KGB EXPLOITATION OF HEINZ FELFE SUCCESSFUL KGB PENETRATION OF A WESTERN INTELIGENCE SERVICE

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 16098716
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 121
• Document Creation Date: July 13, 2023
• Document Release Date: August 26, 2022
• Case Number: F-2020-00942
• Publication Date: March 1, 1969

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KGB EXPLOITATION OF HEINZ FELFi
Successful KGB Penetration of a
Western Intelligence Service
March 1969
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KGB EXPLOITATION OF HEINZ FELFE
Successful KGB Penetration
ofc,a Western Intelligence Service
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TABLE OF CONTENTS
I. Introduction and Summary
Page
1
II. Soviet Operations Against the Gehlen
Organization in the Early Post-War Years 13
a. Background Information on Felfe 15
b. Background Information on Clemens 18
c. Soviet Recruitment of Felfe and Clemens 19
d. Alternate Versions of Recruitment by KGB
and Hiring by Gehlen Organization 24
e. Early Stages of KGB Operation --
the BALTHASAR Deception 26
III. Operations of the Early 1950's 32
a. Efforts to Discredit the Gehlen Organization 32
b. Felfe Settles In - the LENA deception 42
IV. KGB Work in West Germany as a Sovereign
52
Country: 1956-61
a. Targeting of CIA, Provocation, Tactical
Deception
b. Felfe's Final Plot - the Busch Case
c. Support of Soviet Policy and Political
Deception
d. Methods of Communication
e.. New Directions?
V. Investigation and Arrest
VI, The Aftermath
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64
72
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79
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ANNEXES
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A. The HACKE Story 92
B. The LILLI MARLEN Case 96
C. The SOKOLOV Case 100
D. ZUVERSICHT Case 110
E. MERKATOR Case 113
F. Glossary of German Words and Abbreviations 115
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I. INTRODUCTION AND SUMMARY
What happens when the KGB* has a high level penetration
of a Western intelligence service? How does the KGB exploit
the voluminous information received on enemy operations, while
at the same time protecting the security of its source? More
importantly, does the KGB handling of such an agent leave
tell-tale signs which would permit an alert and knowledgeable
Western counterintelligence officer to surmise the existence
of such a penetration? It would be presumptuous to generalize
on the basis of one case, but study of the KGB handling Of
Heinz Felfe may provide some insight to these questions.
Of the identified KGB penetrations of Western intelligence
and security services, Heinz Felfe was certainly one of the
most successful. Felfe was an officer of the West German
Foreign Intelligence Service (BND)** for ten years, six of
them as deputy chief of the section responsible among other
things for countering Soviet espionage. He was a dedicated
Soviet agent throughout this period, and he remained loyal to
the Soviets even after his arrest in November 1961. He was
detected as a result of a lead provided by a CIA-run penetra-
tion of the Polish Intelligence Service (UB).
Felfe was more than a simple penetration agent; he be-
came, in effect, a consultant to the KGB on many of its
operations in West Germany. Through Felfe, the Soviets pursued
three objectives:
a. To protect the security of Soviet installations
and personnel in West Germany and in East Germany,
For convenience, the term KGB will be used throughout this
paper, even though during part of the period covered the proper
terminology for the State Security Service was MGB or MVD.
** From 1947 to 1956, when it had no legal status, this was
known as the Gehlen Organization. In 1956, after West Germany
had regained its sovereignty, it became the BND, which is the
German abbreviation for Federal Intelligence Service. For
convenience and simplicity it is frequently referred to as the
BND even when the earlier period is meant.
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and to detect Western operations inside the Soviet
Union. To this end, the KGB ran deception operations
designed to expand Felfe's access to information not
only from his own service, but also from other West
German and Allied services including CIA,
b. To confuse, disorient and discredit the West
German foreign intelligence service. The aim was
not only to penetrate the service, but to manip-
ulate it to serve Soviet interests.
c. To collect political intelligence on West Germany.
This goal, and the equally important objective of
political disinformation, assumed increasing impor-
tance as the case progressed and may have ultimately
become the most important in Soviet eyes, as a sup-
port to Soviet foreign policy objectives.
The reader will not find here a complete history of the
Felfe case; that would require a much larger volume. The
broad lines of the story are here, and one chapter in partic-
ular is devoted primarily to background information, presenting
the dramatis personae. That chapter describes how the KGB
recruited first Hans Clemens, and then, thru Clemens, Felfe.
They had been colleagues in Nazi intelligence during the war,
motivated by revenge against the Americans, money, and a desire
to be on what they considered the most powerful side. But the
study is essentially a selective and interpretive account, for
the purpose of illustrating KGB methods of handling and support-
ing a well-placed staff penetration of a Western service, The
lessons to be learned lie in the various deception and diver-
sionary operations run by the KGB to build up Felfe's reputa-
tion in the BND, expand his access, protect his security, and
create an illusion that the German service was effectively ful-
filling its CE mission, while the Soviets were generally in-
effective.
There are many ways by which Felfe might have been un-
masked earlier than he was. Even a thorough namecheck might
have done the trick. He could also have been caught earlier
if more weight had been given to analytical evidence which
clearly indicated something was amiss, rather than waiting to
be spurred to action by a report from our own sensitive pene-
tration source. Indications of Soviet penetration of the BND
were to be found in the deception and diversionary operations
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run by the KGB for the express purpose of supporting or pro-
tecting Felfe. Although support and protection of penetra-
tion agents in Western services is not the only reason the
Soviets run deception and diversionary operations, it maybe
one of several principal reasons for such operations. Study
Of the Felfe case suggests that when a number of Soviet de-
ception and diversionary operations are concentrated in one
area, or against one service, these operations should be
carefully analyzed to determine whether they may indicate
Soviet penetration in that area or that service. Many ex-
amples of deception �and diversionary operations are dis-
cussed in detail in this study; the most important are
summarized in the following paragraphs.
The first KGB deception operation in support of Felfe
was the "BALTHASAR" case. As far as the BND knew at the time,
BALTHASAR was one of its better positive intelligence oper-
ations, producing information on Soviet mining of uranium in
East Germany and its shipment to the USSR. The agent BALTHASAR
was a wartime friend of Clemens who had re-initiated contact
with him and then allowed himself to be recruited by Clemens
for the BND. Actually, BALTHASAR was a KGB agent from the
beginning. The KGB initiated the operation to provide Felfe's
co-conspirator, Clemens, with an official reason for repeated
trips to West Berlin (to meet BALTHASAR), from where he could
easily cross to East Berlin to meet with his and Felfe's KGB
case officer.
Another deception operation, the so-called "LENA" �case,
was the most important single contribution to Felfe's career
as a West German intelligence officer, and probably also to
his career as a Soviet agent. It gave him status and stature
within the BND, and maneuverability as a Soviet agent. It
was the vehicle for many gambits to broaden Felfe's access to
collect information, especially political information, and
sometimes to disseminate disinformation.
LENA was the BND cryptonym for an East German political
functionary and publisher. He travelled frequently to West
Germany, where he was well received in certain West German
socialist circles as an apparently independent, outspoken
East German. His role as a BND agent, doubled by the KGB,
goes back to the early fifties. But in January 1954, shortly
after Felfe's assignment to the BND Headquarters CE Group,
LENA suddenly turned from what had been (from the German
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point of view) a positive intelligence operation into a CE
case. LENA reported to the BND that he had been introduced
to a KGB officer, and that after a flurry of meetings he had
been formally recruited by the Soviets and immediately assigned
the task of creating a net of agents to produce information
on the West German Foreign Office and the Chancellor's Office.
The Soviet plan, as related by LENA, was highly ambitious.
LENA was to be the "German net director," to recruit two
principal agents, a political advisor and spotter, several
support agents, and to provide names of potential penetration
agents. As a developing CE case, handling of LENA was then
transferred to the CE Group, where the newly arrived Felfe
became the Headquarters case officer. His assignment to this
case was probably not accidental; Felfe's immediate superior
at the time is believed to have been another KGB penetration
of the BND. With KGB assistance, LENA developed rapidly into
the BND's most important CE case, and it made Felfe's repu-
tation as an authority on Soviet counterespionage.
LENA's talkative KGB case officers revealed information
on other Soviet operations in West Germany, compromising
several bona fide Soviet and East German agents in the process.
LENA was "such an intelligent man" that his KGB case officers
ostensibly enjoyed talking politics with him, and these long
conversations revealed occasional glimpses of the "true" Soviet
policy on Germany. On the surface, LENA's operation to pene-
trate the KGB on behalf of the BND was far more successful
than the Soviet operation using LENA to penetrate the Bonn
Government. Although LENA reported many potential recruits
to the KGB, the only real penetration actually recruited was
an ailing and incompetent gentleman in the Press Office, who
contented himself with the product of waste baskets as his
source material. To some observers it seemed incredible at
the time that the KGB should go through so many motions just
for this. There was created an impression of KGB incompe-
tence, and KGB failure to obtain important information from
West German government offices.* At the same time, LENA was
passing the BND detailed and comprehensive information on
personnel and installations at the KGB's East German Head-
quarters in Karlshorst. So that this information could con-
Although this was the impression which emerged from the
LENA case, on other occasions Felfe criticized the security
of other German government agencies and voiced the conviction
they were penetrated by the Soviets.
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tinue, Felfe decided it was necessary to provide the KGB with
build-up material to keep LENA's faltering West German net
alive. For this purpose, Felfe pioneered procedures within
the West German government for the clearance of build-up
material. He obtained from the Federal Attorney General a
statement that any material already demonstrably known to the
opposition was automatically no longer secret. By extension,
that which was no longer secret could be passed to the oppo-
sition as build-up material. Thus when a KGB case officer
told LENA, or any other double agent reporting to the BND,
that certain areas of information were already covered by the
KGB, Felfe could argue the virtue of providing this information
to LENA as build-up, to satisfy presumed KGB cross-checking,
or to smoke out the presumed Soviet source. In this way,
Felfe was able to maneuver a wide variety of information
"legally" into Soviet hands. Discussion within the West German
government of what could and could not be cleared for passage
in response to Soviet requirements greatly broadened Felfe's
access to positive intelligence otherwise inaccessible to him;
information which could not be cleared for passage as build-up
material was passed clandestinely by Felfe.
The LENA case also provided Felfe -- and the KGB with a ready-made mechanism for investigating West German
personalities of target interest to KGB. The KGB case officer
would instruct LENA to try to obtain certain information con-
cerning a West German official. LENA reported this to the
BND, and the reported Soviet interest then provided Felfe with
cover for namechecking the official in West German and Allied
files. The results went to the KGB directly, through Felfe's
own clandestine communications channels, and at a later meet-
ing LENA would report that his KGB case officer was no longer
interested. To make this exercise more thorough, Felfe even-
tually arranged permission not just to namecheck the West
German targets of interest to LENA's KGB handler, but to con-
duct his own detailed investigation of them. Felfe argued
that if the KGB was interested in certain West German officials
and was seeking vulnerability data on them, then it was neces-
sary in order to protect West German security for the BND to
conduct its own investigation of these persons to determine
if they were in fact vulnerable to Soviet recruitment. This
was done, with the results of the investigation passed by
Felfe to the KGB.
The LENA operation also helped Felfe break ground for
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N.,
liaison between the BND and CIA Berlin Base concerning op-
erations against Soviet installations in East Berlin. BND
information on these installations had been checked in Berlin
Base files since 1954, but in 1958 Felfe began a concerted
campaign to collect detailed information from CIA on its
operational program to penetrate KGB Headquarters in Karlshorst.
The urgency of KGB attention to Berlin Base as a CI target was
heightened by the arrest in late 1958 of a CIA penetration of
Soviet military intelligence in East Germany (Lt. Col, Popov)
run from Berlin Base. Two years earlier, CIA's Berlin tunnel
operation had been detected, as well as an apparently success-
ful CIA attempt to recruit a member of an RU GSFG* intelligence
point in East Berlin. It was clear to the KGB that CIA's
Berlin Base represented a major threat to its security. LENA
provided the BND with sizeable amounts of information on KGB
offices, safe houses, and license and telephone numbers in the
Karlshorst Headquarters compound. This information was then
checked against information available to CIA Berlin Base, with
the results going back to Felfe -- and to the KGB, LENA also
met a number of KGB officers under their full true name, and
these too were nametraced by Felfe with friendly services,
providing the KGB with a mechanism for nametracing some of
their personnel in CIA files. In addition to LENA, the KGB
created other operations producing information on Karlshorst
Headquarters, and arranged for these operations to fall under
Felfe's jurisdiction. Through manipulation of these operations,
and his personal role in engineering a number of crises in
CIA-BND relationships, Felfe was able to force a reluctant
Berlin Base to give him a general briefing on the status of
CIA operations against Karlshorst. Over a period of several
years, Felfe, with the assistance of KGB operations, was able
to achieve ever-closer BND-CIA cooperation in operations
against Karlshorst. In one case when he - or the KGB -
suspected CIA had an agent in an East Berlin housing office,
Felfe, with KGB assistance, boldly provoked confirmation of
this fact by trying to recruit one of our agent's colleagues.
He placed an ad in a West Berlin newspaper designed to attract
An RU is a Soviet tactical military intelligence unit.
In this case, it was the RU subordinate to the Group of Soviet
Forces in Germany (GSFG). The RUs are distinct from the GRU,
which is on the General Staff level and concentrates on
strategic intelligence.
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secretarial help from the East Sector. Our agent's secretary
answered the ad (presumably at KGB behest), and Felfe informed
us that he intended to recruit her as a source. We then told
him that we already employed her chief and asked him to stop
his approach since it might endanger our agent. As a result
of such activity by Felfe and the KGB, the hitherto unilateral
Berlin Base program against Karlshorst was largely compromised.
There were also other cases of provocation to identify
CIA agents. One involved a West German businessman, recruited
by Berlin Base to report on Soviet trade contacts, then
approached by the KGB and targeted against the West German and
U.S. Embassies in Moscow. He was suspected by the KGB of
Western intelligence contacts. Therefore, the KGB closed out
all the agent's KGB requirements except one, namely torspot,
recruit and maneuver into place a West German girl suitable
to be a German Embassy secretary. By introducing a CE factor
urgently affecting German security, the KGB succeeded not only
in forcing revelation of the case to the BND, but an Actual
turnover of the case to the BND, with Felfe becoming the BND
Headquarters case officer. In another case, a West German
woman run by CIA, Felfe provoked revelation of our interest
by sending us reports accusing her of seriously insecure be-
havior *hile in Moscow. Subsequently, she became the object
of what we believe was a KGB-directed "dangle" operation
'--
a Soviet lover who appeared potentially recruitable.
Another integral part of the Felfe case is the "LILLI
MARLEN" operation, which occurred in 1954, and the related
case of Ludwig Albert the following year. LILLI MARLEN is
the German cryptonym for a Soviet operation which involved
the intentional compromise by the KGB of the fact that it
had a source in the BND field base for CE operationsi* To
carry out this operation, the KGB prepared a comprehensive
report on the personnel, organization and some of the opera-
tions of the BND field base. In June 1954, a KGB agent was
sent to place this report in a deaddrop in West Germany. A
second KGB agent was sent to confirm that the drop was in
place, then go to the local police and recite a pre-arranged
story of observing a man hide something at this,'spot. (This
agent was subsequently arrested and confessed his role in the
deception.) Three days later, a third KGB agent was dis-
The German designation for this base was GV"L".
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patched on a mission to "recover" the drop, with the intention
that he unwittingly walk into a police stakeout and be arrested.
The KGB judged (correctly) that this particular agent would
quickly confess to being dispatched by the KGB, thus confirming
KGB control of the "penetration." Through astute police work,
the operation was unmasked as a Soviet deception, but the fact
remained that the Soviets did have a complete and accurate
rundown on the activities of this field base and must there-
fore have actually had a penetration reporting this infor-
mation. Subsequent investigation, in which Felfe played an
important role, centered on identification of this agent. The
report itself provided several clues, and a KGB provocation
operation mounted a week after the report was found may have
been designed to provide additional clues pointing to Ludwig
Albert, a senior officer of this base. A year later, a con-
fessed East German agent fingered Albert, among others, as an
East German agent (,010 may have been originally recruited by
the KGB). It cannot be proven that this "confession" was
Soviet inspired, but circumstantial evidence suggests this
was the case. Albert was arrested and later committed suicide;
evidence found in his home confirmed that he was an agent of
some Eastern service.
Although there are major gaps in our knowledge and hard
evidence is lacking, the KGB purpose in the LILLI MARLEN and
Albert cases appears to have been three-fold: First, initial
impetus for LILLI MARLEN may have come from the defection of
KGB officer Petr Deryabin. Deryabin had served in the German
CE branch in KGB Headquarters and was partially knowledgeable
of KGB operations against the BND,* The LILLI MARLEN operation,
which came just four months after Deryabin's defection, may
well have been designed to divert Western investigation of
his information. By creating circumstances and feeding in-
formation which eventually led to the arrest of Albert, the
KGB apparently hoped to shield a more important or more
reliable agent, Felfe, from investigation. A second purpose
may have been elimination of Albert who, although an actual
East German agent, had apparently become dispensable. (There
are several possible explanations for this. One of them re-
lates to the fact that Albert had become a bitter enemy of
Deryabin knew the KGB cryptonyms ("Peter" and "Paul")
for both Felfe and his co-conspirator, Clemens, but he was
unable to provide details which would help establish their
identities.
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Felfe and had accused Felfe of being a Soviet agent.) And
a third objective of these cases was to further the overall
Soviet and East German program of demoralizing and discredit-
ing the organization, and thus preventing its pending legal-
ization as the West German government's official foreign
intelligence service. Albert was not the first East German
or Soviet agent in the BND who had been deliberately exposed
for this purpose.
As the years passed, the deception operations became
increasingly complex. The BALTHASAR operation was followed
by the increasingly complicated LENA and LILLI MARLEN.cases,
discussed above. The final deception was the BUSCH case,
which aborted in mid-plot as a result of Felfe's arrest in
1961. This seems to have been a convoluted triple-think,
a plot within a plot, which is far too complicated to
summarize here. It is discussed in detail in Chapter IV.
Its purpose may have been to give Felfe access to security
files on BND personnel, to deceive the BND about its own
security or to support an operation with some other KGB
agent in the BND, but since the operation ended prematurely
the KGB rationale and specific objectives are by no means
clear. Felfe exposed himself to many risks to get the opera-
tion started, so it must have been destined for an import-
ant role.
BALTHASAR, LENA, LILLI MARLEN and BUSCH are all cases run on
Soviet initiative for the purpose of improving communications,
increasing the access of Felfe, or otherwise deceiving the
BND. There is also an entirely different category of cases
which merits study. These are apparently clean operations,
primarily double agent operations, initiated by some West
German service, but which took curious turns after their
compromise by Felfe. Two of these, ZUVERSICHT and MERKATOR,
are described in annexes to this paper. ZUVERSICHT was an
RU GSFG operation and MERKATOR an East German foreign intel-
ligence (MfS/HVA) operation, both initially doubled by the
BfV.* They are selected from among many such cases because
in these two instances we have confirmation from Lt. Col.
Popov and an East German MfS/HVA defector (Max Heim) that
BfV is the German abbreviation for the Office for the
Protection of the Constitution, the principal West German
internal security service.
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their agents had been doubled by the West Germans. The KGB
asked the RU and HVA to neither drop nor re-double these
agents, but to continue running them for source protection
or deception purposes. We know the date this happened and
can trace the change in handling which occurred after this
date. In the case of ZUVERSICHT, the RU continued running
the case for four more years, but devoted minimum effort to
carrying out the KGB instruction to keep the case alive.
Because of this minimum effort, RU communications with
ZUVERSICHT became more and more "insecure," from the agent's
point of view. Felfe used this case to help create the im-
pression within the BND that the RU is generally an incompe-
tent organization.
The MERKATOR case illustrates more imaginative use of an
agent known to be controlled by the opposition. It also
illustrates how inaccurate reporting or faulty interpretation
of information can frustrate Soviet Bloc exploitation of such
an agent. When the KGB advised the HVA that MERKATOR was a
double agent, responsibility for the case within the MfS/HVA
Headquarters was transferred to a CI component which apparently
also handled other cases known to be controlled by Western
services. Subsequent East German handling, presumably under
KGB supervision, indicated that the aim was to cause the BND
to distrust its immediate supervisor, the State Secretary in
the Chancellor's office, by making him appear to be a suspect
HVA agent, and also to aggravate further the already existing
distrust on the part of the BND toward the BfV by providing,the
former with evidence that the latter was penetrated by the
HVA. This attempt failed, however, because the HVA assumed
that the case was controlled by the BND when in fact it was
controlled by the BfV. As a result, most of the presumed
intended impact of the HVA manipulation was lost.
An interesting example of KGB exploitation of such an
opposition-controlled double agent is the SOKOLOV case, also
described in detail in an annex to this paper. This case
involved extensive coordination -- with Felfe in the middle
of it -- between the BND, BfV and CIA in a joint operation to
investigate the operations of an RU officer named SOKOLOV in
East Germany, and to induce SOKOLOV's defection at the time
his agents were rolled up. The defection of SOKOLOV never
materialized, but the West Germans did arrest five RU agents
and identified about 200 additional security suspects. The
case appeared to be a Western success, yet the KGB gave
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Felfe a rare bonus for his contribution to the KGB side of the
operation. The KGB seems to have sacrificed willingly the RU
agents in return for extensive information on the inter-agency
coordination procedures and evidence leading to the arrest of
SOKOLOV, who may well have been genuinely vulnerable to re-
cruitment or defection.
In Summary, the Soviets achieved through their various
deception operations a far broader exploitation of Felfe
than would normally be considered possible. By riggingl an
operation especially for Felfe, the KGB could obtain answers
from various elements of the West German government in the
guise of build-up material. By having double agents report
Soviet interest in certain individuals, Felfe was provided
with a cover for namechecking them with other West German
and Allied agencies. By creating various operational
situations and complexities, the KGB could help Felfe in his
bureaucratic manipulations. By introducing a Soviet CE
factor into any BND case anywhere, the KGB could cause the
case to be transferred to the protective custody of Felfe.
By introducing a Soviet CE factor urgently affecting German
security into the operation of any other agency, German or
foreign, the KGB could hope to bring many another case under
Felfe's scrutiny. When this valuable and versatile source
was endangered by the defection of a KGB officer able to
report on KGB penetration of the BND, the KGB protected,
Felfe's security by mounting a deception operation which
confirmed the existence of penetration and which was most
likely intended to divert the investigation to a scapeqoat
selected by the KGB.
