by Curt Gentry
Although instrumental in persuading Roosevelt to give the FBI permission to wiretap, Treasury Secretary Henry Morgenthau, Jr., remained an archrival. There was almost an inevitability to their clashes: despite their disparate backgrounds, the two men were too much alike. Each was a bureaucratic giant, obsessed with defending—and, whenever it suited his purposes, expanding—his territorial fiefdom. And each was a consummate schemer, used to getting his own way, unforgiving when he did not. Their behind-the-scenes confrontations rarely made headlines, but they were often felt throughout the government. They battled over everything, from the issue of Communists in government (Morgenthau refused to believe there were any in the Treasury Department, as he often told his aide Harry Dexter White, who was later accused of being a Soviet spy), to the disposition of one of Hoover’s used cars. Shortly after the United States entered the war, the FBI director—presumably in the spirit of patriotic sacrifice—offered to give the president one of his bulletproof limousines. Convinced that this was just another of Hoover’s attempts to usurp the protective functions of his Secret Service, the treasury secretary vetoed the gift and had the Secret Service specially modify for the president’s use a bulletproof limo the IRS had seized from Al Capone.
Although their agents usually worked well together, there were nearly constant battles between the heads of MID, ONI, and the FBI, many of which had to be settled by the White House. For example, in August 1944 the Navy sank a German submarine. Among the survivors was an Abwehr agent who had been sent to the United States to link up with an already established espionage network. But when Hoover asked to interrogate him, Admiral Roscoe Schuirmann, the director of Naval Intelligence, informed him that he could not do so, since the agent was a commissioned officer of the German armed forces and, if word got out, American military prisoners of war in Germany could be subject to questioning by the Gestapo and other civilian police organizations. In his angry, three-page complaint to Harry Hopkins, Hoover argued that in a case of this importance “legal technicalities of an arbitrary nature should be viewed in the light of the immediate welfare of the American people and the war effort and not construed to the detriment of the American cause.” Roosevelt agreed, and the man was turned over to the FBI for interrogation.41
Hoover’s chief nemesis, however, remained William J. Donovan. On December 9, 1941, just two days after Pearl Harbor, the OSS head launched his own sneak attack on the FBI, by persuading Roosevelt to give him the job of coordinating the activities of all the North American intelligence agencies.
Quickly counterattacking, Hoover protested that the president had already given the FBI responsibility for all intelligence in the Western Hemisphere.
Caught in the crossfire, Roosevelt took Hoover’s side, and on December 23 signed a presidential directive reaffirming the authority of the FBI.
Sent a copy of the order, Donovan protested, only this time he was joined by the heads of MID and ONI, who somehow thought their jurisdiction over military intelligence was being challenged.
With far weightier matters on his mind, Roosevelt decided to withdraw from the bureaucratic battling. On December 30 he sent a memorandum to all concerned stating, “On 23 December, without examination, I signed a confidential directive…I believe that this directive interferes with work already being conducted by other agencies. In view of this, please meet together and straighten out this whole program and let me have whatever is necessary by way of an amended directive.”42
On January 6, 1942, the main combatants met in Attorney General Biddle’s office. It was no contest. Assured their intelligence jurisdictions remained unchanged, the heads of MID and ONI sided with the FBI director. The December 23 directive was reaffirmed, with only minor concessions on Hoover’s part. OSS agents would be allowed to operate in the Western Hemisphere but only outside of the United States and then only after first informing the FBI. Moreover, they would not be allowed to operate under cover.
Since this left Donovan a fairly broad area of operations, including most of Europe,* he should have been content. But he wasn’t. Four days later he wrote Attorney General Biddle complaining that the FBI wasn’t sharing its South American intelligence: “Up to this time material collected by you in South America has not been made available to us. It is necessary that it should be, because Axis activity and intention in South America bears upon the evaluation of information coming from other countries.”
