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*52 Though a bit player in the Service drama, Roth was an intriguing figure, if only for what his career revealed about security standards of the era. In addition to his work at IPR, he had publicly defended the activities of something called the “Free German Committee,” a Communist operation based in Moscow. Despite this, he had been commissioned an intelligence officer in the Navy. The former head of ONI explained this, as quoted in a U.S. Senate report, by saying “The fact that an officer was a Communist was not a bar to a commission.” As seen, this was a perfectly accurate statement of the wartime practice.
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*53 Nor was this Service’s only comment on the subject. In another exchange, Jaffe came back to the question and Service once more showed his willingness to share military information with his new acquaintance. Jaffe: “Jack, do you think we’ll land on the shores of China?” Service: “I don’t believe it’s been decided. I can tell you in a couple of weeks when Stilwell gets back.”
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*54 This project appealed to Jaffe but also made him nervous. Not that Bernstein was a Soviet spy, but rather that he just possibly wasn’t. Suppose Bernstein was a government plant only pretending to work for Moscow? This angle bothered Jaffe, who took pains to check the matter out with Browder and the editor of the Communist New Masses. Both advised him he should require Bernstein to say for whom he was working, and by backtracking on this certify his reliability. If Bernstein really were a Soviet spy, he would be “reliable.” If not, then not. (Bernstein in fact was working for Gerhart Eisler.)
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*55 Shortly after the arrests, Acting Secretary Joseph Grew would speak likewise for the State Department, saying a “comprehensive security program” was being enforced to stop “the illegal and disloyal conveyance of confidential and other secret information to unauthorized persons.” He added that “we heard somebody in the chicken coop and we went to see who was there…ample grounds were found to cause the arrests and bring about the charges.”
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*56 On September 15, 1945, a month after the no-billing of Service, Cohen would be named Counselor to the Department. This was the same appointments package that made Dean Acheson Under Secretary of State, replacing Joseph Grew, and named William Benton as an Assistant Secretary. (See Chapter 12.)
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*57 As recorded in the Bureau transcripts, Mitchell’s lawyer told her he had talked with Tom Clark and thereafter with prosecutor Hitchcock. The latter, according to the attorney, said he would meet with Mitchell in private “the day before we take her to the grand jury so that she would know just what it was going to ask her because I wouldn’t like to take her before the grand jury cold. I don’t think it would be fair to her.”
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*58 These declassified pages, apparently, amount to only a small fraction—10 percent, perhaps—of the total Bentley records. The “Gregory” designation was confusing because the main suspect in the case, Nathan Gregory Silvermaster, went by this name as well.
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*59 FEA = Federal Economic Administration, successor to the Board of Economic Warfare. WPB = War Production Board.
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*60 Of this group Gregg, Park, and Redmont were on the original list of Bentley cases, while the rest were developed through surveillance. Florence Levy was Miller’s sister-in-law, and Philip Raine was both a coworker and personal friend of Miller. Rowena Rommel, a much-neglected player, had been instrumental, as she later acknowledged, in bringing Miller himself to State. (Miller would supply another case in which the Bureau was able to give independent confirmation to Bentley, as the FBI had surveilled him in 1941 in personal contact with Golos.)
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*61 A further link between the West Coast group and activity in D.C. would be provided by Gordon Griffiths, a self-admitted Communist who had been on the faculty at UC Berkeley and divulged in a memoir that in the late 1930s to early ’40s he had been a member of a CP unit there with both Chevalier and Oppenheimer. During World War II, Griffiths relocated to the nation’s capital, where he would figure in one of the significant loyalty/security cases brought by Joe McCarthy in 1950.
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*62 Also important, as the FBI observed, various of the Bentley people and their contacts were now moving to the new international bodies set up in the last phases of the war and in the early postwar era, where many decisions would be made affecting America’s vital interests. Alger Hiss would be the point man in creating and staffing the United Nations, while Harry White would play a comparable role at the International Monetary Fund.
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*63 This thesis would later be modified to the contention that Venona was withheld from Truman, not by the Bureau, but by the Army.
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*64 As to what that knowledge was, it’s instructive to compare the FBI’s findings at this early time to some of the charges recently made against the Bureau. Compare with the critique above, about the alleged naïveté of the FBI concerning the Communist Party linkage to the Kremlin, certain Bureau comments from 1944: “…a number of recent and very striking examples of Comintern operation in the United States emphatically give the lie to pronouncements that the Comintern is dead and to current avowals of loyalty and patriotism by the American Communist Party. Investigations have proved the continued use of Communists in the United States by Soviet agents and have confirmed the operation of an illegal underground apparatus under the direction of Russian Communists and several governmental officers.”
