Soldiers, Spies, and the Rat Line

by James V Milano

  America's Undeclared War Against the Soviets

  Col. James V. Milano, USA (Ret.) and Patrick Brogan

  This book is dedicated to the members of the intelligence community

  who served with the U.S. Army in Austria following World War II.

  They were a group of talented and dedicated people who lived and

  worked under the growing cloud of the cold war. Their contributions

  greatly aided the American government's understanding of the

  Soviet threat that led to more than four decades of global

  confrontation and conflict.

  Acknowledgments ...............................................Ix

  Preface .............................................................xi

  1. The Chilean Connection ..............................1

  2. The Cover-up I I ..........................................

  3. A Start in the Business ............................. 19

  4. Austrian Beginnings .................................29

  5. The Rat Line ...........................................43

  6. Running the Rat Line ................................55

  7. Mauthausen and the Underground Railroad..67

  8. Trouble in Naples ....................................81

  9. The Pursuit of Love ..................................95

  10. The Central Intelligence Agency ............... 105

  1 1. Operation Backfire 1 ................................. 15

  12. Tales of the Vienna Woods ...................... 131

  13. Rivals and Enemies ................................I39

  14. Former Enemies, Future Allies .................. 147

  15. Peering over the Iron Curtain ................... 155

  16. The Rover Boys ..................................... 171

  17. The Goulash Connection ......................... 177

  18. The Major and the Hooker ....................... 191

  19. The Butcher of Lyons ..............................201

  20. The End of the Rat Line 1 ..........................21

  Appendix ........................................................223

  Index .............................................................229

  I would like to thank my son, James, for his valuable assistance in planning and organizing the initial phase of the project. Also, John B. Burkel, former agent in charge of the Counter-Intelligence Corps in Salzburg, Austria, during those exciting days. John was most helpful in recalling many of the details of those times.

  I am most grateful for the clerical assistance extended by Anna Amato, our office coordinator at Pfizer Aviation.

  Last, special thanks to my wife, Ann, for her patience and understanding. We spent those years together in Salzburg when, due to security restrictions, she had virtually no knowledge of what I was doing. Fellow workers came to the house after office hours, and she was never included in the conversations. Telephone calls to report to the code room often came in the middle of the night, and she endured many lonesome hours due to my extensive meetings after work.

  -James V. Milano

  This is a story of the secret beginnings of the cold war in Europe. It concerns intelligence operations carried out for the U.S. Army in Austria immediately after World War II-before the CIA came on the scene-and the "Rat Line" that was used to smuggle Soviet deserters to South America. The operation was kept secret from civil officials of the U.S. government, and from most military officers, and remained hidden for nearly forty years.

  It is Jim Milano's story. He was a young intelligence officer with the American army in Italy that fought its way from Sicily to the Alps and then undertook the occupation of Austria. He directed American military intelligence against Soviet targets from 1945 to 1950, and established the Rat Line. The line's existence, and Milano's role in it, emerged in 1983 when the public learned of the case of Klaus Barbie. Barbie was a Nazi war criminal who had been smuggled out of Germany in 1951 by American officers there and who used the escape route that had been set up by their colleagues in Austria. Milano had left Europe by then and never heard of Barbie until the case became public decades later. The Rat Line, while he operated it, was never used by war criminals; it was reserved exclusively for Soviet defectors and their families. His successors in Austria, at the bidding of their associates in Germany, broke that rule. There was a great outcry in the United States when the public learned that U.S. Intelligence had employed Barbie and had then sent him to safety in South America to escape prosecution for war crimes. The Justice Department held an inquiry. Jim Milano was interviewed and gave an account of his activities in the postwar period and a history of the Rat Line. The inquiry concluded that between 1945 and 1950 the Rat Line may have acted with dubious legality, but did not help war criminals. Milano and his team had nothing to do with Klaus Barbie.

  Now Jim Milano has told his own story of those dramatic events. No files survive of the Rat Line or any of the other operations he directed. After forty-five years, a great many of those who had a part to play have died, and very many details of their secret campaigns, their triumphs and failures, have been lost for good. Old men forget, but he offers his imperfect recollections as the best record still available of this corner of modern history. He gave these and his papers to Patrick Brogan, a writer living in Washington. These are Jim Milano's memoirs as recounted by Patrick Brogan, which is why the book is cast in the third person. The authors did not want a "ghostwritten" book like the memoirs of politicians, film stars, or prominent businessmen in which the purported author puts his name to someone else's work.

  In writing the story for Milano, Brogan has checked whatever details can still be confirmed after such a long interval, and has added some background as well as details of the Barbie case, which all appear in their appropriate place. The conversations are obviously reconstructions based upon Milano's best recollection. Some of the incidents recounted were only partly to be recovered, but nothing was invented, nothing added. Jim Milano was no James Bond, but this is a true story of the real world of intelligence during the most dangerous period of the cold war.