There are certain common denominators which run through
all the major deception operations discussed in this study.
These are as follows:
a. In pursuit of its objectives, the KGB was
willing to sacrifice agents (their own as well
as GRU, RU and East German agents), case officer
time, money, good information, and apparently new
equipment and procedures.
b. The KGB had a well-placed penetration, Felfe,
in a position to monitor the target service's re-
action to and handling of each deception. Fre-
quently, this penetration benefited from the
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deception.
c. The operations were aggressive, imaginative
and at times grandiose in their conception and
planning, but their execution was frequently inept
by comparison. They worked only because of the
naivete of many BND officers and the rigid com-
partmentation within the BND, which in this case
was a disadvantage as it prevented pieces of the
puzzle from coming together in one place. Quite
a few CIA officers in liaison with the BND felt
at the time that these operations were "peculiar."
The CIA liaison officer responsible for BND
security during part of the period in question
frankly thought they "smelled" and were indicative
of penetration. Particularly in the light of
current knowledge of KGB modus operandi (including
this study of the Felfe case), it is quite possible
for an alert CI officer to detect such deception
and diversionary operations.
The source material for this paper is voluminous and
varied. Even though Felfe never confessed to anything more
than could be demonstrably proved against him, some of his
statements have been helpful. He was supported throughout his
agent career by two other agents who have been more frank and
whose testimony has been found generally reliable. These
agents were less important and less knowledgeable than Felfe,
but their information has been useful in reconstructing the
case. CIA had intimate liaison with the BND and BfV concern-
ing the operations discussed in this paper and was directly
involved in several of them. Additional insight into BND
handling of these cases was received unofficially through
close personal contacts with several of the BND officers. This
includes information on disagreements within the BND concern-
ing the interpretation and handling of these operations, and
the exact role played by Felfe in the intra-service maneuver-
ing. In several instances we know the facts from defectors
or from a CIA-controlled penetration source. CIA was also
intimately involved in the investigation of Felfe both before
and after his arrest. Thus, while there are some gaps in our
information, our knowledge of this period of intelligence
history in Germany is probably almost as complete as it ever
could be without a full confession by Felfe or a first-hand
account from his KGB case officer.
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II. SOVIET OPERATIONS AGAINST THE GEHLEN
ORGANIZATION IN THE EARLY POST-WAR YEARS
The history of the Felfe penetration has its beginning
in the early post-war years. The spotting of people like
Heinz Felfe by the Soviet intelligence services was not
accidental, but the result of a well-targeted, well-developed
recruitment campaign directed against former police and intel-
ligence officers of the Nazi Reich. The thesis was simple:
old intelligence hands will flock together, will seek to re-
turn to the work they know best. Some of these people might
be susceptible to a Soviet approach because of their general
sympathies. Others, such as former Elite Gurad (SS)* and
Security Service (SD) members, many of whom were now war
criminals able to make their way only by hiding a past which
had once put them among the elite, would be vulnerable to
blackmail. The Soviet spotters were to be found almost
everywhere in Europe - East and West - in the POW camps, in
the war crimes screening commissions, in the courtrooms. The
future West German intelligence and security services could
be penetrated almost before they were created.
In the closing days of the war, General Reinhard Gehlen
of the Fremde Heere Ost (FHO)** had brought the remnants of
his files and personnel to G-2, U.S. Army, for whom he pre-
sented a valuable and relatively unique source of information
on Soviet order-of-battle. Under G-2's aegis his group
burgeoned until by 1949 it had become recognized as the
primary Western agency for the collection of Soviet OB and
eventually of CI information in the Soviet occupied zone of
Germany. It was a loosely knit organization made up pre-
dominantly of former military intelligence (Abwehr) and
FHO officers who were held together by the officer's code
of honor and individual bonds of friendship. From an insti-
tutional point of view, however, the problems of control,
responsibility and security were serious. G-2 asked CIA
See Annex F for a glossary of German terms used in this
paper.
** FHO - General Staff section dealing with information con-
cerning armies of countries to the East of Germany, with spe-
cial emphasis on Soviet forces.
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to assume the responsibility for the organization, and thus
in July of 1949 began a trusteeship which was to last for
seven years. To the outsider and to its enemies, the Gehlen
Organization looked much more like an American puppet than
it actually was.
By mid-1952, KGB work against various of Gehlen's field
bases had been successful, but an agent working on Soviet
operations inside the Headquarters organization in Pullach
was reportedly still lacking.* Particularly successful had
been the KGB work against Gehlen's field base for CE and CI
operations which was located in Karlsruhe. Within the Gehlen
Organization this field operations base was designated as
GV"L",** and it will be referred to by that designation
throughout this paper. GV"L" was especially attractive to
the KGB. The major part of its work involved the recruitment
and handling of informants in other German agencies for the
ostensible purpose of protecting the security of these agencies.
The same base was also responsbile for running double agent
operations against the Soviets, a function which brought its
personnel into direct contact with Soviet controlled agents.
It was especially vulnerable because it was heavily staffed
by former SD and SS personnel who in order to maintain
their jobs were obliged at least pro forma to conceal their
background, and who still suffered to some extent from old
social and professional caste rivalries which kept the former
Abwehr and FHO officers in ascendency. In reaction to this
situation there had gradually developed within GV"L" a sort
Primary source of information on early KGB work in Ger-
many is Petr Deryabin, who was assigned to the State Security
Headquarters desk responsible for CE work in Germany from May
1952 to September 1953. He read the Headquarters file on the
Gehlen Organization in July 1952 and has stated that as of
that date there were Soviet agents in the field bases but no
evidence of a Soviet agent in the Gehlen Headquarters; however,
we cannot rule out the possibility that there may have existed
restricted files to which he had no access. Ernst Worm, a
Gehlen Headquarters officer working on Czech operations, came
under very strong suspicion of being an agent for some Eastern
service in the fall of 1952.
** The GV stands for General Vertretung -- General Represen-
tation. The "L" is an arbitrary designation.
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of mutual aid society of ex-SS and SD personnel for self-
protection and professional advancement. This group was
particularly susceptible both to simple blackmail and to the
somewhat more complicated appeals of revenge or vindication.*
It was through this base, GV"L", that the Felfe operation was
launched.
a. Background Information on Felfe
Heinz Felfe was born in Dresden in 1918, the son!of a
criminal police inspector. He started his own police career
at the age of 13 as a volunteer in a border unit. 1111938
he was inducted into an SS reserve unit, and from then on his
schooling, legal training, and subsequent assignment to a job
in the Criminal Police was guided and fostered by the SS. In
1943 he went into the foreign intelligence section of the
Reich Central Security Office (RSHA), where he worked. first
in the Swiss section at Headquarters, then in Holland - for
a while under Schreieder of "Nordpol" fame. He finished the
war as a 1st Lt. (Obersturmfuehrer) in the militarized branch
of the Nazi Elite Guard (Waffen SS) and as a prisoner of the
British. He was an average looking individual with no dis-
tinguishing physical characteristics. Of the many recorded
impressions of him from various stages of his career, certain
personality traits dominate: a highly intelligent man with
very little personal warmth; a person with a high regard for
efficiency, and for authority, but susceptible to flattery;
venal; and capable of almost childish displays of vindictive-
A variety of formal and informal secret Nazi organizations
have existed since the end of the Second World War. The KGB
has reportedly had much success in penetrating and controlling
these groups from their inception, and using them as recruit-
ment pools and as propaganda weapons. One of the most inter-
esting reports on this subject was provided by the senior
Polish Intelligence (UB) officer Michal Goleniewski, and con-
cerns an organization which he called HACKE. Information on
HACKE is in Annex A. It shows how early and how thoroughly
the KGB penetrated and manipulated hard-core Nazi groups,
especially the former intelligence and security officers.
These operations were the logical outgrowth of the KGB's war-
time operations and began even before the war was over. They
still have ramifications in areas of the world where former
Nazis have settled.
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ness. Naturally a devious person, he enjoyed the techniques
of engineering a good deception in his profession. He was
brilliant as an elicitor of information, an excellent listener
and an operations officer of such generally recognized capa-
bility that from time to time he was given special "vest-
pocket" operations to manage for the chief of his German
service. Infinitely cool and brazen in the face of danger,
thoroughly aware at all times of what he was doing, Felfe was
the "ice-cold calculator" as he once admiringly described his
favorite agent. The only emotions detectable in him are his
enjoyment of the game and his disdain for his fellow man.
These, together with his great admiration for Soviet power
and efficiency, seem to have sustained him throughout his
career and imprisonment. His attachment to his wife and two
children seems to have been relatively perfunctory. As for
his colleague in espionage for ten years - and friend in
adversity of even longer standing, Hans Clemens - Felfe found
him in the end merely a convenient scapegoat.
As a British POW, Felfe was interned as Blauw Kappel, an
interrogation center near Utrecht, which specialized in the
interrogation of former German intelligence personnel. It is
possible that his name came to Soviet attention through an
agent among the Dutch interrogators. One of Felfe's fellow-
prisoners, a former SD officer named Helmut Proebsting, re-
ported to Dutch authorities in 1946 that he and Felfe had
been approached by Max Wessel, one of the interrogators, to
work for the Soviets. But Felfe denied that any such incident
had occurred, when confronted with this information after his
arrest. This is one of a number of suspicious points in
Felfe's background which could have been uncovered by an ag-
gressive investigation long before his arrest.
Felfe returned from the war in November 1946 with the
determination to settle in the Western zone of Germany, al-
though his home had consistently been in Dresden, in the
Soviet occupied zone. His wife and child joined him at the
end of the year. Seven difficult months followed until he
finally found work as an agent for a British military intel-
ligence unit (Sixth Area Intelligence Office, BAOR). His
task was to develop information on Communist student groups
at the University of Bonn. Under British instruction he
settled himself in the Bonn area, registered in the Faculty
of Law and joined the Communist Party (KPD). In the course
of his work he made several trips to East Berlin and to East
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Germany to observe student rallies, from which he took off on
his own initiative to visit his mother in Dresden. Here again
the possibility of Soviet targeting exists. Felfe says that
on one of these trips, in 1948, his mother warned that some-
one in the town had recognized him and reported him as a
former SS officer. On another occasion, he says, he was
arrested by the police, but quickly released at the interven-
tion of his host, an official of the East German Ministry of
Public Education.
The British finally dropped Felfe in April 1950 for seri-
ous operational and personal security reasons, none of which,
unfortunately, came to the attention of the Gehlen Organization
in any very detailed or forceful form until long after Felfe
was entrenched in it. British files on Felfe were received
by the BND in 1961 and by CIA in 1962. These revealed that
early complaints against Felfe included attempts to sell in-
formation collected for the British to several other intelli-
gence agencies, two West German news services and to the East
German Socialist Unity (i.e., Communist) Party (SED),. They
also contained an account of Felfe's attempt to involve the
British in a double agent operation with the Soviets, as well
as various agent reports showing that he had blown himself as
a British agent to all and sundry, including the West German
Communist Party he was supposed to be penetrating, and that
he was guilty in general of "sharp practice" and "varnishing
of the truth" As specific grounds for dismissal, the British
told Felfe that his refusal to give up undesirable contacts
with former SS personnel could no longer be tolerated.
Specifically, they named Helmut Proebsting and Hans Clemens.
Clemens was an old Dresden friend and former colleague from
the foreign intelligence arm of the RSHA.
After leaving the British, Felfe continued to work
against the West German Communist Party for the Land security
office (LfV) in Nordrhein-Westfallen, to which he hid already
been reporting on the side while a British military intelli-
gence agent. He incurred the wrath of this organization on
at least two serious counts: for having sent a report on it
to a contact in East Germany; and for having tried to peddle
the plans for the BfV charter, which he had somehow acquired
from someone in the Finance Ministry, �to a West German news-
man. From the LfV Felfe went to the Ministry for All-German
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Affairs*, where he worked as an interrogator specializing in
refugees knowledgeable on the East German People's Police
(V0P0). He remained at this job, eventually writing a study
of the VOPO for the Ministry, until his recruitment into the
Gehlen Organization in 1951.
b. Background Information on Clemens
Anyone who has tried to understand Germany knows that
bonds of common local origin are often far stronger than the
larger national concept. The fellowship of former Dresdeners
is a thread which runs very heavily throughout this story.
Both Hans Clemens and Felfe were from Dresden, and their
recruitment by Soviet intelligence was directed by the KGB
office in Dresden.
Clemens had been chief of an SD field office in Dresden
in the late thirties, when he had worked against the German
Communist Party (KPD). Later he was posted to RSHA Amt VI
(foreign intelligence), where he learned to know Felfe well,
and subsequently he went to the SD command in Rome. At the
end of the war he was captured by Italian partisans and in-
terned in various British and U.S. POW camps. In 1948 he was
indicted, and acquitted, during the well-publicized trial of
his chief, the Nazi Police Attache Herbert Kappler, notorious
for the murder of Italian hostages in the Ardeatine Caves.
At some point during his captivity he learned that his wife
Gerda, in Dresden, with whom he had been corresponding, had
been sleeping with Soviet officers. He claimed that this
knowledge severed his already weakened affections for her
and decided him in favor of resettling in West rather than
East Germany after his release from POW camp. He settled in
West Germany in October 1949, but continued to remain in
loose correspondence with his wife, through whom he had
learned the whereabouts of some of his old friends. One of
these was Erwin Tiebel, a fellow-Dresdener then practicing
law quietly in a small town in the Rhineland. Tiebel had
at one time been a confidential informant for Clemens in the
Dresden SD. Later, he had been assigned to the Swiss Desk
At the time, this organization was known as the Kaiser
Ministerium. It became the Ministry for All-German Affairs
when Germany regained its sovereignty in 1955. The latter
name is used here for simplicity and clarity.
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of RSHA VI, where he had also known Felfe. He was to be-
come a support agent for Clemens and Felfe.in their work for
the Soviets.
Felfe had already looked up Tiebel in 1947. Clemens wrote
to him from POW camp in 1948 or 1949 and arranged to meet him
after his release. A letter from Clemen's wife, dated Dresden,
March 1949, addressed to the Felfe family and mentioning
-Tiebel, suggests that these old threads were knotted very soon
after the war, perhaps with KGB cognizance. Tiebel was on
a list of war criminals accused of killing hostages in Dresden,
and there is some suggestion that Clemens was similarly list-
ed. Gerda Clemens was working as a Soviet agent by at least
December 1949, and probably had been since the end of Ahe.ivar,
as Felfe later told his British Case officer. Her cover name
was "Erika". She reported to a KGB Colonel called "Max" in
an office in the Soviet Command, Dresden, which, according to
Clemens, was concerned with tracking down former police and
intelligence officers from the Dresden area who were liable
for war crimes.
Clemens had been every bit as much of a Nazi as Felfe,
with the difference that he declared himself more frankly.
Essentially a less complicated kind of person, coarse and
probably brutal, Clemens' human attachments were more real
and meaningful than Felfe's... Where one has the impression
that Felfe never made a move without a reason or recompense,
one can imagine Clemens making a gratuitous or spontaneous
gesture of loyalty or friendship. Felfe considered Clemens
his cultural and intellectual inferior which is correct in
a certain sense. Bilt after his arrest, Felfe pretended that
the older man- Clemens is 16 years Felfe's senior - had
exercised a dominating and pernicious influence over him by
drawing him into the Soviet service and making him stay there.
Throughopt their BND careers, however, they remained good
friends, and Clemens in his post-arrest statement claimed that
there had never been any friction or rivalry between them in
their Soviet work.
c. Soviet Recruitment of Clemens and Felfe
Within a remarkably short time after Clemens' return to
Germany - about two months - Max sent Gerda Clemens to West
Germany with a recruitment proposal for her husband. This
occurred just at the end of 1949 or possibly in early January
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1950. Clemens claims that the situation was perfectly clear
to him comply or face charges. Moreover, he had no steady
job, he needed money, and he was also intrigued by the idea
of a secret contact. He discussed the situation with both
Felfe and Tiebel. While none of the three seems to have opposed
outright the idea of accepting the Soviet approach, they did
entertain the notion of trying to offer Clemens to someone as
a double-agent. Clemens even talked to an official in the
Ministry of Interior. Unfortunately, the latter brushed him
off without giving him any concrete advice. Felfe may have
offered Clemens to the LfV; British files show that he told
his British case officer in early 1950 that he intended to
do so. Felfe had already tried unsuccessfully in November 1949,
upon Clemens' arrival, to sell him to the British as an agent.
(He also tried to persuade them to recruit Tiebel.) This
effort had merely earned him the admonition to stay away from
his old SS friends, who were bad medicine for someone supposed
to penetrate the Communist Party. In January 1950 Felfe tried
again, this time offering Clemens as a British-Soviet double-
agent. A letter dated 25 January 1950 from Tiebel to Felfe
states that Clemens had already agreed in principle to co-
operate with the Soviets in Dresden. The British files contain
a memo of a visit by Felfe to his case officer on 29 January
1950, during which he reported that Gerda Clemens had arrived
two days earlier and was planning to return shortly to Dresden
with her husband in order to put him in touch with the KGB.
The British lingered only briefly over the decision of whether
to play Clemens as a double-agent. Shortly after Felfe's
proposal, evidence of his double-dealing with the LfV be-
came evident, and he confessed to having sent a report on
that organization to an East German Communist Party contact
in East Berlin. When Frau Clemens appeared in WestGermany again
in early April, and Felfe tried once more to persuade his
employers to undertake an operation, the British case officers
came to the decision that they should drop Felfe and list
Clemens as a "security risk." By this time, of course, Clemens
was no longer just a security risk; he had already gone to
Dresden and become a Soviet agent.
In February 1950 Clemens went to Dresden, where he was
led by his wife to meet Colonel Max in the Soviet
"Waldschloesschen" Compound. Here, Max debriefed Clemens on
his life history and present contacts, lectured him on his
culpability as an SD criminal, probed his feelings of con-
fusion and resentment, listened constructively while Clemens
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delivered himself of a long pent-up statement of his hatred
for the Americans. (They had been twice the cause of German
defeat, etc., had smashed his home town and caused the death
of at least five of his relatives.) Max at this point took
Clemens on a tour of bombed-out Dresden and, at the tide of
Clemens emotional reaction, offered him an opportunity of
revenge against the Americans. The proposal was clear cut and
precise: as a Soviet agent Clemens was to return to the
Western zones, seek out old police and SD contacts and through
them try to penetrate the Gehlen Organization. The Gehlen
Organization was an "Amiladen" (an American shop), and any
blow aimed at it was a blow at the Americans. Clemens agreed:
for money, for a personal cause, and to be on the side of
power, but not, he insisted, because of any special sympathy
toward the Russians. (Here, as in many other cases, are strains
of the old Nazi theme of German superiority to Russians.) He
signed himself on as a Soviet agent with the cover name "Peter;"
later he used German girls' names. At this first meeting
Clemens provided Max with a list of potential recruits in
which he included the names of both Felfe and Tiebel. Clemens
says he was very impressed by Max and by his psychological
adroitness: Max was civil, sober, authoritative, knowledge-
able, but most important - as both Clemens and Felfe have
stressed many times - he never pushed or threatened directly,
His watchwords were to proceed slowly and naturally.
When Clemens returned to West Germany he told Tiebel and
Felfe the whole story and was able without much difficulty to
recruit them, in turn, for Max. (Clemens states it was per-
fectly clear to his friends that Max's target was the Gehlen
Organization. Felfe claims that he did not understand that
this was the case until much later.) When Tiebel paid his
first visit to Dresden some months later, he received much
the same treatment as had Clemens, with perhaps greater
emphasis on the threat of war crimes indictment. He received
the cover name "Erich," which he kept throughout his agent
career. Felfe, who by this time was working as a refugee
interrogator in the Ministry for All-German Affairs, resisted
making the trip east for another year. He did, however,
submit reports to Clemens. Tiebel was later to be used as a
courier.
Clemens was able to carry out his assignment for Max
with amazing rapidity. In March 1950 he came across an old
acquaintance from the Dresden police named Wilhelm Krichbaum
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who was then employed in a sub-unit of GV"L" in Bavaria.
Through him Clemens was able to join the Gehlen Organization
in June of 1950 as a registry clerk and courier for the same
unit. (Clemens' Gehlen Organization alias was "Cramer.")
Krichbaum himself was later to become highly suspect as an
early KGB/Dresden penetration of the Gehlen Organization, but
it is not known whether or not he wittingly maneuvered Clemens
or Felfe in the organization for the Soviets. Clemens remained
in Krichbaum's unit for two years, during which time he report-
ed on the organization and personnel of both the Bavarian unit
and its parent base, GV"L", and on anything else that came his
way. His reports were typed on thin paper and hidden in cans
of powdered milk which he sent periodically to his wife in
Dresden. He collected reports from Felfe whenever they had
the opportunity to meet and sent them on in the same way.
(Since Felfe is reported, in British files, as having made
a trip to Southern Germany within a few days of trying to sell
the plans for the BfV charter to a news service, it is a good guess
that these documents might also have found their way into one
of Clemens' milk cans.) There was relatively little commu-
nication from Max; what there was was handled by Gerda Clemens,
who served as courier and mail drop.
When Felfe's work for the Ministry for All-German Affairs
drew to a close in September 1951, he agreed to make his first
visit to Max in Dresden. At about the same time Clemens recom-
mended him to Krichbaum as a reliable and experienced intelli-
gence officer and Krichbaum arranged for his employment by the
Gehlen Organization. Although Felfe will not admit it, it
seems likely that there was a definite cause and effect re-
lationship between the timing of his availability for work
in the Gehlen Organization and his trip to Dresden. Max was
primarily interested in the Gehlen Organization as a target
and presumably it was at the point when Felfe was actually
able to penetrate his target that Felfe became of importance.
There is some suggestion in our records - no evidence - that
Felfe might really have been recruited earlier, but even if
this is so, his serious Soviet work probably did not begin
until he was a properly accredited West German intelligence
officer.