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*65 A memo from Quinn Tamm to Hoover in February of 1948 relates that “the report which the Bureau furnished to the Treasury Department in the Gregory case some months ago has been found in a safe in the Treasury Department. You will recall that this is the report which was furnished to Secretary Vinson and was apparently lost by him.” In December 1946 it was “stated that the attorney general had mislaid the memorandum on [White-Silvermaster] and wanted to have them before he attended the Cabinet meeting.” In an even more troubling report, Hoover himself would recall in 1953: “John Maragon had indicated that he had been in Vaughan’s office on many occasions and had seen Mr. Nichols and Mrs. Nesse of the Bureau come in and deliver reports to General Vaughan. He stated furthermore that on occasions General Vaughan had thrown into the wastebasket certain FBI reports after they had been received.”
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†66 Echoes of the Amerasia case appear in frequent negative Bureau comments about officials at Truman Justice. The FBI files contain numerous Hoover statements concerning James McInerney, who had been prominent in the handling of the case (and would be again when it was revived in 1950). In particular, Hoover considered McInerney to be a leaker, and often said so (“If they would eliminate James McInerney from this case I believe the leaks might stop”). It’s also apparent from the files that Hoover had a similar unfriendly view of Justice official Peyton Ford, who would also figure in later conflicts.
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*67 Symptomatic of this ongoing conflict, as already seen, was Grew’s effort during the run-up to Pearl Harbor to work out a truce between America and Japan, when such as Harry White and Lauchlin Currie were pushing hard for confrontation. Likewise, at the time of the Yalta conference, Grew would oppose some of the more ghastly features of the agreements made there. He would again get crossways with the “progressives” on the matter of a hard vs. soft peace with Japan as the war wound to a conclusion.
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*68 This Berle testimony would be brought up when Acheson underwent confirmation hearings as Secretary of State in January of 1949. In response, Acheson made much of the technical quibble that Alger Hiss was not his assistant (a position actually held by Hiss’s brother, Donald), and otherwise suggested that he had little or nothing to do with Alger. In fact, as Hiss himself
would relate, the two were extremely close. Hiss dealt with Acheson directly on almost a daily basis in 1944 and ’45, and would strategize with Acheson in 1946 when Hiss was being forced out of the department.
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†69 Sol Adler himself, meantime, continued on with the Treasury and would play a significant role in the further development of U.S. policy toward China. (See Chapter 31.)
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‡70 A curious aspect of this merger was that it originated in the Bureau of the Budget, not usually thought of as an agency with significant Cold War impact. Truman Budget Director Harold Smith and various of his staffers were not only involved in conflating the wartime outfits into State and other mainline agencies but several such staffers would have roles to play in further security troubles resulting from the merger.
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*71 Though the struggle was conducted mostly as a bureaucratic turf war—pitting State Department division heads against the OSS contingent—it had serious policy implications. As seen, intelligence data could have decisive influence on policy—for example, whether to back Mihailovich or Tito, or to pull the plug on Chiang Kai-shek in China.
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*72 This is the lost memo referred to in the Prologue.
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†73 Typographical error in original. The true date was May 15, 1946.
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*74 Though the names of the alleged culprits are blacked out in this memo, a subsequent missive from Ladd to Hoover made their identities clear. Concerning an episode of lax security at State, Ladd suggested that it be brought to the attention of Lyon, but added that “since any correspondence directed to Mr. Russell may easily get into the hands of Mr. Panuch or Sam Klaus, it is believed that a letter to Mr. Russell would be highly inadvisable.” (In the event, it appears that such a letter was in fact sent to Russell.)
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†75 These crippling conflicts would be noted by congressional staffers who later conducted an in-depth survey of the security office. While their report mainly dealt with other matters, primarily individual cases and the way they were handled, its comments on the internal feuding were explicit. The Lyon-Bannerman group, said the Hill report, had been concerned to eliminate “people of questionable loyalty or regarded as security risks” but had run into frequent roadblocks from Panuch and Klaus, preventing timely and decisive action.
“On numerous occasions,” said the report, “Bannerman would recommend that an employee’s services be terminated, Lyon would concur in the recommendation, and it would be forwarded to the assistant secretary for administration [Donald Russell]…. The common practice was for the file to be returned with a request for further information. Everyone consulted concerning this seems to be in agreement that Bannerman, Fitch and Lyon were vigorous in their efforts to eliminate suspect individuals from the department and that Samuel Klaus, particularly, and to a lesser degree, Panuch, in a very few instances would concur, and in practically all cases insisted on further inquiry or having the individual classified as no risk.”
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*76 The available data don’t reflect the Lyon-Bannerman view about Gustavo Duran, but based on the congressional-survey comments it’s likely they agreed with Ladd. What the larger record makes fairly plain is that Duran was cleared because he had a powerful patron (or patrons) higher up in the department who vouched for his bona fides, thus trumping the objections of security types down at the lower levels. This was a common pattern, not only in the State Department but elsewhere.
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*77 Like Gustavo Duran, Hiss had a powerful patron—in this case, Dean Acheson.