  James V. Milano

  Patrick Brogan

  In the fall of 1948, a dilapidated Italian freighter made the long, slow voyage from Genoa in Italy to Valparaiso in Chile. It was a sign, one of many, that life and trade were reviving after the bloody interruption of the war. The ship was in no other way significant, the general goods she carried were not at all remarkable, and all the world's governments and intelligence services ignored her. But there were also passengers on board, refugees or emigrants who were ready to put up with the great discomforts and delays of the cargo line. It was the cheapest and least conspicuous way to escape from the grim reality of postwar Europe to the peaceful, different, and vaguely exotic world across the oceans. It had been autumn when they had left Italy, with its promise of another cold, uncertain winter, but they would arrive in the spring of the southern hemisphere to blue skies, a new life, and renewed hopes.

  If the intelligence services of the United States or the Soviet Union had paid closer attention, they would have found two of those passengers particularly interesting. They carried immigrant visas for Chile, provided by the Vatican Office for Refugees. The documents stated that they were good Catholics from Central Europe, plumbers, qualified artisans, just the sort of immigrants Chile needed. They had appeared on the dock in Genoa on the morning the ship sailed, their tickets and documents all in order, and had been hustled aboard at the last moment by Italian police officials, closely watched by silent men in civilia
n clothing whose nationality and intentions were never revealed. The two spoke no Italian, Spanish, or English, conversing together in some incomprehensible Slavic tongue, and kept themselves to themselves throughout the long voyage west. People traveling the world on their own business in those days were jealous of their privacy. They often had their own, excellent reasons for discretion and did not concern themselves with the identities and business of any strangers they might encounter. It was a prudence greatly appreciated by the two travelers.

  They could have told an extraordinary story, even for those exceptional times. They were refugees from the Soviet Union, deserters from the Red Army, whose names and histories had been wiped away by American intelligence agents in Austria. The Americans had recruited them and had spirited them away from the vengeance of the Soviet security service, the MGB (later known as the KGB). They had been hidden in obscure farmhouses in the Alps and in apartments in small towns in Austria for months while they were thoroughly and laboriously interrogated to discover everything they knew about the Soviet army. They were taught the rudiments of a useful trade, in this case plumbing, and the Americans had bought new identities and passports for them from a corrupt Yugoslav priest in the Vatican. They had been given tickets on that anonymous freighter. They had been taken secretly from Austria to Genoa, with the complicity of senior officers in the Italian Security Police, and hustled on board before any of the emigration or port authorities could examine their papers too closely. The whole operation had been conceived and executed by a group of young Americans working for Army Intelligence but acting wholly outside the normal Army chain of command. They called the operation the Rat Line. It was a method of getting Soviet deserters out of Europe secretly, away from the danger of being kidnapped or killed by the KGB.

  The group of Americans who controlled the Rat Line was commanded by Major James Milano, chief of operations of the intelligence staff of the U.S. Army in Austria, who protected his own identity and his operations as closely as did the refugees. His headquarters was in Salzburg, far from the spotlight that illuminated army command in Vienna. Secrecy, anonymity, and discretion were the rule. The refugees were never to draw attention to themselves. They were to merge silently into their new lives, leaving no trace behind them.

  The Americans had given the two the cosy code names Patsy and Pete, and, when they sailed from Genoa, their hosts hoped they had heard the last of them. But six weeks later, as they stepped into the immigration hall in Valparaiso, all the nightmares returned. Standing before them, in the uniform of a Chilean customs official, was a German SS lieutenant, a war criminal and murderer, who had killed Patsy's brother in a concentration camp in Germany.

  The brothers had been captured by the Wehrmacht during the siege of Leningrad in 1943 and shipped with tens of thousands of other prisoners in cattle trucks a thousand miles west to a camp in Germany. The prisoners were to be worked to death, and Patsy and his brother had been put on a gang laying railroad track. One day, as they were being driven to the site, one of the SS guards had beaten Patsy's brother with a whip. The brother had tried to defend himself, grabbing the whip from the man's hand-and the guard had shot him dead. Patsy had been powerless to help. Other prisoners had seized him by the arms to keep him from interfering: otherwise he would certainly have been shot beside his brother. But the guard's face, the face of a killer, had been forever seared into his memory. He saw him again, four years-later,-in Chile.

  There was no doubt of his identity. South America was the favorite refuge of war criminals who could escape: Adolf Eichmann, Josef Mengele, and Klaus Barbie were merely the most famous. There were many rat lines out of Europe after 1945. Many German police and military officers escaped to Chile and naturally offered their services and a sanitized version of their experience to the local police authorities, who gave some of them employment. A cruel accident had brought this killer face to face with one of his victims. The SS man transformed into a Chilean customs official was suddenly confronted by the refugee whose brother he had murdered.