Around the first of September 1951 Felfe flew to West
Berlin, where he was met by Gerda Clemens, who conducted him
to Max in the East Sektor. Max drove him to the Soviet Com-
pound in Karlshorst, where he questioned Felfe on his back-
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ground - Felfe said he appeared to be very well informed
about him already - and gave him the general lecture on.
guilt. Felfe admits that he wrote a declaration of willing-
ness "to work for peace," but claims he did not sign a pledge
to work for Soviet intelligence as such. He received the
cover name "Paul." He tells us very little about this first
visit; he says he was well wined and dined in the Karlshorst
safehouse where he spent the night and that Max made a great
effort to establish a friendly, sociable atmosphere. He
says Max gave him no instructions at this meeting. Whether
this is true or not, subsequent events played themselves out
exactly to Max's wishes.
On the 26th of October Felfe was called to Karlsruhe for
a personal interview with the chief of GV"L". He made a good
impression, was hired as an assistant to the GV"L" chief for
Soviet CE operations, Oscar Reile, and requested to begin
work on 15 November. (Felfe's Gehlen Organization alias was
"Friesen.") Felfe and Clemens celebrated the .event that
night with a good dinner. Sometime shortly after this and
before he actually began work, Felfe paid his second visit to
Max. This time Max went more deeply into question of moti-
vation.and access. He took Felfe on the tour of Dresden and
discussed at some length the need for Soviet-West German
understanding. He stressed the theme of criminality of SS
membership and the fact that Felfe would need Soviet pro-
tection to keep his new job and to keep his record hidden.
Having maneuvered another agent into the organization, Max
was now concerned to maneuver him to the most desirable spot.
Significantly, he asked Felfe to try to get himself posted
to the Gehlen Headquarters. Again, he stressed the need
Felfe would have for Soviet penetration, warning him that
even if his SS membership were not discovered he would always
run the risk of losing his job in the intelligence service
because of some flap which might not even be his fault.
These words were somewhat more than prophetic, for even then
were brewing in various parts of the Gehlen Organization, and
particularly in GV"L" and its sub-units, the first in 4 series
of scandalous "defections," "kidnappings" and security
"incidents" which were engineered wholly or in part by the
Soviets as part of a campaign to discredit and disorient the
organization. While several of these scandals were to erupt
in Felfe's vicinity, none was to endanger him during the
period he was in GV"L":
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Felfe remained at GV"L" for the next 21 months - November
1951 to August 1953 - first as assistant to Reile and, later,
after Reile's transfer to Headquarters in July 1952, as the
main Soviet CE referant. Reile became very impressed with the
young man's energy and ability, and when he himself moved to
the Headquarters CE Group to work on Soviet targets he opened
the door for Felfe's future career as a Soviet CE expert. Here
again, as in the case of Krichbaum, stands a question mark:
there is much conjecture and considerable evidence that Reile,
too, was working on the Soviet side.
d. Alternate Versions of Recruitment by KGB and Hiring
By aehlen Organization
Up to this point in the story we have more or less ac-
cepted Clemens' and Felfe's own statements concerning their
recruitment by the KGB. But there is a great deal in their
own admissions concerning their early post-war years which
suggests that Felfe might have been recruited by the KGB in
East Germany in the late 1940's rather than the 1950's. The
detailed reasoning behind this speculation is peripheral to
the main story and is not included here, but it is interest-
ing to note that when the defector Michal Goleniewski read
Felfe's testimony he immediately came to the same conclusion.
Goleniewski is the senior Polish Intelligence (UB) officer
who provided the lead which eventually led to Felfe's arrest.
He said he thought Felfe had probably been recruited while work-
ing for the British and traveling to the East. Our best guess
is that this would have been in 1948, when he was allegedly
arrested by the East German Police and released after inter-
cession by a benefactor in the Education Ministry.* But
Felfe could well have been recruited even earlier than this.
Goleniewski surmised that it may have been Felfe who spotted
Clemens to the KGB, which then assigned the "recruitment" of
Felfe to Clemens as a test. Clemens would never have been the
wiser. Goleniewski thought the Soviets did not employ this
This benefactor was Herbert Theuerkauf. Theuerkauf's boss
in the Ministry of Education, Rudolf Boehm, was a notorious KGB
spotter in East Germany. For example, when LENA ostensibly be-
came a Gehlen Organization double agent against the KGB, he re-
ported that it was Boehm who had put him in touch with the KGB.
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technique of "concealed recruitment" (the writer's terminology)
very often, but claimed to have seen it often enough to be
completely familiar with the method.* Certainly Clemens'
account of his recruitment of Felfe makes it appear that Felfe
had been waiting for it with open arms.
There are also alternate explanations of the circumstances
surrounding the Gehlen Organization's hiring of Clemens and
Felfe, circumstances which were probably unknown to Clemens
and perhaps also to Felfe. Wilhelm Krichbaum, who was re-
sponsible for both of them being hired by the Gehlen Organiza-
tion, was himself a highly suspect individual. Although it
cannot be proven, there is a distinct possibility that the
hiring was manipulated by the KGB. Krichbaum was a former
chief of the Geheime Feldpolizei (Secret Military Police)
who served as a witness at the Nuremberg trials from 1947 to
1948 and then entered the Gehlen Organization in early 1950.
There is a report that he had some sort of contact with the
KGB in Dresden as early as 1946. In April 1952 he was re-
lieved of his job in the Gehlen Organization as a result of
investigations which followed the arrest of KGB agents Ponger
and Verber in Vienna. Ponger had been using Krichbaum as a
source of information on the Gehlen Organization and had also
An example of "concealed recruitment" which occurs in the
LENA case is perhaps significant because the LENA case was in
so many respects a sort of overt shadow play of Felfe's secret
KGB career. LENA reported in early 1954 that he had spotted
a clbse business colleague of his for the KGB. He said his
KGB case officer told him he himself would recruit LENA's
colleague and then instruct him to recruit LENA in turn as a
subsource. LENA should pretend to accept the approach with-
out admitting that he already was a Soviet agent and responsible
for the other man's recruitment in the first place. In this
way the KGB would have an excellent double check on the new
agent and LENA himself would enjoy a slightly greater degree
of security since he and the other man were very close pro-
fessional colleagues. (Readers familiar with the LENA case
will recognize here an episode involving Dr. Scurla Of the
"Verlag Der Nation.")
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been trying through him to arrange for the hiring of yet an-
other suspect KGB agent by the BND. After his arrest, Ponger
said he had suspected Krichbaum of being a Soviet agent;
Krichbaum, however, said he had not suspected Ponger. The
result was the conclusion that Krichbaum had been an innOcent
incompetent who had been used unwittingly by Ponger.* But
when KGB officer Anatoliy Golitsyn defected in December 1961,
he provided a description of a KGB agent whose background
paralleled that of Krichbaum.. In the interim, Krichbaum had
died, so the case was never resolved.
The role which Oscar Reile may have played in the hiring
and subsequent promotion of Felfe is equally suspect, as
Reile too was probably a KGB agent. Reile was Felfe's first
boss in the Gehlen Organization, and it was Reile who arranged
for Felfe's transfer from GV"L" to the Headquarters CE Group.
In 1956, Reile traveled to the United States with a group of
CE experts, which included Felfe and four other BND officers.
When Goleniewski reported that the KGB had two agents in this
group, Reile and Felfe were considered to be the most likely
candidates. There is also other information from Goleniewski
and from Golitsyn which tends to point to Reile, but this is
another lengthy story. Reile was investigated by the BND
before and after Felfe's arrest, but no information could be
found which qualified as legal evidence of treason. (Under
German law a suspect must be caught almost in flagtante.)
However, the BND and CIA officers concerned with Reile's
case are personally persuaded by the circumstantial evidence
available that Reile is a long-standing KGB agent. Because
of this suspicion, Reile was retired from the BND in August
1963,
� Early Stages of KGB Operation -- the BALTHASAR
Deception
The late fall meetings of 1951 in Karlshorst and Dresden
were Max's last appearance. At this time Felfe was introduced
It is interesting to note that in the Gehlen Organization's
report to CIA concerning Krichbaum, during the Ponger-Verber
investigation, there is the statement that Krichbaum had not
been responsible for the hiring of any staff personnel for the
Gehlen Organization. It is not known whether this falsehood
was deliberate or accidental.
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to Max's assistant, "Alfred," and to another Soviet whom Felfe
and Clemens nicknamed "Big Alfred," for want of any other name.
In 1952 Alfred took over the handling of Felfe, Clemens: and
Tiebel. It is noteworthy that Alfred continued as their case
officer for the next nine years. To judge from the composite
reports of his three agents, Alfred was a very young man when
he first took over the job - about 26. He spoke excellent
German, Also English, and had a thorough knowledge of his
subject matter: the wartime and postwar German intelligence
services. He seems to have impressed the older men by his
general civility as well as his intelligence. Where they
possibly expected to find the Russian bear, they found in-
stead politeness and a greater degree of refinement than they
had thought possible. They have all remarked repeatedly that
Max and Alfred treated them in the right way psychologically,
and that this treatment went a long way in influencing them
to serve the Soviet cause.
The first problem which Alfred had to tackle as case
officer for Felfe and Clemens was to perfect the very shaky
and dangerous communications system with his agents. At the
moment, it depended on Gerda Clemens, an East Zone resident.
Clemens had not reported to the Gehlen Organization that he
was still in contact with his wife. On the contrary, .he
went out of his way to give the impression that he loathed
her and had nothing to do with her. Most people �had the
impression that he was divorced. Actually he was not; the
Soviets would not allow him, or help him, to get a divorce,
since it provided them with a control in that his.two:children
still lived with their mother. This constituted a shaky point
in the security of the operation, because if his secret
communications with his wife had become known, this could have
caused suspicion of Clemens on the part of the BND. Unfor-
tunately, however, it is just one of several potentially
suspicious items about Felfe and Clemens which did not come
to official notice until too late. While Tiebel had been
recruited as a courier, he coUld be used only occasionally,
since as a lawyer in a small town he had only very rare excuses
to go to Berlin. (He had relatives in East Germany whom he
managed to meet occasionally in West Berlin, and Clemens
twice managed to hire him for the Gehlen Organization for
brief periods as a source on various general East German
targets, using the East Zone relatives as sub-sources.) Gehlen
employees were in an even more difficult position: no Gehlen
employee could travel to Berlin without special permission -
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in effect, without an official reason. The simplest answer,
then, was to provide the agents with a good reason for coming
to Berlin on a fairly regular basis. What was needed was a
case which would specifically require the presence of Clemens
in Berlin from time to time as the Gehlen handler.
Such a case was the BALTHASAR case (BND cryptonym), an
operation engineered entirely by the Soviets for the purpose
of providing mobility to their agent. BALTHASAR was Fritz
Baltrusch, a Russian speaking Bait who at one time had been
Clemens' superior in the Dresden SD. As of mid-1952 he was
a doorman-receptionist at a Soviet-run uranium plant in
Dresden and an agent for the KGB. At KGB instruction he
wrote to Clemens, implying he had something of interest to
discuss, and asking for a meeting in West Berlin. Alfred did
not brief Clemens in advance that this would happen, nor did
he tell BALTHASAR that Clemens was also a Soviet agent.
Clemens rose satisfactorily to the occasion and on his own
initiative seized this chance to work up a case which would
provide him with opportunities to meet Alfred. In doing so
he also showed his good faith to the Soviets. Clemens took
a proposal to GV"L" headquarters (very likely to Oscar Reile)
that he be allowed to go to Berlin to find out what BALTHASAR
wanted and to see what he might have to offer for the Gehlen
Organization.* The convenient result was that Clemens was
ordered officially to Berlin to see BALTHASAR.
BALTHASAR, of course, appeared to have excellent pos-
sibilities as a source on the uranium processing plant. At
a second meeting a short time later, Clemens was able to
recruit him for the Gehlen Organization. From something in
BALTHASAR's manner, however, Clemens suspected a Soviet
presence. He told Alfred about the case for the first time
after recruiting BALTHASAR and learned that Alfred had indeed
engineered the contact especially for Clemens. Alfred ad-
monished Clemens never to let BALTHASAR guess that he, Clemens,
* The Gehlen Organization had a Peport dated in May 1952
that BALTHASAR was working for KGB Dresden as an informant on
former SD members living in the area. Whether this report went
unnoticed or unheeded, we do not know.
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was a Soviet agent. BALTHASAR only knew that Clemens worked
for Gehlen. In addition, Clemens was to be very careful in
his correspondence with BALTHASAR as the Gehlen case officer;
he must always let BALTHASAR take the initiative in setting
meeting times, so that no one at the uranium plant would have
cause to suspect BALTHASAR's intelligence connections. By the
same token Alfred claimed that any information produced by
BALTHASAR for the Gehlen Organization would be good, and
BALTHASAR would reply to any EEI to which he had logical
access. (Clemens was very impressed when BALTHASAR was al-
lowed to deliver to the Gehlen Organization in fulfillment of
a requirement a piece of uranium in the state in which uranium
was regularly shipped to the USSR for final processing.)*
Alfred said that Clemens would not need to report to Alfred
about his contacts with BALTHASAR; Alfred would get this infor-
mation from BALTHASAR himself. Thus Clemens would no longer
It is probably no coincendence that of all possible varieties
of operation which the KGB could have chosen as a vehicle to
provide cover for Clemens' trips to Berlin, they picked one
which produced information on a target which at the time was
of number one importance to the West for positive intelligence
collection, and to the East for security protection. At the
time, BALTHASAR's information on uranium ore shipments was
considered one of the few important successes of the Gehlen
Organization. U.S. estimates of Soviet nuclear capability
drew upon this type information. In addition to providing
cover for Clemens' trips, BALTHASAR was obviously an ideal
deception channel, but we do not know for certain whether the
Soviets doctored the uranium sample and the ore shipment infor-
mation for this purpose. There were other sources reporting
on this field at that time. It is possible the Soviets were
aware the information was already compromised and thus per-
mitted BALTHASAR to pass good information. It is equally
possible the other sources were also under KGB control and
part of a multi-channel deception. Both explanations are
consistent with known KGB modus operandi.
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need to communicate directly with his wife, as Alfred would
learn of Clemens' plans to come to Berlin through BALTHASAR
and would automatically expect to see Clemens immediately
after the meeting with BALTHASAR.
For the next two and a half years this case was used as
a cover for Clemens's trips from West Germany to Berlin to
meet his Soviet case officer. He delivered both his own and
Felfe's reports on these trips and brought back instructions
and money (often concealed in the lid of a candy-box). Clemens
met Alfred about every two months in a Karlshorst safehouse,
where their discussions were regularly recorded on tape. For
the most part their reports were delivered in clear text or
orally by Clemens. Not until later were more elaborate and
technical methods of communication introduced. The BALTHASAR
case provided the main method of communication until the fall
of 1955, when it collapsed because of one of those unhappy
flaps of which Max had spoken so prophetically to Felfe.
(Copies of BALTHASAR's reports to Clemens were found in the
home of a Gehlen employee who had been accused of working for
the East, and the case therefore was declared "blown to the
opposition.") While the insecure link via Gerda Clemens had
been eliminated, the BALTHASAR channel was slow and unwieldy.
There were two accommodation addresses to bolster it and there
was Tiebel with his automobile for emergency use, but neither
of these methods was safe or satisfactory for regular commu-
nication.
During 1952 and 1953 Felfe and Clemens reported extensively
on GV"L" and on those of its field sub-bases which they knew.
For a time they worked together in organizing a sub-base for
the Rhineland in Duesseldorf, but for the most part their
assignments kept them physically separated - Felfe in Karl-
sruhe and later at peadquarters (Munich/Pullach), and Clemens
in Stuttgart and later Cologne. The difficulties in local
communication between Clemens and Felfe remained throughout
their careers a weak part of the Soviet operation, since
Gehlen regulations officially discouraged social contact be-
tween fellow-workers. Thus, their frequent correspondence,
long-distance telephone calls and visits were quite abnormal.
For a while, in the fall of 1952, Felfe had a case (Dolezalek)
which allowed him trips to Berlin, but this folded for some
vaguely defined security reason. In December 1952 Alfred
provided-Felfe with a cover address and a carbon S/W system,
and also with a KGB office telephone number in Karlshorst for
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emergency use, thus giving him some measure of independence
from Clemens. Nevertheless, Alfred's cardinal operating
tenet was that his agents must do nothing outside of their
ordinary working schedule; at all costs, contact with the
Soviets must occur within the framework of officially
sanctioned Gehlen business.
In August 1953 Felfe was able to transfer to the Head-
quarters CE group with the help of Oscar Reile. He was now
definitely the more promising of Alfred's agents.
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III. OPERATIONS OF THE EARLY 1950's
During the period 1952 to 1955, the major theme on which
Soviet CE operational planning in Germany revolved was the
question of the Gehlen Organization's legalization as the
official West German Intelligence Service, and - equally
important - of Reinhard Gehlen's personal tenure as chief of
that organization. 1952 marks the beginning of talk about
an eventual restoration of West German sovereignty. Despite
recurrent threats to Gehlen's tenure and powers, the KGB had
apparently decided by the middle of the year that the Gehlen
Organization was probably there to stay. As the creature of
the strongest occupation power, it probably would one day be-
come the official German service. From the Soviet point of
view, it was no longer simply a vehicle with which to harrass
and penetrate U.S. operations, but another place to seek a
toehold in the future West German government. 1952 also saw
the beginning of a serious, aggressive build-up in Soviet
work against the West German target. In the early part.of
the year an extensive recruitment campaign was mounted in
the USSR (among POWs) and in East Germany for agents who could
be resettled in West Germany. In the latter part of the year
a general reorganization of the Soviet State Security Service
brought to East Germany a new, tougher, more tightly organized
group of counterespionage officers.* This was a period too
of intense in-fighting among the nascent West German security
and intelligence services - the BfV, the BND, and the Defense
Ministry. These organizations rivaled each other for the
supremacy of their service and many persons vied with Gehlen,
both from within and without the Gehlen Organization, for
his job.
a. Efforts to Discredit the Gehlen Organization
The KGB goals during the early 1950s were alternately,
to weaken and discredit the Gehlen Organization by exposing
it as riddled with Soviet agents, and to manipulate it
thrdugh well-placed penetrations. General Gribanov, Chief of
the KGB Internal Counterintelligence Directorate, is quoted
reliably as having made the statement that between 1953 and
1955 the Soviet services deliberately exposed over 100 of
Source: Petr Deryabin
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their double agents and staff penetration agents in an effort
to force changes in the Gehlen Organization leadership. The
Soviets, he said, had two agents at that time in the organi-
zation's leadership. One of them was foreseen as "chief of
the organization." But in the context of the statement it
is not totally clear just what was meant by "the organization."
Our source who heard the statement claims it referred to a
KGB plan to replace Gen. Gehlen himself with a Soviet agent.*
This is certainly a logical KGB objective, and the KGB may
have felt at that time that it had the assets to achieve
such a goal. However, there is also a tenable argument
that the actual KGB objective for its agent was the job as
chief of one of the organizations, such as GV"L", rather than
chief of the organization as a whole.
While Alfred was carefully devising a new and complicated
modus operandi for Felfe, destructive scandals were already
taking shape in various of Gehlen's field bases. At least one
of them was seriously to endanger Felfe. In February of 1953
a section chief in Berlin, Wolfgang Hoehner, was apparently
kidnapped and spirited into East Berlin. It later became
apparent that this was a case of a long-time agent being
recalled and that the kidnapping scene had been contrived
both for cover and dramatic effect. (Felfe was detailed to
investigate Hoehner's disappearance since he and Hoehner had
been friends. He reported on the investigation to Alfred,
and to his superiors in the Gehlen Organization he maintained
consistently that Hoeher had been truly kidnapped and was not
a Soviet agent as of the time of his disappearance. Hoehner
was subsequently turned over to the East German Intelligence
Service, for which he ran operations against Gehlen for sev-
eral years.) In October of the same year another penetration
of the Gehlen field base in Berlin, Hans Geier, was recalled
to East Germany when he feared compromise to West German
authorities. In November 1953 a third disappearance or
defection took place - again a Berlin based officer - Werner
Haase. The East German radio announced a massive roll-up
of Gehlen agents in the East Zone following Geier's recall in
October, and in December the East German press launched an
expos d of the Gehlen Organization. The main substance of the
East German material appeared to be on Gehlen's field bases,
Source: Michal Goleniewski from Gen. Oleg Mikhailovich
Gribanov.
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rather than the Headquarters, with a strong emphasis on GV"L"
and its dependencies. Felfe recognized some of his own report-
ing and was somewhat uneasy. Analysts in the Gehlen Organization
also found considerable portions of it attributable to Hoeher
and Geier. The most immediate effect of all of this was to
produce a reorganization of the GV"L" base. It was redesignated,
reorganized and moved to another location. Cautious analysts
assumed, however, that so destructive an expose would not be
deliberately undertaken unless some penetration asset remained
safely behind to report on the organization.
Some of the scandals which shook the Gehlen Organization
during this period were demonstrably KGB organized but others
were quite naturally self-generated. The situation was over-
ripe for scandal in the atmosphere of intense recrimination,
suspicion, and character assassination which accompanied the
West German political rivalries at this time. Some of the
Gehlen Organization's security operations contributed heavily
to this atmosphere. Most of these operations were run by
Ludwig Albert, the CI Chief and later Deputy Chief of GV"L".
Albert's CI branch was investigating the security of other
West German agencies and, in the early 1950's, one of its
most immediate objectives was to search out rightest elements
in the government. For this purpose, Albert ran a number of
"special connections" in nearly every Land and federal security
agency. From time to time these special connections became
known, with obviously scandalous results. While Gehlen was
honestly worrying on the one hand about Nazi remnants and
Communist infiltrators, his security operations, on the other
hand, tended to give the impression of a widespread infil-
tration of police power, sometimes of ex-Nazi police power,
throughout the West German government. Indeed, some of the
investigators looked as fearsome as the things they said they
were investigating. There was alarm on many fronts, not the
least among American occupation agencies.
In fear of its unwieldy offspring, U.S. Army European
Command asked CIC in 1949 to mount a similar security
/for
of the West German government in order to test
/for rightggt influences. The CIC effort, kndwn as "Operation
CAMPUS", listed until 1953, by which time it had become
politically embarrassing and had to be closdd down. Among
others, CAMPUS utilized two German principai agents, Heinrich
Schmitz and Richard Schweizer, who in turn had their own
"special connections" throughout the various federal and
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Land security agencies. The relationship between Schmitz and
Albert was rather complex. In addition to sharing many of the
same informants, Albert had hired Schmitz in early 1952 to re-
port on CIC to the Gehlen Organization. Gehlen later ordered
Albert to drop Schmitz because his reports on CIC were not of
value, but Albert did not do so, ostensibly because of his
close friendship with Schmitz. When the CAMPUS operation was
terminated by CIC and Schmitz feared losing his job, Albert
agreed to reverse the flow of information. He began giving
Schmitz reports on the Gehlen Organization for passage to CIC.
