01 Ashes

LEGACY of ASHES

The History of the CIA

TIM WEINER

There are no secrets that time does not reveal.

—Jean Racine, Britannicus (1669)

CONTENTS

AUTHOR'S NOTE xiii

PART ONE – "In the Beginning, We Knew Nothing":

The CIA Under Truman, 1945 to 1953

1 . "INTELLIGENCE MUST BE GLOBAL AND TOTALITARIAN" 3

2 . "THE LOGIC OF FORCE" 9

3 . "FIGHT FIRE WITH FIRE" 20

4 . "THE MOST SECRET THING" 32

5 . "A RICH BLIND MAN" 39

6 . "THEY WERE SUICIDE MISSIONS" 49

7 . "A VAST FIELD OF ILLUSION" 63

PART TWO – "A Strange Kind of Genius":

The CIA Under Eisenhower, 1953 to 1961

8 . "WE HAVE NO PLAN" 73

9 . "CIA'S GREATEST SINGLE TRIUMPH" 81

10 . "BOMB REPEAT BOMB" 93

1 1 . "AND THEN WE'LL HAVE A STORM" 105

12 . "WE RAN IT IN A DIFFERENT WAY" 116

13 . "WISHFUL BLINDNESS" 122

14 . "HAM-HANDED OPERATIONS OF ALL KINDS" 136

15 . "A VERY STRANGE WAR" 142

16 . "HE WAS LYING DOWN AND HE WAS LYING UP" 155

PART THREE – Lost Causes:

The CIA Under Kennedy and Johnson, 1961 to 1968

17 . "NOBODY KNEW WHAT TO DO" 171

18 . "WE HAD ALSO FOOLED OURSELVES" 189

19 . "WE'D BE DELIGHTED TO TRADE THOSE MISSILES" 199

20. "HEY, BOSS, WE DID A GOOD JOB, DIDN'T WE?" 210

21. "I THOUGHT IT WAS A CONSPIRACY" 222

22. "AN OMINOUS DRIFT" 236

23. "MORE COURAGE THAN WISDOM" 244

24. "THE BEGINNING OF A LONG SLIDE DOWNWARDS" 249

25. "WE KNEW THEN THAT WE COULD NOT WIN THE WAR" 265

26. "A POLITICAL H-BOMB" 270

27. "TRACK DOWN THE FOREIGN COMMUNISTS" 285

PART FOUR – "Get Rid of the Clowns":

The CIA Under Nixon and Ford, 1968 to 1977

28 . "WHAT THE HELL DO THOSE CLOWNS DO OUT THERE IN LANGLEY?" 291

29. "USG WANTS A MILITARY SOLUTION" 306

30. "WE ARE GOING TO CATCH A LOT OF HELL" 318

31 . "TO CHANGE THE CONCEPT OF A SECRET SERVICE" 325

32. "A CLASSIC FASCIST IDEAL" 330

33. "THE CIA WOULD BE DESTROYED" 335

34. "SAIGON SIGNING OFF" 340

35. "INEFFECTIVE AND SCARED" 346

PART FIVE – Victory Without Joy:

The CIA Under Carter, Reagan, and George H. W. Bush, 1977 to 1993

36. "HE SOUGHT TO OVERTHROW THEIR SYSTEM" 357

37. "WE WERE JUST PLAIN ASLEEP" 368

38. "A FREELANCE BUCCANEER" 375

39. "IN A DANGEROUS WAY" 388

40. "HE WAS RUNNING A GREAT RISK" 394

41 . "A CON MAN'S CON MAN" 401

42. "TO THINK THE UNTHINKABLE" 413

43. "WHAT ARE WE GOING TO DO WHEN THE WALL COMES DOWN?" 423

PART SIX–The Reckoning:

The CIA Under Clinton and George W. Bush, 1993 to 2007

44. "WE HAD NO FACTS" 439

45. "WHY IN THE WORLD DIDN'T WE KNOW?" 448

46. "WE'RE IN TROUBLE" 454

47. "THE THREAT COULD NOT BE MORE REAL" 467

48. "THE DARK SIDE" 477

49. "A GRAVE MISTAKE" 486

50. "THE BURIAL CEREMONY" 498

ACKNOWLEDGMENTS 515

NOTES 517

INDEX 673

AUTHOR'S NOTE

Legacy of Ashes is the record of the first sixty years of the Central Intelligence Agency. It describes how the most powerful country in the history

of Western civilization has failed to create a first-rate spy service. That

failure constitutes a danger to the national security of the United States.

Intelligence is secret action aimed at understanding or changing what

goes on abroad. President Dwight D. Eisenhower called it "a distasteful

but vital necessity." A nation that wants to project its power beyond its

borders needs to see over the horizon, to know what is coming, to prevent

attacks against its people. It must anticipate surprise. Without a

strong, smart, sharp intelligence service, presidents and generals alike

can become blind and crippled. But throughout its history as a superpower,

the United States has not had such a service.

History, Edward Gibbon wrote in The Decline and Fall of the Roman Empire,

is "little more than the register of crimes, follies, and misfortunes of

mankind." The annals of the Central Intelligence Agency are filled with

folly and misfortune, along with acts of bravery and cunning. They are

replete with fleeting successes and long-lasting failures abroad. They are

marked by political battles and power struggles at home. The agency's

triumphs have saved some blood and treasure. Its mistakes have squandered

both. They have proved fatal for legions of American soldiers and

foreign agents; some three thousand Americans who died in New York,

Washington, and Pennsylvania on September 11, 2001; and three thousand

more who have died since then in Iraq and Afghanistan. The one

crime of lasting consequence has been the CIA's inability to carry out its

central mission: informing the president of what is happening in the

world.

The United States had no intelligence to speak of when World War II

began, and next to none a few weeks after the war ended. A mad rush

to demobilize left behind a few hundred men who had a few years' experience

in the world of secrets and the will to go on fighting a new enemy.

"All major powers except the United States have had for a long

time past permanent worldwide intelligence services, reporting directly

to the highest echelons of their Government," General William J. Donovan,

the commander of the wartime Office of Strategic Services, warned

President Truman in August 1945. "Prior to the present war, the United

States had no foreign secret intelligence service. It never has had and

does not now have a coordinated intelligence system." Tragically, it still

does not have one.

The CIA was supposed to become that system. But the blueprint for

the agency was a hasty sketch. It was no cure for a chronic American

weakness: secrecy and deception were not our strengths. The collapse of

the British Empire left the United States as the sole force able to oppose

Soviet communism, and America desperately needed to know those enemies,

to provide foresight to presidents, and to fight fire with fire when

called upon to light the fuse. The mission of the CIA, above all, was to

keep the president forewarned against surprise attack, a second Pearl

Harbor.

The agency's ranks were filled with thousands of patriotic Americans

in the 1950s. Many were brave and battle-hardened. Some had wisdom.

Few really knew the enemy. Where understanding failed, presidents ordered

the CIA to change the course of history through covert action.

"The conduct of political and psychological warfare in peacetime was a

new art," wrote Gerald Miller, then the CIA's covert-operations chief for

Western Europe. "Some of the techniques were known but doctrine and

experience were lacking." The CIA's covert operations were by and large

blind stabs in the dark. The agency's only course was to learn by doing—

by making mistakes in battle. The CIA then concealed its failures abroad,

lying to Presidents Eisenhower and Kennedy. It told those lies to preserve

its standing in Washington. The truth, said Don Gregg, a skilled

cold-war station chief, was that the agency at the height of its powers

had a great reputation and a terrible record.

Like the American public, the agency dissented at its peril during the

of the American national-security establishment. They record what our

leaders really said, really wanted, and really did when they projected

power abroad. This book is based on my reading of more than fifty thousand

documents, primarily from the archives of the CIA, the White

House, and the State Department; more than two thousand oral histories

of American intelligence officers, soldiers, and diplomats; and more

than three hundred interviews conducted since 1987 with CIA officers

and veterans, including ten directors of central intelligence. Extensive

endnotes amplify the text.

This book is on the record—no anonymous sources, no blind quotations,

no hearsay. It is the first history of the CIA compiled entirely from

firsthand reporting and primary documents. It is, by its nature, incomplete:

no president, no director of central intelligence, and certainly no

outsider can know everything about the agency. What I have written

here is not the whole truth, but to the best of my ability, it is nothing but

the truth.

I hope it may serve as a warning. No republic in history has lasted

longer than three hundred years, and this nation may not long endure

as a great power unless it finds the eyes to see things as they are in the

world. That once was the mission of the Central Intelligence Agency.

PART

ONE

"In the Beginning, We Knew Nothing"

The CIA Under Truman

1945 to 1953

1• "INTELLIGENCE MUST BE GLOBAL AND TOTALITARIAN"

All Harry Truman wanted was a newspaper.

Catapulted into the White House by the death of President Franklin D. Roosevelt on April 12, 1945, Truman knew nothing about the development of the atomic bomb or the intentions of his Soviet allies. He needed information to use his power.

"When I took over," he wrote in a letter to a friend years later, "the

President had no means of coordinating the intelligence from around

the world." Roosevelt had created the Office of Strategic Services, under

the command of General William J. Donovan, as America's wartime intelligence

agency. But Donovan's OSS was never built to last. When the

new Central Intelligence Agency arose from its ashes, Truman wanted it

to serve him solely as a global news service, delivering daily bulletins. "It

was not intended as a 'Cloak & Dagger Outfit'!" he wrote. "It was intended

merely as a center for keeping the President informed on what

was going on in the world." He insisted that he never wanted the CIA

"to act as a spy organization. That was never the intention when it was

organized."

His vision was subverted from the start.

"In a global and totalitarian war," General Donovan believed, "intelligence

must be global and totalitarian." On November 18, 1944, he had

written to President Roosevelt proposing that the United States create a

peacetime "Central Intelligence Service." He had started sketching his

plan the year before, at the behest of Lieutenant General Walter Bedell

Smith, chief of staff to General Dwight D. Eisenhower, who wanted to

know how the OSS would become part of the military establishment of

the United States. Donovan told the president that he could learn the

"capabilities, intentions and activities of foreign nations" while running

"subversive operations abroad" against America's enemies. The OSS had

never been stronger than thirteen thousand members, smaller than a

single army division. But the service Donovan envisioned would be its

own army, a force skillfully combating communism, defending America

from attack, and serving up secrets for the White House. He urged the

president to "lay the keel of the ship at once," and he aimed to be its captain.

Nicknamed "Wild Bill" after a fast but errant pitcher who managed the

New York Yankees from 1915 to 1917, Donovan was a brave old soldier—

he had won the Congressional Medal of Honor for heroism in the

trenches of France during World War I—but a poor politician. Very few

generals and admirals trusted him. They were appalled by his idea of

making a spy service out of a scattershot collection of Wall Street brokers,

Ivy League eggheads, soldiers of fortune, ad men, news men, stunt men,

second-story men, and con men.