He had no desire to take over Hoover’s organization, Donovan claimed, or to set up one of his own in South America. All he wanted was to share the FBI’s intelligence, since the OSS had “no observers or operators in that area.”43
Hoover knew better. He was well aware that Donovan had his own men operating not only in Central and South America but even closer to home.
That same month, the OSS, invading FBI turf, did a bag job on the Spanish embassy in Washington, D.C. Hoover, on learning of the break-in, bided his time.
When the OSS again burglarized the embassy, in April, two FBI squad cars pulled up outside and turned on their sirens. Donovan’s agents, who were busy photographing documents, barely had time to escape.*
Donald Downes, who headed the operation, awoke Donovan with news of the fiasco. “I don’t believe any single event in his career enraged him more,” Downes later recalled. The next morning Donovan went to the White House to protest, only to find that Hoover had beaten him to it. Donovan was ordered to turn over all his U.S. operations, including his informants, to the FBI.44
Donovan complained, “The Abwehr gets better treatment from the FBI than we do,” and declared his own war—against the Federal Bureau of Investigation. Later he told Allen Dulles, “When the FBI infiltrated us and pulled that stunt at the Spanish Embassy, I thought that’s a game two can play. I’ve had our men inside the Bureau for months.”45 Donovan also started compiling his own file, of FBI blunders. And he ordered a highly secret investigation into the rumors of Hoover’s and Tolson’s alleged homosexuality, the first of a number of such inquiries, which continued long after the OSS became the CIA.
When Hoover sent the first cadres of his Special Intelligence Service (SIS) to Central and South America in July 1940, their initial task was to collect intelligence, especially in countries with heavy concentrations of German émigrés and sympathizers. Soon, however, they assumed a far more active role, helping round up Axis agents, saboteurs, and smugglers of strategic war materials and, equally important, diverting the funds with which the Nazis intended to finance their Latin-American enterprises.
In Bolivia the SIS, working with the British, exposed an Axis-inspired coup d’état. Had it succeeded, U.S. steel and arms production would have been seriously hampered, since Bolivia was the chief supplier of wolfram, the ore from which tungsten is derived. In Argentina the SIS reported on the rise of Vice-President Juan D. Perón and intercepted messages proving that he was communicating with Adolf Hitler. In Mexico the FBI legal attaché became so close to the president that he was able to report on the secret deliberations of his cabinet, and even drafted legislation for his signature. In nine of the Latin-American republics FBI representatives acted as technical advisers to the police, in the process establishing working relations that continued long after the war (in some cases, to Hoover’s embarrassment). By 1944 Hoover could claim that the SIS’s overt and covert operatives had succeeded in locating “and eliminating” twenty-nine clandestine radio stations and been able to “completely neutralize through arrests, internments, etc.”* some 250 enemy agents, plus hundreds of informants, couriers, and minor collaborators (one roundup of Axis agents in Brazil resulted in five hundred arrests).†46
Adolf Berle, whose State Department was the chief recipient of much of the FBI’s intelligence data, later characterized the Bureau’s Latin-American operations as “a great piece of work.” Ernest Cuneo, who acted as liaison between Stephenson’s BSC, Hoover’s FBI, and the White House, called it simply “a hell of a job.”47
Justifiably proud of
the SIS’s accomplishments, Hoover, looking ahead to the war’s end, began making plans to expand his organization worldwide. Unfortunately for the FBI director, the head of the OSS had his own plans.
There were eight separate investigations of the Pearl Harbor disaster. Neither the Japanese questionnaire nor the name Dusko Popov was mentioned in any of them.‡
Had they been, there is little doubt, J. Edgar Hoover’s long tenure as director of the Federal Bureau of Investigation would have come to an abrupt end. Instead, the U.S. Navy and, to a lesser extent, the Army, became the scapegoats. Following the FBI director’s testimony at the last of these hearings, Representative Bertrand Gearhart of California observed, “If the Army and Navy had been as aware of the situation as Mr. Hoover was, there probably would have been no necessity for this investigation at this time.”48
As far as the FBI’s role was concerned, the Pearl Harbor cover-up was completely successful, with one important exception.