Albert's reports to CIC concerned derogatory information on-
Gehlen Organization personnel, with particular emphasis on
Felfe, whom Albert labelled as a suspected Soviet agent.
The situation was vastly complicated, and in retrospect
it is even more complicated than it appeared at the time, for
we now know several very important additional facts. One of
these is that Albert reported his "recruitment" by CIC to
Gen. Gehlen, and that he was in effect run by Gehlen as a
double agent against CIC. Another is that he was also an
East German agent all the while -- an agent who, in the end,
became expendable and was apparently deliberately fingered
and denounced on KGB instructions. In the next several pages
we try to shed some light on this complex situation and Felfe's
role therein, but the reader should note that what follows is
a speculative and interpretive account. There are important
gaps in this aspect of our knowledge of the Felfe case, and
it is possible to interpret the known facts in other ways,
The story as we see it begins with the defection of
KGB officer Petr Deryabin in Vienna in February 1954. Deryabin
had served in the German CE section in KGB Headquarters and
had read a KGB file on the Gehlen Organization. Deryabin was
able to report to his CIA debrief ers the cryptonyms of three
KGB agents in the Gehlen Organization, two of which were
identified many years later as the KGB cryptonyms for Felfe
and Clemens; the third remains unidentified, but may possibly
have been either Geier or Haase, both of whom had gone to
East Berlin and been surfaced there prior to Deryabin's de-
fection. The KGB was perhaps uncertain of the full extent
of Deryabin's knowledge of agent identities. In any case,
the KGB had ample cause for concern about the security of
its agents within the Gehlen Organization. Knowing that
Deryabin's revelations would prompt another investigation of
Gehlen Organization security, it became important to the KGB
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to divert the investigation in a way designed to protect the
most important KGB agents.* The KGB operation which appears
to have been run for this purpose is known by its Gehlen
Organization cryptonym, LILLI MARLEN.
In June 1954, just four months after Deryabin's defec-
tion, a German citizen reported to the local police in
Ludwigsburg, West Germany, that he had seen a man place
something under a certain lamppost. The man's furtive
manner had aroused the citizen's suspicions. On inspecting
the spot, the police found a deaddrop containing a role of
microfilm. Several days later, having placed surveillance
on the area, they caught a man trying to retrieve the dead-
drop. This man quickly confessed to being a KGB agent.
The microfilm turned out to be a very complete report on
GV"L" �-- its organization, personnel, and many of its opera-
tions. It was signed "Artur," and clearly implied that
"Artur" was actually in GV"L". Gehlen analysts felt that
only the chief of GV"L" or his deputy could have such a
comprehensive knowledge, yet the style in which it was written
and certain incorrect nomenclature suggested that the report
might have been prepared by an outsider. All things consid-
ered, the primary suspect was the chief of GV"L", Bensigner,
as he had already been under investigation for various
reasons for a long time. Albert was a second suspect.
Several days after the LILLI MARLEN deaddrop was found,
a GV"L" agent whose first name was Artur -- the same name
as was signed to the report in the deaddrop -- was approached
by a Soviet agent who tried to persuade him to come to the
When an important agent is known to be endangered, the
KGB will try to set up a "false victim" whose arrest takes the
heat off the actual agent. The "false victim" may be wholly
innocent, or he may be an actual Soviet agent of lesser
importance. Documents on State Security training show this
"false victim" technique was being taught to trainees at least
as early as 1939.
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East. When Artur refused, the agent tried to provoke Artur
to call the local police and have him, the Soviet agent,
arrested. Artur refused to rise to either provocation. This
incident may have been designed to lead to Albert, who was
Artur's GV"L" case officer, or it may have been meant to
provide a handle to force the public surfacing of the LILLI
MARLEN find for propaganda purposes.
Typically, and understandably in view of his position,
Felfe was among those assigned to investigate the LILLI
MARLEN case.* No thanks to Felfe, an important break in the
case did come several months later. A mail intercept on the
man who had reported the deaddrop to the Ludwigsburg police
revealed that he was in contact with the same KGB principal
agent in East Berlin who had dispatched the agent the police
had arrested trying to recover the deaddrop. Subsequent
investigation confirmed what had previously been vaguely
suspected -- namely, that the discovery of the deaddrop was
a deliberate Soviet expose. The document had been prepared
by the KGB, hence the errors in nomenclature. One KGB
agent had been sent to Ludwigsburg to emplace the report in
the deaddrop, a second KGB agent had been instructed to tell
the Ludwigsburg police that he had accidentally discovered it,
and a third agent had been sent to walk unwittingly into the
police stake-out and be arrested while attempting to empty
the deaddrop.**
This exposure of the LILLI MARLEN deaddrop as a Soviet
deception operation only served to add to the mystery, rather
than to clarify it. The KGB clearly had an excellent source
of information on GV"L", and the problem of identifying this
source remained. Moreover, several additional questions
At the time, one of the Gehlen Organization security
officers (alias Bernhardt) complained in veiled terms to his
CIA liaison contact that Felfe's behavior during the LILLI
MARLEN investigation was frustrating and curiously obstructive.
** The second and third agents were both arrested and both
confessed. See Annex B for a more detailed write-up of the
role these agents played in the LILLI MARLEN case, including
their spotting, development, and dispatch by the KGB.
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rose: Why would the KGB want the Gehlen Organization to
know GV"L" was penetrated? Would the KGB cause so much
attention to be focused on GV"L" if it really did have good
agents there? Might the KGB have had the intention (foiled
for the moment) of trying to burn an old recalcitrant agent
who was causing trouble? Or, might LILLI MARLEN have been
an attempt to deflect attention from a valuable agent who had
moved elsewhere?
MN,
awl
These questions were asked at the time, but they have
never been answered with any degree of certainty. In retro-
spect, the most plausible explanation relates to Deryabings
defection and KGB efforts to minimize the damage assumed to
have been caused by his revelations. The KGB had nothing
to lose by indicating it still had an active penetration of
the Gehlen Organization -- Deryabin had already done that.
But it did have a vital interest in creating a certain
impression as to who or where that penetration was. By.call-
ing attention to GV"L" as the locus of Soviet penetration,
both Felfe and the presumed KGB agent Reile were protected,
as both had by this time already transferred from GV"L" to
Headquarters. EGIS agent Albert, on the other hand, was
caught in the middle, and we do not know what the Soviets
intended should happen to him. As it worked out, Albert
was promoted from Chief CI to Deputy Chief of GV"L" during
the reorganization which followed the LILLI MARLEN investi-
gation, so it could be that the Soviets intended that he
benefit from the operation. It is more likely, however,
that he had become expendable and was the intended target
of the LILLI MARLEN exposure, a scapegoat to make it appear
that the most important of the agents whose existence was
known to Deryabin had been caught. If so, that part of the
Soviet plan which was intended to finger Albert as the
source of the LILLI MARLEN deaddrop either did not work
(the provocation of Artur) or was aborted after the Gehlen
Organization tumbled to the fact that emplacement of the
deaddrop was a deliberately staged KGB scenario.
The KGB probably had cause for being discontent with
Albert and wanting him out of the way. Since at least
1953, Albert had been voicing dissatisfaction with certain
of Gehlen's personnel policies. Part of this dissatisfaction
was undoubtedly justified; part surely stemmed from an old
rivalry between GV"L" and the Headquarters CE chief, Dr.
Kohler, and when GV"L" officers like Reile and Felfe "defected"
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from GV"L" and went to work on Dr. Kohler's staff, they too
became personal targets of Albert. But even apart from the
influence of the rivalry with Dr. Kohler, there had been
numerous instances when Felfe's behavior, operational and
personal, had incurred Albert's particular wrath and even
suspicion. Albert's main objections were to the closeness
of Felfe, Reile, and certain of their friends in what he
termed an "SD clique." He considered them "politically
unreliable" and possibly dangerous. With few exceptions,
Albert's complaints fell on deaf ears within the Gehlen
Organization, but Big Brother must also have been listening.
It is difficult to imagine that Albert's accusations against
Felfe could have been made on KGB instructions or with KGB
approval. It is more plausible that the KGB was considerably
irked at the thought of EGIS agent Albert denouncing KGB
agent Felfe, that Albert's actions cast doubt upon his loyalty
to the cause, and that the KGB's hands were tied because telling
Albert to lay off Felfe would mean in effect confirming that Felfe
was indeed a Soviet agent. What motivated Albert to denounce
Felfe is unknown. Professional jealousy may have played a
role. Perhaps, too, he felt the signs of penetration of the
Gehlen Organization's CE operations were so clear that it
was necessary to develop a scapegoat; by focusing attention
on Felfe, Albert may have hoped to divert suspicion from
himself. The latter theory is supported by the fact that
Albert intensified his accusations against Felfe after
discovery of the LILLI MARLEN deaddrop, an incident which
probably caused Albert many a sleepless night. In September
1954, Albert began passing information to CIC via Schmitz,
and over a period of about six months he spelled out in
very precise terms his suspicions that Felfe, among others,
was an "enemy." He told CIC that he considered Felfe res-
ponsible for the betrayal of one of his sources who was
named in the December 1953 press expose on the Gehlen
Organization; he thought Felfe's behavior in investigating
some of the recent flaps was "suspect;" he described in
detail several incidents in which Felfe behaved with
suspicious curiosity in matters of no concern to him; and
he elaborated repeatedly on the extent to which the Head-
quarters CE Group seemed to be an SD preserve, with Felfe
one of the ringleaders.
At this point in the Albert story, we come to a major
gap in our knowledge. As noted previously, Albert reported
his "recruitment" by CIC to Gen. Gehlen and was run by Gen.
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Gehlen as a double agent against CIC. Although Gehlen
directed the case personally, there was one case officer
involved who was never identified to CIA but who may have
been Felfe. This phase of the Albert affair was meticulously
kept secret from CIA by both .Gen. Gehlen and by CIC. Gen.
Gehlen ha A persisted in believing that CIA was the actual
controlling service behind the CIC recruitment of Albert, and
the Gehlen Organization files have been denied to us. CIC
records on the case were also never revealed to us, ostensibly
because of the hopeless task of attempting to retrieve the
files. Therefore, we do not know whenthe "doubling" of
Albert took place. We do not know whether Gen. Gehlen
specifically approved Albert's passage of derogatory infor-
mation on Felfe to CIC, nor, if so, why. We suspect, but
do not know for certain, that Felfe was somehow involved in
the case. We do not know whether Albert reported truthfully
on this aspect of his activity to the East Germans, or whether
he withheld this information. In view of these gaps in our
knowledge, we are not certain that the KGB knew of Albert's
denunciation of Felfe to CIC, but it seems reasonable to
assume it did, as there were a number of ways in which it
could have obtained this information. If the KGB was aware
of Albert's allegations against 'Felfe, it could scarcely
have been happy about the situation. Indeed, it would have
had considerably more urgent reasons for trying to get rid
of Albert than was the case at the time of the LILLI MARLEN
operation.
The finger was put on Albert in May 1955, nine months
after he began reporting to CIC. Herbert Weinmann, a former
East German MfS case officer/courier, after having been ar-
rested in West Germany on a charge unrelated to espionage,
made a clean breast of his espionage past in return for
immunity from prosecution. In so doing he -reported Albert
as an MfS agent who had probably been recruited first by the
KGB, and he also compromised a number of other relatively
insignificant MfS agents. According to Weinmann, the first
part of Albert's MfS dossier, which he claimed to have seen,
had been translated into German from Russian. He could not
say when Albert had been recruited by the KGB, or when he
had been turned over by the KGB to the MfS, except that the
file went back a number of years. Albert was arrested on the
basis of Weinmann's allegations, and during a search of
Albert's house certain damaging evidence was uncovered,
evidence never made available to CIA. According to alias
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Bernhardt, senior security officer of the Gehlen Organization
and a reliable source, part of the evidence was three sets of
files pertaining to Albert's work for three employers -- CIC,
the Gehlen Organization and the MfS/KGB. Bernhardt stated
privately that he had no doubt Albert was an Eastern agent,
a clear indication that the totality of the evidence on this
score was convincing to the Gehlen Organization. But despite
the evidence, Albert refused to admit to Eastern contacts until
the night of 13 July, when his interrogators thought they saw
signs he was ready to talk. Although his jailers were warned
to watch him carefully, toward morning their attention wandered,
and Albert was found hanged - an action as baffling still for
many people as on the day it happened.
There is no doubt that Weinmann was an MIS agent of long
standing, but it is suspected that his "confession" and de-
nunciation of Albert was KGB inspired. Although part of his
information was clearly valid, other parts were obviously
fabricated. After his release from jail in November 1955,
he was the object of some East German attention which looked
very much like an attempt to support his bona fides as a
source of information. A very well blown double agent
allowed the Gehlen Organization to come into possession of a
letter addressed to Weinmann by his MfS case officer. In it
the MIS officer expressed surprise that Weinmann had been
released from prison so soon and concluded that he must have
conducted himself well. A few months later Weinmann was
contacted again, but this time through a more securely
managed contact which may not have been intended to -come to
Western attention. At this time, Weinmann received instruc-
tions to "continue" giving information in the way he had
been giving it, with a few specified exceptions.
The Albert and the related Weinmann and LILLI MARLEN
cases have been the subject of considerable analysis and
speculation over the years. There are many questions which
remain unclarified, but one thing is clear. The net effect
of the Albert case was to solidify, rather than weaken,
Felfe's position. It brought the nagging derogatory data on
Felfe out into the open, and somehow the doubts were re-
solved in Felfe's favor. That he was cleared is evidenced
by the special trust placed in him by Gen. Gehlen, who from
that time forward pushed in his direction the special
"sensitive" cases in which Gehlen had a personal interest.
To be sure, in belated consequences of Albert's accusations,
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Felfe was subjected to a security review on charges of "SD
and Eastern connections," but this was a perfunctory matter.
In February 1956, Felfe was asked formally, "officer to
officer," whether he had been a member of the SD. He replied
with a brazen "No, sir," despite the fact that his SD past
was known to a number of Gehlen officers and could have been
readily proven by a check of wartime records under Allied
control at the Berlin Documents Center.* The results of this
"investigation" were "inconclusive." Although the BND's
security file on Felfe was kept up in a desultory fashion for
the rest of his career, nothing much was to come from it
alone. By this time, Felfe was already well on the way to
becoming one of the more energetic and productive CE experts
in the BND. His professional reputation was growing, and
Felfe's corner was a disheartening place in which to look for
additional treachery.
b. Felfe Settles I - the LENA deception
While all these storms were breaking, Felfe was care-
fully settling in to his new job as a senior case officer in
the Soviet Operational Section of the CE Group. He had his
first personal meeting with Alfred as a Headquarters officer
in the fall of 1954, almost a year after his transfer. He
reveals only very generally what they discussed at this
meeting: problems of access, his and Clemens'; and questions
of how to hinder the legalization of the Gehlen Organization.
He gives no further detail, but under these headings one
Felfe worked hard on several of his CIA liaison contacts
to get him an "informal" copy of his Berlin Documentation
Center dossier. He was clearly concerned that it might contain
evidence to prove he had lied about his background. He may
have hoped that he was lucky and that, as happened in many
cases, his file had been lost or was incomplete. Another
indication of his concern was a comment to a CIA liaison
officer in March 1956. He said he had heard that Albert had
asked Schmitz to investigate him, and that while he had re-
ceived a vote of confidence from Gehlen, he hoped that there
wasn't anything derogatory about him hidden away in some
American file.
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assumes that the basic modus operandi and a certain number
of specific cases must have been discussed. The basic op-
erating plan was that Felfe should have one general meeting
with his Soviet case officers each year. Communications from
hip would be via Clemens as courier and via S/W letters to
an East Berlin accommodation address. Communication from
Alfred would be via Clemens or directly to Felfe via microdot.
(Felfe and Clemens disagree in their testimony as to who
was to receive the microdot. Clemen's statements seem more
plausible, namely, that it was Felfe who handled the micro-
dot communications, retrieving and reading the film and
sending to Clemens only those EEI which pertained to him.)
Training in S/W and microdot was given to Felfe in 1954 and,
in addition, he was presented with a Minox. These technical
innovations in the operation provided yet greater compart-
mentation between Felfe and Clemens and reflected the fact that
Felfe was now seen as the senior of the two agents.
From the fall of 1954 on, Felfe photographed Gehlen
registry cards on a regular basis for Alfred; he also per-
formed specific name checks for the KGB. Other file material
he photographed on a more selective batis. As an example
of his enormous sangfroid (or perhaps of the ease with
which a spy can operate even in a highly compartmented agency),
Felfe says that he used to photograph file material in his
office, with a tripod, during the twenty minute interval
between the official closing time of 5:00 p.m. and the be-
ginning of overtime when special registration of one's presence
in the building was required. He says he never photographed
after this hour, even if he worked late officially, for fear
of being controlled when leaving the building. When leaving
the building he hid the film under his clothing next to his
skin. Sometimes he handed the film directly to Clemens,
sometimes he sent it to him by registered mail. On other
occasions he checked files out officially and took them with
him when he had official business in Clemens' vicinity.
Then he would photograph-the material in Clemens' apartment,
to which he had his own key. He was a keen amateur photog-
rapher (and in general a lover of gadgets) and later on
built himself a darkroom in his weekend cottage where he
could do some of his KGB work.
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What Felfe does not tell us about this 1954 meeting with
Alfred was, however, probably infinitely more important. With-
in a very short time after his arrival in Headquarters, Felfe
had been put in charge of a double agent through whom he was
soon to make a reputation for himself as an authority on
Soviet CE matters. This was called the "LENA" case and was
unquestionably the most important single contribution to
Felfe's career as an intelligence officer. Felfe claims he
never discussed this case with Alfred, that it was a "clean"
BND operation. This is generally accepted as being incon-
ceivable, and Felfe's attempted deception only confirms the
case's importance. The LENA case gave Felfe maneuverability
as a Soviet agent and status as a BND officer; it provided him
with a channel to receive and to fulfill EEI; it broadened
considerably his access both to collect information and some-
times to disseminate disinformation. It fits the basic formula
of the BALTHASAR case, only with a much greater conception
and much greater complexity. For the years 1954 to 1958, it
moves like the shadow play of Felfe's real Soviet career.
LENA is the BND cover name for Guenther Hofe, an East
German political functionary and publisher. Hofe was a
member of the Central Committee of the NDPD (National
Democratic Party of Germany - an ostensibly independent
political party), director of its publishing house "Verlag
der Nation", and editor of the party paper, Nationale
Zeitung. He had a minor reputation as a political analyst,
trav-e-Ted frequently to West Germany and was well received
in certain West German Socialist circles as an apparently
independent, outspoken East German. LENA's story to the
BND was that he had joined various Communist front groups
in order to "bore from within," and that very soon after
the war he decided for ideological reasons to volunteer
his services to a Western intelligence service. Through an
old Luftwaffe comrade in West Berlin he came into contact
with French intelligence, the SDECE, in 1948. The French
ran him for several years as a political source and were
apparently highly satisfied with him. By early 1953.it
had become apparent that the ex-Luftwaffe comrade was
working as a principal agent for both the SDECE and the
Gehlen Organization, and for a year or so LENA was in
effect run jointly. In mid-1954 the case was officially
transferred to the Gehlen Organization. Somewhat prior to
the turnover, the Gehlen Organization asked CIA to evaluate
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some of LENA's intelligence product for them. Without naming
the source, they presented us with a copy of a study of the
NDPD written by LENA. CIA's branch for the study of inter-
national communism wrote an evaluation which said in part:
"This study is a biased collection of overt and semi-overt
knowledge of the NDPD, missing several essential points
pertaining to the organization, purpose and utilization of
the Party by the Soviets in Eastern Germany...the extensive
use-of NDPD members by Soviet intelligence for missions in
West Germany is not mentioned." A prophetic note, but easier
to read with hindsight.
Despite this one negative evaluation, LENA became highly
regarded by the Gehlen Organization as a political source.
Within five months of Felfe's transfer to Headquarters, how-
ever, LENA abruptly became a CE case. Through the NDPD
Party Chairman, LENA had been introduced in :January 1954 to
a Soviet intelligence officer. After a flurry of meetings,
he was formally recruited in early March and immediately
assigned the task of creating a net of agents to produce
information on the West German Foreign Office, the Chancellor's
Office, and the Federal Press Office. The plan was grandiose:
LENA was to be the "German net director," to recruit two
principal agents and a sort of general political advisor and
spotter, and several support agents, and to provide names of
potential penetration agents. As a double-agent in contact
with the Soviets, whose activities were directly to affect
West German security, the LENA case now properly belonged to
the CE Group of the Gehlen Organization. Felfe was made the
Headquarters case officer. He directed LENA through a field
case officer whom he met regularly each time the field hand-
ler saw LENA. Felfe met LENA personally only two or three
times. There is no firm evidence that the field handler or
any other Gehlen personnel besides Felfe who were connected
with the LENA case were-Soviet agents, although, since all
analysis of this case insists that it was a KGB "set-up"
from the beginning, one is strongly tempted to assume at
least the presence of a helping hand in the Gehlen Head-
quarters to ensure that Felfe would be made the responsible
case officer. The highly suspect Reile was Felfe's immediate
superior at this time; perhaps he helped steer the case.
