Clever Girl

by Lauren Kessler

  Time and again, the Venona cables confirmed the details of Bentley’s story, identifying her sources and contacts, mentioning information and documents they passed along to her, detailing how sources were handled, who was valued, who was causing concern, who might be tapped for undercover work. This was the corroboration the Bureau had been searching for. If the FBI had harbored any doubts about the veracity of Bentley’s statement, Venona wiped them away.

  But would the Bureau —could the Bureau—use Venona to go after those named by Bentley? It was not as easy a decision as it seemed. The advantage was obvious: The material could very well help convict a number of people accused of espionage whose “continued freedom,” one FBI official wrote to another, “is a sin against justice.” But the disadvantages were, according to Hoover and his top assistants, “overwhelming.” To use the material was to make it public. But the history of Venona was one of utmost secrecy and security. Almost no one knew about it, just the code-breakers themselves, the FBI team working on code names, and top brass at army intelligence and the FBI. Hoover saw to it that the CIA, the new kid on the block, the agency that had replaced the OSS, remained in the dark. There were even plans, at first, to keep the president out of the loop. The elite of the intelligence community whose professional lives were all about secrets guarded this one like no other. As proud as they were of what they had accomplished, they were prouder still that they were the only ones privileged to know about it. Knowledge was power, as Hoover knew well, and it was to be guarded jealously. Going public with Venona went against the whole culture of the FBI and the intelligence community.

  And there were compelling reasons to keep the project secret. Venona would embarrass the U.S. government. After all, the decrypted messages were diplomatic cables intercepted while the Soviet Union was an ally. Was this the way the United States treated its allies? What might this disclosure mean to future U.S.–Soviet relations now that the war was over? But even more important, if Venona was made public, Hoover believed it would compromise ongoing counterintelligence operations. The Russians would know that the United States had broken one of their very toughest codes. That would make code-breaking even more difficult in the future and would most certainly mean that the Russians would reexamine how and to whom any messages were sent from now on. That was too high a price to pay for the conviction of a handful of no-longer-active spies. The integrity of the project itself and the future counterintelligence activities were simply more important than punishing the wrong-doers.

  Underpinning the decision, too, was the FBI’s concern that Venona might be viewed as problematic evidence in court. A judge could rule it inadmissible, viewing it as “hearsay.” Neither the originators of the messages nor the recipients would be in court to testify to their veracity. The messages themselves were incompletely decrypted, with words or entire passages missing. And the identities of the people mentioned, those who presumably would be on trial, were cloaked in code names. What if the FBI introduced Venona in court, compromising its own counterintelligence operations and endangering international relations, only to have the evidence thrown out? The risk was too great. Venona stayed secret. It would remain secret for the next fifty years.

  But the decision to keep Venona under wraps did not mean the FBI was willing to halt its pursuit of the people Bentley named. And so, the investigation continued. The interviews continued. The surveillance continued. Then, early in 1947, Hoover asked E. P. Morgan, one of the Bureau’s top lawyers, to evaluate the evidence to determine if prosecution was possible. Morgan’s conclusions were grim. Despite a widespread and intensive investigation, all the FBI really had was the uncorroborated statement of one informer. If Bentley’s espionage network had existed, there was no proof that it existed now. And, although the investigation had uncovered the fact that many of the people Bentley named knew each other and socialized together, there was no proof of any other kind of relationship. Moreover, the subjects in the case were bright, successful, unusually well educated, and included some very prominent people. “It can be expected that some of the finest legal talent in the country would be retained for their defense,” the FBI lawyer wrote in his report. And, with the evidence available—which did not include the Venona revelations—the case was little more than Bentley’s word against theirs. “The likely result,” Morgan concluded, “would be an acquittal under very embarrassing circumstances.” The FBI had hit a wall.

  Chapter 14

  Red Spy Queen

  AS THE FBI investigation dragged on into 1947, Bentley struggled to find her footing. She had imagined that the break with her past would be clean: She would confess, say her mea culpas, and move on. She would close the door on her past. The clouds would part, the seasons would change, and Elizabeth Bentley would walk forth in sunshine to begin the rest of her life. She was, after all, only thirty-seven years old. But that was not the way it was happening. The investigation seemed to have no end, the case no closure. Bentley signed her final statement at the end of November 1945, but her involvement was far from over. In fact, for much of the next year, she was virtually on-call for the FBI, coming in for dozens of interviews as agents tirelessly went back over details, followed up leads, and presented her with photographs to identify.

  She was out of the spy business, but she wasn’t. She was no longer an underground operative, and her attempts at counterespionage had been short-lived, yet her life was now more secretive and solitary than ever. Back when she was handling the networks and checking in with her sources, back when she was juggling multiple rendezvous and traveling at least twice a month to Washington, she was out in the world, in regular contact with a wide range of people. She dined with them, talked with them, and if they couldn’t be considered friends, they were at least compatriots, partners in the cause. They were, in large part, the people who made up her life. Now, of course, they were gone. Even before she fingered them for the FBI, she had lost them to the Russians. And now that she was a committed anticommunist, she could not go back to the acquaintances she had made years before as an open party member. Nor could she talk to or confide in her colleagues at work, as she had—much to the dismay of the Russians—when she was involved in espionage. Several of her coworkers at USS&S had known about her espionage work, but they could not know this even bigger secret, that she was now an FBI informer. She had broken off with Peter Heller. Her isolation was almost complete. The only people talking to her now were federal agents.

