Wild Bill Donovan

by Douglas Waller

  But not for long. Soviet military commanders moving in assumed that any foreign intelligence service in their midst would spy on them, so soon they began to put the squeeze on Donovan’s operations. Moscow refused to allow OSS contingents to enter Budapest and Warsaw and forced a team in Sofia to leave after it evacuated 335 airmen. Donovan quickly realized what the Red Army did not want his agents to see in their occupation zones. His OSS officers who remained reported that Soviet troops were looting millions of tons of grain from the Balkans and shipping it back to Russia. Wisner cabled that Romanian factory and refinery equipment was being loaded onto rail cars headed for the Soviet Union. Meanwhile, communist thugs had moved into the capitals to hunt down intellectuals and political opponents. OSS men soon became harassment targets. Donovan was outraged when Russian soldiers roughed up several of his officers who were filming a communist rally in Bucharest from a nearby rooftop and confiscated their film.

  Donovan invited Fitin to meet with him in the Balkans, or anywhere in Europe convenient for the spy chief, to discuss how the OSS and NKGB might work together in enemy territory either side occupied. Fitin begged off, claiming “a number of important duties” prevented him from leaving Moscow.

  Soon after the war ended in Europe, the Soviets forced the remaining OSS teams out of countries they occupied. But long before that, Donovan had grown suspicious of the Russians and increasingly alarmed over Stalin’s aggressive moves. In August of 1944, he notified Marshall that he already had nearly three dozen Russia experts on his research staff preparing a comprehensive intelligence estimate on “Soviet intentions and capabilities.” After Germany’s defeat, “the United States and the Soviet Union will become, and will long remain, by far the strongest nations in the world,” he predicted. And though Donovan was willing to work with the Soviets if he thought it was in his country’s interest, he was also ready to treat them as an intelligence target before many in the American government were. In August, he quietly arranged for the Italian government to have its military intelligence service, the SIM, spy on Moscow for the OSS under the diplomatic cover of its overseas embassies. “The handling of Russia is a very delicate matter at this time,” a secret OSS memo acknowledged, “and it is thus considered advantageous to have a second power perform the basic work of securing the necessary intelligence.”

  Within months, Donovan would discover just how delicate collecting intelligence on the Soviets could be.

  THOUGH SHE DECLARED herself neutral, Sweden had at first collaborated with the Nazis, shipping them high-grade iron ore and allowing tens of thousands of Wehrmacht troops to cross her territory to attack the Soviet Union. Only when the Germans began losing the war did the nimble Swedish government begin tilting toward the Allies. Stockholm, like Bern and Istanbul, became a major espionage outpost for the OSS and other foreign intelligence services. Donovan had seventy-five officers in Stockholm collecting information on the Nazis and the help they received from the Swedes. He also used the capital as a launching pad for agents infiltrating into Germany and German-occupied Norway and Denmark. His Stockholm officers eventually had a code clerk in the German embassy on the OSS payroll feeding them secret diplomatic cables while the Swedish intelligence service provided them transcripts from their phone taps at the Japanese embassy.

  Wilho “Ty” Tikander was a former Justice Department antitrust lawyer whose father had emigrated from Finland in the 1880s and set up a country store in northern Minnesota to sell dry goods to local miners. Tikander knew nothing about spying except for a quickie OSS tradecraft course he had taken in Washington and he spoke no Swedish. But he was fluent in Finnish, a difficult language to master, so he was packed off in the fall of 1942 to Stockholm, the key OSS post for vacuuming intelligence out of war-torn Finland. Donovan at first had been wary of promoting Tikander to station chief. Stockholm was a difficult assignment, and Donovan wanted a seasoned OSS officer in charge there, who would be as skilled a diplomat as he was a spy so he did not anger the Swedes or the U.S. ambassador, Herschel Johnson. Johnson seemed to be allergic to espionage operations. Tikander soon proved adept at cultivating the Swedes and staying on Johnson’s friendly side, so Donovan finally put him in charge of the station in April 1944. But he kept Tikander on a short tether, demanding to be “kept fully informed” of his most sensitive missions and sending him nasty notes when he held back details from OSS headquarters in Washington.