The British knew.
That both Popov and his handlers in British intelligence were bound by Great Britain’s Official Secret Act was no consolation to Hoover. If it suited their purposes, the officials of MI-6 were quite capable of leaking the most highly classified information, as Hoover well knew, having often been the recipient of such disclosures.
The British knew. And just the possession of that knowledge, even if never revealed, was a subtle form of blackmail. No one had to explain the rules of that game to J. Edgar Hoover.
* * *
*It was a fairly broad roundup, however. Of the 16,062 enemy aliens arrested during World War II, fewer than a third were interned or repatriated; the majority were either paroled or released—leading to the inevitable conclusion that the FBI and the INS had different standards of dangerousness.
*Not coincidentally, the volunteer informants also reported any strike talk, union organizing, or other signs of labor unrest. According to The FBI Story, “It was through this antisabotage machinery that the FBI learned early in the war of the extent of Communist infiltration of some labor unions and was forewarned of the scope of the Communist Party’s activities.”4
†In the spring of 1944, buckling under to complaints from Congress and the public, Hoover canceled military draft exemptions for agents under twenty-five.
*Two years later, on learning he had inoperable cancer, Keith shot himself. Like Melvin Purvis, he used a gun his fellow agents had given him at his retirement party.
*Those postal employees who assisted the FBI were unaware the mail was being opened. Rather, they believed the agents were obtaining “mail covers”—that is, copying the names, addresses, and postmark information from the outside of envelopes—a practice the FBI had engaged in for some years and which was, at the time, deemed legal.
†Although Hoover terminated all of the FBI’s mail-opening programs in July 1966, he blackmailed the CIA into supplying the illegal fruit of its own programs, which the Bureau continued to receive until 1973.
*Interviewed shortly before his death in a mysterious “hunting accident,” the former assistant director William Sullivan admitted that he had “heard” that this “sometimes happened,” but he refused to discuss specific cases in which it had occurred. When asked if it had happened in the Rosenberg, Hiss, or Oswald cases, Sullivan responded, “I’m not going to answer that.”
Another former headquarters official, who does not wish to be identified, said simply, “It happened a lot oftener than anyone cares to admit.”18
*In fairness to the SACs, it must be said that most break-ins were the result of pressure from FBIHQ to produce results in a particular case. However, if an operation was “compromised,” it was usually the SAC who was held accountable.
†Frank Donner has observed, “Although the FBI covered itself against possible charges of deception by noting that its list was ‘incomplete,’ one can only conclude that the intent to deceive the Church Committee—both about the total number of entries and targets and the date of termination of the burglary practice—was deliberate. Nothing suggests a purpose to mislead so clearly as the fact that the unit which collected the data for submission to the Church Committee…was in charge of a course of instruction in burglary techniques at Bureau headquarters in Quantico, Virginia.”20
*One former attorney general, Ramsey Clark, believes the true number of wiretaps was at least double the number Hoover reported to Congress. Horace R. Hampton, a Chesapeake and Potomac Telephone Company executive, who for twenty-two years handled all national-security wiretap requests in the District of Columbia, stated in a deposition that there were about a hundred national-security wiretaps in operation at any given time in the District alone.23
†Since no records were kept, there is no way to determine how many “suicide taps” there were. However, the former special agent William Turner observes, “From my experience, I suspect the practice was widespread…What the Bureau didn’t know—or didn’t want to know—was that you cannot train and equip people for electronic intrusion and expect them to hold themselves in check. It is just too handy a shortcut for human nature to resist.”24
*The story of one such bug became a Bureau legend. On discovering that Special Agent Norman Ollestad was dating the daughter of the Mafia moneyman Meyer Lansky, the Miami SAC called Ollestad in and demanded an explanation. Hastily improvising, Ollestad told him that he was developing a “CI,” or Criminal Informant. Mollified, the SAC then came up with what he considered a brilliant plan. The next time Ollestad was in Lansky’s home, he plugged up the toilet. An FBI agent, impersonating a plumber, then unplugged it and installed a bug in the bathroom. “The only thing we ever got out of that recording device” Ollestad recalled, “was hours of recording tapes of running water, flushed toilets and an occasional emission of gas.”25
*According to Roosevelt’s biographer Ted Morgan, the president, who immediately assumed that the charges were true, was less than sympathetic. In the Army, he told Senator Alben Barkley, this sort of thing was handled by having a fellow officer leave a loaded gun with the accused, on the assumption that he would do the right thing and use it.27 However, Walsh was one of the isolationists. As will be observed, when similar charges were brought against his close friend Under Secretary of State Sumner Welles, Roosevelt reacted differently.