The OSS had developed a uniquely American cadre of intelligence analysts,

but Donovan and his star officer, Allen W. Dulles, were enthralled

by espionage and sabotage, skills at which Americans were amateurs.

Donovan depended on British intelligence to school his men in the dark

arts. The bravest of the OSS, the ones who inspired legends, were the

men who jumped behind enemy lines, running guns, blowing up

bridges, plotting against the Nazis with the French and the Balkan resistance

movements. In the last year of the war, with his forces spread

throughout Europe, North Africa, and Asia, Donovan wanted to drop his

agents directly into Germany. He did, and they died. Of the twenty-one

two-man teams that went in, only one was ever heard from again. These

were the kinds of missions General Donovan dreamed up daily—some

daring, some deluded.

"His imagination was unlimited," said his right-hand man, David

K. E. Bruce, later the American ambassador to France, Germany, and

England. "Ideas were his plaything. Excitement made him snort like a

racehorse. Woe to the officer who turned down a project, because, on

its face, it seemed ridiculous, or at least unusual. For painful weeks under

his command I tested the possibility of using bats taken from concentrations

in Western caves to destroy Tokyo"—dropping them into

the sky with incendiary bombs strapped to their backs. That was the

spirit of the OSS.

President Roosevelt always had his doubts about Donovan. Early in

1945, he had ordered his chief White House military aide, Colonel

Richard Park, Jr., to conduct a secret investigation into the wartime operations

of the OSS. As Park began his work, leaks from the White House

created headlines in New York, Chicago, and Washington, warning that

Donovan wanted to create an "American Gestapo." When the stories

broke, the president urged Donovan to shove his plans under the rug.

On March 6, 1945, the Joint Chiefs of Staff formally shelved them.

They wanted a new spy service to serve the Pentagon, not the president.

What they had in mind was a clearinghouse staffed by colonels and

clerks, distilling information gathered by attach.s and diplomats and

spies, for the benefit of four-star commanders. Thus began a battle for

control of American intelligence that went on for three generations.

"AN EXTREMELY DANGEROUS THING"

The OSS had little standing at home, and less inside the Pentagon. The organization

was barred from seeing the most important intercepted communications

from Japan and Germany. Senior American military officers

thought an independent civilian intelligence service run by Donovan,

with direct access to the president, would be "an extremely dangerous

thing in a democracy," in the words of Major General Clayton Bissell, the

assistant chief of staff for military intelligence.

These were many of the same men who had slept through Pearl Harbor.

Well before dawn on December 7, 1941, the American military had

broken some of Japan's codes. It knew an attack might be coming, but it

never imagined Japan would take so desperate a gamble. The broken

code was too secret to share with commanders in the field. Rivalries

within the military meant that information was divided, hoarded, and

scattered. Because no one possessed all the pieces of the puzzle, no one

TIMWEINER

saw the big picture. Not until after the war was over did Congress investigate

how the nation had been taken by surprise, and not until then was

it clear that the country needed a new way to defend itself.

Before Pearl Harbor, American intelligence covering great swaths of

the globe could be found in a short row of wooden filing cabinets at the

State Department. A few dozen ambassadors and military attach.s were

its sole sources of information. In the spring of 1945, the United States

knew next to nothing about the Soviet Union, and little more about the

rest of the world.

Franklin Roosevelt was the only man who could revive Donovan's

dream of a far-seeing, all-powerful American intelligence service. When

Roosevelt died on April 12, Donovan despaired for the future. After sitting

up half the night grieving, he came downstairs at the Ritz Hotel, his

favorite haunt in liberated Paris, and had a gloomy breakfast with

William J. Casey, an OSS officer and a future director of central intelligence.

"What do you think it means for the organization?" Casey asked.

"I'm afraid it's probably the end," Donovan said.

That same day, Colonel Park submitted his top secret report on the

OSS to the new president. The report, fully declassified only after the

cold war ended, was a political murder weapon, honed by the military

and sharpened by J. Edgar Hoover, the FBI director since 1924; Hoover

despised Donovan and harbored his own ambitions to run a worldwide

intelligence service. Park's work destroyed the possibility of the OSS continuing

as part of the American government, punctured the romantic

myths that Donovan created to protect his spies, and instilled in Harry

Truman a deep and abiding distrust of secret intelligence operations. The

OSS had done "serious harm to the citizens, business interests, and national

interests of the United States," the report said.

Park admitted no important instance in which the OSS had helped to

win the war, only mercilessly listing the ways in which it had failed. The

training of its officers had been "crude and loosely organized." British

intelligence commanders regarded American spies as "putty in their

hands." In China, the nationalist leader Chiang Kai-shek had manipulated

the OSS to his own ends. Germany's spies had penetrated OSS operations

all over Europe and North Africa. The Japanese embassy in

Lisbon had discovered the plans of OSS officers to steal its code books—

and as a consequence the Japanese changed their codes, which "resulted

in a complete blackout of vital military information" in the summer of

1943. One of Park's informants said, "How many American lives in the

Pacific represent the cost of this stupidity on the part of OSS is unknown."

Faulty intelligence provided by the OSS after the fall of Rome

in June 1944 led thousands of French troops into a Nazi trap on the island

of Elba, Park wrote, and "as a result of these errors and miscalculations

of the enemy forces by OSS, some 1,100 French troops were

killed."

The report personally attacked Donovan. It said the general had lost a

briefcase at a cocktail party in Bucharest that was "turned over to the

Gestapo by a Rumanian dancer." His hiring and promotion of senior officers

rested not on merit but on an old-boy network of connections

from Wall Street and the Social Register. He had sent detachments of

men to lonely outposts such as Liberia and forgotten about them. He had

mistakenly dropped commandos into neutral Sweden. He had sent

guards to protect a captured German ammunition dump in France and

then blown them up.

Colonel Park acknowledged that Donovan's men had conducted some

successful sabotage missions and rescues of downed American pilots. He

said the deskbound research and analysis branch of OSS had done "an

outstanding job," and he concluded that the analysts might find a place

at the State Department after the war. But the rest of the OSS would

have to go. "The almost hopeless compromise of OSS personnel," he

warned, "makes their use as a secret intelligence agency in the postwar

world inconceivable."

After V-E Day, Donovan went back to Washington to try to save his

spy service. A month of mourning for President Roosevelt was giving

way to a mad scramble for power in Washington. In the Oval Office on

May 14, Harry Truman listened for less than fifteen minutes as Donovan

made his proposal to hold communism in check by undermining the

Kremlin. The president summarily dismissed him.

All summer long, Donovan fought back in Congress and in the press.

Finally, on August 25, he told Truman that he had to choose between

knowledge and ignorance. The United States "does not now have a coordinated

intelligence system," he warned. "The defects and the dangers

of this situation have been generally recognized."

Donovan had hoped that he could sweet-talk Truman, a man he had

always treated with cavalier disdain, into creating the CIA. But he had

misread his own president. Truman had decided that Donovan's plan

had the earmarks of a Gestapo. On September 20, 1945, six weeks after

he dropped America's atomic bombs on Japan, the president of the

United States fired Donovan and ordered the OSS to disband in ten days.

America's spy service was abolished.

FORCE "

In the rubble of Berlin, Allen Dulles, the ranking OSS officer in Germany,

had found a splendid and well-staffed mansion for his new headquarters

in the summer of 1945. His favorite lieutenant, Richard Helms,

began trying to spy on the Soviets.

"What you have to remember," Helms said half a century later, "is

that in the beginning, we knew nothing. Our knowledge of what the

other side was up to, their intentions, their capabilities, was nil, or next

to it. If you came up with a telephone book or a map of an airfield, that

was pretty hot stuff. We were in the dark about a lot of the world."

Helms had been happy to return to Berlin, where he had made his

name as a twenty-three-year-old wire service reporter by interviewing

Hitler at the 1936 Olympics. He was dumbstruck by the abolition of the

OSS. At the outfit's operations center in Berlin, a commandeered

sparkling-wine factory, the anger and alcohol flowed freely on the night

the order from the president arrived. There would be no central headquarters

for American intelligence as Dulles had envisioned. Only a

skeleton crew would stay on overseas. Helms simply could not believe

the mission could come to an end. He was encouraged a few days later

when a message arrived from OSS headquarters in Washington, telling

him to hold the fort.

"THE HOLY CAUSE OF CENTRAL INTELLIGENCE"

The message came from Donovan's deputy, Brigadier General John Magruder,

a gentleman soldier who had been in the army since 1910. He

adamantly believed that without an intelligence service, America's new

supremacy in the world would be left to blind chance, or beholden to the

British. On September 26, 1945, six days after President Truman signed

away the OSS, General Magruder stalked down the endless corridors of

the Pentagon. The moment was opportune: the secretary of war, Henry

Stimson, had resigned that week, and Stimson had been dead-set against

the idea of a CIA. "Seems to me most inadvisable," he had told Donovan

a few months earlier. Now General Magruder seized the opening left by

Stimson's departure.

He sat down with an old friend of Donovan's, the assistant secretary

of war, John McCloy, one of the great movers and shakers of Washington.

Together, the two men countermanded the president.

Magruder walked out of the Pentagon that day with an order from

McCloy that said, "the continuing operations of OSS must be performed

in order to preserve them." That piece of paper kept the hope for a Central

Intelligence Agency alive. The spies would stay on duty, under a new

name, the Strategic Services Unit, the SSU. McCloy then asked his good

friend Robert A. Lovett, the assistant secretary for air war and a future

secretary of defense, to set up a secret commission to plot the course for

American intelligence—and to tell Harry Truman what had to be done.

Magruder confidently informed his men that "the holy cause of central

intelligence" would prevail.

Emboldened by the reprieve, Helms set to work in Berlin. He purged

officers who had plunged into Berlin's black market, where everything

and everyone was for sale—two dozen cartons of Camels, purchased for

$12 at the American military PX, bought a 1939 Mercedes-Benz. He

searched for German scientists and spies to ferret out to the West, with

the aim of denying their skills to the Soviets and putting them to work

for the United States. But these tasks soon took second place to the

struggle to see the new enemy. By October, "it was very clear our primary

target was going to be what the Russians were up to," remembered

Tom Polgar, then a twenty-three-year-old officer at the Berlin base. The

Soviets were seizing the railroads and co-opting the political parties of

eastern Germany. At first the best the American spies could do was to try

to track the movement of Soviet military transports to Berlin, giving the

Pentagon a sense that someone was trying to keep an eye on the Red

Army. Furious at Washington's retreat in the face of the Soviet advance,

working against the resistance from the ranking American military men

in Berlin, Helms and his men began trying to recruit German police and

politicians to establish spy networks in the east. By November, "we were

seeing the total takeover by the Russians of the East German system,"

said Peter Sichel, another twenty-three-year-old S SU officer in Berlin.