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†78 The level of Communist penetration among American U.N. employees would eventually become a scandal, explored in the early 1950s by two committees of Congress and a grand jury in New York—the last guided by a precocious Assistant U.S. Attorney named Roy Cohn.
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‡79 All this was summed up in a scorching letter from Panuch to Hiss deploring “serious security laxness” in the office and intimating tough reprisals. Both in tone and content, this letter would unmistakably have told Hiss the security forces had his number. As to the making of extra copies, Panuch observed, “it appears that over-ordering is a common practice in SPA with respect to classified documents; the security dangers are obvious.” Given the timing of this inquiry—September/October 1946—it most probably was this investigation that prompted Lyon’s talk with Mickey Ladd. If so, this would indicate that Lyon and Co. were not informed as to the nature of the Hiss investigation, thus suggesting still more communication problems. It also suggests that the presence of China-related data in Hiss’s SPA was seen as a potential link to Amerasia.
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*80 Also of interest was a comment in this Bannerman memo with respect to Maurice Halperin, one of the original Bentley cases, a transferee from OSS and a Miller contact: “He [Halperin] has been requested to resign from the department at the direction of the secretary, as an FBI investigation definitely linked him to a Soviet espionage ring, and revealed that he furnished official information of this government to a Soviet espionage courier.” (Halperin had in fact departed on “sick leave” by the time this memo was written.) Thus, the supreme penalty for alleged involvement in a Soviet espionage ring was simply having to resign from the department.
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*81 That said, the investigation of Marzani run by Panuch and Klaus was wide-ranging and instructive. As with Hiss and Miller, the State Department records show the extent to which the security team was trying to put the pieces together and trace connections among the players. The Marzani file reflects, for instance, that he was linked with yet another transferee from OSS already met with, David Zablodowsky, who was also pressured to resign (and did). The investigators then found a nexus between Marzani and Robert Miller in the person of Marshall Wolfe—an identified CP member, according to Klaus, who had worked with Marzani in New York, then migrated to D.C., where he hooked up with the Miller combine. While Marzani eventually went to jail, Zablodowsky and Wolfe did rather nicely—both winding up with jobs at the United Nations.
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*82 Though nobody could have predicted it at the time, this Byrnes letter—undoubtedly the handiwork of Panuch and Klaus—would prove to be one of the more significant documents ever drafted in the history of our domestic Cold War.
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†83 Sabath was of the view that State Department security measures of the time were too strict, while Jonkman, Bridges, and others thought they were too lenient.
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*84 Acheson would stay on as Under Secretary through June of 1947, returning as Secretary in January of 1949.
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*85 Undoubtedly Cyrus Peake, a State Department intelligence expert who had been connected to Amerasia but resigned from the editorial board because of the journal’s pro-Red nature.
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*86 It is pretty clear, for instance, that Gustavo Duran, though cleared by State, resigned because of the repeated inquiries from Congress, and the same appears to have been true of Hiss and Carl Marzani. As one Bureau memo relates: “Mr. Russell confidentially informed Mr. Roach [of the FBI] that he was of the opinion that there was nothing wrong with Duran…but that if pressure from the Hill continued it may be necessary to accept his resignation to keep Senators McKellar and Wherry quiet.”
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†87 Thus, in a memo of February 5, Klaus stressed his earlier theme that the security setup would need revamping, but only “after we have disposed of the few cases which have achieved notoriety—that is, have come to the attention of congressmen.”
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‡88 This memo added: “It is further their [ACOPS’] opinion that short of General Marshall’s assurance, it is improbable that anyth
ing we can do will fully satisfy every member of the House or Senate who may question the retention of a given person or the loyalty and sincerity of departmental officers.”
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*89 Klaus would explain this more clearly still in yet another of his memos. Justifying the penchant for resignations, he gave the customary reasons—contentious hearings, evidence to be protected. He then added: “In view of that fact, and the cost in time and personnel which investigation entailed, the Department under Secretary Byrnes pursued the policy of requesting and accepting resignations, thus achieving the same end as would be achieved by dismissal.” This explanation, written in March of 1947, conspicuously did not address the issue of why such dismissals had been so few after adoption of the McCarran rider, which had occurred nine months before. Equally strange, it failed to note the obvious hazard in such methods—allowing suspects to relocate to other governmental posts and taking an inordinate amount of time to get them out of the department.
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a90 Employment approved by Assistant Secretary Russell in November 1945; it is believed that this was by arrangement with Assistant Secretary Benton.
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a91 Employment approved by Assistant Secretary Russell in November 1945; it is believed that this was by arrangement with Assistant Secretary Benton.
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b92 Cleared by Secretary Byrnes in writing. [Footnotes in original.]
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*93 In addition to submitting his list of suspects, Stefan was at this time also raising inconvenient questions about the various cultural projects promoted by the department. In February he had questioned State official William Benton in private about these matters, and in March would run a series of public hearings on them that were highly embarrassing to the department.
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