  Patsy was a Russian officer. He had survived the horrors of the Nazi death camps, where nine out of ten Soviet prisoners had died. At the end of the war, the camp had been liberated by the Red Army, in the spring of 1945. Patsy had concealed his identity from the commissars and had made his way to a displaced persons camp near Linz in Austria. There he had met Pete, another Soviet deserter, and the two had been discovered by American interrogators examining the thousands of people in the camps. During his travels after his defection, Patsy had obtained and hidden an Italian Beretta 9mm pistol. He had acquired a few bottles of a fine German wine and used them to buy the pistol from an Italian soldier, stranded in Austria and trying to get home, who knew that he would have to part with his gun when he presented himself to the authorities and preferred to sell it instead.

  Now, in Valparaiso, Patsy saw his enemy before him in uniform. Immediately, though he was surrounded by other refugees and the police and officials of the country he had hoped to make his home, he pulled out his pistol and hurled himself onto the Nazi, firing the pistol and shouting that he was avenging his brother.

  The man was shot in the stomach and fell screaming to the floor, in a widening pool of blood. There was pandemonium in the cus toms hall as passengers and civilians dived for cover while uniformed police pulled out their guns and rushed to the scene. Miraculously, the Nazi was not killed, though he was seriously wounded, and Patsy was seized and thrown to the ground before he could finish the job. He was arrested and interrogated, and the Chilean authorities discovered immediately that he and his companion were not at all the simple plumbers they claimed to be. They may also have learned something of the true history of their new customs official.

  The incident was potentially a catastrophe for American intelligence operations in Europe, which depended on defectors from the East for information on the Soviet armed forces and the situation behind the Iron Curtain. The shooting in Valparaiso occurred at the most dangerous moment of the cold war, during the Berlin Airlift and soon after the Communists had seized power in Czechoslovakia. It was essential to continue gathering intelligence on the strength and intentions of the Soviet army and therefore equally important to keep the Rat Line open, so that the deserters and refugees could be made to disappear when they had told their tales. Now the whole Rat Line might be unraveled and one of the U.S. Army's best hidden intelligence operations revealed. The danger was not only from the Soviet secret service, the KGB. As ever, the various departments of the U.S. government were at odds with one another, competing for power and reputation. The State Department and other bureaucracies barely accepted the necessity for clandestine operations, and if they were to find out about the Rat Line, which was altogether illegal and unofficial, they might also discover all the other secret operations conducted by Milano and his friends, and an invaluable source of intelligence would be compromised. There were high officials in Washington who were quite capable of closing down a major intelligence source, just because they had never been told about it, and others who would insist on shutting down the Rat Line because it could embarrass the U.S. government. Patsy and Pete had to be saved, and every trace of their passage across Europe and the Atlantic had to be erased.

  The Chilean police quickly decided that this was an international affair, a question involving the secret services of several countries and an echo of the war in Europe that had ended three years before. They wanted none of it. They decided to save themselves the trouble of a trial and simply deported Patsy and Pete back to Italy-and informed the U.S. and Italian governments. Jim Milano and his colleagues would have to deal with them and salvage the Rat Line.

  As soon as news of the Chilean disaster reached him, Milano convened his staff to decide how to limit the damage. They sat and marveled at the malign coincidence that had brought Patsy face to face with his enemy. He had often told his American interrogators about his brother's murder, how he had missed being killed himself, how clearly he
remembered the face of the murderer, and how implacably he vowed vengeance. The odds against such an encounter must have been millions to one.

  Paul Lyon, the chief operator of the Rat Line, had rushed down to Genoa to speak with his contact in the Italian police there and had returned seriously concerned. Major Mario Anselmo, chief of security for the Border Police branch of the Carabinieri, had been informed by the port police and the Genoa police that the two undesirables were due back in a few days. The Chilean police had held them for a week before their ship had turned around and had doubtless discovered that they were not the simple immigrants they pretended to be. The State Department in Washington had gotten wind of the affair and was putting pressure on the Italians to investigate it thoroughly and to send them a report of their findings. The embassy in Rome had sent two investigators to Genoa, and they were already interrogating the local police. Perhaps the Chilean government had protested directly to Washington, suspecting that the United States was running an illegal rat line out of Europe to South America.

  Fortunately, the Genoa police knew nothing. Major Anselmo had seen to that. But when Patsy and Pete came ashore, they would be arrested immediately and the whole saga would be revealed. The group briefly considered reporting the matter to their superiors in Vienna and asking their help. Milano slapped the idea down firmly. That was not the way they did business.

  "Those idiots would probably give all sorts of orders that would screw up everything," he said. "They'd have Patsy put on trial out in the open where the Russians could see him, they'd wind up the Rat Line and God knows what else. We'll solve this one ourselves-and if anyone ever asks us about it later, we'll just have to tell them and take our lumps. Until then, not a word to anyone."

  That solved that problem. Lyon was a smart operator. He had not spent his time in Genoa wringing his hands. He had already taken the first, essential step toward extricating them all from their difficulties.