The Joint Chiefs of Staff and the forceful secretary of the navy, James

V. Forrestal, now began to fear that the Soviets, like the Nazis before

them, would move to seize all of Europe—and then push on to the eastern

Mediterranean, the Persian Gulf, northern China, and Korea. One

false move could lead to a confrontation no one could contain. And as

the fear of a new war increased, the future leaders of American intelligence

split into two rival camps.

One believed in the slow and patient gathering of secret intelligence

through espionage. The other believed in secret warfare—taking the

battle to the enemy through covert action. Espionage seeks to know the

world. That was Richard Helms. Covert action seeks to change the world.

That would be Frank Wisner.

Wisner was the charming son of land-rich Mississippi gentry, a dashing

corporate lawyer in a tailored military uniform. In September 1944

he had flown into Bucharest, Romania, as the new OSS station chief.

The Red Army and a small American military mission had seized control

in the capital, and Wisner's orders were to keep an eye on the Russians.

He was in his glory, conspiring with the young King Michael, plotting

the rescue of downed Allied airmen, and requisitioning the thirty-room

mansion of a Bucharest beer baron. Under its sparkling chandeliers,

Russian officers mingled with the Americans, toasting one another with

Champagne. Wisner was thrilled—he was one of the first OSS men to

bend an elbow with the Russians—and he proudly reported to headquarters

that he had made a successful liaison with the Soviet intelligence

service.

He had been an American spy for less than a year. The Russians had

been at the game for more than two centuries. They already had well-

placed agents within the OSS and they quickly infiltrated Wisner's inner

circle of Romanian allies and agents. By midwinter, they took control of

the capital, herded tens of thousands of Romanians who had German

bloodlines into railroad cars, and shipped them eastward to enslavement

or death. Wisner watched twenty-seven boxcars filled with human cargo

rolling out of Romania. The memory haunted him all his life.

He was a deeply shaken man when he arrived at OSS headquarters in

Germany, where he and Helms became uneasy allies. They flew to

Washington together in December 1945, and as they talked during the

eighteen-hour journey, they realized they had no idea whether the

United States would have a clandestine service after they landed.

"AN APPARENTLY BASTARD ORGANIZATION"

In Washington, the battle over the future of American intelligence was

growing fierce. The Joint Chiefs of Staff fought for a service firmly under

their control. The army and the navy demanded their own. J. Edgar

Hoover wanted the FBI to conduct worldwide espionage. The State Department

sought dominion. Even the postmaster general weighed in.

General Magruder defined the problem: "Clandestine intelligence operations

involve a constant breaking of all the rules," he wrote. "To put

it baldly, such operations are necessarily extra-legal and sometimes illegal."

He argued, convincingly, that the Pentagon and the State Department

could not risk running those missions. A new clandestine service

would have to take charge.

But almost no one was left to fill its ranks. "The intelligence collection

effort more or less came to a standstill," said Colonel Bill Quinn, General

Magruder's executive officer at the Strategic Services Unit. Five of every

six OSS veterans had gone back to their old lives. They saw what was left

of American intelligence as "transparently jerry-built and transient,"

Helms said, "an apparently bastard organization with an unpredictable

life expectancy." Their number fell by nearly 10,000 in three months,

down to 1,967 by the end of 1945. The London, Paris, Rome, Vienna,

Madrid, Lisbon, and Stockholm stations lost almost all their officers. Fifteen

out of twenty-three Asian outposts closed. On the fourth anniversary

of Pearl Harbor, convinced that Truman had run American

intelligence off the rails, Allen Dulles returned to his desk at Sullivan and

Cromwell, the New York law firm where his brother John Foster Dulles

was a partner. Frank Wisner followed his lead and went back to his own

New York law firm, Carter, Ledyard.

The remaining intelligence analysts were dispatched to form a new research

bureau at the State Department. They were treated like displaced

persons. "I don't suppose there had ever been or could ever be a sadder

or more tormented period of my life," wrote Sherman Kent, later a

founding father of CIA's directorate of intelligence. The most talented

soon left in despair, back to their universities and newspapers. No replacements

appeared. There would be no coherent intelligence reporting

in the American government for many years to come.

President Truman had relied on his budget director, Harold D. Smith,

to oversee the orderly dismantling of the American war machine. But

demobilization was turning into disintegration. Smith warned the president

on the day he dismembered the OSS that the United States was at

risk of returning to the state of innocence that had prevailed before Pearl

Harbor. He feared that American intelligence had become "royally

bitched up." At a hastily convened White House meeting on January 9,

1946, Admiral William D. Leahy, Truman's crusty military chief of staff,

bluntly told the president that "intelligence had been handled in a disgraceful

way."

Truman saw he had created a snafu and decided to set it straight. He

summoned the deputy director of naval intelligence, Rear Admiral Sidney

W. Souers. A reservist, Souers was a Democratic Party stalwart from

Missouri, a wealthy businessman who made his money in life insurance

and Piggly Wiggly shops, the nation's first self-service supermarkets. He

had served on a postwar commission studying the future of intelligence

created by Secretary of the Navy James Forrestal, but his sights were set

on nothing grander than a swift return to Saint Louis.

Souers discovered to his dismay that the president was going to make

him the first director of central intelligence. Admiral Leahy recorded the

moment of the investiture in his office diary for January 24, 1946: "At

lunch today in the White House, with only members of the Staff present,

RAdm Sidney Souers and I were presented with black cloaks, black

hats, and wooden daggers" by Truman. The president then knighted

Souers as chief of the "Cloak and Dagger Group of Snoopers" and "Director

of Centralized Snooping." This vaudeville act placed the flabbergasted

reservist in command of the misbegotten and short-lived

organization called the Central Intelligence Group. Souers was now in

charge of nearly two thousand intelligence officers and support staff who

controlled files and dossiers on some 400,000 individuals. Many of them

had no idea what they were doing, or what they were supposed to do.

Someone asked Souers after his swearing-in what he wanted to do. "I

want to go home," he said.

Like every director of central intelligence who followed him, he was

given great responsibility without equivalent authority. He had no direction

from the White House. The trouble was that no one really knew

what the president wanted—least of all the president himself. Truman

said he only needed a daily intelligence digest, to keep from having to

read a two-foot stack of cables every morning. It seemed to the charter

members of the Central Intelligence Group that it was the only aspect of

their work he ever considered.

Others saw the mission very differently. General Magruder maintained

that there was a tacit understanding at the White House that the

Central Intelligence Group would operate a clandestine service. If so, not

a word of it appeared on paper. The president never spoke of it, so almost

no one else in the government recognized the new group's legitimacy.

The Pentagon and the State Department refused to talk to Souers

and his people. The army, the navy, and the FBI treated them with the

deepest disdain. Souers lasted barely a hundred days as director, though

he stayed on to serve the president as an adviser. He left behind only one

note of consequence, a top secret memo with the following plea: "There

is an urgent need to develop the highest possible quality of intelligence

on the USSR in the shortest possible time."

The only American insights on the Kremlin in those days came from

the newly appointed American ambassador in Moscow, the future director

of central intelligence, General Walter Bedell Smith, and his ranking

Russia hand, George Kennan.

"WHAT DOES THE SOVIET UNION WANT?"

Bedell Smith was a shopkeeper's son from Indiana who rose from buck

private to general without the polish of West Point or a college degree.

As Eisenhower's chief of staff in World War II, he had thought through

every battle in North Africa and Europe. His fellow officers respected and

feared him; he was Ike's unsmiling hatchet man. He worked himself beyond

exhaustion. After receiving blood transfusions for a bleeding ulcer

when he collapsed at the end of a late dinner with Eisenhower and Winston

Churchill, he argued his way out of a British hospital and back to

his commander's tent. He had broken bread with Russian military officers,

sitting down for awkward dinners at Allied headquarters in Algiers

to plan joint operations against the Nazis. He had personally accepted the

Nazi surrender that ended the war in Europe, staring down with contempt

at the German command in the battered little red schoolhouse in

Rheims, France, that served as the American military's forward headquarters.

On V-E Day, May 8, 1945, he had met for a few fleeting minutes

in Rheims with Allen Dulles and Richard Helms. Dulles, cursed by

gout, hobbling on a crutch, had come to see Eisenhower and win his approval

for the creation of an all-powerful American intelligence center

in Berlin. Ike had no time for Dulles that morning—a bad omen.

Bedell Smith arrived in Moscow in March 1946 to be schooled by

George Kennan, the charg. d'affaires at the American embassy. Kennan

had spent many years in Russia, many dark hours trying to decipher

Joseph Stalin. The Red Army had seized almost half of Europe in the war,

a prize taken at the terrible price of twenty million Russian dead. Its forces

had liberated nations from the Nazis, but now the shadow of the Kremlin

was falling over more than 100 million people beyond Russia's borders.

Kennan foresaw that the Soviets would hold their conquests by brute

strength. He had warned the White House to prepare for a showdown.

A few days before Bedell Smith landed in Moscow, Kennan unleashed

the most famous cable in the history of American diplomacy, the "long

telegram," an eight-thousand-word portrait of Soviet paranoia. Ken-

nan's readers—at first a few, in time millions—all seemed to seize on a

single line: the Soviets were impervious to the logic of reason but highly

sensitive to "the logic of force." In short order, Kennan would gain fame

as the greatest Kremlinologist in the American government. "We had accustomed

ourselves, through our wartime experience, to having a great

enemy before us," Kennan reflected many years later. "The enemy must

always be a center. He must be totally evil."

Bedell Smith called Kennan "the best possible tutor a newly arrived

chief of mission could have had."

On a cold, starry night in April 1946, Bedell Smith rode a limousine

flying the American flag into the fortress of the Kremlin. At the gates,

Soviet intelligence officers checked his identity. His car passed the ancient

Russian cathedrals and the huge broken bell at the foot of a tall

tower within the Kremlin's walls. Saluting soldiers in high black leather

boots and red-striped breeches ushered him inside. He had come alone.

They took him down a long corridor, through tall double doors padded

with dark green quilted leather. Finally, in a high-ceilinged conference

room, the general met the generalissimo.

Bedell Smith had a double-barreled question for Stalin: "What does

the Soviet Union want, and how far is Russia going to go?"

Stalin stared into the distance, puffing on a cigarette and doodling

lopsided hearts and question marks with a red pencil. He denied designs

on any other nation. He denounced Winston Churchill's warning, delivered

in a speech a few weeks earlier in Missouri, about the iron curtain

that had fallen across Europe.

Stalin said Russia knew its enemies.

