The Chairman

by Kai Bird

  28. NYT, July 4, 1950.

  29. Charles W. Thayer, The Unquiet Germans, pp. 210–11.

  30. NYT, July 5, 1950; Schwartz, “From Occupation to Alliance,” p. 298.

  31. Schwartz, “From Occupation to Alliance,” p. 242.

  32. NYT, Aug. 23, 1950; Don Cook, Forging the Alliance (New York: Arbor House/ William Morrow, 1989), p. 224.

  33. Schwartz, “From Occupation to Alliance,” pp. 299–301.

  34. Ibid., pp. 305–6, 312–13.

  35. Ibid., pp. 301, 323.

  36. NYT, Aug. 24, 1950.

  37. John Dornberg, The New Germans: Thirty Years After (New York: Macmillan, 1975), p. 55.

  38. That summer, McCloy’s office hired a political scientist, James Pollack, to sample German political opinions. Among other things, Pollack had concluded that the German people had “lost its military ardor and would not, without considerable difficulty, cooperate in the revival of any kind of military force.” (Schwartz, “From Occupation to Alliance,” pp. 389–90.)

  39. Thayer, Unquiet Germans, pp. 223–24.

  40. NYT, Sept. 7, 1950.

  41. Ibid., Sept. 6, 1950.

  42. Schwartz, “From Occupation to Alliance,” pp. 332–33.

  43. McCloy to Acheson, Sept. 20, 1950, cited in Schwartz, “From Occupation to Alliance,” pp. 368, 424. The French would have been shocked had they known that, sometime in late September or early October 1950, McCloy quietly met with Adenauer’s defense adviser, General Hans Speidel, who during the war had served as Rommel’s chief of staff. Speidel revealed that recently a group of former Wehrmacht generals like himself had secretly met in a secluded monastery and had drawn up a blueprint of a new German army. They envisioned a twelve-division army of 250,000 men, complemented by naval and air defenses. (Schwartz, “From Occupation to Alliance,” p. 398.)

  44. Schwartz, “From Occupation to Alliance,” pp. 390, 396.

  45. Ibid., pp. 332, 358.

  46. Top-secret intelligence report, n.d., AH.

  47. McCloy to Acheson cable, 12/27/50, DOS FOIA declassified 9/7/82.

  48. McCloy to Acheson, 12/18/50, McCloy HICOG Papers, NA (Suitland).

  49. Schwartz, “From Occupation to Alliance,” pp. 406–7.

  50. Stephen E. Ambrose, Eisenhower: Soldier, General of the Army, President-Elect, p. 508.

  SEVENTEEN: McCLOY AND U.S. INTELLIGENCE OPERATIONS IN GERMANY

  1. Christopher Simpson, Blowback: America’s Recruitment of Nazis and Its Effects on the Cold War (New York: Weidenfeld & Nicolson, 1988), pp. 187–88. Erhard Dabringhaus, Klaus Barbie: The Shocking Story of How the U.S. Used This Nazi War Criminal as an Intelligence Agent (Washington, D.C.: Acropolis Books, 1984), p. 79.

  2. HICOG staff meetings, Aug. 1, 1950, July 25, 1950, Aug. 22, 1950, McCloy HICOG Papers, NA (Suitland).

  3. Magnus Linklater, Isabel Hilton, and Neal Ascherson, The Nazi Legacy: Klaus Barbie and the International Fascist Connection (New York: Holt, Rinehart & Winston, 1984), p. 177.

  4. Justice Department Ryan Report, Klaus Barbie and the United States Government, August 1983, p. 93, and tab 53, p. 99.

  5. Ibid., p. 101.

  6. Tom Bower, Klaus Barbie: The “Butcher” of Lyon (New York: Pantheon, 1984), p. 170.

  7. Justice Department Ryan Report, p. 104.

  8. Ibid., p. 107.

  9. Ibid., p. 108.

  10. Justice Department Ryan Report Exhibits, tab 77. Another State Department document, declassified and released only after the Ryan Report was published, confirms that Byroade “talked the matter over with McCloy and Riddleberger. . . .” (Courtesy of Christopher Simpson.)