  One of Tikander’s most delicate operations, which Donovan knew could be diplomatic dynamite, began when four battered Finnish steamboats sailed into Swedish harbors on September 21, 1944. Among the 750 refugees on the vessels fleeing the Russian army was the entire Finnish intelligence service along with crates of their most secret documents stored in the cargo holds. The Finns had one of the best spy organizations in Europe. Already they had broken a State Department code for cables coming from many U.S. embassies overseas. The Swedish intelligence service, which had arranged for the evacuation in an operation code-named “Stella Polaris,” put their Finnish colleagues in downtown Stockholm’s Hotel Anston, where they stored the crates in the basement under heavy guard and soon opened for business to sell their precious documents to the highest bidders. Despite their country’s alliance with the Nazis, military and diplomatic officers in Finland’s Stockholm embassy had handed the OSS station a steady stream of reports under the table the past two years on German and Russian forces. Tikander became a prime customer for one of the choice items the Stella Polaris gang had for sale on the black market: 1,500 pages containing keys to decipher the codes the Russian army and NKGB used for their cables, plus a trove of sensitive Finnish intelligence documents on the Red Army, all gift-wrapped in two hundred boxes. The price: $62,500. (The entrepreneurial Finns did not tell Tikander that they later sold copies of the same material to the Japanese military attaché in Stockholm for $75,000.)

  Tikander cabled Donovan in October with the Finnish offer. Donovan was enthusiastic and ran the sale by Roosevelt, Marshall, and Undersecretary of State Edward Stettinius. An industrialist whose hair had grown prematurely white but whose dark eyebrows and bright blue eyes made him strikingly handsome, Stettinius was to replace the ailing Hull as secretary at the end of November. He had been impressed in the past with the intelligence he had received from the OSS, but not always with the agency’s political acumen; this deal was a perfect example of Donovan’s tin ear for international politics, Stettinius thought. The Soviet Union was still an ally and if it ever came to light that the United States had stolen the Russians’ communication code there would be diplomatic hell to pay, he knew. Stettinius protested so forcefully, Donovan sent a top secret cable to Tikander: “Do not undertake to secure or indicate interest in any Russian material now in the hands of your Finnish friends. There are impelling political reasons for this prohibition, which must under no circumstance be violated.”

  The Finns, however, kept dangling the documents before Tikander. In early December he flew to Washington to lobby Donovan and finally convinced him the Finnish offer was too valuable to pass up. Donovan approved the $62,500 payment. In Stockholm, Tikander’s officers loaded the two hundred boxes onto a plane for Washington. Ned Buxton, one of the OSS deputies, told the State Department Donovan felt the purchase “was of such importance, that he was willing to take the entire responsibility for dealing with this matter.” He sent Roosevelt a short top secret note on December 11 informing him that his Stockholm chief had bought the codes.

  Even for Donovan, this was an audacious move. Stettinius, now the secretary, was livid at being overruled. Two days before Christmas he walked into the Oval Office to plead with FDR to order Donovan to turn the code material over to the Russians. Roosevelt had become increasingly irritated with Donovan’s intelligence escapades that gave him political headaches at home or abroad. He ordered the code books delivered to the Russians. Donovan cabled Deane in Moscow to tell Fitin one of the biggest cock-and-bull stories one spymaster has ever sent to another spymaster. The OSS
had discovered that “enemy sources” were selling some 1,500 pages of Russian codes on the black market, so “General Donovan took the only course open to a loyal ally in accepting this material as soon as he found it was procurable,” General Deane was to inform the NKGB chief. Donovan now wanted to turn the documents over to a Russian representative in Washington and assure Fitin that the OSS had not read a single page.

  Fitin did not quite know what to make of this tale—except that it was likely not the truth—but he arranged for the handover. In late January 1945, Putzell showed up at the Soviet embassy on 16th Street with several OSS security officers lugging the boxes. Andrei Gromyko, who had taken over as ambassador just a year earlier and at thirty-five was the youngest Russian ever to assume such an important post, had Putzell’s men stack the boxes near his office. Gromyko was tall, dark, and wore horn-rimmed glasses. The OSS dossier on him was thin because he kept to himself in Washington and rarely talked to neighbors around his home in the suburbs. “He is modest, bookish and speaks English well,” an agency report noted. Putzell found Gromyko noticeably disdainful when he presented him the documents. The Soviets had already changed the codes since they obviously had been compromised. Gromyko likely had a disparaging look on his face because he probably suspected he still was not the only one who had custody of the material. Donovan was bound to have had his men photograph the papers before he gave them to the Russians—although copies have never turned up in the OSS archives.