"Is it possible that you really believe that the United States and Great

Britain are united in an alliance to thwart Russia?" Bedell Smith asked.

"Da, " said Stalin.

The general repeated: "How far is Russia going to go?"

Stalin looked right at him and said: "We're not going to go much further."

How much further? No one knew. What was the mission of American

intelligence in the face of the new Soviet threat? No one was sure.

"AN APPRENTICE JUGGLER"

On June 10, 1946, General Hoyt Vandenberg became the second director

of central intelligence. A handsome pilot who had led Eisenhower's

tactical air war in Europe, he now ran a fly-by-night outfit based in a

cluster of undistinguished masonry buildings at the far end of Foggy Bottom,

atop a small bluff overlooking the Potomac. His command post

stood at 2430 E Street, the old headquarters of the OSS, surrounded by

an abandoned gasworks, a turreted brewery, and a roller-skating rink.

Vandenberg lacked three essential tools: money, power, and people.

The Central Intelligence Group stood outside the law, in the judgment of

Lawrence Houston, general counsel for Central Intelligence from 1946

to 1972. The president could not legally create a federal agency out of

thin air. Without the consent of Congress, Central Intelligence could not

legally spend money. No money meant no power.

Vandenberg set out to get the United States back into the intelligence

business. He created a new Office of Special Operations to conduct

spying and subversion overseas and wrangled $15 million under the

table from a handful of congressmen to carry out those missions. He

wanted to know everything about the Soviet forces in Eastern and

Central Europe—their movements, their capabilities, their intentions—

and he ordered Richard Helms to deliver in a hurry. Helms, in charge of

espionage in Germany, Austria, Switzerland, Poland, Czechoslovakia,

and Hungary, with 228 overseas personnel on his roster, said he felt like

"an apprentice juggler trying to keep an inflated beach ball, an open milk

bottle and a loaded machine gun in the air." All over Europe, "a legion

of political exiles, former intelligence officers, ex-agents and sundry entrepreneurs

were turning themselves into intelligence moguls, brokering

the sale of fabricated-to-order information." The more his spies spent

buying intelligence, the less valuable it became. "If there are more

graphic illustrations of throwing money at a problem that hasn't been

thought through, none comes to mind," he wrote. What passed for intelligence

on the Soviets and their satellites was a patchwork of frauds

produced by talented liars.

Helms later determined that at least half the information on the Soviet

Union and Eastern Europe in the CIA's files was pure falsehood. His

stations in Berlin and Vienna had become factories of fake intelligence.

Few of his officers or analysts could sift fact from fiction. It was an ever

present problem: more than half a century later, the CIA confronted the

same sort of fabrication as it sought to uncover Iraq's weapons of mass

destruction.

From the first day Vandenberg took office, he was shaken by terrifying

reports from overseas. His daily bulletins generated heat but little

light. It was impossible to determine whether the warnings were true,

but they went up the chain of command regardless. Flash: a drunken Soviet

officer boasted that Russia would strike without warning. Flash: the

commander of Soviet forces in the Balkans was toasting the coming fall

of Istanbul. Flash: Stalin was prepared to invade Turkey, encircle the

Black Sea, and take the Mediterranean and the Middle East. The Pentagon

determined that the best way to blunt a Soviet advance was to cut

the Red Army's supply lines in Romania. Senior staff members under the

Joint Chiefs started drawing up battle plans.

They told Vandenberg to prepare the first covert operation of the cold

war. In an attempt to carry out that order, Vandenberg changed the mission

of the Central Intelligence Group. On July 17, 1946, he sent two of

his aides to see Truman's White House counsel, Clark Clifford. They argued

that "the original concept of the Central Intelligence Group should

now be altered" to make it an "operating agency." Without any legal authority,

it became one. On that same day, Vandenberg personally asked

Secretary of War Robert Patterson and Secretary of State James Byrnes

to slip him an additional $ 10 million in secret funds to finance the work

of "intelligence agents all over the world." They did.

Vandenberg's Office of Special Operations set out to create an underground

resistance force in Romania. Frank Wisner had left behind a network

of agents in Bucharest desperate to work with Americans but

deeply infiltrated by Soviet intelligence. Charles W. Hostler, the first

station chief in Bucharest for the Office of Special Operations, found

himself surrounded by "conspiracy, intrigue, nastiness, double-dealing,

dishonesty, occasional murder and assassination" among fascists, communists,

monarchists, industrialists, anarchists, moderates, intellectuals,

and idealists—"a social and political environment for which young

American officers were poorly prepared."

Vandenberg ordered Lieutenant Ira C. Hamilton and Major Thomas R.

Hall, based at the tiny American military mission in Bucharest, to organize

Romania's National Peasant Party into a resistance force. Major Hall,

who had been an OSS officer in the Balkans, spoke some Romanian.

Lieutenant Hamilton spoke none. His guide was the one important agent

Wisner had recruited two years before: Theodore Manacatide, who had

been a sergeant on the intelligence staff of the Romanian army and now

worked at the American military mission, translator by day and spy by

night. Manacatide took Hamilton and Hall to meet the National Peasant

Party leaders. The Americans offered the clandestine support of the

United States—guns, money, and intelligence. On October 5, working

with the new Central Intelligence station in occupied Vienna, the Americans

smuggled the former foreign minister of Romania and five other

members of the would-be liberation army into Austria, sedating them,

stuffing them in mail sacks, and flying them to safe harbor.

It took Soviet intelligence and the Romanian secret police only a few

weeks to sniff out the spies. The Americans and their chief agent ran for

their lives as communist security forces crushed the mainstream Romanian

resistance. The Peasant Party's leaders were charged with treason

and imprisoned. Manacatide, Hamilton, and Hall were convicted in absentia

at a public trial after witnesses swore that they had represented

themselves as agents of a new American intelligence service.

Frank Wisner opened The New YorkTimes on November 20, 1946, and

read a short article on page ten reporting that his old agent Manacatide,

"formerly employed by the United States Mission," had been sentenced

to life imprisonment, "on the grounds that he accompanied a Lieutenant

Hamilton of the American Military Mission to a National Peasant congress."

By winter's end, nearly every one of the Romanians who had

worked for Wisner during the war was jailed or killed; his personal secretary

had committed suicide. A brutal dictatorship took control of Romania,

its rise to power hastened by the failure of American covert

action.

Wisner left his law firm and went to Washington, securing a post at

the State Department, where he oversaw the occupied zones of Berlin,

Vienna, Tokyo, Seoul, and Trieste. He had greater ambitions. He was

convinced that the United States had to learn to fight in a new way, with

the same skills and the same secrecy as its enemy.

"FIGHT FIRE WITH FIRE"

Washington was a small town run by people who believed that they

lived in the center of the universe. Their city within the city was Georgetown,

a square-mile enclave of cobblestone streets lush with magnolias.

In its heart, at 3327 P Street, stood a fine four-story house built in 1820,

with an English garden out back and a formal dining room with high

windows. Frank and Polly Wisner made it their home. On Sunday

evenings in 1947, it became the seat of the emerging American national-

security establishment. The foreign policy of the United States took

shape at the Wisners' table.

They started a Georgetown tradition, a Sunday night potluck supper.

The main dish was liquor, all hands having sailed out of the Second

World War on a tide of alcohol. The Wisners' eldest son, Frank's namesake,

who in time rose to the heights of American diplomacy, saw the

Sunday night suppers as "extraordinarily important events. They were

not just trifling social affairs. They became the very lifeblood of the way

the government thought, fought, worked, compared notes, made up its

mind, and reached consensus." After dinner, in the British tradition, the

ladies retired, the gentlemen remained, and the bold ideas and boozy

banter went late into the night. On any given evening the guests might

include Wisner's close friend David Bruce, the OSS veteran en route to

becoming the American ambassador in Paris; Chip Bohlen, counsel to

the secretary of state and a future ambassador to Moscow; Undersecretary

of State Robert Lovett and the future secretary of state Dean Ache-

son; and the newly eminent Kremlinologist George Kennan. These men

believed it was in their power to change the course of human events,

and their great debate was how to stop a Soviet takeover of Europe.

Stalin was consolidating his control of the Balkans. Leftist guerrillas battled

a right-wing monarchy in the mountains of Greece. Food riots broke

out in Italy and France, where communist politicians called for general

strikes. British soldiers and spies were pulling out of their posts all over

the world, leaving wide swaths of the map open for the communists. The

sun was setting on the British Empire; the exchequer could not sustain

it. The United States was going to have to lead the free world alone.

Wisner and his guests listened closely to Kennan. They had absorbed

his "long telegram" from Moscow and they shared his view of the Soviet

threat. So did Navy Secretary James Forrestal, soon to be the first secretary

of defense, a Wall Street wonder boy who saw communism as a fanatical

faith to be fought with a still-deeper conviction. Forrestal had

become Kennan's political patron, installing him in a general's mansion

at the National War College and making his work required reading for

thousands of military officers. Director of Central Intelligence Vandenberg

brainstormed with Kennan about how to spy on Moscow's atomic

weapons work. The new secretary of state, George C. Marshall, the chief

of the U.S. Army in World War II, determined that the nation needed to

reshape its foreign policy, and in the spring he put Kennan in charge of

the State Department's new Policy Planning Staff.

Kennan was drawing up a battle plan for the newly named cold war.

Within the course of six months, the ideas of this obscure diplomat gave

rise to three forces that shaped the world: the Truman Doctrine, a political

warning to Moscow to halt its subversion of foreign nations; the

Marshall Plan, a global bastion for American influence against communism;

and the clandestine service of the Central Intelligence Agency.

"THE GREATEST INTELLIGENCE SERVICE IN THE WORLD"

In February 1947, the British ambassador had warned acting secretary of

state Dean Acheson that England's military and economic aid to Greece

and Turkey would have to cease in six weeks. The Greeks would need

something on the order of a billion dollars over the next four years to

fight the threat of communism. From Moscow, Walter Bedell Smith sent

his assessment that British troops were the only force keeping Greece

from falling into the Soviet orbit.

At home, the red scare was rising. For the first time since before

the Great Depression, the Republicans now controlled both houses of

Congress, with men like Senator Joseph McCarthy of Wisconsin and

Congressman Richard Nixon of California gaining power. Truman's popularity

was plunging; his approval rating in public opinion polls had

fallen 50 points since the end of the war. He had changed his mind about

Stalin and the Soviets. He was now convinced that they were an evil

abroad in the world.

Truman and Acheson summoned Senator Arthur Vandenberg, the

Republican chairman of the Committee on Foreign Relations. (The

newspapers that day noted that the senator's nephew Hoyt soon would

be relieved as director of central intelligence, after only eight months in

power.) Acheson explained that a communist beachhead in Greece

would threaten all of Western Europe. The United States was going to

have to find a way to save the free world—and Congress was going to

have to pay the bill. Senator Vandenberg cleared his throat and turned

to Truman. "Mr. President," he said, "the only way you are ever going to

get this is to make a speech and scare the hell out of the country."