*Dasch later claimed that his knowledge of German U-boats alone was of enormous strategic value to the U.S. Navy. In addition to pinpointing the location of a German submarine base U.S. intelligence didn’t even know existed, his “information that the German submarines were operating at the then unheard of depth of six hundred feet—far deeper than American subs could dive, and well below the range at which American depth charges had been set—proved a vital factor in combating the wolf packs that had been taking a staggering toll of American ships.”32
*Nevertheless, it was another three years before President Truman pardoned Dasch and Burger and ordered them deported to Germany, where they were treated as traitors who not only had betrayed the fatherland but also were responsible for the deaths of six of their comrades. Dasch’s own, understandably bitter account, Eight Spies against America, didn’t find a publisher until 1959 and then was largely ignored by reviewers.
*Under the revised presidential directive on intelligence, the OSS was restricted to neutral countries outside the Western Hemisphere and to enemy and enemy-occupied countries. There was a further restriction, however. Neither General MacArthur nor Admiral Nimitz would allow the OSS to operate in the Pacific theater. While it is possible that Hoover may have had some part in the ban, it is just as likely that MID and ONI, both of which opposed Donovan’s organization, were responsible.
*The FBI’s own coverage of the Spanish embassy was more than adequate. In addition to TELSUR, FISUR, and mail and cable interception, the Bureau had three confidential informants working inside the embassy. There was similar coverage of the residence of the Spanish ambassador and his staff; the Spanish Library of Information in New York City
; and the Spanish consulates in New York, New Orleans, Chicago, Philadelphia, San Francisco, and San Juan, Puerto Rico. In addition, as the result of earlier FBI break-ins, U.S. experts had succeeded in breaking the Spanish diplomatic and commercial codes.
*That very loaded “etc.” included the kidnapping of Nazi agents in Brazil, Argentina, and Chile and their incarceration in the U.S. Canal Zone.
†At its peak, the SIS had 360 agents in Latin America, many of them operating under cover. Four were killed in the line of duty, all in plane crashes, including Assistant Director Percy Foxworth, the agent to whom Dusko Popov gave the Japanese questionnaire.
‡The existence of the Japanese questionnaire, and its full text, was not made public until December 1972, seven months after J. Edgar Hoover’s death, with the publication of J. C. Masterman’s The Double-Cross System in the War of 1939 to 1945. Popov’s own memoirs, Spy Counter-Spy, were not published until two years later and then only after FBI agents tried, unsuccessfully, to persuade his publisher, Grosset & Dunlap, that Popov’s story was bogus.
21
The FBI Director, the First Lady, and Other Matters
The investigation of Edith B. Helm appeared, at first, to be nothing more than a routine background check, one of hundreds the FBI conducted. Lacking investigative staffs of their own, an increasing number of federal agencies, boards, and commissions relied on the FBI to determine whether their applicants, appointees, and employees had subversive affiliations. Hoover not only welcomed such work; he solicited it, envisioning the day when anyone who wanted to work for the U.S. government would first have to be cleared by the FBI.*