Virgilio Scattolini was a short, fat Roman with an oily, confident air and a damp handshake. As a young man, he had enjoyed success in the back alleys of literature with his first pornographic work, Such Women, about Roman whores. His next, Amazons of the Bidet, became a best-seller. One would be hard-pressed to imagine that anything produced by Virgilio Scattolini would find its way onto the desk of the President of the United States. Yet, a sharp turnabout in Scattolini’s destiny put him on that path. He married a beautiful and pious woman and turned his back on his unsavory past. He and his wife attended Mass every morning. He became a tertiary, a minor layman’s rank in the Franciscan order. He wrote “The Poem of Holy Rome,” a work praising the papacy. The poem caught the eye of the editor of L’Osservatore Romano, the Vatican newspaper, who hired Scattolini to write film reviews. In this position he was privy to much that happened within the Vatican. Unfortunately, someone unearthed Scattolini’s earlier career as a pornographer and he was fired. Scattolini, now a dutiful husband and a doting father, took up freelance reporting to support his family. When the Allies marched into Rome on June 5, 1944, he saw a chance to augment his slender living.
Soon after the liberation of the Eternal City, the OSS set up a headquarters run by Victor Scamporini, a former State Department official. In mid-1944 a windfall dropped into Scamporini’s lap. Through an intermediary named Filippo Settacioli, he began receiving tantalizing intelligence from within the supposedly impenetrable Vatican. In the midst of war, the Holy See had continued to maintain embassies throughout the world in belligerent and neutral capitals alike. The first delivery to Scamporini was a copy of a cable from the pope’s apostolic delegate in Tokyo, reporting on events inside the Japanese capital. Soon the Vatican reports began to flow so heavily that one OSS radio operator was occupied solely with translating and transmitting them to Washington. Donovan’s front office was overjoyed with both the volume and quality. In January 1945 these reports were assigned a special code word, “Vessel,” and classified “Top Secret/Control,” which meant that only those on a restricted list could see this intelligence.
The OSS was not blind to the potential dangers of an unverified source, however promising. Vessel could be a double agent, an enemy plant, a fabricator of intelligence for profit. “This series offers great promise,” Washington cabled Scamporini, but warned, “For its full usefulness a careful evaluation of the sources is essential.” Scamporini knew only that Settacioli received the intelligence from an unidentified source with access to the pope’s Department of Extraordinary Affairs, the latter serving as the papal foreign office. The informant also had access to Bishop Giovanni Battista Montini, the pope’s undersecretary of state, who would later become Pope Paul VI. Scamporini found Vessel’s intelligence well worth the $500 a month paid to the informant through Settacioli, a trifling sum to the OSS, but munificent in defeated and impoverished Italy. What he did not know was that the source of these prized secrets was Settacioli’s brother-in-law, Virgilio Scattolini.
The OSS’s counterintelligence branch, X-2, was assigned to vet Vessel. The task was delegated to a recent arrival in the Rome X-2 office, Lieutenant James Jesus Angleton, young, brilliant, armored with the skepticism of the counterintelligence professional, but hugely overworked. His office was handling over a thousand counterespionage cases with just thirty agents, only one of whom, a green lieutenant, could be spared to check out Vessel.
X-2 had not yet completed its clearance of Vessel, but an impatient Wild Bill found the intelligence so valuable and the source sufficiently credible that he chose not to wait any longer. On January 11, while still out of the country, he authorized his acting director, Charles S. Cheston, to send the first Vessel message to the White House with a cover note, “I think [this] will be of interest to the President.” The content was extraordinary. Vessel message 7a, as it was designated, reported a private conversation between Pope Pius XII and Pietro Cardinal Fumasoni-Biondi, prefect of the Propaganda Fides, the church’s missionary arm. In it, the cardinal said: “I think that the Russian government has already decided to renounce the neutrality pact with Japan and that in the coming conference between Stalin, Roosevelt and Churchill the three leaders will fix the method and time for the renunciation.” To which the pope responded: “… [I]t will be necessary to ascertain the peace conditions which would be offered by Great Britain and America, in order that we may be able to see whether the difference between the two stands could be resolved by mediation.” The cardinal was pessimistic: “This will be very difficult, probably impossible, for the Allies want unconditional surrender.” The pope was still hopeful and concluded: “At any rate, we must try… . Please inform your man in Tokyo that it is necessary to know the attitude of the Tokyo government before determining whether our intervention is opportune.” For Roosevelt, knowing the massive casualties the JCS predicted to conquer Japan, the possible intercession of the Vatican in hastening the end of the Pacific war would be heaven-sent.