On March 12, 1947, Truman made that speech, warning a joint session

of Congress that the world would face disaster unless the United

States fought communism abroad. Hundreds of millions of dollars had to

be sent to shore up Greece, now "threatened by the terrorist activities of

several thousand armed men," the president said. Without American

aid, "disorder might spread throughout the Middle East," despair would

deepen in the nations of Europe, and darkness could descend on the free

world. His credo was something new: "I believe that it must be the policy

of the United States to support free peoples who are resisting attempted

subjugation by armed minorities or by outside pressures." Any

attack launched by an American enemy in any nation of the world was

an attack on the United States. This was the Truman Doctrine. Congress

rose for a standing ovation.

Millions of dollars started flowing to Greece—along with warships,

soldiers, guns, ammunition, napalm, and spies. Soon Athens became

one of the biggest American intelligence posts in the world. Truman's decision

to fight communism overseas was the first clear direction that

American spies received from the White House. They still lacked a strong

commander. General Vandenberg was counting the days until he could

take over the new air force, but he delivered secret testimony to a handful

of members of Congress in his last days as director of central intelligence,

saying that the nation faced foreign threats as never before. "The

oceans have shrunk, until today both Europe and Asia border the United

States almost as do Canada and Mexico," he said, in a turn of phrase repeated,

eerily, by President Bush after 9/11.

In World War II, Vandenberg said, "we had to rely blindly and trustingly

on the superior intelligence system of the British"—but "the United

States should never have to go hat in hand, begging any foreign government

for the eyes—the foreign intelligence—with which to see." Yet the

CIA would always depend on foreign intelligence services for insight into

lands and languages it did not understand. Vandenberg ended by saying

it would take at least five more years to build a professional cadre of

American spies. The warning was repeated word for word half a century

later, in 1997, by Director of Central Intelligence George J. Tenet, and

Tenet said it again upon resigning in 2004. A great spy service was always

five years over the horizon.

Vandenberg's successor, the third man to hold the post in fifteen

months, was Rear Admiral Roscoe Hillenkoetter, sworn in on May Day

1947. Hilly, as everyone called him, was a miscast man. He exuded insignificance.

Like his predecessors, he never wanted to be director of

central intelligence—"and probably never should have been," says a CIA

history of the era.

On June 27, 1947, a congressional committee held secret hearings that

led to the formal creation of the CIA at summer's end. It spoke volumes

that not Hillenkoetter but Allen Dulles—a lawyer in private practice—

was selected to conduct a secret intelligence seminar for a few select

members of Congress.

Allen Dulles had an "Onward, Christian Soldiers" sense of patriotic

duty. He was born into the best family of Watertown, New York, in 1893.

His father was the town's Presbyterian pastor; his grandfather and his uncle

both had served as secretary of state. The president of his college,

Princeton, was Woodrow Wilson, later to be president of the United States.

Dulles had been a junior diplomat after World War I and a white-shoe Wall

Street lawyer in the Depression. By virtue of his carefully cultivated reputation

as an American master spy, built as the OSS chief in Switzerland, he

was regarded by the Republican leadership as the director of central intelligence

in exile, in the way that his brother John Foster Dulles, the party's

principal foreign policy spokesman, was seen as a shadow secretary of

state. Allen was genial in the extreme, with twinkling eyes, a belly laugh,

and an almost impish deviousness. But he was also a duplicitous man, a

chronic adulterer, ruthlessly ambitious. He was not above misleading Congress

or his colleagues or even his commander in chief.

Room 1501 of the Longworth Office Building was sealed off by armed

guards; everyone inside was sworn to secrecy. Puffing away on his pipe,

a tweedy headmaster instructing unruly schoolboys, Allen Dulles described

a CIA that would be "directed by a relatively small but elite corps

of men with a passion for anonymity." Its director would require "judicial

temperament in high degree," with "long experience and profound

knowledge"—a man not unlike Allen Dulles. His top aides, if they were

military men, would "divest themselves of their rank as soldiers, sailors

or airmen and, as it were, 'take the cloth' of the intelligence service."

Americans had "the raw material for building the greatest intelligence

service in the world," Dulles said. "The personnel need not be very numerous"—

a few hundred good men would do the trick. "The operation

of the service must neither be flamboyant nor over-shrouded in the mystery

and abracadabra which the amateur detective likes to assume," he

reassured the members of Congress. "All that is required for success is

hard work, discriminating judgment, and common sense."

He never said what he really wanted: to resurrect the wartime covert

operations of the OSS.

The creation of a new American clandestine service was at hand. President

Truman unveiled the new architecture for the cold war by signing

the National Security Act of 1947 on July 26. The act created the air

force as a separate service, led by General Vandenberg, and a new National

Security Council was to be the White House switchboard for presidential

decisions. The act also created the office of secretary of defense-

its first occupant, James Forrestal, was ordered to unify the American

military. ("This office," Forrestal wrote a few days later, "will probably be

the greatest cemetery for dead cats in history.")

And, in six short and sketchy paragraphs, the act gave birth to the

Central Intelligence Agency on September 18.

The CIA was born with crippling defects. From the outset, it faced

fierce and relentless opponents within the Pentagon and the State

Department—the agencies whose reports it was supposed to coordinate.

The agency was not their overseer, but their stepchild. Its powers were

poorly defined. No formal charter or congressionally appropriated funds

would come for nearly two more years. The CIA's headquarters would

survive until then on a subsistence fund maintained by a few members

of Congress.

And its secrecy would always conflict with the openness of American

democracy. "I had the gravest forebodings about this organization,"

wrote Dean Acheson, soon to be secretary of state, "and warned the

President that as set up neither he, the National Security Council, nor

anyone else would be in a position to know what it was doing or to control

it."

The National Security Act said nothing about secret operations overseas.

It instructed the CIA to correlate, evaluate, and disseminate intelligence—

and to perform "other functions and duties related to intelligence affecting

the national security." Embedded in those eleven words were the powers

that General Magruder had preserved in his end run around the president

two years before. In time, hundreds of major covert actions—eighty-one of

them during Truman's second term—would be driven through this loophole.

The conduct of covert action required the direct or implied authority

of the National Security Council. The NSC in those days was President

Truman, the secretary of defense, the secretary of state, and the military

chiefs. But it was an evanescent body. It seldom convened, and when it

did, Truman was rarely at the table.

He came to the first meeting on September 26, as did a very wary

Roscoe Hillenkoetter. The CIA's counsel, Lawrence Houston, had warned

the director against the growing calls for covert action. He said the

agency had no legal authority to conduct them without the express consent

of Congress. Hilly sought to limit the CIA's overseas missions to the

gathering of intelligence. He failed. Momentous decisions were being

made in secret, often over breakfast on Wednesdays at Secretary of Defense

Forrestal's house.

On September 27, Kennan sent Forrestal a detailed paper calling for

the establishment of a "guerrilla warfare corps." Kennan thought that although

the American people might never approve of such methods, "it

might be essential to our security to fight fire with fire." Forrestal fervently

agreed. Together, they set the American clandestine service in

motion.

"THE INAUGURATION OF ORGANIZED POLITICAL WARFARE"

Forrestal called Hillenkoetter into the Pentagon to discuss "the present

widespread belief that our Intelligence Group is entirely inept." He had

good reason. The mismatch between the CIA's capabilities and the missions

it was called upon to carry out was staggering.

The new commander of the CIA's Office of Special Operations,

Colonel Donald "Wrong-Way" Galloway, was a strutting martinet who

had reached the apex of his talent as a West Point cavalry officer teaching

equestrian etiquette to cadets. His deputy, Stephen Penrose, who had

run the Middle East division of the OSS, resigned in frustration. In a bitter

memo to Forrestal, Penrose warned that "CIA is losing its professionals,

and is not acquiring competent new personnel," at the very time

"when, as almost never before, the government needs an effective, expanding,

professional intelligence service."

Nevertheless, on December 14, 1947, the National Security Council

issued its first top secret orders to the CIA. The agency was to execute

"covert psychological operations designed to counter Soviet and Soviet-

inspired activities." With this martial drum roll, the CIA set out to beat

the Reds in the Italian elections, set for April 1948.

The CIA told the White House that Italy could become a totalitarian

police state. If the communists won at the ballot box, they would seize

"the most ancient seat of Western Culture. In particular, devout

Catholics everywhere would be gravely concerned regarding the safety

of the Holy See." The prospect of a godless government surrounding the

pope at gunpoint was too awful to contemplate. Kennan thought that a

shooting war would be better than letting the communists take power

legally—but covert action modeled on communist techniques of subversion

was the next best choice.

The CIA's F. Mark Wyatt, who cut his teeth on this operation, remembered

that it began weeks before the National Security Council formally

authorized it. Congress, of course, never gave a go-ahead. The mission

was illegal from the start. "In CIA, at headquarters, we were absolutely

terrified, we were scared to death," Wyatt said, and with good reason.

"We were going beyond our charter."

Cash, lots of it, would be needed to help defeat the communists. The

best guess from the CIA's Rome station chief, James J. Angleton, was $10

million. Angleton, partly reared in Italy, had served there with the OSS

and stayed on; he told headquarters that he had penetrated the Italian

secret service so deeply that he practically ran it. He would use its members

as a bucket brigade to distribute the cash. But where would the

money come from? The CIA still had no independent budget and no

contingency fund for covert operations.

James Forrestal and his good friend Allen Dulles solicited their friends

and colleagues from Wall Street and Washington—businesspeople,

bankers, and politicians—but it was never enough. Forrestal then went

to an old chum, John W. Snyder, the secretary of the treasury and one

of Harry Truman's closest allies. He convinced Snyder to tap into the Exchange

Stabilization Fund set up in the Depression to shore up the value

of the dollar overseas through short-term currency trading, and converted

during World War II as a depository for captured Axis loot. The

fund held $200 million earmarked for the reconstruction of Europe. It

delivered millions into the bank accounts of wealthy American citizens,

many of them Italian Americans, who then sent the money to newly

formed political fronts created by the CIA. Donors were instructed to

place a special code on their income tax forms alongside their "charitable

donation." The millions were delivered to Italian politicians and the

priests of Catholic Action, a political arm of the Vatican. Suitcases filled

with cash changed hands in the four-star Hassler Hotel. "We would have

liked to have done this in a more sophisticated manner," Wyatt said.

"Passing black bags to affect a political election is not really a terribly attractive

thing." But it worked: Italy's Christian Democrats won by a comfortable

margin and formed a government that excluded communists. A

long romance between the party and the agency began. The CIA's practice

of purchasing elections and politicians with bags of cash was repeated

in Italy—and in many other nations—for the next twenty-five

years.