  Though he told Tikander to back away from more Finnish offers from the Stella Polaris trove, Donovan continued to build up his spy operation against the Soviets. By December he had begun tapering off the number of OSS research reports sent to Fitin. Several weeks before Putzell visited the Russian embassy, Donovan told Dulles to prepare agents to penetrate the occupation zone the Soviets would control in Germany after the war. He wanted his spies in the British sector as well. Donovan assumed those two countries would plant their agents in the American zone. Donovan also ordered his men to look for NKGB agents to recruit as informers as they had with German moles.

  BY THE END of 1944, Donovan’s men noticed other enemies circling as victory in Europe seemed near. In Washington, the OSS and FBI fielded basketball teams that played each other regularly in a city league. Both agencies brought in college players for the games. The OSS had the services of George Glamack, a six-foot-seven-inch all-American from the University of North Carolina at Chapel Hill. But the friendly rivalry stopped at the court’s edge. Hoover had put FBI agents in the U.S. embassies in Paris, Madrid, Lisbon, Rome, and Manila. He insisted his men were acting only as legal attachés to track international criminals and communist agitators who threatened the United States, but Donovan’s officers knew better. Hoover was laying the groundwork for a worldwide intelligence network after the war to replace the OSS, they warned their boss. Donovan’s counterintelligence agents had made a “good-faith” effort to cooperate with the FBI, they wrote him in early 1945, while Hoover’s cooperation had been “half-hearted” at best. By their count, over the past two years the OSS had sent the FBI 615 intelligence reports, but had received only 398 in return. Hoover still believed that most OSS intelligence reports were rewrites from the British. Donovan thought Hoover’s much ballyhooed spy-catching record also was a lot of smoke and mirrors. He sent an acid memo to Roosevelt in early 1945 pointing out that of the twenty espionage and sabotage cases Hoover had brought to trial, in a dozen of them “the original tip-off that the individual was a German agent came . . . from the British.” Four of the other big busts benefited indirectly from information the Brits had supplied. Hoover’s men had solved only four cases on their own.

  Then there was John “Frenchy” Grombach, the Army major Donovan had eased out of the OSS two years earlier. No one in the OSS could determine exactly what the Pond’s band of spies was doing for the Army’s G-2, but Grombach, now a colonel, kept popping up on Donovan’s radar screen. At one point Frenchy breezed into London, where Bruce’s men found him the same conspiratorial oddball they had known when he was in the OSS. But now he was secretive and vague about his job for the Army. As near as Donovan’s officers could tell, Grombach had operatives roaming Portugal, Sweden, Hungary, and Romania. By December 1944, Donovan’s senior advisers discovered he was also trying to recruit former OSS officers with experience in Turkey and Greece. “He is extremely ambitious and tough-minded,” one OSS officer warned headquarters.

  Indeed he was. Operating out of front companies in Washington and New York that were kept hidden from Donovan, Grombach had assembled a network of more than forty military intelligence agents spread out in over thirty countries with some six hundred foreign informants on their payroll. They secretly fed thousands of intelligence reports on the Axis to Marshall and other top officers. The Pond’s spies also mounted a major espionage operation against the “Dons,” their nickname for Donovan and his agents. Grombach’s snitches overseas kept him regularly posted on any missteps Donovan and his men made. Grombach kept tabs on Donovan’s affairs with other women, suspecting he “freely talked about secret matters” with some, as he put it in one report. He even looked for dirt on the theft of Donovan’s traveling bag from the Sofia hotel in 1941, believing the bag contained more sensitive material than Donovan acknowledged and the Nazi line that he had been carousing with nightclub dancers. The colonel also collected dossiers on hundreds of OSS officers. Sometimes, wives of the Dons were watched.

  Frenchy clearly was treading on Donovan’s turf. The G-2 had no authority that he knew of to launch a worldwide espionage service. But Buxton advised Donovan not to confront the Army just yet on Grombach’s big-footing. We’ll collect more intelligence on this colonel, he wrote Donovan, “and continue to assemble a file for use at the right time.”