OSS Washington received twelve more Vessel messages before 20a was considered vital enough to send to the President. In it Cardinal Fumasoni-Biondi responded to Pius XII’s request to find out the Japanese conditions for peace. The cardinal’s subordinate in Tokyo, the apostolic delegate to Japan, reported: “The Japanese minimum demands for a negotiated peace are the following: Japan will renounce all occupied territories except Hainan and Hong Kong… . The Philippines are to be independent and sovereign, free from all United States ties. India is to be elevated to dominion status in the British Commonwealth of Nations… . Australia is to be opened to Japanese immigration.” The papal envoy showed a sensitivity to the importance of saving face in the Orient, noting that the Anglo-Americans must remember “the form rather than the substance of their demands should be tempered and that the psychology of the Orientals should be protected.” Choice Vessel intelligence continued to go to the President. Vessel 24b was especially impressive since it relayed a report directly from within the Imperial Palace. The Vatican’s apostolic delegate reported: “On 10 January the Japanese Emperor attended a secret council meeting during which someone dared to speak about peace feelers… . The Emperor did not express any disapproval of these efforts.”
Along with the White House, Donovan began sharing Vessel’s reports with State and the military intelligence branches, both for strategic use and to boost his own standing. Relevant Vessel messages also went to Admiral Nimitz at U.S. Pacific Fleet headquarters in Hawaii. This intelligence enabled OSS Washington to alert the Nimitz staff: “The Japanese have recently put into service a new battleship with nine of the largest guns in the world. This warship is commanded by Rear Admiral Yanuchi, a Catholic.” Using Vessel to cultivate the Navy especially appealed to Donovan since he was eager for Nimitz’s permission to let him operate in the Pacific, from which the OSS was still shut out.
Even while the President had been at Yalta he continued to receive Vessel traffic through a special Navy radio circuit. One such message reported: “… [T]he Japanese Government is confident that Stalin will categorically refuse to abrogate the non-aggression pact with Japan… . The Japanese Government feels that Japan can continue the Pacific war indefinitely in view of Russia’s certain refusal to enter the war”; grim news for FDR if true. Roosevelt’s secretary, Grace Tully, informed Wild Bill of the Vessel traffic: “The President finds this material most interesting and reads every one carefully.” It was indeed an extraordinary penetration. Vessel’s revelations could influence the President’s strategy in bringing Russia into the Pacific war; they could help him gauge the seriousness of the peace movement inside Japan, and even influence his decision regarding the necessity of using the atom bomb against the Japanese.
At the same time that Donovan was feeding the Vessel disclosures to the White House he presented the President with another coup. In 1943, Mussolini’s foreign minister, Count Galeazzo Ciano, hoping to spare Italy further suffering, had voted with the Fascist Grand Council to remove Mussolini from pow
er. Thereafter, with Mussolini’s acquiescence, the Germans arrested Ciano, kept him in jail in Verona, and then shot him. Il Duce had, in effect, condemned the husband of his daughter, Edda, to death. The widow then fled to Switzerland disguised as a peasant, concealing in her underwear twelve hundred pages of the diaries Ciano had kept since 1939. Allen Dulles, in Bern, managed to buy the diaries from the sick, financially strapped Countess Ciano, while she was recuperating in a Swiss hospital. Donovan considered acquisition of the diary, which had been sought by several other intelligence services, proof of OSS’s growing stature.
As for Vessel, an unexpected opportunity presented itself to test the source’s authenticity. A Vessel message forwarded to the President on January 27 reported a meeting between the pope and Myron Taylor, FDR’s personal envoy to the Vatican. The pope had reportedly asked Taylor if he would be willing to meet with the Japanese ambassador to the Holy See, referred to as Harada Ken, to discuss the prospects of papal intervention in ending the Pacific war. Taylor was said to have told the pope that he was not precisely an official of the United States government and thus could speak only as a private individual. But he did promise to present the pope’s request to the President. Here was a perfect opportunity to ask Taylor about his meeting with the pontiff and see if it squared with Vessel’s account. Lieutenant Angleton sent a man to Taylor’s office at the Holy See to inquire about the papal encounter. Taylor was not pleased. What passed between him and the pontiff, he maintained, was privileged. The OSS base in Italy thereafter sent a message to Washington concluding, “… Vessel report was undoubtedly authentic or Taylor would have said so if it were not.”