LENA was cast as the perfect agent: intelligent, cool,
a demonic worker ("needs only four hours of sleep a night")
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with a phenomenal memory (he claimed to find it relaxing to
memorize the license numbers and makes of the Soviet auto-
mobiles he saw in Karlshorst!). Felfe took great pains to
point out LENA's excellent personal qualities and to emphasize
the indications in his reporting that the Soviet also had a
very high respect for him. In contrast to LENA, however, the
Soviet handlers seemed somewhat naive. Indeed all his ,Soviet
case officers in succession had the shocking fault of being
chatterboxes and through them LENA was ostensibly able to
pick up a great variety of information about other Soviet
agents and operations in West Germany which were unrelated
to him. Furthermore, the KGB officers enjoyed talking
politics with such an intelligent man, and from these long
conversations the BND was now and then given an apparent
glimpse into the "true" Soviet policy in Germany. Much of
the information that LENA delivered to the Gehlen Organization
was excellent. Several bona fide RU and MfS agents were
identified for the BND in this manner; the KGB apparently had
little compunction about throwing away the assert S of its
sister services, although it did give away some of its 'own
assets too. The license plate numbers, telephone numbers -
and addresses of KGB safehouses were all accurate; that is
there were traces from other cases on them. Unfortunately,
it was not completely clear in 1954 and 1955 that these
other cases were blown cases of the KGB/CE section working
against the Gehlen Organization and the other German security
services. Looking back on this fact, one can say that it
should have been disconcerting to find so many traces from
blown CE cases in a case which the KGB pretended was a
political intelligence collection operation. Similarly
disconcerting was the fact that one of LENA's case officers,
Vladimir Shchukin, had been described to us in early 1954
by Deryabin as a former colleague working on West German
security and intelligence agencies. Deryabin described him
as incompetent, one fact at least which seemed to be
corroborated by LENA. In addition to their talkativeness�
Shchukin and his colleagues were unusual and puzzling in
another respect: they dealt with their agent under their
full, true names.* They were thus readily checkable.
Note by way of comparison that neither Felfe nor George
Blake were ever given full names or true names of their
Karlshorst KGB handlers. The purpose of revealing full true
names to LENA was presumably to give Felfe cover for an all-
agency namecheck on them.
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Technical discrepancies abounded too: for example the KGB
gave LENA a false West German identity document in August 1954
which was so obviously falsified that they said they were
obliged to apologize, and that unfortunately they were unable
to produce anything better.
On the surface, LENA's operation to penetrate Bonn on
behalf of the Soviets seemed less spectacular than his operation
to penetrate Karlshorst on behalf of the BND. The leads he
gathered for the Soviets were numerous, but they often petered
out. Many potential recruits were reported to the Soviets
(with the Gehlen Organization standing by to make a double
recruitment in case the Soviets followed up), but only one
real penetration was actually recruited: an ailing and in-
competent gentleman in the Press Office who contented him-
self with the product of waste baskets for his source material.
To some observers it seemed incredible at the time that the
KGB should go through so many motions just for this. And,
indeed, it did not. The KGB was in fact very interested in
information on the Foreign Ministry and Chancellor's office:
personnel rosters, tables of organization, internal directories
and other memoranda, compromising information on leading
officials, etc. These EEI were all given directly to Felfe
by Alfred. Felfe admits that at his 1955 and 1956 meetings
with the KGB officer they discussed these targets. In addition,
Alfred asked him to identify Gehlen informants within the other
government departments. Felfe denies that he was able to ful-
fill Alfred's requirements; he claims he told Alfred he had no
access to such information. In a certain sense this was true,
but the fact is that the LENA case did work for him.
The singular and especial importance of LENA's net of
agents in West Germany was that it forced the Gehlen Organi-
zation to produce "build-up" material on the target agencies
on a systematic basis and to a greater extent than had ever
been done before. It caused answers to be produced to Soviet
questions, while at the same time creating the impression
within the BND that the Soviets did not have other agents in
these targets. Because of the comprehensive nature of LENA's
targets and because of his detailed reporting (described by
CIA officers as "more than necessary"), LENA quickly became
tagged as Gehlen's most important CE case. Felfe begged for
permission to pass appropriate build-up material to keep LENA's
faltering net alive: the theory was that one had to please
the Soviets so that a source of importance both for West
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German security and possibly for an eventual penetration of
the KGB might remain viable. Felfe's principal problem was
that at this time there was no provision for clearing build-
up material in the German government. Felfe tried to persuade
various security officials in Bonn, then he went to a CIA
liaison officer, hoping that we would intervene in some way.
Eventually he went to the Federal Attorney General and obtained
a statement from him to the effect that any material already
demonstrably known to the opposition was automatically no
longer secret. By extension, that which was no longer'secret
could be passed to the opposition as build-up material. Finally,
Gehlen himself briefed Adenauer and the State Secretary of the
Federal Chancellery, Dr. Hans Globke, on the case and obtained
Globke's agreement in the matter: specifically, this included
permission to pass information on Foreign Ministry personnel
to the Soviets.* Thus armed, Felfe was able to maneuver a
wide variety of information "legally" into Soviet hands. All
that LENA's Soviet case officer had to do was to declare that
certain areas of information were already known or already
"'covered" by them, and then Felfe could argue the virtue of
providing that information to LENA as build-up, or to satisfy
presumed KGB cross-checking on LENA, or as a way of trying to
smoke out the presumed Soviet source. Any number of Soviet
targets could be traced in Bonn and in BND files simply by
working them into LENA's EEI in some way. In the LENA case,
there are many examples of persons or subjects of Soviet
interest which flash into the limelight for a moment -
perhaps long enough to be checked out in Western files -
and then disappear from the LENA case with the Soviet case
officer's remark that he is no longer interested.
Here is a quote from remarks about Felfe's technique
written at the time by the CIA liaison officer responsible
for security matters: Felfe "very cleverly played the
Oberbundesanwalt (Federal Attorney General) against his own
superiors. He obtained access to the Chancellor's office
through Gehlen's own access. Then he used (the Chancellery's)
approval of his wishes to insure the approval of Gehlen. Along
the way he made references to the uncooperative attitude of
various .other officials, including the BfV-and security
officers in the Foreign Office. Al]. in All, he made fools
.out of everybody in the name of the security of the Federal
Republic."
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To make this exercise more thorough Felfe eventually
managed to get permission to conduct his own investigation of
personnel known to be under study by the Soviets, and on whom
the Soviets were seeking information on vulnerabilities for
recruitment attempts. Even more brash is the incident when
Felfe asked a CIA liaison officer if CIA could provide leads,
from lists of dropped agents, to persons who might be employed
at a relatively high level in different Bonn ministries whom
he could then recruit and "feed" to the KGB via LENA.
Through the LENA operation, the BND became intimately
involved in the security of the West German Foreign Ministry,
checking on targets of interest to the Soviets, passing
build-up and deception material, etc. This established
an important precedent at a time when the nascent West German
intelligence and security organizations were still engaged in
intensive in-fighting over the precise definition of their
functions and responsibilities. The BfV, which has formal
responsibility for the security of government offices, was
not yet sufficiently well-organized to fully exercise this
responsibility. Using the LENA case, the BND moved into the
vacuum and established a precedent which still holds. The
END still exercises certain de facto responsibility for
Foreign Office security, despite the BfV's formal authority
in this field.
There was another interesting gambit in the LENA operation
which was used by Felfe to exacerbate the already existing
friction between the BND and the BfV. On Felfe's instructions,
LENA expressed concern to his Soviet case officer about op-
erating in West Germany as a Soviet agent and about the
danger that the BfV might get on his trail. The Soviet case
officer allegedly advised LENA to have no fear, as the BfV
had only two files on him and they contained only routine
information on LENA's party activities. When Felfe got this
information from LENA he checked the BfV on an appropriate
pretext and found that their files were exactly as described
by the Soviet case officer. This was proof, Felfe then said,
that the BfV was penetrated. This point was cited rather
widely by Gehlen, Felfe and other BND officers to their
American colleagues and presumably to other elements of the
German government.
Felfe discovered during the course of the LENA operation
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that CIA could be useful to him in various ways. In the LENA
case as in many subsequent ones, his contact with CIA was of
enormous value as a kind of super-liaison, since the various
German services would sometimes tell their foreign confidantes
more then they would tell each other. When LENA's KGB officer
wanted him to recruit a laborer working on the new Chancellery
office building in 1955 so that a transmitter might be con-
cealed in it, Felfe came to CIA with the complaint that there
were at least seven different German agencies to which a
workman might report a recruitment approach and that his
organization could be sure of hearing automatically from only
two of them. He feared that if he did not have timely warning
of such an approach he might lose the opportunity to double
the worker securely: would we please monitor the situation
for him?. Typically for the LENA case, nothing came of this
plan to recruit a workman and to plant an audio device. In
retrospect, we speculate the Soviets were planning to approach
such a workman independently of LENA, and that they used this
tactic to insure that Felfe would learn of it if their actual
target reported the approach. Thus, if Felfe did not learn
of any such approach, the KGB could be confident of the work-
man's bona fides and feel free to use its best (and most
sensitive) type of audio equipment.
The LENA case, while dazzling for a while, produced
many questions and suspicions in the minds of analysts in
both the Gehlen Organization and CIA. The unnatural talk-
ativeness of the KGB case officers, the endless and incon-
clusive backing and filling in the setting up of his net,
the lack of Gehlen control (LENA came and went at his own
initiative, and always in a hurry, to the West Berlin home of
his old Luftwaffe friend, where he simply recorded what he
wanted to say on tape and left); all these features were
puzzling even while the case was new. One colleague of Felfevs,
alias Dr. Herder, was puzzled enough to write a review of the case
in late 1955. He decided it was a fraud, but he was not yet
quite certain why. Felfe's CIA contact felt the same way:
there seemed to exist the possibility of a deception, but the
obvious take for the Soviets did not appear to pay for output
in terms of good leads given to the West. There was no
internal logic to the case. This of course was the correct
conclusion. There was no internal reason for running the
case as a deception, but there was a very good "external" one:
Felfe, whose benefits far outweighed the loss of any information
to the West from the LENA operation. These stirrings of
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suspicion about the LENA case constituted the second obvious
major danger signal - after Albert's denunciations - to Felfe.
The LENA case would have to alter its course.
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IV. KGB WORK IN WEST GERMANY AS
A SOVEREIGN COUNTRY: 1956-61
The years 1955-1956-mark a major change in KGB operational
policy in West Germany. The post-war period was over and West
Germany had become a sovereign nation. By spring 1956 the
Gehlen Organization had become the Federal Intelligence ...Service
(Bundesnachrichtendienst - BND), a dependency of the Chancellor's
Office, the legal foreign intelligence collection agency of the
Federal Republic of Germany. Formal CIA trusteeship had ended.
The BND was considerably reorganized and its relationship with
CIA gradually began to normalize, although CIA has never really
lost its "favored" position. To meet the new situation, new
units were created in the BND and BfV for the penetration of
the Soviet installations which were set up following the
restoration of sovereignty and establishment of diplomatic
relations with the USSR. CIA bases in Frankfurt and Bonn also
turned their efforts on these targets and in doing so found
the need, and the obligation, to operate closely - but as
liaison equals - with the newly independent German agencies.
In Berlin, CIA's operations base redoubled its efforts against
the Soviet "extra-territorial" headquarters - Embassy, Trade
Delegation, KGB and GRU - in East Berlin, producing in the
process a fairly comprehensive body of documentary and bio-
graphic material, which, along with the CIA German Station's
library of CE case histories, became widely used for cross-
checking new information as well as for trading purposes in
the new liaison relationships.
For the KGB, the BND was no longer a target for possible
destruction; far more, now, it was an object to be manipulated.
The opportunity to replace Gehlen had been lost, but he 'could
still be embarrassed. It was no longer possible to make use
of his complicated jockeying with political rivals, but he
might still have certain political dreams which could be
played upon. The fundamental theme of Soviet policy in Ger-
many, now stronger than ever, was neutralization, and as West
Germany's economic and military status increased the KGB
moved correspondingly to support its own government, not
simply with the collection of information or the parrying of
its enemy's operations, but by mounting a number of "influ-
ence" or "inspirational" operations, some of which filtered
through Felfe's fingers.
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With the help of the LENA case - and in spite of its
potential dangers and the distrust of alias Dr. Herder (who
was also an ex-SD officer) - Felfe had established himself in
the Headquarters organization fairly solidly by 1955 as
the most energetic, aggressive case officer working on the
Soviet intelligence target. In late 1956 or early 1957 he
succeeded Reile as deputy chief (in practice the real chief)
of the Soviet Operations Section of the CE Group. Broadening
of Felfe's access became a primary objective. Alfred's
factual EEI for the period 1956-59 reflect the KGB need for
detailed organizational and personnel information on the BND
and its liaison partners: the internal security service,
the military security service, the Foreign Ministry, the
Chancellor's Office and, among the Americans, primarily CIA.
Alfred's purpose was mainly protective: of Soviet installations
in Bonn and East Berlin and of the operations run from them.
USSR internal security requirements were reflected, too, in
requests for Felfe to develop information on the BND section
running penetrations into the Soviet Union and to outline
Foreign Office security procedures for the German Embassy in
Moscow. In general, Felfe and Clemens were expected to warn
the Soviets of any projected operation against them. They
were also given specific names to check.
With a better bureaucratic position and the allure of
being an "expert," Felfe had considerably more maneuverability
in his own right after 1956. In addition he was enterprising
and his talent for elicitation was phenomenal. He made a
practice of winning a personal contact in every important
Federal and Land Security Office: more than one security
official has ruefully admitted that he used to brief Felfe
regularly and informally on his cases in order to get the
expert's opinion. And where he could not develop an already
existing contact he would try to insert one in the guise of
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a "special connection."* Whenever Felfe had to visit another
government agency on BND business he would look up other con-
tacts in the area just to keep up with what was going on.
After a while he devised the practice of taking along a tape
recorder so that he could cover more ground efficiently. Soon
BND colleagues found this a handy way of having him take care
of some of their liaison for them, and he was eventually re-
laying questions and answers on various matters concerning
Soviet, satellite and Communist Party operations of the BND
and BfV which otherwise were not of official concern to him.
From the BND's own damage assessment we have the characteriza-
tion of Felfe during this period as "shamelessly curious."
Clemens in the meantime had been transferred to Cologne
to work in one of the new units targeted against the Soviets
in Bonn. His unit was designed to penetrate (primarily by
audio installation) the Soviet Trade Delegation, and it
worked in tandem with a corresponding unit directed by the
BfV against the Soviet Embassy. Felfe could learn much
about these operations from Clemens, and in any case, as a
An interesting example of this kind of maneuver by Felfe
involves a man named Max Klemm, a former SS officer and late
returner from Soviet PW camp. Felfe was instrumental in having
Klemm taken on as an agent by the BND and in having him get a
job in the Office of the Federal Chancellor. Felfe argued that
such a person as Klemm on the Chancellor's payroll would prob-
ably attract a Soviet recruitment attempt. The BND (Felfe)
could then monitor the operation for "security purposes":
Somehow Felfe succeeded in selling this idea to his superiors,
but there was never any sign of a Soviet approach. (There are
various possible explanations of Felfe's motive for inserting
Klemm into the Chancellor's office. It may have been simply
to use him as an unwitting source on this office. A more
onimous speculation is that Klemm was a KGB agent, and that
Felfe devised the BND operations utilizing Klemm as cover for
moving him into a sensitive job and ensuring all concerned of
his "security.")
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CE staff officer, he had the right to review certain relevant
cases from time to time. Felfe's involvement with these
operations increased steadily, so that by late 1959 he was
officially responsible for the Headquarters supervision of
nearly all BND operations against the Soviets in Germany.
The KGB could well congratulate itself. At the same time it
had to be willing and nimble enough to counter the Western
efforts on a broad scale without endangering its source.
a. Targeting of CIA, Provocation, Tactical Deception
The LENA case also helped to break ground for liaison
with CIA on operations against Soviet installations in East
Berlin. The CIA Berlin Operations Base, which handled these
operations, still enjoyed the possibility of working unilaterally.
The BND naturally wanted badly to have its share of sources in
Karlshorst, the seat of KGB Headquarters in East Germany, and
Felfe strove with a variety of ploys to further both the BND's
and the KGB's cause. In September 1956 Felfe and Reile visited
CIA Headquarters in Washington as members of a BND CE orienta-
tion group. During this visit Felfe gave a talk on the LENA
case, describing it as clean, one of the best operations the
BND had, and practically a penetration of the KGB itself. The
LENA case had at this time begun to produce sizeable amounts
of information on KGB facilities in Karlshorst - safe house
addresses, license plate numbers, telephone numbers, etc. -
and in June 1956 the Berlin Base Soviet operations chief had
discussed the case with Felfe, offering full support in
evaluating and checking out LENA's information. Felfe agreed
to supply all the positive operational detail obtained by LENA
through normal BND-CIA channels, and he also offered, off-the-
record, to pass whatever sensitive information he received
affecting West German-security if we would agree to be very
discreet about it. We responded with alacrity. Not only did
we wish to keep our foot in the door now that the newly
legalized BND was often eager to dispense with us, we hoped
that through this case we could induce the apparently clumsy
and unprofessional KGB case officer, Shchukin, to defect. Even
more important was the need to have as many sources as possible
within Soviet controlled territory such as Karlshorst who could
give us "early warning" information on any major Soviet retreat
or redisposition in East Germany. (The Soviets showed their
goodwill in this respect by letting LENA give a whole twenty-
four hour advance notice of the East German-USSR Troop Agree-
ments, and again by giving some spurious indications of alleged
Soviet withdrawals from the Karlshorst Compound in 1957.) The
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by-product of cooperation on the LENA case was to indicate more
or less unavoidably that CIA had a certain coverage of the
Karlshorst Compound. A similar process was repeated in another
operation which had been run by the BND against the Soviet Trade
Delegation Polyclinic in Karlshorst and which produced an enormous
quantity of personality information on the Trade Delegation
and on some intelligence officers under Trade Delegation cover,
In late 1956 Berlin Base offered full support to this operation,
which was eventually to follow the almost classic pattern of
suddenly turning into a CE case and being put into Felfe's hands.
In 1958 Felfe began a concerted campaign to collect de-
tailed information from CIA on its Karlshorst penetration
program. To this end he engineered a series of crises in
CIA-BND relationships which resulted in his being briefed by
CIA on the status of its effort. The first of these briefings
occured in May 1958. In October 1958 Felfe tried unofficially,
without BND approval, to get another briefing from the Chief of
Berlin Base, but was turned down. A second official briefing
followed in February 1959 and a third in July 1959. At� this
point a mechanism was created for close, continued official
BND-CIA cooperation against Karlshorst. A BND case officer
was placed in the U.S. Army Berlin Compound and worked closely
with Berlin Base liaison officers. This was an important and
delicate step since the BND representative had to be-documented
as a U.S. Army Berlin Command employee, supplied with an auto-
mobile with U.S. Forces license plates and other American
Army support facilities. Felfe in turn became the BND Head-
quarters supervisor for the now official BND Karlshorst
penetration program and the immediate supervisor of the BND
case officer in the Berlin Command compound.
At a meeting with Alfred in Berlin in December 1959,
Felfe discussed the CIA operations against Karlshorst.' He
said he had been making some headway in discovering what the
Americans were up to, but as yet they were not revealing
their sources to him. Alfred proposed that he "help" the
Americans by sending some sources for them to recruit,.but
Felfe claims, as he naturally would, that he tried to
discourage this. Some cases of planted recruits were of
course uncovered by CIA, but not through Felfe's admissions,
so we have no evidence that they were manipulated in direct
support of Felfe. In other cases, Felfe's role seems some-
what clearer.
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In mid-1957, Felfe had discovered through our trace
replies on some of the KGB safehouses in the LENA case, that
Berlin Base had an excellent source in the Karlshorst Housing
Administration. (A source in this spot was able to provide
considerable "order of battle" inforMation on a variety of
Soviet agencies, including the intelligence services, through
regular monthly reporting on Soviet billeting assignments.
This source had been one of Berlin Base's major Karlshorst
assets for some years.) By 1959 the Soviets had apparently
succeeded in identifying the CIA source. At that time one
of Felfe's colleagues succeeded'in recruiting this source's
co-worker in the Housing Administration. After this, we
began to note that our source's access to information was
slowly diminishing. We presume the KGB decided to leave her
alone in order to protect their source (Felfe), but restricted
her access in order to minimize the amount of harm she could
cause. We know her activities were closely monitored. Although
we know East German surveillants watched her come to West
Berlin for meetings with her CIA case officers, she was not
arrested and was eventually allowed to escape to West Berlin.
Shortly after she fled, the BND recruit, who may well have
been KGB-controlled, claimed to have received an anonymous
warning and also fled to West Berlin. Thus the Housing
Administration was purged.
In several other cases we have been able to determine
that within a certain period of time, ranging from two to
nine months after an agent or prospective recruit had been
identified to Felfe, the agent was either arrested, or simply
disappeared from sight, or lost access to our target. In one
case when Felfe came to suspect CIA had an agent in another
East Berlin housing office, Felfe, with KGB assistance, bold-
ly provoked confirmation of this fact by trying to recruit
one of our agent's colleagues. He placed an ad in the West
Berlin newspapers designed to attract secretarial help from
the East Sector. Our agent's secretary answered it'(presum-
ably at KGB behest) and Felfe announced to us that he intended
to recruit her as a BND source on Karlshorst. We then told
Felfe that we already employed her chief and asked him to
stop his approach since it might endanger our agent -- who
already covered the target in any case. As a result of such
aggressive manipulation by Felfe and the KGB, the hitherto
unilateral Berlin Base program against Karlshorst was largely
compromised. Until the Berlin Wall was erected on 13 August
1961, however, the Soviets refrained from arresting or
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doubling many of the agents involved, presumably to avoid
generating suspicion or any risk to Felfe. After the Wall,
however, when these agents could no longer visit West Berlin
for personal meetings with their CIA case officers, the Soviets
and/or MfS did move in and bring these agents under control.
The agents who were able to maintain clandestine communications
with Berlin Base after the Wall soon showed definite signs of
hostile control.
The KGB also manipulated Felfe in support of its investi-
gation of other suspected CIA operations inside the Soviet
Union. One case, which occurred in 1960, involved a West
German businessman recruited by Berlin Base to report on Soviet
trade contacts during his frequent visits to the USSR. This
businessman was subsequently recruited by the KGB, independent
of the Berlin Base recruitment, and targeted against the West
German and U.S. Embassies in Moscow. When the KGB suspected
him of having Western intelligence contacts, they reacted by
closing out all the agent's KGB requirements except one,
namely, to spot, recruit and maneuver into place a West German
girl suitable to be a German Embassy secretary. By thi$
maneuver of introducing a CE factor urgently affecting West
German security, the KGB succeeded not only in forcing
revelation of the case to the BND, but an actual turnover of
the case to the BND. Felfe became the BND Headquarters case
officer, and the KGB continued to play the operation for the
purpose of identifying other BND assets inside the USSR. In
another case, that of a West German woman run by CIA, Felfe
provoked revelation of our interest by sending us reports
accusing her of seriously insecure behaviour while she was
in Moscow. Subsequently, she became the target of an apparent
KGB "dangle" operation -- a Soviet lover was introduced who
lappeared to be potentially recruitable.