  11. Justice Department Ryan Report Exhibits, tab 58.

  12. Brendan Murphy, The Butcher of Lyon: The Story of the Infamous Nazi Klaus Barbie (New York: Empire Books, 1983), p. 251.

  13. Justice Department Ryan Report Exhibits, tab 77.

  14. Ibid., tab 80.

  15. Justice Department Ryan Report, p. 97.

  16. Justice Department Ryan Exhibits, tab 58.

  17. Murphy, Butcher of Lyon, p. 250.

  18. Linklater et al., Nazi Legacy, p. 180.

  19. Justice Department Ryan Report, pp. 121–22.

  20. Linklater et al., Nazi Legacy, p. 181.

  21. Justice Department Ryan Report, p. 132.

  22. Ibid., p. 147.

  23. Allan A. Ryan, Jr., Quiet Neighbors: Prosecuting Nazi War Criminals in America (New York: Harcourt Brace Jovanovich, 1984), pp. 26–27.

  24. A year later, in August 1951, McCloy himself assisted one such recruitment when he certified that a former SA general, Kurt Blome, was “not likely to become [a] security threat to the U.S.” Blome had confessed to interrogators in 1945 that he had once appealed to Himmler for SS funds to finance a medical institute where he intended to experiment with a plague vaccine on concentration camp inmates. He was narrowly acquitted of war crimes at Nuremberg when prosecutors were unable to prove that he had acted on his expressed intention. He was hired by the U.S. Chemical Corps in August 1951 at a salary of $6,800 annually. Such cases were common. (Tom Bower, The Paperclip Conspiracy: The Hunt for Nazi Scientists [Boston: Little, Brown, 1987], p. 254.)

  25. Ibid., p. 152.

  26. There is some evidence that Shute himself was a knowing participant in the cover-up. In late August 1950, when the CIC learned that a request for Barbie’s arrest had finally been issued, CIC’s commanding officer, Colonel David G. Erskine, cabled EUCOM to remind them that back in May 1950 CIC had “coordinated” the Barbie case with Shute and several other intelligence officials: “The decision reached on subject case [Barbie] at that time is well known to the above-mentioned persons.” The May decision, of course, was the one in which CIC decided not to turn Barbie over to the French. If Shute was fully informed of this decision in early May, then he must be considered a central player in the cover-up. The Justice Department’s Ryan Report investigation of the affair argues that no weight should be given this cable, because Erskine had no personal contact with Shute. Instead, the Ryan Report speculates that the Erskine cable was merely an attempt to muddy the waters and slow down the extradition process. This explanation seems unnecessarily complicated. If it wasn’t true, why would Erskine name Shute as a party to the decision, and thereby risk having the matter bucked all the way up to the high commissioner’s intelligence coordinator? That could have led to the unraveling of the entire cover story.

  27. McCloy HICOG daily journal, 3/30/50, McCloy HICOG Papers, NA (Suitland).

  28. John Loftus, The Belarus Secret (New York: Alfred A. Knopf, 1982), p. 59. Loftus reports that Gehlen was impressed with the work of Radislaw Ostrowsky, who had been mayor of Nazi-occupied Smolensk when Gehlen had his headquarters in that city. Ostrowsky had returned to Byelorussia in June 1941 with the Einsatzgruppen killing squads, and later became president of Nazi Byelorussia. After the war, Ostrowsky worked closely with Gehlen’s “Org,” providing him with the names of Belarus SS Brigade veterans willing to work for American intelligence. (Ibid., p. 57.)

  29. Simpson, Blowback, p. 44.

  30. Michael Burke interview, Sept. 23, 1985; Charles Whiting, Gehlen: Germany’s Master Spy (New York: Ballantine, 1972), p. 130; Rhodri Jeffreys-Jones, The CIA and American Democracy, p. 104.

  31. A professor with a doctorate in law from the University of Berlin, Dr. Six was a cold, calculating Nazi intellectual who as late as 1944 could tell a conference on the “Jewish Question,” “The physical elimination of Eastern Jewry would deprive Jewry of its biological reserves. The Jewish Question must be solved not only in Germany but also internationally.” Six was closely associated with the Wannsee Institute, where the Final Solution was planned in January 1942, and where Germany’s top academic experts on the Soviet Union gathered during the war to plan the strategic aspects of the war on the Eastern front.