But in the weeks before the election, the communists scored another

victory. They seized Czechoslovakia, beginning a brutal series of arrests

and executions that lasted for nearly five years. The CIA station chief in

Prague, Charles Katek, worked to deliver about thirty Czechs—his

agents and their families—over the border to Munich. Chief among

them was the head of Czech intelligence. Katek arranged to have him

smuggled out of the country, stuffed between the radiator and the grille

of a roadster.

On March 5, 1948, while the Czech crisis was exploding, a terrifying

cable came to the Pentagon from General Lucius D. Clay, chief of American

occupation forces in Berlin. The general said he had a gut feeling

that a Soviet attack could come at any minute. The Pentagon leaked the

cable and Washington was swamped by fear. Though the CIA's Berlin

base sent a report reassuring the president that there was no sign of any

impending attack, no one listened. Truman went before a joint session

of Congress the next day warning that the Soviet Union and its agents

threatened a cataclysm. He demanded and won immediate approval of

the great undertaking that became known as the Marshall Plan.

The plan offered billions of dollars to the free world to repair the damage

done by the war and to create an American economic and political

barricade against the Soviets. In nineteen capitals—sixteen in Europe,

three in Asia—the United States would help rebuild civilization, with an

American blueprint. George Kennan and James Forrestal were among

the plan's principal authors. Allen Dulles served as a consultant.

They helped devise a secret codicil that gave the CIA the capability to

conduct political warfare. It let the agency skim uncounted millions of

dollars from the plan.

The mechanics were surprisingly simple. After Congress approved the

Marshall Plan, it appropriated about $13.7 billion over five years. A nation

that received aid from the plan had to set aside an equivalent sum

in its own currency. Five percent of those funds—$685 million all told—

was made available to the CIA through the plan's overseas offices.

It was a global money-laundering scheme that stayed secret until well

after the cold war ended. Where the plan flourished in Europe and in

Asia, so would American spies. "We'd look the other way and give them

a little help," said Colonel R. Allen Griffin, who ran the Marshall Plan's

Far East division. "Tell them to stick their hand in our pocket."

Secret funds were the heart of secret operations. The CIA now had an

unfailing source of untraceable cash.

In a top secret paper sent to perhaps two dozen people at the State Department, the White House, and the Pentagon on May 4, 1948, Kennan proclaimed "the inauguration of organized political warfare" and called for the creation of a new clandestine service to conduct covert operations worldwide. He stated clearly that the Marshall Plan, the Truman Doctrine, and the CIA's covert operations were all interlocking parts of a grand strategy against Stalin.

The money that the CIA siphoned from the Marshall Plan would finance

a network of false fronts—a fa.ade of public committees and

councils headed by distinguished citizens. The communists had front organizations

all over Europe: publishing houses, newspapers, student

groups, labor unions. Now the CIA would set up its own. Those fronts

would recruit foreign agents—the .migr.s of Eastern Europe, refugees

from Russia. These foreigners, under CIA control, would create underground

political groups in the free nations of Europe. And the underground

would pass the flame to "all-out liberation movements" behind

the iron curtain. If the cold war turned hot, the United States would

have a fighting force on the front lines.

Kennan's ideas caught on quickly. His plans were approved in a secret

order from the National Security Council on June 18, 1948. NSC directive

10/2 called for covert operations to attack the Soviets around the

world.

The strike force Kennan conceived to carry out that secret war received

the blandest name imaginable—the Office of Policy Coordination (OPC).

It was a cover, serving to veil the group's work. It was placed inside the

CIA, but its chief would report to the secretaries of defense and state, because

the director of central intelligence was so weak. The State Department

wanted it to carry out "rumor-spreading, bribery, the organization

of non-communist fronts," according to a National Security Council report

declassified in 2003. Forrestal and the Pentagon wanted "guerrilla

movements. . . underground armies. . . sabotage and assassination."

"ONE MAN MUST BE BOSS"

The biggest battleground was Berlin. Frank Wisner worked ceaselessly to

shape American policy in the occupied city. He urged his superiors at the

State Department to undertake a stratagem aimed at subverting the Soviets

by introducing a new German currency. Moscow was sure to reject

the idea, so the postwar power-sharing agreements in Berlin would collapse.

A new political dynamic would push the Russians back.

On June 23, the Western powers instituted the new currency. In immediate

response, the Soviets blockaded Berlin. As the United States

mounted an airlift to beat the blockade, Kennan spent long hours in the

crisis room, the double-locked overseas communications center on the

fifth floor of the State Department, agonizing as cables and telexes

flashed in from Berlin.

The CIA's Berlin base had been trying unsuccessfully for more than a

year to obtain intelligence on the Red Army in occupied Germany and

Russia, to track Moscow's progress in nuclear weapons, fighter jets, missiles,

and biological warfare. Still, its officers had agents among Berlin's

police and politicians—and most important, a line into the Soviet intelligence

headquarters at Karlshorst in East Berlin. It came from Tom Pol-

gar, the Hungarian refugee who was proving himself one of the CIA's

best officers. Polgar had a butler, and his butler had a brother working

for a Soviet army officer in Karlshorst. Creature comforts such as salted

peanuts flowed from Polgar to Karlshorst. Information flowed back. Pol-

gar had a second agent, a teletypist in the Soviet liaison section at the

Berlin police headquarters. Her sister was the mistress of a police lieutenant

who was close to the Russians. The lovers met in Polgar's apartment.

"That brought me fame and glory," he remembered. Polgar

delivered crucial intelligence that reached the White House. "I was completely

certain, in the Berlin blockade, that the Soviets would not move,"

he said. The CIA's reports never wavered from that assessment: neither

the Soviet military nor their newly created East German allies were

readying for battle. The Berlin base did its part to keep the cold war cold

in those months.

Wisner was ready for a hot war. He argued that the United States

should battle its way into Berlin with tanks and artillery. His ideas were

rejected, but his fighting spirit was embraced.

Kennan had insisted that covert operations could not be run by committee.

They needed a top commander with the full backing of the Pentagon

and the State Department. "One man must be boss," he wrote.

Forrestal, Marshall, and Kennan all agreed that Wisner was the man.

He was just shy of forty, deceptively courtly in appearance. He had

been a handsome man in his youth, but his hair was starting to thin and

his face and torso were starting to swell from his thirst for alcohol. He

had less than three years' experience as a wartime spy and cryptodiplomat

under his belt. Now he had to create a clandestine service from

scratch.

Richard Helms observed that Wisner burned with "a zeal and intensity

which imposed, unquestionably, an abnormal strain" on him. His

passion for covert action would forever alter America's place in the

world.

Frank Wisner took charge of American covert action on September 1,

1948. His mission: to roll the Soviets back to Russia's old boundaries and

free Europe from communist control. His command post was a crumbling

tin-roofed shanty, one of a long row of temporary War Department

buildings flanking the reflecting pool between the Lincoln Memorial and

the Washington Monument. Vermin scuttled down the corridors. His

men called the place the Rat Palace.

He worked himself into a controlled frenzy, twelve hours or more a

day, six days a week, and he demanded the same of his officers. He rarely

told the director of central intelligence what he was doing. He alone

would decide whether his secret missions conformed to American foreign

policy.

His organization soon grew bigger than the rest of the agency combined.

Covert operations became the agency's dominant force, with the

most people, the most money, the most power, and so they remained

for more than twenty years. The CIA's stated mission had been to provide

the president with secret information essential to the national security

of the United States. But Wisner had no patience for espionage,

no time for sifting and weighing secrets. Far easier to plot a coup or pay

off a politician than to penetrate the Politburo—and for Wisner, far

more urgent.

Within a month, Wisner had drawn up battle plans for the next five

years. He set out to create a multinational media conglomerate for propaganda.

He sought to wage economic warfare against the Soviets by

counterfeiting money and manipulating markets. He spent millions trying

to tip the political scales in capitals across the world. He wanted to

recruit legions of exiles—Russians, Albanians, Ukrainians, Poles, Hungarians,

Czechs, Romanians—for armed resistance groups to penetrate

the iron curtain. Wisner believed there were 700,000 Russians adrift in

Germany who could join the cause. He wanted to transform one thousand

of them into political shock troops. He found seventeen.

On Forrestal's orders, Wisner created networks of stay-behind agents—

foreigners who would fight the Soviets on the opening days of World

War III. The goal was to slow the advance of hundreds of thousands of

the Red Army's troops in Western Europe. He wanted arms, ammunition,

and explosives stockpiled in secret caches all over Europe and the

Middle East, to blow up bridges, depots, and Arab oil fields in the face of

a Soviet advance. General Curtis LeMay, the new chief of the Strategic

Air Command and the controller of American nuclear weapons, knew

that his bombers would run out of fuel after dropping their weapons on

Moscow, and on their return flights his pilots and crews would have to

bail out somewhere east of the iron curtain. LeMay told Wisner's right-

hand man Franklin Lindsay to build a ratline inside the Soviet Union—

an evacuation route for his men to escape overland. Air force colonels

barked commands at their CIA counterparts: steal a Soviet fighter-

bomber, preferably with its pilot stuffed in a gunnysack; infiltrate agents

with radios onto every airfield between Berlin and the Urals; sabotage

every military runway in the Soviet Union at the first warning of war.

These were not requests. They were orders.

Above all, Wisner needed thousands of American spies. The hunt for

talent, then as now, was a constant crisis. He set out on a recruiting drive

that ran from the Pentagon to Park Avenue to Yale and Harvard and

Princeton, where professors and coaches were paid to spot talent. He

hired lawyers, bankers, college kids, old school friends, veterans at loose

ends. "They would pull people off the streets, anybody with warm blood

who could say yes or no or move arms and legs," said the CIA's Sam

Halpern. Wisner aimed to open at least thirty-six stations overseas within

six months; he managed forty-seven in three years. Almost every city

where he set up shop had two CIA station chiefs—one working on covert

action for Wisner, the other working on espionage for CIA's Office of Special

Operations. Inevitably they double-crossed one another, stole each

other's agents, fought for the upper hand. Wisner poached hundreds of

officers from the Office of Special Operations, offering higher salaries and

the promise of greater glories.

He commandeered aircraft, arms, ammunition, parachutes, and surplus

uniforms from the Pentagon and its bases in the occupied zones of

Europe and Asia. He soon controlled a military stockpile worth a quarter

of a billion dollars. "Wisner could call on any agency of the Government

for personnel and such support as he may require," said

James McCargar, one of the first men Wisner hired at the Office of Policy

Coordination. "The CIA was, of course, a publicly known agency

whose operations were secret. OPC's operations were not only secret,

the existence of the organization itself was also secret. It was, in fact,

for its first years, and this must be emphasized, since few people now

seem aware of it, the most secret thing in the U.S. Government after

nuclear weapons." And like the first nuclear weapons, whose test

blasts were more powerful than their designers anticipated, Wisner's

covert action shop grew faster and spread farther than anyone imagined.