On February 3 a small cloud rose over the Vessel horizon. OSS Rome had sent a copy of a Vessel report to Allen Dulles as an information addressee. Dulles read it and replied that he questioned Vessel’s veracity, and “was investigating further.” Rome’s reaction was to cut Dulles from the distribution list. No future Vessel cables were to be sent “to any place other than Washington.” Rome further cautioned OSS headquarters to “warn all people handling Vessel material of necessity of extreme caution in view ever constant risk killing source completely.”
On February 16, Vessel 67a provided another opportunity to verify the agent’s bona fides. This message described the meeting the pope had asked for between Myron Taylor and Harada Ken. “Harada,” Vessel reported, “declared that Japanese elements desirous of peace are not responsible for the Pacific War, and that those elements might make their will felt if the Anglo-Americans would offer acceptable terms. Taylor reminded Harada that American public opinion still remembers the unprovoked attack on Pearl Harbor.” Both men feared that their respective countries’ positions were too far apart for fruitful negotiations.
On March 7, OSS Rome sent Washington a muted alarm. “We have very good reason to believe that VESSEL SERVICE is not exclusive OSS source. It is virtually certain that several other governments have access to this source.” Rome was aware of ten other recipients. What this discovery meant was that if Vessel’s other clients included neutral nations with representatives in Rome, through them his information could reach the enemy. For that reason the message ended, “… suggest you also consider appropriately advising the White House and State Department that all activities, reports, and discussions of U.S. officials near the VESSEL source are most probably subject to leakage.”
The possibility of a leak to foreign intelligence services proved to be the least of OSS’s problems. A copy of 67a, reporting the Taylor/Harada Ken conversation, had been sent to Assistant Secretary of State James Dunn, the department’s liaison with the OSS. On March 2, Dunn advised Donovan’s office, “We immediately sent a telegram to Myron Taylor asking him if he had a conversation with the Japanese Ambassador as reported.” Dunn now had Taylor’s reply, which he shared with Donovan. “I have not seen or talked with Ken Harada. I do not even know Ken Harada,” Taylor had answered. Taylor’s reversal of the Japanese name only served to underscore his lack of familiarity with the man. OSS Washington immediately warned the Italy office, “Conversation as reported … known to be pure fabrication.” A sharp crack ran through the tower of intelligence erected by Vessel. Bill Donovan immediately put himself on the side of the angels. He wrote Dunn, “Dear Jimmie … your statement confirmed us in our suspicion of the source of this material. For some time we have been inquiring into information coming from a certain source coming from that institution [the Vatican].” Cautious skepticism, however, was hardly the spirit in which Donovan had sent numerous unverified Vessel reports to the White House.
Jim Angleton had never been comfortable with Vessel. He found it hard to swallow that an institution as tightly shrouded in secrecy as the papacy, whose intelligence activities reached back for a millennium, could be so easily breached. Angleton, a Catholic of near-mystical vision, had his own pipeline into the Vatican, the same Bishop Giovanni Battista Montini who was Vessel’s supposed entrée. Still, Angleton faced a classic intelligence dilemma. To inquire about a source in the Vatican would be to reveal that the OSS was spying on the Vatican. Angleton managed to walk the tightrope. He learned that one of Bishop Montini’s duties was to maintain the Holy See’s archives. Vessel had informed the OSS: “The procedure of the Papal audiences is the following: After each audience, Monsignor Pio Rossignani, private secretary to the Pope, heard personally from the Pope what was said. He often writes a rough copy that the Pope corrects so that it may be registered in the archives.” Access to these archives was presumably what had enabled Scattolini to provide his controllers with near-verbatim reports of what passed between the pope and his inner circle. Scattolini had, in fact, provided detailed accounts of twenty such private papal audiences. All told, his reports had generated over seventeen hundred OSS documents. But, as Angleton learned through Bishop Montini, no transcripts of papal audiences were ever made. None existed in the Vatican archives.
All that Virgilio Scattolini did have access to was a fertile imagination. His earlier work at L’Osservatore Romano, his ear as a playwright for convincing dialogue, and a spongelike memory had combined to produce plausible fabrications swallowed at the highest levels. The Rome station chief had been fooled. OSS Washington had been fooled. Donovan himself had been fooled. At times, State, the War Department, the Joint Chiefs of Staff, and the military services appear to have been taken in. But was the object of Donovan’s keenest attentions, the President, duped as well?