  Chapter 28

  The Vatican

  DONOVAN SPENT Christmas Eve 1944 in New York but took the train the next morning to have Christmas dinner at the Georgetown house with Ruth, Mary, and his granddaughter. It was a miracle for Ruth that Bill had showed up at all. With the war, holidays had been just another workday for him and Christmas this year fell on a Monday. But Donovan took the rest of the afternoon off to relax at home and play with his granddaughter, who delighted him. Little Patricia was a rambunctious and assertive three-year-old who did not like the stern French governess Mary had brought in to care for her when she was at work at OSS headquarters. The little girl had marched into Donovan’s study one day and declared that she was sure she could fly and planned to test her wings by jumping out of a third-story window and onto the awning over the porch below.

  “I don’t think you should try that,” Donovan said with a chuckle and finally talked her out of the flight. Patricia and the grandchildren born later called Donovan “Faddy.” They called Ruth “Num Num,” which was what her children had called their grandmother.

  Donovan’s holiday respite was brief. The morning after Christmas he boarded a plane with almost a dozen senior aides and flew to Paris for another month-long trip that again would take him around the world to Asia. David Bruce, who had moved to the French capital to direct OSS operations as the Allied armies pushed east, met Donovan’s plane at the Paris airport. He was grappling with a serious security breach when the boss arrived.

  On the morning of September 26, Gertrude Legendre, a glamorous New York socialite on Donovan’s payroll, had been riding in a jeep near the German-Luxembourg border with Navy Lieutenant Commander Robert Jennings (an OSS secret intelligence officer), Army Major Maxwell Papurt (an OSS counterintelligence officer), and Private Doyle Dickson, their driver. As their jeep approached Wallendorf on the German side of the border an enemy patrol spotted them and opened fire with their machine guns. Dickson and Papurt were shot in the legs, but along with Legendre and Jennings they managed to escape the vehicle and dive into a shallow ditch, burning their identification cards with a cigarette lighter and concocting a cover story before the German soldiers captured them. The four were herded off to
the Wallendorf village, where Legendre and Jennings eventually were separated from their wounded comrades.

  Panic swept through the OSS over Gertrude Legendre’s capture. An old Donovan friend, the forty-two-year-old heiress hailed from one of South Carolina’s most prominent families and had married a sugar baron from New Orleans before moving into New York’s best social circles. When war broke out, Legendre wanted to serve her country, believing that her world travels, her fluency in French, and the fact that she could shoot a rifle as good as any man qualified her for something. Donovan hired her in August 1942 as a cable clerk in Washington, where she routed the secret intelligence messages from overseas stations to the people who needed to read them. A year later, Legendre was transferred to London’s message center and then followed Bruce to Paris doing the same job.

  When Legendre’s jeep did not return to base the evening of September 26, OSS security officers dispatched a search team to hunt for the four but it found nothing. Donovan finally learned what happened to them on October 21 when German radio announced their capture. The propaganda broadcast hailed Legendre as “the first American woman to be made a prisoner of war on the Western Front.” Thankfully, Legendre had the good sense to tell her captors that she was just a Red Cross worker with the Allied Expeditionary Forces Club, which the Germans apparently bought for the moment because that was how they had identified her in the broadcast.

  American newspapers soon were crawling all over the story that a New York society matron was a Nazi prisoner. So far, the Western media had bought the line that Legendre was just a Red Cross volunteer. Donovan had the War Department confirm to reporters the cover story Legendre had put out. But he feared it might be only a matter of time before the Germans discovered her true employer. Legendre was a lowly clerk but what she had read in the messages that had crossed her desk gave her “a tremendous fund of information concerning the OSS operations in the European Theater,” Donovan warned the War Department before he flew to Paris. “Any discovery by the Germans that she possesses such information would have grave consequences not only for her personally but also for this organization.” Dickson was just a driver who knew nothing even if he talked. Papurt and Jennings were skilled enough intelligence agents they could probably bluff their way out of having to admit they belonged to the OSS, Donovan’s security officers thought. But they did not have the same faith in Legendre. Eisenhower’s staff and Menzies at MI6 were briefed on what a top secret OSS memo acknowledged could be “one of the disasters of the war.”