  32. Simpson, Blowback, pp. 46–49. McCloy reduced Six’s twenty-year sentence to ten years in January 1951.

  33. Otto Jo
hn, Twice Through the Lines (New York: Harper & Row, 1972), p. 210; Whiting, Gehlen, pp. 127–28; Loftus, Belarus Secret, p. 60.

  34. Though he confirmed an ex-Nazi like Reinhard Gehlen as Adenauer’s external-intelligence adviser, at the end of 1950 McCloy chose an individual with quite a different background as head of the newly created Federal Internal Security Office. Otto John was one of the few surviving members of the July 20, 1944, plot to assassinate Hitler. A lawyer and a confirmed democrat, he had narrowly escaped execution and after the war had the courage to assist the Allies in the trial of various war criminals at Nuremberg. McCloy was fascinated by the German resistance and enjoyed talking with John about his exploits during the war. But Adenauer and John’s counterpart, General Gehlen, did not share the high commissioner’s enthusiasm for the new head of internal intelligence. Adenauer knew that John had close links to the British, whom the chancellor had disliked ever since they had rudely dismissed him from office as mayor of Cologne in 1945. As for Gehlen, he quite simply regarded John as a traitor for his involvement in the July 20 plot. Needless to say, John’s tenure was a rocky one. It was finally brought to an abrupt end in 1954, when Gehlen handed Adenauer a dossier on John alleging that the internal-security chief was a homosexual and possibly a Soviet double agent. Shortly afterward, John mysteriously disappeared into East Berlin, where ten days later he appeared at a press conference to say that he had defected. Later, he reappeared in West Berlin, claiming that he had been kidnapped and forced to cooperate with the Soviets. Though the West Germans tried him and sentenced him to four years in prison, the CIA today has concluded that the evidence, on balance, supports John’s story. (Otto John interview, Feb. 20, 1984; John Ranelagh, The Agency: The Rise and Decline of the CIA from Wild Bill Donovan to William Casey, p. 749.) Don Cook, a New York Herald Tribune reporter, interviewed John shortly before his “defection” or “kidnapping” to East Berlin. John surprised Cook by suddenly exclaiming that Gehlen was creating a “potential Gestapo organization.” Cook ascribed John’s disappearance to a combination of emotional exhaustion and frustration at having lost his bureaucratic struggle with Gehlen. (Don Cook interview, Dec. 19, 1983.)

  35. Officially, there was a ban on the hiring of Nazis. But even some of the earliest Labor Service units in 1946 had a large number of SS veterans. In 1950, when someone in the bureaucracy proposed regulations that would strictly prohibit the recruitment of all former SS officers, McCloy’s personal assistant and old Cravath colleague, Chauncey G. Parker, overturned the regulation. By this time, there were some thirty thousand Labor Service recruits armed with light infantry weapons, ostensibly prepared to wage guerrilla warfare inside the Soviet bloc in the aftermath of a nuclear attack. These Labor Service units had also become a warehouse for some of Gehlen’s networks of Baltic and Ukrainian Nazi collaborators. (Simpson, Blowback, pp. 142–45.)

  36. Ibid., pp. 123–24, 145.

  37. Michael Burke interview, Sept. 23, 1985.

  38. Ibid.; Michael Burke, Outrageous Good Fortune: A Memoir (Boston: Little, Brown, 1984), pp. 139–44, 149–53, 160. Nicholas Bethell, Betrayed (New York: Times Books, 1984), pp. 119–23.

  39. Michael Burke interview, Sept. 23, 1985.

  40. Simpson, Blowback, pp. 146–47; William Blum, The CIA: A Forgotten History (London: Zed Books, 1986), p. 66.

  41. On McCloy’s wiretapping, see McCloy cable to State Department, 10/19/51, control no. 5899, McCloy HICOG papers, NA (Suitland). For RFE/RL budget, see Ranelagh, The Agency, p. 216.