McCargar had toiled for the State Department in the Soviet Union

during World War II, where he learned quickly that "the only methods

which would help you get your work done were clandestine." He had

single-handedly evacuated Hungarian political leaders from Budapest,

delivering them to a safe house in Vienna set up by Al Ulmer, the first

CIA station chief in that occupied capital. The two became friends, and

when they found themselves in Washington in the summer of 1948, Ulmer

invited McCargar to meet his new boss. Wisner took them both to

breakfast at the Hay-Adams Hotel, the fanciest in Washington, just

across Lafayette Park from the White House. McCargar was hired on the

spot as a headquarters man and placed in charge of seven nations—

Greece, Turkey, Albania, Hungary, Romania, Bulgaria, and Yugoslavia.

When he reported for work in October 1948, "there were only ten of us,

including Wisner, a couple of officers, the secretaries, and myself—ten

people," McCargar said. "Within a year, we were 450, and a few years

after that there were so many thousands."

"WE WERE SEEN AS KINGS"

Wisner sent Al Ulmer to Athens, where he set out to cover ten nations,

across the Mediterranean, the Adriatic, and the Black Sea. The new station

chief bought a mansion on a hilltop overlooking the city, a walled

compound with a sixty-foot-long dining room and top-drawer diplomats

for neighbors. "We were in charge," Ulmer said many years later. "We

ran things. We were seen as kings."

The CIA began channeling clandestine political and financial support

to Greece's most ambitious military and intelligence officers, recruiting

promising young men who might someday lead the nation. The connections

they cultivated could pay great dividends later on. First in Athens

and Rome, then across Europe, politicians, generals, spy chiefs, newspaper

publishers, union bosses, cultural organizations, and religious associations

began looking to the agency for cash and for counsel. "Individuals,

groups, and intelligence services quickly came to see that there

was a force abroad in the world around which they could rally," said a

secret CIA chronicle of Wisner's first years in power.

Wisner's station chiefs needed cash. Wisner flew to Paris in mid-

November 1948 to talk that problem over with Averell Harriman, the

Marshall Plan's director. They met in a gilded suite at the Hotel Talleyrand,

once the home of Napoleon's foreign minister. Under the gaze

of a marble bust of Benjamin Franklin, Harriman told Wisner to dip as

deeply as he needed into the plan's grab bag of dollars. Armed with that

authority, Wisner returned to Washington to meet Richard Bissell, the

Marshall Plan's chief administrator. "I had met him socially and knew

and trusted him," Bissell remembered. "He was very much part of our

inner circle of people." Wisner came right to the point. Bissell was baffled

at first, but "Wisner took the time to assuage at least some of my

concerns by assuring me that Harriman had approved the action. When

I began to press him about how the money would be used, he explained

that I could not be told." Bissell would learn soon enough. A decade later

he took Wisner's job.

Wisner proposed to break communist influence over the largest trade

federations in France and Italy with cash from the plan; Kennan personally

authorized these operations. Wisner chose two talented labor

leaders to run the first of those operations in late 1948: Jay Lovestone,

a former chairman of the American Communist Party, and Irving

Brown, his devoted follower; both men were dedicated anticommunists,

transformed by the bitter ideological battles of the 1930s. Love-

stone served as executive secretary of the Free Trade Union Committee,

a spin-off of the American Federation of Labor; Brown was his chief

representative in Europe. They delivered small fortunes from the CIA to

labor groups backed by Christian Democrats and the Catholic Church.

Payoffs in the gritty ports of Marseilles and Naples guaranteed that

American arms and military materiel would be off-loaded by friendly

longshoremen. The CIA's money and power flowed into the well-

greased palms of Corsican gangsters who knew how to break a strike

with bare knuckles.

One of Wisner's more genteel tasks was underwriting an arcane association

that became an influential CIA front for twenty years: the Congress

for Cultural Freedom. He envisioned "a vast project targeted on the

intellectuals—'the battle for Picasso's mind,' if you will," in the elegant

phrase of the CIA's Tom Braden, an OSS veteran and Sunday-nightsupper

regular. This was a war of words, fought with little magazines,

paperback books, and high-minded conferences. "I think the budget for

the Congress for Cultural Freedom one year that I had charge of it was

about $800,000, $900,000," Braden said. That included the start-up

funds for the high-minded monthly called Encounter, which created a

swirl of influence in the 1950s without selling more than forty thousand

copies an issue. That was a kind of missionary work that appealed to the

liberal-arts majors newly arrived at the agency. It was a good life, running

a little paper or a publishing house in Paris or Rome—the junior

year abroad of American intelligence.

Wisner, Kennan, and Allen Dulles saw a far better way to harness the

political fervor and intellectual energies of Eastern European exiles and

channel them back behind the iron curtain—Radio Free Europe. The

planning began in late 1948 and early 1949, but it took more than two

years to get the radios on the air. Dulles became the founder of a National

Committee for a Free Europe, one of many front organizations financed

by the CIA in the United States. The Free Europe board included

General Eisenhower; Henry Luce, the chairman of Time, Life, and Fortune;

and Cecil B. DeMille, the Hollywood producer—all recruited by

Dulles and Wisner as a cover for the true management. The radios would

become a powerful weapon for political warfare.

"THE HEAT OF CONFUSION"

Wisner had high hopes that Allen Dulles would be the next director of

central intelligence. So did Dulles.

In early 1948, Forrestal had asked Dulles to run a top secret investigation

into the structural weaknesses of the CIA. As election day approached,

Dulles was putting his final touches on the report that was to

serve as his own inaugural address at the agency. He was confident that

Truman would be defeated by the Republican Thomas Dewey, and that

the new president would elevate him to his rightful place.

The report, which remained classified for fifty years, was a detailed

and brutal indictment. Count One: the CIA was churning out reams of

paper containing few if any facts on the communist threat. Count Two:

the agency had no spies among the Soviets and their satellites. Count

Three: Roscoe Hillenkoetter was a failure as director. The CIA was not

yet "an adequate intelligence service," the report said, and it would take

"years of patient work to do the job" of transforming it. What was

needed now was a bold new leader—and his identity was no secret. Hillenkoetter

noted bitterly that Allen Dulles had all but engraved his name

on the director's door. But by the time the report landed in January

1949, Truman had been re-elected, and Dulles was so closely associated

with the Republican Party that his appointment was politically inconceivable.

Hillenkoetter stayed on, leaving the agency effectively leaderless.

The National Security Council ordered Hillenkoetter to implement

the report, but he never did.

Dulles began telling his friends in Washington that unless something

drastic was done at the CIA, the president faced disaster abroad. A chorus

of voices joined him. Dean Acheson, now secretary of state, heard that

the CIA was "melting away in the heat of confusion and resentment." His

informant was Kermit "Kim" Roosevelt, President Theodore Roosevelt's

grandson, FDR's cousin, and the future chief of the CIA's Near East and

South Asia division. Forrestal's intelligence aide, John Ohly, warned his

boss: "The greatest weakness of CIA stems from the type and quality of its

personnel and the methods through which it is recruited." He noted "a

complete deterioration of morale among some of the better qualified

civilians who would like to make CIA a career and the loss of many able

individuals who simply could not stand the situation." Worse yet, "most

of the able people left in the Agency have decided that unless changes occur

within the next several months, they will definitely leave. With this

cadre of quality lost, the Agency will sink into a mire from which it will

be difficult, if not impossible, to extract it." The CIA would then become

"a poor to mediocre intelligence operation virtually in perpetuity." These

messages could have been written half a century later. They would accurately

describe the agency's woes in the decade after the fall of Soviet

communism. The ranks of skilled American spies were thin, the number

of talented foreign agents next to none.

The capabilities of the CIA were not the only problem. The pressures

of the cold war were fracturing the new leaders of the national-security

establishment.

James Forrestal and George Kennan had been the creators and commanders

of the CIA's covert operations. But they proved unable to control

the machine they had set in motion. Kennan was becoming a

burnt-out case, seeking seclusion in his hideaway at the Library of Congress.

Forrestal was beyond the edge. He resigned as secretary of defense

on March 28, 1949. During his last day in office, he broke down, moaning

that he had not slept in months. Dr. William C. Menninger, the most

prominent psychiatrist in the United States, found Forrestal in the midst

of a psychotic episode and committed him to a psychiatric ward at

Bethesda Naval Hospital.

After fifty haunted nights, in the final hours of his life, Forrestal was

copying out a Greek poem, "The Chorus from Ajax," and he stopped in

the middle of the word nightingale. He wrote "night," and then he fell to

his death from his sixteenth-floor window. Nightingale was the code

name of a Ukrainian resistance force Forrestal had authorized to carry

out a secret war against Stalin. Its leaders included Nazi collaborators

who had murdered thousands of people behind the German lines during

World War II. Its members were set to parachute behind the iron curtain

for the CIA.

5 "A RICH BLIND MAN"

In World War II, the United States made common cause with communists

to fight fascists. In the cold war, the CIA used fascists to combat

communists. Patriotic Americans undertook these missions in the name

of the United States. "You can't run the railroads," Allen Dulles said, in

an unfortunate turn of phrase, "without taking in some Nazi Party members."

More than two million people were adrift in American-occupied Germany.

Many among them were desperate refugees from the spreading

shadow of Soviet rule. Frank Wisner sent his officers directly into the

displaced-persons camps to recruit them for a mission he defined as

"encouraging resistance movements into the Soviet World and providing

contacts with an underground." He made the case that the CIA had

to "utilize refugees from the Soviet World in the national interests of

the U.S."

Over the objections of the director of central intelligence, he wanted

to send guns and money to these men. The Soviet exiles were very much

in demand "as a reserve for a possible war emergency," the agency

recorded, though they were "hopelessly split between groups with opposing

aims, philosophies and ethnic composition."

Wisner's orders gave rise to the first of the agency's paramilitary missions—

the first of many that sent thousands of foreign agents to their

deaths. The full story began to reveal itself in a CIA history that first

came to light in 2005.

"THE LESS WE SAY ABOUT THIS BILL, THE BETTER"

Wisner's ambitions faced a huge hurdle at the start of 1949. The agency

lacked the legal authority to carry out covert action against any nation.

It had no constitutional charter from Congress and no legally authorized

funds for those missions. It still operated outside the laws of the United

States.

