be sacrificed as a decoy in order to keep suspicions off Gehlen? Whatever Donovan may have been thinking, after consulting with Sibert, Donovan went directly to Fitin, told him of the unsuspecting network, and treacherously offered to help the NKVD “liquidate” it. Concluding that Hoettl was “evidently motivated by desire to stir trouble between Russians and ourselves,” Donovan wrote his Moscow counterpart, “it seemed desirable that we (1) make such information available [to you] and (2) we discuss with the Soviet Union means of eliminating Hoettl’s entire organization.”
⁴³

In the meantime, the Joint Chiefs became aware of Donovan’s offer to Fitin and got mad at him for revealing such a prize to the Russians and, doubly, offering it without consulting them. “The action by the Office of Strategic Services which led to the Russians being informed of the discovery of the Hoettl network was not coordinated with the War and Navy Departments and has not been confirmed by the Joint Chiefs of Staff
as required. . .”
they admonished in an “18 August 1945” memorandum to Donovan.
⁴⁴
Cave-Brown speculates that in addition to being by-passed, one of the reasons for their displeasure may have been that Hoettl earlier “had provided Patton’s G-2 with extremely important information about the Red Army in Austria—armies that Patton faced,” and that Patton, hearing of the NKVD deal, “may well have protested.” Also, if they double-crossed Hoettl, how could they hope to attract other ex-Nazis to spy for them?

But the deal had already been offered and could not now be rescinded without stirring Soviet suspicions and antipathy which the U.S. was trying to avoid. Stalin himself, according to
The Haunted Wood
, had already been briefed.
⁴⁵
Interestingly, Fitin did not jump at the Donovan offer even though it amounted to a bonanza of counterintelligence dropped literally in his lap. He was cautious in his response. In an August 1, 1945, letter headed “Top Secret,” he dutifully thanked Donovan but wanted answers to pointed questions before making up his mind.
⁴⁶
Who were Hoettl’s spies? What kind of documents did he offer to the U.S.? What proof was there that his agents were spying on the Soviets? Finally, had the U.S. “captured other network chiefs who have similarly worked against the Soviets?” The last question suggests he might already have gotten a whiff of the courting of Gehlen, which would not be surprising given the strong network of spies he had operating against the U.S. Fitin, of course, knew Gehlen’s specialty and was hunting for him.