LETTER TO ROSCOE H. HILLENKOETTER FROM EMERSON BIGELOW RE RESIGNATION FROM THE CENTRAL INTELLIGENCE AGENCY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 00619333
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 5
• Document Creation Date: July 13, 2023
• Document Release Date: August 30, 2022
• Case Number: F-2020-01140
• Publication Date: January 31, 1948

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K�'
EVERSON BIGELOW
2709 DUMBARTON AVENUE, N. W.
WASHINGTON 7, D. C.
31 January 1948.
Roscoe H. Hillenkoetter, Rear Admiral, USN
Uashington 25, D. C.
My dear Admiral:
In view of the possibility that my recent resignation from the
Central Tntelligence Agency has been brought to your attention by
Col. Galloway, I am desirous to lay before you a more complete ex-
position of the case history than Col. Galloway might feel impelled
to give you. There are, furthermore, in this situation as in all
controversies two sides. It seemed likely to me that you would want
to know mine in order that you might form a more adequate judgment
of the case than you might derive from a one-sided presentation.
This is the more important to you inasmuch as there is a possibility
that outside inquiry might be made of you concerning this particular
situation.
All that I can be sure you know or have heard of me and my work
is that I am an "arbitrageur" of foreign bank notes, and that my "job
is a highly complex one", or so it was described to you in my hearing
the one day I met you in my room when you made a trip through Que
Building last Spring with Mr. De Bardeleben. It was you, in fact,
who asked if I were not an "arbitrageur".
Actually my functions and history of my training and experience
are more extensive than this might indicate.
In World War I from Yale University I volunteered and was accepted
upon the outbreak of War for service in the USNRF as a signal quarter-
master. I was selected with others to attend certain classes in naval
intelligence at the War College at Newport, R. I. Later I was given
a provisional commission with the USNRF only shortly thereafter, to
qualify for an accelerated course at the U. S. Naval Academy. The
successful completion of this course with honors resulted in my re-
ceiving a temporary commission in the regular USN. Part of my World
War I experience was in naval intelligence. I have, therefore, a sound
practical knowledge and have had a working experience in intelligence
work. After World War I I became an international banker and after many
years won recognition as an authority on international finance and ,
foreign exchange operations. It was due to this,4s well as to m/6
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World War I experience, that I was asked to engage in fiscal counter-intel-
ligence work shortly after the German invasion of Poland. This I continued
until I was called to Tashingten in the early days of the 0.S.S. It was
due, in great measure, to this happy combination of experience in fiscal
intelligence operations and in, foreign exchange that my work in O.S.S. proved
so successful. ry record of success was not only recognized by many, but
was deemed worthy of a special letter of commendation by the Director of
0.S.S., and of laudatory comment by the then Under Secretary of the Treasury.
It has furthermore been recognized by every succeeding commanding officer
or Director since those days until the incumbent - Col. Galloway. Yy 0.S.S
work entailed the proper handling, bookkeeping and accounting as an individual
Agent Cashier of some 30 odd million dollars used in connection with special
financial arrangements or in connection with the secret foreign financial
supply function in all parts of the world except Central and South America,
in which areas 0.S.S. did not function. This was a greater sum than used
by any other Agent Cashier.
Now I come to the history of the specific difficulties which have led
to my reluctant resignation. In the Spring of 1946 Er. E. D. Echols was
appointed Chief of the Special Funds Branch to liouidate the outstanding
advances and accountings of 0.S.S. under the direction of the Strategic
Services Unit of the Tar Department, pending decision as to the ultimate
disposition of this Unit. In July 1946 when it was decided that this War
Department Unit was to be turned over to the Central Intelligence Group
and that this Group was to become a permanent adjunct of government, and,
as such, to resume some of the secret intelligence procurement operations
of the former O.S.S. on an expanding scale, Mr. Echols, in view of the
possibility that his job would be an expanding one, immediately attempted
to change the character of his work and to build up a new job. In order
to do so and because of his lack of operational experience, he proposed a
number of policies to Col. Galloway, which the latter was tempted to support
because of his own operational inexperience and because they were presented
to him as measures of protection to his own probable position. I protested
some of these proposals as operationally unsound to the then Director, Col.
W. W. Quinn, who took immediate steps to insure to me the necessary facilities
to carry on my work, by appointing me as Chief of the Fiscal Intelligence Unit,
the support of which I needed for a continuance of the financial support opera-
tions, which I was also asked to supply. Both Col. Quinn and I had the full
concurrence and cooperation of the then Chief of Operations, Mr. S. B. L.