  42. HICOG staff meeting, 1/30/51, McCloy HICOG Papers, NA (Suitland).

  43. Ambassadors’ conference, Frankfurt, Feb. 5–8, 1951, item 7, Coordination of Psychological Warfare Programs, U.S. High Commissioner, McCloy HICOG Papers, NA (Suitland). See also top-secret memo from Allen Dulles to director of the CIA and chairman of the Psychological Strategy Board, “Analysis of the power of the Communist Parties of France and Italy and of measures to counter them,” AH.

  44. Blum, CIA: A Forgotten History, p. 114. Murray Waas reported in The Nation (June 19, 1982) that Springer received $7 million in the early 1950s.

  45. Thomas Schwartz, “From Occupation to Alliance: John J. McCloy and the Allied High Commission in the Federal Republic of Germany, 1949–52,” unpublished thesis, Department of History, Harvard University, June 1965, pp. 332–33.

  46. Peter Coleman, The Liberal Conspiracy (New York: Free Press, 1989), pp. 27–32.

  47. Ibid., p. 9.

  48. Ranelagh, The Agency, p. 246; McCloy to Paul G. Hoffman, 12/31/51, McCloy HICOG Papers, NA (Suitland). By this time, McCloy already had a close relationship to the Ford Foundation, which in the summer of 1951 contributed $25,000 to the McCloy Fund, a charitable trust consisting of funds contributed by various corporations and McCloy friends. McCloy was given exclusive control over the distribution of these private funds. (Paul Hoffman to McCloy, 7/16/51, Fund for the Republic Papers, box 16, PU.)

  49. Ranelagh, The Agency, p. 194.

  50. Ibid., p. 246.

  51. McCloy was partially influenced by theoreticians of psychological warfare like Edward Meade Earle of Princeton’s Institute for Advanced Study. A prominent historian, Earle had served on the OSS’s Board of Analysts and had helped Bill Donovan recruit academics for intelligence work during the war. By the early 1950s, Earle was working with Allen Dulles and C. D. Jackson on various intelligence projects, including “some of the problems of ‘psychological warfare’ directed toward our allies.” McCloy and Earle had been personal friends for some time, and from their correspondence it is clear that the Princeton academic helped provide McCloy with a theoretical framework for HICOG’s intelligence activities. A typical anticommunist liberal, Earle emphasized the importance of public relations. He thought rewarding and promoting liberal-thinking Germans and critical institutions such as newspapers and labor unions was a positive tactic, and McCloy agreed, particularly when he felt he had so little time left. Financing Axel Springer’s press empire was a case in point: Springer was chosen because he gave evidence of liberal attitudes and a willingness to publish American-style critical, muckraking journalism. Similarly, McCloy favored the funding of SPD labor unions and individual Social Democratic politicians in order to build a credible anticommunist opposition to Adenauer’s Christian Democrats. (Edward Meade Earle to Lieutenant General Al Gruenther, 10/1/51; McCloy to Earle, 12/22/49, Edward Meade Earle Papers, PU; Robin W. Winks, Cloak and Gown: Scholars in the Secret War, 1939–1961 [New York: William Morrow, 1987], p. 70; Who’s Who in America, 1936–37, vol. 19, p. 784.)

  EIGHTEEN: THE CLEMENCY DECISIONS

  1. William Manchester, The Arms of Krupp, p. 377.

  2. Benjamin B. Ferencz, Less Than Slaves: Jewish Forced Labor and the Quest for Compensation (Cambridge, Mass.: Harvard University Press, 1979), p. 70.

  3. Some of the beatings took place in the cellar of the Main Administration Building, in which Krupp had his office. The journalist Bernard Fall later reported, “Sometimes, the German employees on the first floor complained about the screams and cries that emanated from those cellars, but the directing members of the Krupp firm had their offices on the third floor. . . .” (Bernard B. Fall, “The Case of Alfried Krupp,” Prevent World War III, Summer 1951, published by the Society for the Prevention of World War II, pp. 39–40.)