  Bentley was stuck between the life she used to live and the one she would have to reconstruct. It was a lonely and uncomfortable place, and a frightening one, too. The FBI offered confidentiality—Bentley’s identity was masked by the code name “Gregory,” in all reports—but the Bureau offered her no physical protection. If there was a leak, and the press found out what she was doing, she would be pilloried by the left-wing newspapers, just as turncoat Louis Budenz was now being roasted. If the Soviets found out—Bentley didn’t know that they already knew—she feared she would be killed.

  In fact, her friends in Moscow were still considering liquidating her as late at mid-1947. That’s when KGB officials ordered the Paris station chief to meet with Joseph Katz, who had been an agent in Washington, D.C., and knew Bentley but was then living in France. Two years earlier, when the KGB had first learned of Bentley’s defection, Katz was the one selected to poison her. That was Gorsky’s plan, which Moscow didn’t buy. Now Moscow wanted the Paris station chief to round up Katz and have him “review the prospects” for killing Bentley. A week later, Paris wired back that Katz was ready, willing, and able. But once again, Moscow demurred, for reasons that can be imagined but never known. Officials there may have figured that Bentley had already done all the harm she was going to do, and that killing her now would not only be useless but impolitic. They may have reasoned that the less Moscow showed its hand to the American intelligence community, the better. They may have considered that Bentley’s death could serve to validate her story and seal her credib
ility, which would only mean more trouble for Moscow.

  Although she knew nothing about the KGB plot to kill her, Bentley knew enough about the KGB to be concerned for her own safety. But she had no alternative other than to continue on as if living a normal life. In between frequent visits to the New York field office, Bentley kept working at USS&S. The FBI had asked her to stay on, but she would have kept the job anyway. She had stood up to Gorsky for months when he tried to pressure her to quit. She was not about to quit now. The job was not only the one source of stability in her life, it was also her only source of income. And the money was considerable. By 1946, her monthly salary had climbed to $600. By the end of that year, she was earning $800 a month. That Christmas, she received a $2,000 bonus. But the company was in trouble. It had been under FBI investigation, on and off, since the early 1940s, and Hoover was once again pushing for action. The shipping business, at an all-time high during the war years, was waning. Tourism was falling off, too, as the era of good feeling between the United States and the Soviet Union came to an abrupt postwar end.

  John Reynolds, titular head of USS&S, began closing down operations at the end of 1946. Bentley claimed he promised her $9,600 in severance pay, a year’s salary, when the firm shut down. But in mid-January, after she drew a check from the corporate coffers for half that amount and deposited it in her own account, she received a call from the manager of the bank informing her that Reynolds had told him several days before that all checks had to be countersigned by Reynolds himself. This was news to Bentley who, as vice president, had always had check-signing privileges. Not only that, but she had essentially functioned as the chief operating officer of the company for years, with Reynolds at first relatively uninvolved in daily operations and then away from the office entirely when he served in the military. Bentley was shocked and upset. Reynolds had valued her work and had depended on her. Now it looked as if he was attempting to renege on his promise of severance pay. When she phoned him at home, his wife wouldn’t put the call through. She said he was confined to his bed, suffering a nervous collapse. It may finally have dawned on him that his company had been involved in activities that would, at the very least, compromise his reputation.

  Bentley promptly took her problem to the FBI. It was the first time—but it would hardly be the last—that she would take advantage of her importance to the Bureau to enlist special help. She understood her worth to the FBI, and she was smart enough and assertive enough to use it as leverage. Bentley told the agents in the New York field office that she would probably be “of no further use to the government” unless the USS&S matter was resolved promptly and to her satisfaction. They reacted immediately to the thinly veiled threat, arranging a lengthy conference with her for the next day during which they told her that Reynolds’s revocation was probably not valid and offered “informal” advice about how to proceed. The following day she met with a member of the firm that handled corporation’s legal matters who indicated to her that a satisfactory solution could probably be worked out after Reynolds recovered. But a few days later, the lawyer called to tell her that Reynolds not only denied ever having promised her a year’s salary but insisted that the $2,000 Christmas bonus be deducted from any severance package that might be negotiated. The FBI referred her to a lawyer, and Bentley filed a civil suit against the company. Meanwhile, the corporation stopped doing business at the end of February 1947 and was officially dissolved a few weeks later.