Penrose. This modus operandi carried on successfully until the Spring of
1947 when there took place an internal reorganization ordered by General
Vandenberg and planned by Col. Gallowayls appointees, who were not only
operatiOnally inexperienced but had no financial responsibility of any kind
for the outcome of their recommendations. The adoption by Col. Galloway of
the part of the reorganization affecting my duties and responsibilities was
Only.maidepoSsible because, in the meanwhile, both Col. Quinn and Mr. Penrose
had been supplanted. Under the reorganization, my position was put back under
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Yr. hchols, although I was given "autonomy" by a special directive, ap-
proved by Col. Galloway. Actually under the new arrangement I wcs given
additional responsibilities but was provided with reduced facilities for
carrying them out. The highly desirable Special Fiscal Intelligence Unit,
described on the attached sheet upon which I had leaned heavily in an at-
tempt to minimize the financial risks inherent in my operations, was broken
up. Furthermore in spite of Col. Galloway's directive establishing my
"autonomy" of action, Kr. Echols acted as if it did not exist and privately
stated that his actions would not be guided by it. These facts were brought
to Col. Galloway's attention and he promised he would investigate and, if
necessary, issue new orders, re-establishing my autonomous status, and would
see to it that these new orders would be carried out. This was in October
1947 when I felt compelled to serve positive notice that my position had
been untenable for some time and was steadily deteriorating. I informed
Col. Galloway that I would have to resign if immediate and positive remedial
action was not taken. He asked me to continue as best I could until his
return from Europe. This I did, again pointing out the deplorable and
highly risky state of affairs. At the time of Col. Galloway's return Jr.
Echols himself was abroad. Col. Galloway again promised to "have a talk"
with Vr. Echols upon the latter's return, and protested he had not had
time to take further action. At my suggestion Counsel investigated my
situation, and uncovered, I believe, many examples of inefficiency and
interference on the part of Mr. Echols, and found that my presentation of
my untenable situation was accurate and well founded.
In order that the situation might be saved, even at this eleventh hour,
I consulted many of the men who had been and still were the direct beneficiaries
of my services, all of whom had had previous field experience and had been
financially maintained by my efforts. From these consultations, there evolved
a broad suggestion of organizational set-up and procedure, which was legal
and highly constructive. Had it been adopted by Col. Galloway and put into
effect, he would have obtained simultaneously the benefit of Er. Echols'
training and of the training, experience, technical knowledge and proven
value of the writer. But Col. Galloway did not approve the suggestion nor
did he even explore the detailed possibilities. He did promise to tighten
up certain administrative procedures, which, I believe had been reported to
him by Counsel as badly needing correction. To this time I have seen no
evidence of "this tightening up". Not only did Col. Galloway not explore
the possibility of this broad constructive suggestion, born of the experience
and training of field men, but he made it quite clear to me that he had no
confidence in my recommendations. He even appeared to be critical of my
motives in making them and in bringing to his attention a picture of malad-
ministration in the Special Rands Division which was seriously interfering
with the hitherto successful carrying out of my duties and responsibilities.
Quite incidentally, but for the record, may I say here that Col. Galloway
is the first Commanding Officer who has ever impugned my motives or who has
seen fit to downgrade my efficiency record, in spite of the grading of my
former Commanding Officers, the while he was using the term "expert u when
describing me and my work.
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That my duties call for a highly technical knowledge of foreign exchange,
for an ability to evaluate fiscal intelligence, for a "know how" obtained only
from operational experience, and for a personal integrity beyond question can
not be denied. 1,4- record, when reviewed from all these angles speaks for it-
self, and its success can be easily ascertained by consultation with the Op-
erating or Foreign Branch Heads who have had field experience, with the Chief
Disbursing Officer of the U. S. Treasury, or with any other Treasury official
with whom I have had to work to carry out my duties. I am not only willing
and prepared but am anxious to have my World War II record in C.S.S. closely
scrutinized by any impartial and qualified group. Furthermore, in the event
that proper conditions are restored and that the U. S. Government should wish
to have me, I should be only too willing to resume my work and to exert my
every effort along these lines, I believe my potential contribution, though
relatively small, to be so important in this work at this time, that I am
willing to resume my efforts if I can be given reasonable assurance of an
opportunity to carry them on successfully without undue operational difficulty.
Respectfully,
-r r
L.
Drier son Bigelow.
Attachment
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The Special Projects Division - Fiscal (SPDF) was originally set
up to accomplish two ends.
1. To correlate information, received from our sources, on foreign
exchange rates, secret financial dealings, black market operations, counter-
feiting, gold smuggling, etc., which was of paramount importance to me,
either as spot or background information on trends of prices. This infor-
mation tended to minimize the risks inherent in my operations of buying
foreign currencies and had been made readily available to me through an
punch card cross index system.
2. To disseminate much of this same information to certain divisions
in the U. S. Treasury. From the very beginning of OSS we found that when
we passed information to the Treasury, it, in turn, would reciprocate by
passing back to us the type of information which I needed. The Treasury
had often advised us that our information was of spot, background, or
continuing interest to it. Fiscal Intelligence obtained from clandestine
sources is important, and when there was a particular piece of information
required by the Treasury, which, due to the training of some of our per-
sonnel we felt we could obtain, we would query the field, and very often
get the required information. It is known that on more than one occasion
the Treasury accepted our information and acted on it.
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