  4. Manchester, The Arms of Krupp, pp. 644–45.

  5. Conrad E. Snow to Jack Tate, 7/26/50, DOS FOIA.

  6. J. M. Raymond memo to Robert Bowie, 9/11/50, DOS FOIA.

  7. John Bross memo to McCloy, 8/18/50, McCloy HICOG Papers, NA (Suitland).

  8. Thomas Schwartz, “From Occupation to Alliance: John J. McCloy and the Allied High Commission in the Federal Republic of Germany, 1949–52,” unpublished thesis, Department of History, Harvard University, June 1965, p. 451.

  9. NYT, Aug. 26, 1950.

  10. Ferencz, Less Than Slaves, p. 74.

  11. NYT, Sept. 14, 1950.

  12. On Jan. 2, 1951, Adenauer reiterated his hope for
a “great clemency.” (See McCloy to State Department, 1/3/51, DOS FOIA; Schwartz, “From Occupation to Alliance,” pp. 453–54.)

  13. Schwartz, “From Occupation to Alliance,” pp. 453–54.

  14. Meeting between Mr. McCloy and delegation from Bundestag, 1/9/51, McCloy HICOG Papers, NA (Suitland).

  15. T. H. Tetens, The New Germany and the Old Nazis, p. 206.

  16. Manchester, The Arms of Krupp, p. 648.

  17. But there was no doubt about his guilt. Von Weizsäcker’s own son, who in the 1980s became president of West Germany, later publicly acknowledged the seriousness of his father’s crimes.

  18. NYT, Oct. 15, 1950. On Oct. 17, 1950, Buttenwieser told a HICOG staff meeting, “I guess Mr. McCloy was impressed by the letters [on behalf of Weizsäcker] because they came from the type of people whose influence you couldn’t buy. . . . It is true that there was the letter [signed by Weizsäcker] that sent some 6,000 people to some concentration camp and he okayed it, but there was considerable evidence to say that in some ways he had not been as bad as he might have been; therefore, Mr. McCloy said that there ought to be some indication that with so many people speaking in his behalf, they should not be unheard.” (HICOG staff meeting, 10/17/50, McCloy HICOG Papers, NA (Suitland).

  19. Acheson cable to McCloy, 11/16/50, McCloy HICOG Papers, NA (Suitland); Acheson memorandum of conversation with Truman, 11/16/50, HST.

  20. Schwartz, “From Occupation to Alliance,” pp. 401–2.

  21. Adenauer to McCloy, 12/5/50; McCloy to Adenauer, 12/19/50, McCloy HICOG Papers, NA (Suitland).

  22. To complicate matters for McCloy, the expropriation order had never been carried out, so the Krupp companies lay intact, operating under the original Krupp-appointed managers. Earlier in the year, several American politicians had written McCloy, protesting this fact and urging him to seize the properties and redistribute them to new owners. In answering these appeals, McCloy’s legal counsel had discovered a problem. In March 1949, shortly before leaving Germany, General Clay had found cause to amend the confiscation order. The original order had specified that Krupp property would be “delivered to the Control Council for Germany. . . .” This would have given the Soviets grounds for a claim to at least a portion of the confiscated Krupp assets in the Ruhr. So HICOG lawyers rewrote the order, providing that the zone commander in each of the four occupied sectors would take control of Krupp property in that sector. This gave the Soviets no claim to properties in West Germany. But the new language also stated that Krupp assets would only be “subject to forfeiture,” which was different from outright confiscation. John Bross, HICOG’s deputy legal counsel, told McCloy in the spring of 1950 that his office would study the matter, but, clearly, McCloy realized now that, if the Nuremberg expropriation judgment was to be carried out, he would have to issue a confiscation order in the American sector and persuade his fellow commissioners to do the same in their sectors. To further complicate matters, the Krupp family was attempting to block any expropriation order on the grounds that the Nazi law under which Bertha Krupp had transferred sole ownership to her son was illegal. In the spring of 1950, with the appointment of the Peck Panel, McCloy simply allowed the matter to slide. (John Bross memo to Chester McClain, 1/19/50; General Hays to Governor Lehman, 3/20/50; Senator Joseph C. O’Mahoney to Hays, 3/10/50, McCloy HICOG Papers, NA (Suitland).