  Bentley was out of work, and with the suit still pending, her financial circumstances were tenuous. In April, she took a job as a secretary for Ameritex Industrial Company, remaining there only one month. Then she found a similar position at Pacific Molasses, Ltd., in New York City. It seemed that her life was going backward rather than forward. She had been an executive in charge of a corporation since 1941. Now she was back where she had been before the war, scrounging for clerical jobs, accepting temporary positions to pay her bills. In June, the civil suit was settled out of court, with Bentley receiving just what she said had been promised, her $9,600 yearly salary. This should have been enough to support her without worries for quite a while. But Bentley had never been a good money manager. She was still living at the hotel in Brooklyn Heights rather than in a more affordable rental apartment. She liked eating at restaurants, and she liked her martinis. She was partial to nice hats. During her years at USS&S, she had grown accustomed to having money; she spent first and thought about it later. A few months after the settlement, she treated herself to a two-week vacation in Bermuda.

  By the end of 1946, after a year of investigation of Bentley’s allegations, it was becoming clear that the FBI didn’t have a case. The Bureau had been sending regular summaries of its investigation to the attorney general, and in November presented the case to him for possible prosecution. A few weeks later, the assistant attorney general wrote to Hoover, asking pointed questions about Bentley’s viability as a witness. Would she be willing or reluctant? Did she have any drawbacks…alcohol, narcotics, a criminal record, mental instability? But taking the case to court in its current state was really not an option. The FBI’s top lawyer had said it was unwinnable. Still, no one was willing to let go. They all felt that Bentley had given them a treasure. They just had to figure out how to cash it in.

  Part of the problem was that the Bureau could send out agents to ask questions, but the Bureau could not force people to talk. The Bureau could order wiretaps and surveillance, but the Bureau could not subpoena witnesses or interview people under oath. The FBI had tried its best but could not unearth enough evidence to indict any of the people Bentley named. But there was another way. The government could impanel a grand jury. With its broad subpoena power, a grand jury might be able to further develop the case. It could shake things up, rustle the underbrush and see who might slink out. When people heard “grand jury,” they sometimes got scared and started talking. A grand jury was serious business. It was also an opportunity to testify in secret, behind closed doors and away from the media’s prying eyes. The grand jury system offered tremendous protection for witnesses. It was worth a shot.

  The Department of Justice was also undoubtedly interested in impaneling a grand jury to see how the “star witness” performed. Bentley would be under oath and in front of an audience—there were twenty-three people on the jury—for the first time. Grand juries were not trials with adversarial lawyers and pointed cross-examinations, but they were formal, under-oath presentations of allegations to an official body. The proceedings could be better controlled than a trial. The prosecutor, who would have access to all of Bentley’s FBI statements as well as the Bureau’s file on the case, would know just what the witness was going to say. The whole enterprise was really the prosecutor’s show: “Here is my witness…listen to her.” But the government would see how Bentley comported herself, how well she presented her story, and how the jury reacted. The grand jury could also serve an important political purpose: It could help deflect criticism that the FBI had botched its investigation. It would show congressional Red-hunters that the hunt continued.

  In late March 1947, the grand jury was impaneled to begin hearing testimony at the U.S. courthouse in Foley Square in Lower Manhattan. The Department of Justice asked Thomas J. “The Hat” Donegan to handle the case. Donegan, who had headed the squad investigating Bentley’s allegations from the FBI side, left the Bureau in 1946 to become special assistant to the U.S. attorney general. A thirteen-year veteran of the FBI, an expert in espionage and a man with an abundance of apparently well-earned self-confidence, Donegan seemed the natural choice. The assistant attorney general in charge of the Criminal Division, a man named T. Vincent Quinn, was also involved. The government was lining up its big guns.

  The grand jury heard testimony all through the spring, summer, and fall of that year, beginning with a two-week stint on the stand by star witness Elizabeth Bentley, who retold most of the story she had told to the FBI and named the same names. Then the government shook the bushe
s and subpoenaed more than one hundred witnesses, most of whom were called to defend themselves against Bentley’s allegations. Former assistant to the secretary of the Treasury Harry Dexter White testified, as did William Remington, chairman of a Commerce Department committee that allocated exports to the Soviet Union. Lauchlin Currie, former assistant to FDR and Truman, was called, as well as dozens of other government employees, including Bentley’s major sources, Silvermaster and Perlo. Newsweek described the witness list as “an array of top New Deal talent.”

  Donegan was a tough cross-examiner, an intense, poker-faced man who wanted badly to win, which meant, in grand jury terms, a return of indictments against some or all of the accused. But he was having trouble with the case, the same kind of trouble the FBI had. Witnesses were revealing little more than their employment records. A few flatly denied any involvement in the Communist Party or espionage activities, but many of the major characters invoked the protection of the Fifth Amendment, refusing to answer questions on the grounds that their testimony might be self-incriminating. Lauchlin Currie swore under oath that he had no affiliation with the party and no knowledge of Bentley. Remington told the grand jury, under oath, the same story he had told the FBI: He thought Bentley was a journalist and gave her only information already available to the public. He admitted to meeting “Helen” and “John” (Bentley and Golos) several times, but he said he had no idea they were connected to the Party. Frank Coe, a Treasury Department official whom Bentley had named as part of the Silvermaster Group, testified only that he knew some of the people Bentley had named from his work in the government. William Taylor, another Treasury Department employee, denied all charges. Duncan Lee, Sonya and Bela Gold, Bernard Redmont, and Cedric Belfrage, a British intelligence officer, all denied Bentley’s allegations under oath.