The Berlin Wall made KGB CI work in Berlin considerably
easier, but it did nothing for the Soviet diplomatic and
trade installations in West Germany. In the West the problems
of negating German and American counterintelligence operations
without revealing the existence of a major leak were more
difficult. Paradoxically, Felfe himself had been largely
responsible for promoting an operation to tap Soviet Embassy
telephones in Bonn. The KGB regarded this situation in a
fairly relaxed manner, however; Felfe kept them supplied with
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information from the transcripts.* Presumably it gave the KGB
a good security check on the Embassy employees as well as a
convenient deception channel; and, of course, they knew pre-
cisely which Soviet offices were not tapped and, therefore,
safe. The Kirpichev case, described below, contains examples
of the deliberate use, as well as the careful avoidance, of
tapped wires for operational purposes. For different, and
obvious reasons, the KGB was also quite unconcerned about the
joint BND-CIA audio operation against the New China News
Agency. Felfe reported to the KGB on this operation and it
remained moderately successful from our point of view. But,
while the KGB seems to have been willing to allow us a passive
coverage of their official installations through telephone
taps, it was somewhat more energetic in trying to counter
microphone operations against their own installations and
personnel, and in frustrating Western agent operations
mounted on the basis of the audio product. By procrastinating
bureaucratically Felfe could foil many a plan. If this did
not work, then the audio equipment would often fail technically
for some unexplained reason, although in no given case could
the failure be positively ascribed to anything but accident.
In other cases, the target of the audio operation would sud-
denly be moved to another billet at the laSt minute, after the
audio installation had been completed, and an employee of no
great interest to us would be assigned to the wired apartment
in his stead. In some cases, however, the defensive ploys had
to be more complicated, and sometimes they did not succeed.
Two of the best known examples concerned the Soviet intelligence
officers, Kirpichev and Pripoltsev.
Dmitriy Ivanovich Kirpichev was a KGB operations officer
assigned to West Germany under cover of the Soviet Freight
and Transport Office, SOVAG, in Hamburg. Kirpichev had been
in contact with a Soviet emigre residing in West Germany, who,
in turn, was reporting on his contact to the BfV. Kirpichev
had been under survelliance by the BfV in an effort to estab-
lish some legally incriminating material which might serve
Golitsyn reported that he learned in 1959 or 1960 that
the KGB had many reports on the monitoring of conversations
in Soviet installations in West Germany. He conjectured that
these must have come from a KGB agent connected with BND audio
operations.
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as the basis for an arrest. Felfe says he learned of this
case and of a plan to arrest Kirpichev at a routine BND-BfV
conference sometime in the first half of February 1961. On
11 February he had a meeting with Alfred in Berlin, at which
time he informed the KGB about the Kirpichev case. Alfred
then asked Felfe (according to Felfe) if he thought it would
endanger Felfe if the Soviets "undertook something" to pro-
tect Kirpichev. Felfe says he replied in the negative, as
long as the Soviet counter-operation were carried out "with
the necessary finesse". He suggested the idea of having
Kirpichev pretend to fall sick while on a trip to Berlin.
Immediately after this, on 16 February, Felfe had a
conference with the BfV referent for work on the Soviet
Embassy. From him he learned the details of Kirpichev's
emigre operation, including the emigre's KGB covername,
"KRITIK," and the fact the arrest was to take place soon.
Felfe reported this to Alfred in secret writing. At the
time, he knew that the police planned to interrogate KRITIK
formally on 21 February for the purpose of preparing the
legal basis for the subsequent arrest of Kirpichev in Hamburg.
He may or may not have been aware that the arrest was definitely
planned for the 23rd.
On the afternoon of 21 February Kirpichev left Hamburg
and travelled to Bonn, where he spent the night in a hotel
near the Soviet Embassy. Prior to his departure, various
Soviet officers indicated that Kirpichev was about to leave
on a business trip to Berlin, but would return to Hamburg on
the 23rd of February. The BND phone tap on the Trade Mission
produced this information, as the KGB knew it would, and
Felfe sent it on to the BfV. Kirpichev proceeded to Berlin
on the 22nd. The 23rd came and went with no arrest. A few
days later Kirpichev's wife in Hamburg made some remarks on the
SOVAG premises, where a BND agent was employed, which "explained"
why her husband had not returned to Hamburg. Presumably this
agent Was known to the KGB; in any case, Kirpicheva took care
that he overheard her saying that her husband was severely ill
in Berlin. Two %ore days passed and the BND agent in SOVAG was
able to report the receipt by that agency of an official announce-
merit from Berlin that Kirpichev had been stricken by an in-
flamed appendix and confined to a Berlin hospital. Felfe
sent this report to the BfV in a routine manner. On the
16th of March this report was "confirmed" in a telephone call
between the Soviet Embassy in East Berlin and the Soviet
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Trade Mission in Cologne. Now all that remained for the KGB
to do was to give the BfV and the BND a specific reason on
which to pin the entire failure of the Kirpichev operation,
and which at the same time might head off any potentially
dangerous general inquiry. Kirpicheva let the BND source in
SOVAG hear her remark that she had been under surveillance in
Hamburg by an unknown person. Meanwhile the BfV's double-
agent, KRITIK, received a secret message from Kirpichev warning
him that they had been under surveillance during their last
meeting and that Kirpichev had fled West Germany for security
reasons. Felfe informed the BfV of the SOVAG penetration
agent's report; the BfV sent him the item about Kirpichev's
message to KRITIK, and it seemed as though the operators had
only themselves to blame for everything. Although after his
arrest Felfe tried to give the impression that he had not
given this operation away in the first place, he was obviously
interested in seeing it work out well for the KGB. According
to Clemens, Felfe asked him some time in 1961 to ask Alfred
"if everything worked out and Kirpichev got out all right."
Clemens said Alfred answered in the affirmative.
An interesting side light on the modus operandi in this
case is that in its earlier stages (before Pelfe had reported
to the KGB that KRITIK was a double-agent), the KGB provided
KRITIK with an emergency contact whom he could reach by tele-
phone in the Press Section of the Soviet Embassy. The signif-
icance of this is that the Press Section was housed in a sepa-
rate building from the rest of the Embassy and the KGB knew,
through Felfe, that it was not tapped, unlike the offices of
KRITIK's regular case officer.
Not so successful was the Pripoltsev case. Valentin
Aleksandrovich Pripoltsev was an engineer assigned to the
Soviet Trade Mission in Cologne. The BfV had uncovered
Pripoltsev's role as case officer in three cases which it
was monitoring. Felfe learned of this first in May 1961 at a
routine interagency conference. In July, at a second conference,
he learned that the BfV was thinking of making an arrest. The
date of the planned arrest was, however, a closely guarded
secret. Felfe learned it on 24 August, only two days in ad-
vance of the arrest date. The result was that he was unable
to warn Alfred in time. Pripoltsev was arrested and sentenced
to four years in- prison on charges of espionage. Felfe in
turn received a reprimand from the KGB. (This event became
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another cause for the KGB's subsequent insistence on a faster
communications system through the use of an Illegal.) Felfe
made some sort of effort, however. As soon as he heard of the
date for-the arrest he sent a telex to the Cologne office of
the BND suggesting, on his own initiative, that it have A
Russian linguist standing by. In doing this he used a crypto-
graphic reference in strange way which revealed the name of
the Soviet to be arrested. The BND subsequently surmised that
Felfe could have done this to alert Clemens or simply to extend
the range of knowledge of the planned arrest in order to cover
himself in the -event that Pripoltsev disappeared before'his
arrest.
Another operation, known as the Sokolov case, demonstrates
KGB exploitation of a Soviet agent known to have been doubled
by the opposition. This case is summarized below but discussed
in some detail in Annex C. The case started as a U.S. *my
CIC double agent operation. The case officer on the Soviet
end of the operation was an RU GSFG Major (who used the alias
Sokolov) in East Germany. In 1959, after several uneventful
years, CIC turned the case over to the BfV, at which point CIA
replaced CIC as the American liaison partner. Study of the
case revealed that Sokolov was a drunkard, An insecure talker,
and a flamboyant and promiscuous type, and inducing his defec-
tion became an important ,objective of the Western services.
At some point, investigating Sokolov and obtaining evidence
for his arrest seems to have become a corresponding KGB objective.
Approximately six months after the BfV took over the case,
the BND also developed a lead to one of Sokolov's agents, and
thus Felfe, as the designated BND representative, was cut into
the operation. It seems likely that the KGB learned of the
operation even before this time, either through Felfe who
may have learned of it informally from the BfV, or through
another source. If so, this would have enabled the KGB to
feed the lead to Sokolov's agent to the BND in order to get
the latter involved as a partner in the Western double agent
operation and thus facilitate close KGB monitoring through Felfe.
From the Western point of view, the case eventually came
to involve several interrelated double agent operations which
produced leads to roughly 200 security suspects, a seemingly
attractive operational lead to an RU Major (Sokolov) in East
Germany, and the participation of the BfV, two LfVs, the BND,
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CIA and, in an indirect capacity, CIC and OSI. A CIA case
officer worked nearly full time, for six months, exclusively
on this case. CIA provided traces, guidance, and information
on RIS modus operandi and organization.
Felfe's behavior vis-a-vis the other services was un-
characteristically passive, which suggests that the KGB was
apparently content to sit back and watch the Western services
make their moves. At one point he made a strong plea for the
BfV and CIA to be more forthcoming in the exchanges of traces
on the various suspects, but most of the time Felfe simply sat
back and allowed himself to be briefed by all participants.
The executive action phase of the operation proceeded
smoothly: five RU agents arrested, many more suspects
identified and investigated, considerable espionage equipment,
including one of the newest Soviet W/T sets confiscated. Al-
though Sokolov was not recruited or induced to defect, the
operation was considered a success by the Western services.
But the KGB was apparently also very pleaspd;'in-faCt-Felfe
admitted having received a rare cash bonus for his work on
the case. The KGB obtained a wealth of information on the
operational and liaison procedures of Western services, as
well as evidence which, according to Alfred, would "certainly"
lead to Sokolov's arrest.
This investigation of Sokolov may have been one of the
KGB's principal objectives. Felfe's co-conspirator, Clemens,
who was slower and less sophisticated in his thinking than
Felfe, was shocked that the KGB deliberately allowed an RU
agent from East Germany to walk into a West German trap and
be arrested along with four other RU agents in the West.
Felfe, on the other hand, admitted after his arrest that he
had observed this case with some glee and had been amused to
deliver derogatory information to the KGB about another Soviet
intelligence officer. Felfe's West German prosecutors thought
it strange that he should receive a bonus in a case which had
actually been a Soviet "failure", e.g. the five RU agents
arrested. Perhaps Felfe was also amused by his prosecutors'
bafflement, as when asked to elKplain the bonus he replied
merely that he had been compensated for hard work despite
the "losses" suffered.
Annexes D and E describe two other cases -- ZUVERSICHT
and MERKATOR -- which show what happened when the opposition
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learned that one or more of its operations has been doubled.
In one of these cases, the operation limped along in desultory
fashion for quite a few years, and Felfe used the case to
support his contention of opposition incompetence. The other
case was exploited more aggressively as a channel for passing
both political and counterintelligence disinformation.
b. Felfe's Final Plot -- the Busch Case
The last major counterintelligence plot before Felfe's
arrest was the Busch case. Felfe was arrested in the middle
of it, so we do not know exactly where it was supposed to
take him. If the risks he was willing to take to manipulate
this operation are a valid indication, however, it seems to
have been destined for an important role. The ostensible
purpose, as planned by the BND (i.e. Felfe), was to set up a
BND staff officer for KGB recruitment, as a BND deception
against the KGB. The screening of candidates would have
given Felfe access to the personnel and security files of a
number of BND officers. From the KGB point of view, we con-
jecture, the case may also have been connected in some way
with the planned recruitment of another real staff penetration
of BND Headquarters.*
We would like to describe this operation in detail be-
cause at nearly every stage of its development, it was re-
plete with signs of danger, which should have been heeded by
an alert Western service. Unfortunately, the use of multiple
cryptonyms to disguise sources and agents and the fierce
compartmentation in the BND in this, as in the LENA and many
other cases, prevented anyone from putting two and two. to-
gether for a long time. To make sure that no one could
arrive at the proper conclusions in this case, Felfe charged
out all the pertinent file material to himself, and no one
else had access to it.
Friedrich Busch was another old Gestapo friend of Clemens
A macabre touch of humor in the files is a remark by a
BND security officer, made before Felfe's arrest, to the
effect that Felfe's handling of the Busch operation was so
strange it wouldn't even be surprising if Felfe were to suggest
himself as the eventual target for KGB recruitment.
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from wartime days in Italy. He was also an old acquaintance
of Oscar Reile and the protege of Carl Schuetz - Clemens'
former chief in Cologne. Clemens recruited Busch for the
Gehlen Organization in 1951 - as he had Schuetz - and sub-
sequently Busch worked for a time in GV"L" with Reile and
Felfe. His professional history is cloudy at best: while a
GV"L" case officer he appears to have tried to run a Soviet
double agent case without informing his BND superiors.* When
the deception was uncovered he gave a rather lame excuse and
was transferred to anon-sensitive job in a field debriefing
office. He is described as a weak man who cries under pressure
and who is not particularly "quick on his feet." Our files
contain a note that Felfe tried at some point to get him a
staff position in Headquarters, but was unsuccessful.
In early 1956 Oscar Reile brought Busch into an exten-
sive KGB deception operation known by the BND cryptonym
"PANOPTIKUM." The first player to fill the lead role in
PANOPTIKUM was General Friedrich Panzinger, a former senior
officer in the RSHA. He had been in charge of Rote Kapelle
investigations for a while, later Chief of SD Ostland (Baltic
States and Belorussia). In 1947 he had been captured by the
Soviets in Vienna and imprisoned in the Soviet Union on
charges of war crimes committed against a Soviet officer. In
1956 he was released on the promise that he would work for
the KGB "to penetrate the BND and to report on political events
in the Federal Republic." Upon his return to Germany in early
1956 he went directly to an old friend, the President of the
Busch's double agent operation was a typical Soviet op-
eration for the period and possibly significant for the early
history of the case: the brother-in-law of a Gehlen employee
had run a sort of service in the immediate post-war years
assisting former SD personnel to cover their tracks and to
find gainful employment. The KGB in Vienna caught on to him
and with this compromising knowledge recruited the Gehlen
employee. The Gehlen man reported the Soviet recruitment and
found himself with Busch as a case officer. Why Busch really
tried to play him back without telling anyone is not in CIA
records, nor is any description of the content of the play-
back, which lasted nearly two years.
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Bavarian LfV, to whom he reported the KGB recruitment and who
in turn passed him on to.the BND in the person of Reile.
Reile's plan was to put Panzinger in contact with an ostensible
BND net (real people, fabricated activity), about which he
could then report to the KGB. When Panzinger happened to be-
come reacquainted with Busch, whom he had known before the war,
Reile allowed Panzinger to mention this to the KGB. Panzinger
did not know Busch was a BND man until the KGB wrote back tell-
ing him to be wary of Busch. Reile then made Busch Panzinger's
BND case officer and a deliberate sitting duck for recruitment
by the KGB. The case was handled in a desultory fashion by
Rolle for a while, then by another colleague, until the fall
of 1958, when it was given to Felfe. During this two year
period nothing much happened. Indeed, Panzinger's KGB case
officer, "Heinz," exhibited all the reactions of a very sus-
picious man. Panzinger met him only once during the two years
(in one of the LENA case safehouses in Berlin!), and the whole
proceeding had come to a near standstill when Felfe moved in.
At this point the case picked up spectacularly. Felfe
proposed to the CE section to make Panzinger more attractive
to the KGB: he had Panzinger tell Heinz that Busch had
asked him to serve as a letter drop for the BND and also that
Busch had been made chief of a special BND office handling
Baltic and North Sea operations. In February 1959 he had
Panzinger ask the KGB for a meeting. As reason for the
meeting, Panzinger was to discuss the war crimes charges
which hung over his head. The Soviets had released Panzinger
without giving him an amnesty and the old General lived in
fear of arrest. Actually, sometime previously the BND had
arranged with the Bavarian LfV President to brief a high
official of the Bavarian Justice Ministry so that no action
would be taken against Panzinger without prior warning.to
the BND. Unfortunately, as it later turned out, only one
such person in the Justice Ministry was briefed. The KGB
may have known of it, however, since once before when Pan-
zinger had discussed the charges with his KGB case officer,
the latter had assured him that his case would never come up.
Nevertheless, under Felfe's direction Panzinger asked the
KGB case officer for a meeting to discuss this problem. He
traveled to Berlin on 22 February 1959. The KGB case officer
told him he would see what he could do about the charges, but
did not offer much hope for an amnesty. At the same time,
he said he thought Panzinger's case merited a more "secure"
communications arrangement and instructed him in the methods
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of OWVL reception. (Felfe told his Western colleagues with
great interest that this was the first BND double agent to
receive OWVL from the KGB.)
Now strange things began to happen in Panzinger's op-
eration. In July he received a KGB instruction via OWVL to
find out if the East German HVA defector Max Heim had been a
BND or a BfV agent prior to his defection. This was in many
ways a very indiscreet question on the part of the KGB. The
CIA liaison officer for security matters, who was already on
Felfe's trail at this time, wrote the following comments in
August 1959: "Unless Panzinger has grossly overstated his
BND connections to the Soviets it is strange that the KGB
seems to think he might have access to this information. If
the KGB actually asked the question this could be an indica.:-
tion that the KGB knows Panzinger has been turned and cal-
culates that the BND will supply a true answer. On the other
hand.. .consider the possibility that (Felfe) has been asked
this question..."
In the meantime Panzinger had innocently carried out
his KGB case officer's instruction to ask Gehlen, whom he
knew slightly, for a job in the BND. He wrote a letter of
application and, after an appropriate interval, Felfe drafted
an answer for the signature of one of Gehlen's deputies.
Felfe's draft was nothing short of a death blow to the Pan-
zinger operation, and indeed there was speculation even at
the time that it was for some reason a deliberate blow.
Felfe and his colleagues in the BND and CIA had discussed the
type of answer which should be prepared to Panzinger's letter
of application and had decided together that a sort of non-
committal reply suggesting "no present vacanies" but still
holding out some hope would be the best. It appeared strange,
then, when Felfe produced the signed reply which stated that
Gehlen could not employ Panzinger until the matter of war
crimes charges was settled. The CIA liaison officer reporting
on this episode wrote: "Considering the fact that the charge
was a very painful thing to Panzinger - as time proved -
it seems somewhat unusual and a bit grotesque that Felfe
should have written a letter to Panzinger on such a literal
basis. Felfe, a fellow alumnus of the RSHA along with Pan-
zinger and Busch, could have prepared a less cold-blooded
reply...We can only speculate as to the reason for the change.
At any rate it would seem that (the) other approach would
have served to keep the KGB more hopeful and interested and
at the same time would not have rubbed salt in old Panzinger
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wounds."
Four months later a warrant of arrest for war crimes was
served on Panzinger, and as the police officers waited for him
to collect his belongings he committed suicide by poisoning
himself. This occurred on a day in early August 1959, when
both Felfe and the one man in the Bavarian Justice Ministry
who had been briefed to forestall an arrest were absent. Felfe's
comments to a CIA liaison officer made shortly after this are
interesting. He said he thought Panzinger had been depressed
for some time (this was true) and had shown signs of emotional
instability. He had been clearly worried about the war crimes
charges. As to the operation, Felfe thought that perhaps the
KGB might not regret having him out of the way since in a
sense, even though he had been the KGB channel to a BND officer,
he was also an obstacle between the KGB and the BND officer
and now the KGB could approach the latter more directly. The
KGB would reason, said Felfe, that through Panzinger they had
been able to gather enough evidence of Busch's "indiscretions"
to enable them to make an approach - an approach which earlier
they might not have believed possible. In fact, said Felfe,
the KGB might now be expected to move against Busch and in
doing so they might even go so far as to reveal their know-
ledge that Busch, too, was a war criminal. (This waS the
first time this information about Busch became known to CIA.)
While making wise surmises about the KGB to his American
colleagues, Felfe set about frantically in the BND to cause
the very contact with Busch which he had been predicting.�,
Shortly after Panzinger's suicide Felfe and Alfred met in
Vienna, where, Felfe admits, Alfred asked him how they could
keep the operation going and extend it to Busch. Felfe hit
upon the effective and simple plan of having Panzinger's
brother write to Panzinger's old KGB accommodation address
saying he had found the name and address among Panzinger's
effects and was informing them of Panzinger's death. The
brother invited the addressee to write back either to him
or to Panzinger's "closest friend during his last days," i.e.
Busch. In this way Busch began corresponding directly with
the KGB. A meeting was arranged to take place in Rome in
August 1960 during the Olympic Games. An urgent OWVL message
from Alfred admonished Felfe to remember that he was responsible
for the safety of the KGB officer, who was coming from Moscow
for this meeting. The KGB officer, Heinz, told Busch he had
been sent from Moscow especially to recruit him, but on BND
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instructions Busch played hard-to-get, challenged the KGB
officer to provide bona fides, and refused to accept recruit-
ment by anyone but the "boss." They parted with an agreement
to meet again in Geneva in early 1961.
Felfe presented this turn of events to the BND as being
very remarkable, and he immediately set about the creation of
a deception unit on which Busch could report in the event of
his recruitment. Some people found this a bit premature, but
Felfe kept moving and during the next few months gave the
impression of great activity surrounding the Busch case while
he collected all the necessary approvals for Busch to accept
a KGB recruitment, to nominate a (real) candidate for KGB
recruitment in the Headquarters, and for the release of decep-
tion material. He set Busch up in Heidelberg in an office
consisting of Busch, one colleague and a secretary. His
theory was that Busch would report freely on this office, thus
giving the KGB the impression that they had reached their goal
of penetrating the BND. He reasoned that in this way the BND
could keep the KGB busy while fending them off with deception
and monitoring the extent of KGB knowledge about the BND! The
files show fairly universal feelings of incredulity at the
time Felfe propounded his plan. Unfortunately the incredulity
did not extend to Felfe's immediate supervisor, the BND CE
chief. He was fairly well hoodwinked by Felfe in this case,
and in several others, to his intense embarrassment later.