In early February 1949, the director of central intelligence went to

have a private chat with Carl Vinson, a Georgia Democrat and the chair

of the House Armed Services Committee. Hillenkoetter warned that

Congress had to pass formal legislation blessing the CIA and granting it

a budget as soon as possible. The agency was up to its neck in operations,

and it needed legal cover. After confiding his concerns to a few other

members of the House and Senate, Hillenkoetter submitted the Central

Intelligence Agency Act of 1949 for their consideration. They met for

about half an hour in secret to weigh it.

"We will just have to tell the House they will have to accept our judgment

and we cannot answer a great many questions that might be

asked," Vinson told his colleagues. Dewey Short of Missouri, the ranking

Republican on the House Armed Services Committee, agreed that it

would be "supreme folly" to debate the act in public: "The less we say

about this bill, the better off all of us will be."

The CIA Act was rammed through Congress on May 27, 1949. With

its passage, Congress gave the agency the widest conceivable powers. It became fashionable a generation thereafter to condemn America's spies for crimes against the Constitution. But in the twenty-five years between the passage of the CIA Act and the awakening of a watchdog spirit in Congress, the CIA was barred only from behaving like a secret police force inside the United States. The act gave the agency the ability to do almost anything it wanted, as long as Congress provided the money in an annual package. Approval of the secret budget by a small armed services subcommittee was understood by those in the know to constitute a legal authorization for all secret operations. One of the congressmen voting "aye" summed up this tacit understanding many years later, when he was the president of the United States. If it's secret, it's legal, Richard M. Nixon said.

The CIA now had free rein: unvouchered funds—untraceable money

buried under falsified items in the Pentagon's budget—meant unlimited

license.

A key clause of the 1949 act allowed the CIA to let one hundred foreigners

a year into the United States in the name of national security,

granting them "permanent residence without regard to their inadmissibility

under the immigration or any other laws." On the same day that

President Truman signed the CIA Act of 1949 into law, Willard G.

Wyman, the two-star general now running the agency's Office of Special

Operations, told American immigration officials that a Ukrainian

named Mikola Lebed was "rendering valuable assistance to this Agency

in Europe." Under the newly approved law, the CIA smuggled Lebed

into the United States.

The agency's own files described the Ukrainian faction led by Lebed as

"a terrorist organization." Lebed himself had gone to prison for the murder

of the Polish interior minister in 1936, and he escaped when Germany

attacked Poland three years later. He saw the Nazis as natural

allies. The Germans recruited his men into two battalions, including the one named Nightingale, which fought in the Carpathian Mountains, survived past the end of the war, and remained in the forests of Ukraine to haunt Secretary of Defense Forrestal. Lebed had set himself up as a self-proclaimed foreign minister in Munich and offered his Ukrainian partisans to the CIA for missions against Moscow.

The Justice Department determined that he was a war criminal who

had slaughtered Ukrainians, Poles, and Jews. But all attempts to deport

him ceased after Allen Dulles himself wrote to the federal immigration

commissioner, saying Lebed was "of inestimable value to this Agency"

and was assisting in "operations of the first importance."

The CIA "had few methods of collecting intelligence on the Soviet

Union and felt compelled to exploit every opportunity, however slim

the possibility of success or unsavory the agent," the secret agency history

of the Ukrainian operation notes. ".migr. groups, even those with

dubious pasts, were often the only alternative to doing nothing." So

"the sometimes brutal war record of many .migr. groups became

blurred as they became more critical to the CIA." By 1949, the United

States was ready to work with almost any son of a bitch against Stalin.

Lebed fit that bill.

"WE DID NOT WANT TO TOUCH IT"

So did General Reinhard Gehlen. During World War II, General Gehlen had tried to spy on the Soviets from the eastern front as a leader of the Abwehr, Hitler's military intelligence service. He was an imperious and cagey man who swore he had a network of "good Germans" to spy behind Russian lines for the United States.

"From the beginning," Gehlen said, "I was motivated by the following

convictions: A showdown between East and West is unavoidable. Every

German is under the obligation of contributing his share, so that Germany

is in a position to fulfill the missions incumbent on her for the

common defense of Western Christian Civilization." The United States

needed "the best German men as co-workers .. . if Western Culture is to

be safeguarded." The intelligence network he offered to the Americans

was a group of "outstanding German nationals who are good Germans

but also ideologically on the side of the Western democracies."

The army, unable to control the Gehlen organization, despite lavishly

financing its operations, repeatedly tried to hand it off to the CIA. Many

of Richard Helms's officers were dead-set against it. One recorded his revulsion

at working with a network of "SS personnel with known Nazi

records." Another warned that "American Intelligence is a rich blind man

using the Abwehr as a seeing-eye dog. The only trouble is—the leash is

much too long." Helms himself expressed a well-founded fear that "there

is no question the Russians know this operation is going on."

"We did not want to touch it," said Peter Sichel, then chief of German

operations at CIA headquarters. "It had nothing to do with morals or

ethics, and everything to do with security."

But in July 1949, under relentless pressure from the army, the CIA

took over the Gehlen group. Housed in a former Nazi headquarters outside

Munich, Gehlen welcomed dozens of prominent war criminals into

his circle. As Helms and Sichel feared, the East German and Soviet intelligence

services penetrated the Gehlen group at the highest levels. The

worst of the moles surfaced long after the Gehlen group had transformed

itself into the national intelligence service of West Germany. Gehlen's

longtime chief of counterintelligence had been working for Moscow all

along.

Steve Tanner, a young CIA officer based in Munich, said Gehlen had

convinced American intelligence officers that he could run missions

aimed at the heart of Soviet power. "And, given how hard it was for us,"

Tanner reflected, "it seemed idiotic not to try it."

"WE WEREN'T GOING TO SIT STILL"

Tanner was an army intelligence veteran fresh out of Yale, hired by

Richard Helms in 1947, one of the first two hundred CIA officers sworn

into service. In Munich, his assignment was to recruit agents to gather

intelligence for the United States from behind the iron curtain.

Almost every major nationality from the Soviet Union and Eastern

Europe had at least one self-important .migr. group seeking help from

the CIA in Munich and Frankfurt. Some of the men Tanner vetted as potential

spies were Eastern Europeans who had sided with Germany

against Russia. They included "people with fascist backgrounds trying to

save their careers by becoming useful to the Americans," Tanner said,

and he was wary of them. The non-Russians "hated the Russians violently,"

Tanner said, "and they were automatically on our side." Others

who had fled the outlying republics of the Soviet Union exaggerated

their power and influence. "These .migr. groups, their main goal was to

convince the U.S. government of their importance, and their ability to

help the U.S. government, so that they would get support in one form

or another," he said.

Lacking guidelines from Washington, Tanner wrote his own: to receive

the CIA's support, the .migr. groups had to be founded on native

soil, not in a Munich coffeehouse. They had to have contact with anti-

Soviet groups in their home country. They should not be compromised

by close collaboration with the Nazis. In December 1948, after a long and

careful assessment, Tanner believed he had found a band of Ukrainians

who deserved the CIA's backing. The group called itself the Supreme

Council for the Liberation of the Ukraine. Its members in Munich served

as political representatives of the fighters back home. The Supreme

Council, Tanner reported to headquarters, was morally and politically

sound.

Tanner spent the spring and summer of 1949 preparing to infiltrate

his Ukrainians behind the iron curtain. The men had come out of the

Carpathian Mountains as couriers months before, carrying messages

from the Ukrainian underground written on thin sheets of paper folded

into wads and sewn together. These scraps were seen as signs of a stalwart

resistance movement that could provide intelligence on events in

Ukraine and warning of a Soviet attack on Western Europe. Hopes were

even higher at headquarters. The CIA believed that "the existence of this

movement could have bearing on the course of an open conflict between

the United States and the USSR."

Tanner hired a daredevil Hungarian air crew who had hijacked a Hungarian

commercial airliner and flown it to Munich a few months earlier.

General Wyman, the CIA's special-operations chief, formally approved

the mission on July 26. Tanner supervised their training in Morse code

and weaponry, planning to drop two of them back into their homeland

so that the CIA could communicate with the partisans. But the CIA had

no one in Munich with experience in parachuting agents behind enemy

lines. Tanner finally found someone. "A Serbo-American colleague who

had parachuted into Yugoslavia in World War Two taught my guys how

to jump and land. And it was crazy! How can you do a backward somersault

on impact with a carbine strapped to your side?" But that was the

kind of operation that had made the OSS famous.

Tanner cautioned against great expectations. "We realized that in the

woods of western Ukraine, they weren't liable to know what was on

Stalin's mind, the big political issues," he said. "At least they could get

documents, they could get pocket litter, clothing, shoes." To create a real

network of spies inside the Soviet Union, the CIA would have to provide

them with elements of disguise—the daily detritus of Soviet life. Even if

the missions never produced much important intelligence, Tanner said,

they would have strong symbolic value: "They showed Stalin that we

weren't going to sit still. And that was important, because up 'til then we

had done zilch as far as operations into his country."

On September 5, 1949, Tanner's men took off in a C-47 flown by the

Hungarians who had hijacked their way into Munich. Singing a martial

strain, they jumped into the darkness of the Carpathian night, landing

near the city of Lvov. American intelligence had penetrated the Soviet

Union.

The CIA history declassified in 2005 offers a terse summary of what

happened next: "The Soviets quickly eliminated the agents."

"WHAT HAD WE DONE WRONG?"

The operation nevertheless set off a huge wave of enthusiasm at CIA

headquarters. Wisner began drawing up plans to send more men to recruit

networks of dissidents, create American-backed resistance forces,

and send the White House early warning of a Soviet military attack. The

CIA dispatched dozens of Ukrainian agents by air and by land. Almost

every one was captured. Soviet intelligence officers used the prisoners to

feed back disinformation—all's well, send more guns, more money,

more men. Then they killed them. After five years of "abortive missions,"

the agency's history states, "CIA discontinued this approach."

"In the long run," it concludes, "the Agency's effort to penetrate the

Iron Curtain using Ukrainian agents was ill-fated and tragic."

Wisner was undaunted. He started new paramilitary adventures all

over Europe.

In October 1949, four weeks after the first flight into the Ukraine,

Wisner teamed up with the British to run rebels into communist Albania,

the poorest and most isolated nation in Europe. He saw this barren

Balkan outcrop as fertile ground for a resistance army formed from exiled

royalists and ragtag loyalists in Rome and Athens. A ship launched

from Malta carried nine Albanians on the first commando mission. Three

men were killed immediately and the secret police chased down the rest.

Wisner had neither the time nor the inclination for introspection. He

flew more Albanian recruits to Munich for parachute training, then

turned them over to the Athens station, which had its own airport, a

fleet of planes, and some tough Polish pilots.

They jumped into Albania and landed in the arms of the secret police.

With each failed mission, the plans became more frantic, the training

more slipshod, the Albanians more desperate, their capture more certain.

The agents who survived were taken prisoner, their messages back to the Athens station controlled by their captors.