Inexplicably, and inexcusably, not only did Donovan fail to notify the President that the communications he had rushed to the White House were suspect, but he also continued to send FDR Vessel reports even as his counterintelligence officers in Rome were exposing the pornographer/playwright/con artist. More than a month after Donovan wrote James Dunn of his suspicions of Vessel, number 84a went to the White House, in which the “Apostolic Delegate in Yokohama” tells the Vatican that a prince of the Japanese royal family is preparing “a set of conditions which they judge acceptable to the Anglo-Americans” to achieve peace.
Scattolini, never imagining how high his fictions would reach, could not know that some of what he fabricated could be checked for authenticity by the President himself. While FDR was en route to Yalta, a Vessel report relayed to him told of a “White House spokesman” forwarding a message for the Vatican regarding Poland’s future. The President had to know that no such message ever existed. Most telling, the President received Magic, the direct interception of Japanese diplomatic traffic coming out of Rome, Berlin, and other capitals, intelligence that did not square with what Vessel was reporting. FDR had no need to depend on hearsay from an anonymous spy in Rome. If the OSS had not been shut out of Magic, Donovan would likely have been spared the humiliation of having his proudly trumpeted source exposed as a swindle.
It was FDR’s habit, upon receiving any communication of consequence to the war, to forward it to Leahy, Stimson, Stettinius, or whomever he wanted to deal with the matter, usually with an appended note reading, “
Please take care of this,” “What do you make of this?” or “What are we doing about this?” No record exists among the voluminous Roosevelt archives that FDR ever forwarded a single Vessel message to anyone, no matter how seemingly urgent, as in the case of supposed Japanese peace feelers. No evidence establishes that FDR took any action as a result of a Vessel report. The question then arises, if he must have known the spuriousness of this source, why did FDR never say so to Donovan or anyone else? Roosevelt may have chosen not to embarrass a man whose boldness and energy, if not his reliability, he genuinely admired. However, the likeliest explanation, given the President’s crushing burdens coupled with his steady physical decline, is that FDR lacked the time or energy to focus on a misbegotten Donovan venture. Whatever the reasons, leaving the matter in limbo was not odd, but typical of FDR’s impenetrable motives.
As for Virgilio Scattolini, he never knew that he had been unmasked. Indeed, at Angleton’s insistence, the Italian kept receiving his monthly $500 stipend, not for his worthless product, but because Angleton, of a conspiratorial bent that would persist throughout his long subsequent CIA career, could not believe that one lone figure could have produced the torrent of Vessel intelligence. He wanted to uncover the chain that, he was convinced, would lead from Scattolini to a wider ring of deceit.
The Vessel fiasco came at a bad time for the OSS, exploding within weeks after the Chicago Tribune debacle. Donovan would now have to survive the twin batterings of Walter Trohan and Virgilio Scattolini.
Chapter XXVII
Who Knew—and When?
THE SOVIET Union was still at peace with Japan, outwardly respecting the nonaggression pact between the two countries. Stalin had told FDR at Tehran in 1943, “We Soviets welcome your successes in the Pacific,” but as for Russian participation, his forces in the East were, he claimed, sufficient only for defense. If the United States wanted the Soviet Union fighting Japan, Stalin estimated, “Our forces … must be increased about three-fold.” Out of this demand was born a secret collaboration between the United States and USSR beginning in October 1944 to bring the Soviet Union to offensive strength in the Pacific. The operation was code-named Hula. Under Hula, the United States would covertly turn over to the Soviet Union a flotilla of thirty U.S. frigates, sixty minesweepers, fifty-six submarine chasers, and thirty large landing vessels. Chosen to head the project was one of the least likely officers in the U.S. Navy, a newly minted forty-five-year-old captain named William S. Maxwell. Maxwell had been born in Warsaw and his surname at birth was Dzwoniecki. The boy went to sea at age thirteen and, penniless and not speaking a word of English, jumped ship in New York City. He was subsequently adopted by a U.S. Navy recruiter, George Maxwell, joined the Navy, and rose from seaman apprentice to his present rank, forging along the way a reputation as a hard-driving but fair commander. Besides his get-things-done record, Maxwell was chosen for Hula because he spoke a bastard Russian. This Polish American, his thick Slavic features set in permanent resolution, was to complete his mission at one of the most inhospitable spots on earth, Cold Bay, on the southwestern tip of the Alaskan peninsula, where the average annual rainfall was forty inches and the port was shrouded in fog half the time. Here, Maxwell began receiving fifteen thousand Soviet naval officers and enlisted men, housing them, feeding them, and training them to take over the American ships, all without Japan’s knowledge.
Joseph E. Persico Page 54