Each time the security section officers wanted to review
the case, they found that the material was inaccessible;
finally, in July 1961, one of them was able to get into Felfe's
safe and discover, to his amazement, that contrary to all
impressions, absolutely nothing had happened in the Busch
case since the meeting in Rome a year earlier.
The KGB simply did not appear for the meeting with Busch
in Geneva, and no word came from the case officer Heinz sug-
gesting a new meeting. At the same time, Felfe knew from
Alfred that there would be no meeting. Via Clemens, Alfred
sent the message in early 1961 that Busch's KGB case officer
was having difficulty in obtaining documents for a trip to
Switzerland. The KGB's Heinz was hard to push around, however.
One surmises that he was already quite suspicious of Busch and
prepared to drop the case. (According to Alfred, Heinz was
unwitting of the true circumstances of the case. This was �a
bad situation in some ways, as it meant Alfred was unable to
control Heinz's reactions.) Alfred told Felfe that Heinz would
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have to be prodded from the West, so in May 1961, Busch'wrote
him a letter saying he was sorry they had missed each other
and that if Heinz was still interested he should set a new
meeting date. Busch stipulated that the place should be any-
where but France, since he was blacklisted in that country.
Slightly more than two months went by before Heinz replied
offering to meet Busch - in Paris: Now Busch had to write
another letter. (A tap on Felfe's telephone which was already
operating by this time, reveals that Felfe informed Clemens
about this time that the BND would not give Busch permiSsion
to keep a KGB meeting in Paris. Since Clemens had absolutely
no official reason to know this information, one assumes that
he was supposed to pass it on to Alfred.
Another six weeks were used up in negotiation for a
new meeting. Finally, Busch and Heinz agreed to meet in
Vienna on 11 September 1961. At a meeting in Berlin on!
10 August, Felfe's own KGB handlers informed him privately
of the new meeting plan. They urged Felfe not to let the
BND countersurveil Busch's meeting with Heinz, since if.
Heinz, "who doesn't know the real situation," were to spot
the surveillance he would sin-01y break contact. Neverthe-
less, the BND was insistent about the surveillance, various
sections for various reasons. The CE section wanted to
identify Heinz; Felfe wanted an excuse to get Clemens (now
in the surveillance unit) a chance to meet with Alfred and
to countersurveil Felfe's own meetings with Alfred, and: the
Security Section and CIA wanted to surveil Felfe: To this
it must be added that the KGB Heinz bad his own counter
surveillance; the only man we do not know about is Alfred -
possibly he would have done well to have had some surveillance
of his own if he didn't.
When Busch arrived in Vienna, Heinz told him that he was
the KGB "boss" for this operation; that he had come again
especially from Moscow and was prepared to offer Busch $10,000
if he would work as a source on the BND. -(The money would be
paid later into a Swiss Bank account, for which Busch should
make his own arrangements.) Busch modestly replied that he
doubted if he could be a very good source since he was not a
Headquarters case officer; had been in a debriefing unit
(ignoring the previous fabrications about his work) for, some
years as a result of earlier difficulties, and actually knew
no more about the BND than that which had been published in
the East German and Soviet exposes of GV"L" at the time of
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the great flaps of the early 1950's. Heinz assured him (Felfe
wrote in his report to the BND, "swore to him") that, incredible
as it might seem, the content of these old exposes was in fact
the sum total of KGB knowledge about the BND and they were
hungering for more. He said that Busch was a most important
man for the Soviets, and he gave Busch a list of requirements
on the BND; true names and pseudonyms of case officers;
identification of agents in the East; all information about
the Headquarters, about bus routes to the Headquarters, BND
license plate numbers; political and operational information
about Berlin. In addition to these penetrating EEI, Heinz
made several interesting political observations - much in the
old LENA style. Felfe wrote them up as follows:
"It was said that the Soviets do not understand Adenauer.
Because Adenauer doubted the determination of Soviet demands
concerning Berlin, and was not ready to negotiate sooner, now,
after the 13th of August, his negotiating position is appreciably
less favorable than it was before.
"The Americans in Moscow were said to be of the same
opinion. From them it became known to the Soviet intelligence
service that they wanted to force the victory of Brandt in
the Bundestag elections or in a general victory of the SPD.
In this case the Soviets would then try to see that Brandt
would not become so powerful as Adenauer.
"Khrushchev reportedly will stand on his word: a peace
treaty with the 'DDR' can still be signed this year and Berlin
become a free city. Otherwise, one can reckon with'further dif-
ficulties in Berlin."
Heinz sent Busch home with an S/W system, some developer
and a test to practice on, and the agreement to meet again in
Vienna in April 1962. In the meantime Felfe prepared his re-
port on the case, assessing it as follows:
"The continuing patience of the Soviets over the years
and their careful procedure underline the repeated statements
that everything had been stopped (referring to the hiatus
between the Rome and Vienna meetings) for security reasons,
since our agent was especially important to them. The S/W
system given him and the money paid (500 DM) without receipt
support this interpretation. The interest of the Soviets is
undoubtedly in this case to penetrate Headquarters or at least
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to develop the possibilities for doing so. For the future
handling of this case it is decisive to determine if, and to
what extent, build-up material on the BND, especially about
the Headquarters, can be passed, and if it would be possible
to find an ostensibly witting source in the Headquarters for
our agent, whom our agent could describe in at least a few
details."*
When Busch got home he tried out his new S/W: the practice
text was in Russian, which he couldn't read and the code con-
sisted of several number groups for which he had no key. His
first communication then to the KGB was a rather stinging com-
plaint. As of early November 1961, when Felfe was arrested,
there was no reply to Busch; indeed none came until well after
it was clear that Felfe's operation was at an end. In January
1962 a routine letter for Busch arrived asking why nothing had
been heard from him. This was the end of the Busch case. Busch
was interrogated by the BND just after Felfe's arrest and the
conclusion resulted that Busch had been operating honestly in
respect to the BND.
c. Support of Soviet Policy and Political Deception
While Felfe could serve admirably as watchdog for KGB
assets in Germany, Soviet needs after 1955 had also created
for him a private role on the political scene, which in some
ways might have provided him an even greater sense of impor-
tance than did his bureaucratic omniscience. LENA - as ever
provides a clue. During the period of legalization and re-
organization in the BND, the LENA case had been dormant,
possibly sleeping off alias Dr. Herder's probing critiCisms.
In mid-1956 it suddenly awoke, but this time in the guise of a
political case. Shchukin told LENA to forget temporarily about
his net to penetrate the Foreign Office and to concentrate on
investigating the existence of a possible neutralist faction
in West Germany, Shchukin said that the Soviets were doing
everything in their power to establish a neutralist party which
Felfe's report dated 28 September 1961 on the Busch case:
"Bericht ueber Gegnertreff am 11.9,61 in Wien," Had the op-
eration continued and been pursued in the direction proposed
by Felfe, Felfe would have become involved in screening personnel
and security files of BND officers on whom Busch might be allowed
to report,
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would make some dent in the 1957 vote for Adenauer. (When
election time came, however, he admitted that the Soviets
did not have this capability: he said they had no assets
for starting a political party!) Soviet interest in LENA's
task waxed and waned several times during the year between
the summer of 1956 and the summer of 1957, but as tension
began to grow in the West about the imminent unveiling of a
Soviet ICBM and over the East German troop agreements, LENA's
case officer spoke more urgently of the neutralist assignment.
In the summer of 1957, Felfe came to a CIA officer with a
report from LENA which he said he considered very significant:
the KGB wanted LENA to find out if there did indeed exist in
the West German government a faction advocating closer rap-
port with the East German government and with the USSR.
Nothing very much came of this item of "intelligence". It
was not treated significantly for a variety of reasons, not
the least of which had to do with CIA's increasing bafflement
with the LENA case as a whole and increasing speculation that
it might be a deception. As an indication of KGB operational
intent, however, it is interesting. After this, LENA re-
turned briefly to work on the Bonn penetration project, but
in early 1958 was told definitely by the KGB to ease out of
it and to devote himself entirely to political reporting.
Simultaneously, Felfe was involved in another KGB attempt
to support its government's policy. The Rapacki proposals
for a nuclear-free Central Europe had come to naught with the
successful passage by the Bundestag in March 1958 of a resolu-
tion favoring U.S. nuclear weapons in West Germany. Never-
theless, Soviet clandestine feelers for some kind of rapproche-
ment were still out. We can see a small example in one of
Felfe's operations. Since the early 1950's, the Soviets had
been interested in the ex-Wehrmacht officer, Boguslav von
Bonin. Von Bonin was a well-spoken, and out-spoken, neutralist,
with excellent social connections, strong idealism and rather
little political acumen. He had been chief of the military
planning section of the Amt Blank, the predecessor organization
of the Defense Ministry, and in 1955 he had been dismissed from
the Defense Ministry for publicly propounding his neutralist
views. At that time the KGB, through Colonel-General Aleksandr
Pavlovich Tarasov, Chief of Staff of the Soviet Forces in
Germany, invited him to come to East Berlin to discuss the
German problem. He went, was delighted with General Tarasov,
left him his notes on his thoughts, but violently repudiated
a direct recruitment pitch from a KGB respresentative. Gen.
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Gehlen, who had been in touch with von Bonin on and off for
several years, backed him in his trip to East Berlin. Although
he realized von Bonin's basic political naivete, he had hoped
to use him in some way to further an old personal dream; that
he could somehow be instrumental in bringing about a rapproach-
ment, if not a reunification, of his country through a personal
channel to the other side. Felfe was Gehlen's personal repre-
sentative in dealing with von Bonin.*
In the fall of 1958 the von Bonin case was raised again
from the Soviet side. In that year Felfe had three important
meetings with the KGB. The first, in Berlin, was with Alfred,
and was designed primarily to introduce a faster communication
system by means of OWVL. Through the new radio system Felfe
was summoned to Vienna in September 1958 to meet a new and
imposing person introduced simply as "the director." The
following month he met the director again in Berlin. Felfe
will not tell us in detail or in any kind of organized fashion
about these meetings, but he does convey that the basic opera-
tional reason for them was to discuss von Bonin. Felfe. says
the director asked his advice about what to do with this case;
if Felfe thought it would be advisable for the Soviets to
extend another invitation for talks to von Bonin. These
meetings seem to have made a great impression on Felfe.. He
speaks of the director almost with reverence. Certainly this
man appealed to Felfe intellectually, and he obviously cul-
tivated Felfe's not insignificant ego. Felfe told Clemens
when he returned from the Berlin meeting that he and the
director had talked at length of many "deep and important"
things. To his interrogators, Felfe presented the topic of
the director's talk as though it were a kind of policy 'state�
ment. Actually, we should, under the circumstances, consider
it also in terms of a kind of propaganda outline. The director
Felfe stated to his American interrogators after his
arrest that he thought the von Bonin case was a good example
of a Soviet "political operation run by CE methods." He added
his opinion that the Soviets, in running this type of operation
against the BND, were under the impression that the BND played
a far more important role in the German political scene than
it actually does play.
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began with a discussion of historical Russian respect for Ger-
many. He said that Soviets realized the impossibility of making
West Germany into a Communist country, but that this was all the
more reason why everyone should try to seek agreement, to find
some guarantee of peace. The Soviets were disappointed, he
said, that the contacts started by Adenauer on his trip to the
USSR in 1955 had not been followed up. There now seemed little
likelihood of success on the official diplomatic contacts.
Now the Soviets must try to seek unofficial contacts. Enemy
intelligence chiefs should maintain satisfactory contact with
each other. There were distinct possibilities in this direction,
and "the doors were always open." This is all Felfe tells us,
but in the context of the von Bonin operation it suggests much.
It also looks as though information passed in the one case,
LENA, namely that the Soviets were sincerely interested in a
peaceful solution in Germany, was produced to confirm the
rightness of Gen. Gehlen's intentions in the other case, von
Bonin. These are but small details - one would expect to find
many more - of the peace message which has often been played
against the louder themes of more warlike Soviet statements.
(About three weeks after the director's meeting with Felfe on
the von Bonin case, the Soviet government made its first
threatening statement of the Berlin crisis - Khrushchev's
statement of 10 November 1958.)*
Eight years later, the von Bonin case was dredged up by
the Soviets on yet a third occasion, this time as a propaganda
weapon to discredit Gen. Gehlen and the BND. In December 1965,
the Moscow correspondent of Der Spiegel magazine, the West Ger-
man equivalent of Time or Newsweek, was, on Soviet initiative,
given an interview�B7�a Soviet Colonel Karpov. The ostensible
purpose of the interview was for Col. Karpov to provide dero-
gatory information on Penkovskiy whom he claimed to have known
personally, and to attack the book "The Penkovskiy Papers."
Near the end of the interview, however, Col. Karpov casually
mentioned that he was not unknown in�WeSt Germany, and in re-
sponse to questions from the correspondent (who is reportedly
a KGB agent), Karpov then proceeded to reveal that he was the
individual who had met with Gen. Gehlen's personal representative
(von Bonin) when Gehlen initiated contact with the Soviet military
leadership in East Germany in 1955. Karpov's account of this
operation was tailored to give the impression Gen. Gehlen had
initiated secret discussions with the Soviets on the German
problem without the knowledge of either the West German or the
U.S. governments. The interview, together with BND rebuttal,
appeared in the 10 January 1966 issue of Der Spiegel.
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Felfe says that the director urged him to develop his
political reporting - even to join the Foreign Office (although
this last comment might be one of Felfe's own embellishments
rather than a real KGB idea). The director also urged Felfe
to speed up his political reporting, particularly the trans-
mittal of BND and BfV weekly and monthly situation reports,
which he had begun to send regularly in about March 1958. He
also asked for information on the BND offices concerned with
political intelligence collection on areas other than the
Soviet Union.
A. Methods of Communication
In addition to increased concentration on the political
scene, the 1958 meetings between Felfe and Clemens and their
KGB mentor also brought about important developments in the
agents' method of communication with the KGB. It will be
recalled that in 1952 Alfred set up the BALTHASAR case to
provide cover for Clemens to make regular trips to West Berlin
on BND business, and that during these trips Clemens went over
to East Berlin for meetings with Alfred. After the BALTHASAR
case collapsed in the fall of 1955, Erwin Tiebel, who had been
more or less in reserve since his recruitment, took over as
courier between West Germany and Alfred in Berlin. Upon
occasion, however, Felfe and Clemens also travelled clandestinely
to Berlin, despite the risks which such trips entailed. For
these trips, Alfred supplied all three agents with West German
identity documents in other names (completely valid documents,
unlike the obviously forged product in the LENA case), and
suitcases with a false panel to conceal reports and film.
The agent would then drive through the East Zone, holding a
quick meeting with Alfred at a predesignated kilometer marker
(Km. stone 107) on the Helmstedt-Berlin Autobahn inside East
Germany, to pass him documentary or other incriminating
material. The agents then proceeded normally into West Berlin
and met Alfred later for a lengthy meeting in Karlshorst.
Clemens at this time (1956) had also been given an S/W system
and a code, system for using one-time pads. This procedure was
fairly satisfactory, but Clemens had less and less chance of
lengthy oral reporting to Alfred, while at the same time the
volume of reporting increased. Felfe had begun to rely more
and more on the tape recorder (he was apparently very lazy
about composing written reports, and several instances of
Alfred's impatience with him in this respect are documented),
and his reporting consisted primarily of a handful of rolls
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of Minox film and several spools of tape on which (according
to Clemens) he recorded situation reports and the latest
changes in BND personnel and T/O. Sometimes he would visit
Clemens in Cologne, where he would dictate a report in cipher
which Clemens would then transpose into S/W. This worked well
enough until March 1958, when Clemens was unexpectedly relieved
of his post in the Cologne penetration unit and demoted to a
surveillance team. Clemens' superiors in BND Headquarters had
apparently been dissatisfied with his work for some time. Now
his usefulness to Felfe and to the KGB was sharply curtailed.
He claims that Alfred was uninterested in the information he
was able to develop from most of his surveillance activities
(primarily against members of the Algerian independence
movement in Germany). At this point OWVL was introduced.
Clemens acted as the receiver and decoder. Communication
was made once a week, with one alternate per week as well.
After a while, a "burst" transmission method was introduced,
for which Clemens had to use a tape recorder hooked to his radio.
After recording the high-speed transmission, he would play the
tape at slow-speed and then decipher the message. At one time
Alfred wanted to introduce a system of rubbing metal shavings
onto the tape so that the impressions would become visible,
but Clemens and Felfe found this method too messy and too un-
reliable and refused to use it.
Clemens says that from 1958 on he received very few
personal instructions from Alfred and that the majority of the
messages were for Felfe. In short, he had become largely a
support agent for Felfe. When he did go to Berlin after this
date it was not on BND business (until 1960, when Felfe was
able to bring him back briefly to an operational role in a
double agent case). Alfred tightened up the security by re-
fusing to let Clemens come to the East Sector of Berlin any
longer. All their meetings were merely brush meetings on the
street, useful only for exchanging material, but not for dis-
cussion. Felfe tried repeatedly - with only occasional success -
to bring Clemens into a case in order to give him legal excuses
to go to Berlin, but the problem of quick, secure communications
remained a serious one.
It was as much to this problem as to political matters
that the director addressed himself in his September and
October 1958 encounters with Felfe. He announced that he wished
Felfe and Clemens to sever personal contact with Alfred and
the East Berlin Rezidentura and to work from then on solely
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through an Illegal Rezident in West Germany. They would be
introduced to the Illegal, but their primary communication
with him would be via dead drops. Each man would have his
own set of dead drops and it would no longer be necessary for
Felfe to communicate laterally so often with Clemens on KGB
business. The director said that any communication via this
system would reach Karlshorst within 24 hours. The immediate
reaction of Clemens and Felfe was dismay. Their refusal to
comply with such a proposal was adamant. They claimed that
the introduction of an unknown intermediary between them and
Alfred would merely provide more risk of exposure or accident
over which they would have no control. The director and Alfred
tried to reassure them, saying that the Illegal Rezident was
an absolutely reliable person, a Soviet citizen, but the two
agents continued to refuse. For the next few years the Soviets
allowed them to have their own way.*
Sometime in 1959 Felfe received a new KGB cover name:
"Kurt." Clemens became "Hanni," and, along with Tiebel, was
referred to in KGB files as part of "Kurt's Team" or of
"Operation Kurt."** In 1960, during one of his rare visits
to Berlin, Clemens was presented with a citation by the KGB
in honor of his ten years of service: a letter from the then
KGB Chairman, Shelepin***, and a bonus of 2,000 DM. Felfe
also received a letter from Shelepin, and we presume also a
bonus, although he did not confess to this.
The KGB use of Illegals to handle West German CE operations
goes back a long way. Deryabin told us in 1954 that while he
was on the German Desk in Moscow in 1952-53, there were plans
afoot to set up two such Rezidents, one in Duesseldorf and
the other in Munich.
* *
Source: KGB defector Golitsyn.
*** A BND comment on this subject conjures up a humorous scene
in which Clemens "in the purest Saxon dialect" innocently asked
his KGB case officer "who this Shelepin might be." Alfred
apparently was really shocked, and Felfe claimed to be annoyed
with Alfred for not orienting Clemens better.
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Alfred held his last meeting with Felfe and Clemens in
Vienna in September 1961. At this time he informed his old
agents that at the end of the year he would leave Germany for
good. This time there was to be no question of whether or not
they would work with an Illegal Rezident. Alfred informed
Felfe and Clemens that at their next meeting later in the fall
they would meet the Rezident, and that after this they-would
work through dead drops. Each man was to select and set up
drops for himself: Felfe in the Munich area, Clemens in the
Cologne area. From time to time they would have personal
meetings with a KGB case officer in a third country, and if
they should ever feel themselves in danger they could go to
the Soviet Military Attache in some Western European country
other than Germany.
A very rough estimate of the frequency of personal meetings
between Felfe and/or Clemens and their KGB case officers during
the course of their KGB Career is once every three months. But
this frequency varied greatly during different stages of the
operation, depending upon the availability of cover for travel
and the intensity of the operational developments at the time.
The personal meetings were, of course, heavily supplemented
by impersonal communications.
e. New Directions?
We have seen how Felfe, as chief Soviet counterespionage
referent in the BND, was able in the last years of his career
to cover Soviet requirements on a variety of levels and a
variety of topics. By rigging an operation especially for
Felfe, Alfred could force answers from almost any element of
the West German government in the guise of "build-up" material.
By creating certain operational situations or complexities,
Alfred could help Felfe in his bureaucratic manipulations, in-
deed even promote the formulation of helpful bureaucratic
regulations or precedents. By introducing a Soviet CE factor
into any BND case anywhere, the KGB could cause the case to
be transferred to the protective custody of Felfe. By intro-
ducing a Soviet CE factor urgently affecting German security
into the operation of any other agency, German or foreign,
the KGB could hope to bring many another case under Felfe's
scrutiny. Finally, Felfe, because of his own personal
qualities - brashness, inquisitiveness, aggresiveness -
was able to broaden his access to information in areas in
which he had no official excuse to be interested. (In this
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respect he is reported in one of the BND security investigations
as having tried to meddle in a BND operation involving a West
German nuclear scientist - probably in response to a specific
request from Alfred.) In the end, Felfe had become much more
than just a simple servant of the KGB. (It's doubtful if he
ever thought of himself as such.) Evidence from intercepted
OWVL broadcasts - as well, of course, as Felfe's own statements -
shows that Alfred often asked Felfe for advice about the Soviet
handling of certain operations. This included advice on the
Soviet handling of BND-KGB double agents and the timingand
tenor of KGB propaganda operations. Felfe had become in many
ways something of a consultatt to the KGB, as well as an agent.
In spite of the fact that in many ways Felfe had an almost
ideal position, there is evidence that in 1960 he was instructed
by the KGB to move on to a new job. This was the post of
security officer for the BND Communications Unit. At this time,
discussions were underway for the establishment of the BND
as the German communications intelligence (COMINT) authOrity.
Felfe knew that the post of communications security chief was
shortly to become vacant, through the retirement of its in-
cumbent, and he probably knew that the job would assume greater
importance once the COMINT agreement was signed. He submitted
his application for the post early and worked hard to sell
himself as the next candidate. In many respects, however,
this is a job which might not have interested him as much as
his old one, and it is curious that he tried so hard to get it.
In his post-arrest statements, he went to great pains to claim
that the KGB was definitely against having him transfer, but
there is sufficient evidence (including intercepted telephone
comments between Felfe and Clemens) to suggest that the opposite
is true. If so, then the obvious question springs out: Would
the KGB have asked an agent who was de facto chief of the BND
Soviet CE Section to give up this job unless it had a replace-
ment with equal or better access?
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V. INVESTIGATION AND ARREST
For almost every year of Felfe's post-war existence an
item of derogatory information was entered in the files of some
Western agency. Unfortunately, no one agency, much lesS the
BND, had it all until shortly before his arrest. Both Clemens
and Felfe have praised Soviet security practices as greatly
superior to those of the BND, and their account of the KGB
handling shows a continuing concern with operational security.
The weakness of the Soviet operation cannot be laid so much
at Alfred's door as at Felfe's and Clemens', The weakness,
of course, was built in: the clannishness and susceptibility
of the ex-SD officers which drew them to KGB attention in the
first place, also bore the seeds of an eventual breakdown.
Felfe and Clemens refused the discipline of maintaining contact
via an Illegal, insisted on keeping up their lateral communications
and their trips East to meet the KGB officers. One can at least
understand what psychology might have motivated the two agents
in their refusal of the impersonal and mechanical communications
system, but their stubbornness was disastrous, and as time
passed their operational practices became more and more lax.
What saved them for so long was the fact - over which they had
little or no control - that no thorough investigation was
ever made of either Felfe or Clemens by any one agency. The
BND, hamstrung between the requirements of "respectability"
and the need for experienced personnel, did not (at the time
Felfe and Clemens were recruited) perform background checks
on new employees and did not routinely trace them with other
agencies. Instead it tried to rely on rigid internal compart-
mentation as its primary security technique.
As early as April 1950, British files contained sufficient
derogatory information on Felfe to make anyone wary at the very
least. Aside from information on such general and common
post-war sins as the falsification of personal history state-
ments, "insecure" talk, and information peddling to several
agencies at once, the British file contained: (a) Felfe's
report on Gerda Clemens' attempt to recruit her husband for
the KGB in Dresden, an indication that Clemens might have ac-
cepted recruitment, and Felfe's offer of Clemens to the
British as a double agent; (b) Felfe's admission that he had
sent a report on a unit of the LfV Nordrhein-Westfallen to
a contact in the SED in East Berlin; (c) a report that Felfe
had attempted to peddle to at least two West German news
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agencies the charter of the proposed BfV which was about to
be presented to the Ministry of Finance for approval. The
history of Felfe's possibly dangerous contacts with Max
Wessel and Helmut Proebsting was also recorded in some de-
tail, as well as indications of untrustworthiness, possible
theft and general "varnishing of the truth". Some of this
information was made available in general terms to the BND
in January 1958, when the BND requested traces on Felfe in
the course of their 1956-57 investigation of him.
CIC had a certain amount of derogatory information on
Felfe by the fall of 1954, mostly from Ludwig Albert, who had
become aware of the existence of black marks against Felfe in the
BfV and the Federal Criminal Office through his own early CI
work. CIC also had the report of Max Wessel's alleged approach
to Felfe.
By 1956 CIA had what CIC had, although in condensed form,
without source description. It also had Deryabin's information
in early 1954, which indicated the existence of two KGB agents
in the Gehlen Organization with the cover names "Peter" and
"Paul" (Clemens' and Felfe's cover names at the time), but
unfortunately Deryabin was not able to provide details to
help identify the agents.* After 1957, when CIA officers
began to work more closely with Felfe, the file of suspicious,
or at least puzzling, items about him grew. For example,
in February 1957 a CIA officer from the liaison base in
Munich/Pullach accompanied Felfe on a trip to Berlin. The
purpose of the trip was a special meeting with LENA, at which,
Felfe said, he hoped to obtain additional details concerning
an earlier LENA report that the KGB was targeting a homosexual
officer of the U.S. Department of State stationed in Berlin.**
Nevertheless, Deryabin's report on the fact of penetration
should have led to a review of personnel security practices
within the BND, but it did not. At that point in West German
and BND history, almost any type of investigation into the
backgrounds of BND personnel would have turned up derogatory
information and possible indications of Soviet connections on
the part of a number of BND employees.
** This was a typical diversionary allegation. CIA's Berlin
Base and the State Department security office expended con-
siderable effort to investigate LENA's report. The investigation
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After Felfe and his CIA liaison officer had already arrived
in Berlin, and separated, Berlin Base received a cable indicating
that Gen. Gehlen was concerned about Felfe's safety and had
requested that he be under CIA's 24 hour-a-day protection.
(Was this one of Gehlen's flashes of intuition, and could he
have suspected the truth even then? This possibility cannot be
rejected out of hand.) After this cable was received, the CIA
liaison officer, remembering a remark Felfe had made earlier
in the day that he intended to go to a movie at 1830, telephoned
Felfe's hotel at 2030 hours. Felfe was not there, nor had he
returned by four in the morning when out sleepy officer decided
to abandon his vigil. Located in his hotel at 0800 the next
morning, Felfe invited our liaison officer to breakfast. With-
out being asked to account for his time, Felfe volunteered
that he had gone to the movie at 1830, had had something to
eat and a drink, and had then gone to another movie at 2230.
Again without being asked or challenged, he exhibited two
movie tickets. This voluntary display of props to support a
story struck the liaison officer as quite unusual. Equally
unusual was the fact that the stub was torn off only one of
the tickets, and that even if Felfe had in fact attended the
second movie it would not have lasted until some time after
four o'clock in the morning. The liaison officer did not
reveal his suspicions to Felfe, but he did prepare a report
on this disappearing act and suggested that Felfe be investigated.*
The BND had Ludwig Albert's denunciations of Felfe as
early as 1953, but these went unheeded. Albert made a practice
of denouncing many of his colleagues who transferred from
GV"L" to the Headquarters CE units and, furthermore, was not
entirely above suspicion himself. The first concerted inves-
tigation of Felfe of which we have record was begun by the BND
in 1956 on the official grounds of "Suspected SD and Eastern
Connections," When the BND traced the British in the. course
of this investigation, they received a memo on 21 January 1958
generally outlining Felfe's insecure and deceptive practices
as a British agent and specifically pointing out suspicious
contact with Helmut Proebsting and "the HIS attempt to recruit
Clemens," The memo did not contain an account of Felfe's
having offered Clemens to them as a double agent. In addition,
It was later confirmed that Felfe met with the KGB in
East Berlin that evening.
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the British pointed out that as late as August 1957, Felfe had
attempted to establish an unofficial connection to a British
intelligence officer in Duesseldorf. None of this seems to
have stirred the BND particularly. Felfe was called in and
asked, in a pro forma manner, about his SD connections. Felfe,
equally pro T5iina, denied having been an SD officer. The
"investigati�geems to have petered out at thispoint, despite
the fact that the falsity of Felfe's statement could have been
proven very easily.
In the meantime, during 1956 or 1957, the CIA security
liaison officer to the BND had been making a review of the
horrendous GV"L" flaps of the early 1950s. He reasoned quite
simply and accurately that if the KGB had deliberately sacrificed
a number of agents in the GV"L" bases, it did not do so without
leaving some penetrations in place to report on the subsequent
CE and CI organization and operations of the BND. To find
the remaining penetrations, one should look primarily in the
Headquarters CE section and in the Frankfurt-Cologne field
base, which had absorbed a number of the old GV"L" officers
after the dissolution of that base. In a memo dated in early
1957, this officer suggested several candidates for investigation,
among whom were Felfe, Reile, Clemens and Schuetz. His con-
clusions were given to the BND security section, where they
were added to the general suspicions of Felfe and his coterie,
but again, unfortunately, did not succeed in sparking any sort
of investigative action which might have tested out the logical
analysis.
The security situation continued to fester quietly in this
way until early 1959, when finally a report from a high-level
penetration source shot us into action. In March 1959, Michal
Goleniewski, a senior officer in the Polish Intelligence Service
reported to us that the KGB had had two agents in the BND group
which visited the U.S. in September 1956. The KGB also had
an agent, Goleniewski reported, who was in position to obtain
information on a joint American-BND office running operations
against the Soviet Embassy in Bonn and against the Soviets
traveling in the West. The KGB had guidance papers used by
this office and prepared by the Americans in 1956. The original
source of this information was the highest level of the KGB:
Gen. Gribanov, the Chief of the Internal Counterintelligence
Directorate, who revealed this information in a briefing of
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the assembled satellite intelligence chiefs in 1958.* On the
basis of this information and several other leads from Goleniewski,
and despite some questions concerning Goleniewski's bona fides,
CIA began a quiet, closer investigation of suspect KGB agents in
the BND. This investigation centered on Felfe. As a first step,
file information was pulled together on Felfe and on the stranger
of his operational activities - the LENA and Busch cases, He was
placed under unilateral CIA surveillance on several of his trips
out of town, and a unilateral phone tap was put on his Munich
telephone. The BND was not immediately informed because:of the
extreme sensitivity of the source, Goleniewski, who was still in
place.
By early 1961 the circumstantial evidence against Felfe, the
positive evaluation of Goleniewski's information in general, and
especially the fact that Goleniewski had by then safely defected
to the West, brought CIA to the point where it felt it could
inform the BND, When General Gehlen was told in February 1961
of the specific report about two KGB agents in the group which
visited the U.S. in 1956? he immediately agreed that his here-
tofore favorite case officer - Felfe - was the major suspect:
He set up a small special task force to investigate Goleniewski's
leads to penetration of the BND. Now, with the impetusof infor-
mation from "the horse's mouth," their investigation of Felfe
picked up rapidly where it had left off six years previously,
The BND noted that Felfe had a weekend house built, suspiciously
it seemed, right on the Austrian border, and in mid-March a tap
was put on the telephone on this house. This was difficult to
achieve because the house was located in an area with virtually
no other residents, but as soon as this tap began producing, the
KGB's operation "Kurt" unraveled rapidly. The first lead came
from a remark by Clemens, who complained to Felfe about the high
cost of his phone calls to Felfe: if these had been official
calls there would have been no need to complain. The BND then
began to look at Clemens more closely and discovered that he was
in correspondence with his daughter in Dresden Via a third person
(Tiebel), even though he went to great pains to give the public
impression that he had no connection with his East German family.
The BND security team also discovered that Felfe had been falsify-
ing his expense accounting, and they noticed his relatively high
Revelation of such information even to the chiefs of the
satellite services was a major KGB mistake.
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standard of living. In the summer of 1961 Felfe began dropping
remarks about having received a large bequest from a recently
deceased aunt in the U.S. CIA checked and found the aunt very much
alive and that there was no record of her having made any foreign
money transaction. Indeed, a few weeks later she applied for a
passport to make a trip to Germany to visit Felfe, and Felfe then
began mentioning a loan instead of a bequest.
During the course of the spring and summer of 1961, telephone
coverage on Felfe's weekend house revealed that he and Clemens
were definitely in clandestine contact with each other on matters
which could not be identified with official Gehlen operations.*
They spoke quite openly - very "insecurely" - about Gehlen
affairs on the telephone, but double-talked certain other matters.
It was also evident that they were corresponding with each other
on operational matters of some kind although they had no official
BND reason to do so. Mail coverage was placed on Felfe. By
piecing together various scraps and shavings from the taps and
from close observation of Felfe, the BND security officer was able
to establish a significant pattern of action on Felfe's part. It
became clear that Felfe was always curious and aggressive just after
his bi-monthly trips to Cologne. (The investigator drew up an
impressive analysis showing how Felfe pushed for information on a
subject not normally of direct concern to him - namely the
whereabouts of an engine recovered by the BND from wreckage of
a Czech owned IL-18 which had crashed in Bavaria - at a time when
normal interest in the air crash had died down, but just after one
of Felfe's trips to Cologne. Felfe later admitted that the where-
abouts of the IL-18 engine had been an urgent EEI from Alfred.)
The investigators reached the conclusion that Felfe was receiving
his EEI in Cologne via Clemens, who served as a communications
link to the East. In August three very damning telephone intercepts
revealed that Clemens had been "called" and asked to find out
from Felfe what had happened in the Pripoltsev affair. Felfe told
Clemens that he had written something about it the previous day,
which would be "over there" the following day. By early October it
The phone tap on Felfe's Munich residence remained generally
unproductive. Felfe knew this phone was easy to tap, and he
apparently instructed Clemens to always call at the country home
on Saturday evenings.
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was clear to monitors that Clemens was receiving OWVL, and they
were able to establish his frequencies and schedules (every
Saturday at noon, alternate repeat on Mondays at 1700 hours).
Several messages were subsequently broken when Clemens relinquished
his one-time-pads.
In addition to this form of observation, Felfe's more extra-
ordinary operational behavior was being scrutinized as never before.
In the LENA case a full scale security review was ordered - the
reviewer unaware of the pressing reasons for it, however. Within
two months after this order was given the slippery principal of
the LENA case, Hofe, announced that the Soviets had lost interest
in him and turned him over to the East German service. In Felfe's
safe, evidence was found that he had falsified official Registry
records on the LENA case. In the Busch case, both CIA and BND
investigators watched nervously as Felfe and Clemens prepared to
accompany Busch to the 9 September 1961 meeting with the KGB in
Vienna.
CIA surveillance of Felfe in Vienna revealed that he took
extreme evasive tactics when leaving his hotel at a time when no
activity was scheduled in the Busch operation. It was a Sunday
morning, when the Vienna streets were quiet. Felfe drove very
fast, made several U-turns and crashed a red light. The surveillance
team was under instructions to let Felfe go rather than risk being
detected. It was later learned that Felfe met with Alfred barely
ten minutes after the surveillance had been broken off. Clemens
was in his hotel room with a bad cold and could not make the
meeting with Alfred. (This was unfortunate, as after his arrest
he would have given an honest account of what happened at this
meeting.)
By October 1961, the evidence from telephone intercepts was
convincing enough to prompt the BND to seek the opinion of the
Attorney General's office as to the chances for taking executive
action against Felfe. On 19 October the Federal Attorney advised
that none of the tapping evidence was juridically useful so far,
but he advised that the investigation be continued. On the alth
of October, a series of very provocative telephone calls was
recorded between Clemens and Felfe. From these calls it emerged
that Clemens was having difficulty deciphering a "call from Alfred."
Clemens said, "They must have called when I wasn't here," since
"several pages seem to have been skipped." When Clemens was at
last able to read Alfred's message, he reported to Felfe that
Alfred wanted Felfe's advice for the continued direction of a press
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campaign then being directed by the KGB against the BND regarding
the murder of the Ukrainian emigre leader, Stefan Bandera.* The
KGB had already learned from Felfe about planned American and
German publicity on this case, and on the basis of Felfe's infor-
mation and with his guidance were preparing to steal the show with
counter publicity of their own. Alfred also wanted Felfe's opinion
about the further handling of Fritz Busch's operation. Most
important for the investigators, however, was Felfe's news for
Clemens that he had just made arrangements for Clemens to accompany
Busch to Berlin in mid-November as a counter-surveillant for a
meeting Busch was to have with a double agent. Clemens could,
therefore, have an opportunity to see Alfred again. Felfe remarked
that the double agent didn't know yet that there was to be a
meeting, but that Felfe was about to write (to Alfred) to arrange
a meeting on the 13th or 14th of November. At last it looked
as though there would be an opportunity to catch one or the
other of the agents with incriminating evidence on him. Further-
more, it seemed certain that Felfe's request to the KGB to make a
specific meeting arrangement would produce a response from the
KGB in the next scheduled OWVL broadcast. This was to be on
Saturday noon, 4 November, or alternately on Monday afternoon at
1700 hours, 6 November. Furthermore, it was likely that Clemens
would be telephoning to Felfe immediately after the receipt of
the OWVL message to report its contents. Perhaps at this point
the much needed legal evidence would appear.
The expected OWVL message was picked up on Saturday noon.
During the afternoon Clemens made three telephone calls to Felfe,
the gist of which was that Alfred's message contained more about
the press conference, nothing as yet about the new meeting in
Berlin, in fact "nothing special;" consequently, Clemens would
just send it along to Felfe by registered mail. Thus the weakest
link in the EGBis communications channel was presented to us.
The opportunity was ideal. The following day, Sunday, saw
hurried legal conferences between the BND security chief and the
Federal Attorney's office and between CIA and the chief of the
mail intercept service (which is under Allied control). The
coordination and planning among these offices for Felfe's arrest
Shortly before this, the KGB assassin Bogden Stashinskiy had
defected to the West and confessed the murder of Bandera. To
counter the adverse publicity the KGB disinformation group in East
Germany mounted a campaign to discredit Stashinskiy and place the
blame for the assassination on the BND.
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was superb - not a simple matter, since Felfe's own "special
connections" had to be circumvented without Arousing ire or
suspicion.
At 1030 on Monday morning, 6 November, Clemens' registered
letter to Felfe was officially handed to the BND and the Federal
Attorney. By 1130 the appropriate police officers with BND
scort were assembled at the BND Headquarters building in Pullach;
Felfe had been summoned to the office of a senior BND official
on an unalarming pretext; the compound gates were locked, the
telephone lines cut; all principals were armed, and the BND
doctor was standing by for any emergency. A few minutes later,
the arresting officers entered the office in which Felfe was
conferring and served their warrant. Felfe's first reaction was
to grab for his wallet and attempt to destroy a scrap of paper
which was in it. There was a small scuffle; the officers retrieved
the paper, subdued Felfe, By an enormous stroke of luck the
captured notes turned out to be Alfred's typewritten EEI which
Felfe had received in Vienna in September. Felfe refused for
several days to make any admissions. Clemens, whose arrest had
been carried out in Cologne about eight minutes after Felfe's,
began talking immediately and led his arrestors to the place
where he had hidden his code pads. Erwin Tiebel was arrested the
following day in his home town. Thus ended, nearly ten years to
the day, Felfe's career as a West German intelligence officer and
a KGB penetration agent.
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VI. THE AFTERMATH
INV
By 8 December 1961 news of the arrests was generally :known
throughout the West German government. By 12 December it Was in
the newspapers, The trials took place after lengthy (and from
the counterintelligence officer's point of view, unsatisfactory)
interrogations in July 1963. Felfe received a sentence of 14 years
in prison, Clemens nine years in prison, and Tiebel two years at
hard labor. Through his mother in Dresden Felfe managed to re-
establish contact with the KGB and continued to correspond with
the Soviets even from his prison cell. Ever resourceful, Felfe
first prepared an S/W system from the alum in his shaving kit;
later, he undoubtedly received a better system. From time to
time he "recruited" criminals about to be released from jail to
smuggle letters out for him. Some letters were intercepted, but
others apparently got through, and it is evident that Felfe asked
the KGB to send him, suitably concealed in laundry, reading matter,
a chess set, etc., various paraphernalia for escape and for
clandestine communications. He also asked for poison to be taken
in the event the KGB was unable to spring him. He also gave the
KGB a fairly comprehensive and self-exonerating damage report --
blaming as much as possible on Clemens.
Over the years the Soviets repeatedly attempted without
success to gain Felfe's release in exchange for prisoners in the
East. Felfe, meanwhile, remained confident that sooner or later
he would be pardoned, exchanged, or would manage to escape. His
optimism eventually proved to be justified: on 14 February 1969
the West German government, through the Ministry of All-German
Affairs, announced tersely and without further detail that Felfe
had been exchanged for three West German students imprisoned as
intelligence agents in the Soviet Union. The KGB, at long last,
had redeemed its servant.
Unpublicized provisions of the Felfe exchange agreement, nego-
tiated through East Berlin lawyer Wolfgang Vogel (a Soviet-trusted
veteran of previous agent swaps), included the ransom of 18 BND
agents imprisoned in East Germany. The price to the West German
government was double that of former ransom cases: 80,000 DM
($20,000) for each West German agent released; These agents were
turned over on 13 February. The next day Felfe was taken to a
West German border post (reportedly at a crossing into Thuringia)
where Vogel was waiting on the other side with car and driver.
There was no visible Soviet presence. After East German release
of the West German students who had been held in the USSR, a formal
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release order was read to Felfe. He had but two questions, the
first concerning whereabouts of his West German identity card.
Answer: "We have no idea." He then asked if he could ever
return to the Federal Republic. Answer: "Anytime, right now if
you wish." Vogel stepped forward with a formal offer of asylum
which Felfe accepted. As the KGB agent crossed the border, suit-
case in hand, he muttered a partly unintelligible parting shot
which one observer said was "I'll make enough trouble for you yet"
or words to that effect. It was noted that once across the border,
Felfe was told to sit in the front of Vogel's car, next to the
driver, while Vogel occupied the rear seat alone. One cannot help
speculate whether the driver, perhaps, was Alfred.
In Felfe's two major deception operations, LENA and Busch,
the KGB endeavored to act as naturally as possible after his arrest.
Fritz Busch received a routine message in early 1962 asking why he
hadn't corresponded lately with the KGB. LENA went to elaborate
lengths to misconstrue or simply to ignore the danger signals
which the BND kept sending him, and he insisted on sending
"political intelligence" back to his West German case officers.
The KGB even went so far as to let him come to West Germany on one
of his regular business trips, at which time he was arrested and
interrogated on charges of espionage. He refused to admit KGB
control; however, there were enough inconsistencies in his story
to bolster the earlier analysis that he had been KGB directed from
the beginning. After a brief period in prison, LENA was returned
to East Germany in a prisoner exchange agreement. The manner in
which the East Germans conducted these negotiations was evidence
in itself that LENA was regarded by the East as a person of special
importance, whose return was urgently desired. The entire prisoner
exchange agreement, which was a big thing and involved well over
1,000 prisoners, was made contingent upon the release of LENA.*
The BND has taken to heart the sad lessons learned from this
case and has made vigorous efforts to improve and protect its
security. Although historical developments of the last 25 years
inevitably make the German services more vulnerable to penetration
than other Western European services, one should note that since
Felfe's arrest the BND has faced this problem squarely. The
determined efforts of a small group of the BND's most competent
younger officers have been focussed on this problem, and much
progress has been made in detecting and removing officers who
because of their wartime background or for other reasons fall into
categories classed as security risks.
* Persons knowledgeable on this case have speculated that LENA
could be a long term KGB Illegal.
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ANNEX A:
The HACKE Story
At the end of 1943, Nazi Party boss Martin Bormann foresaw
the approaching defeat of the Third Reich and reportedly began to
build up a secret Nazi cadre organization unknown to Hitler and
other Nazi leaders. This organization has come to be known in
Western intelligence circles under the codeword HACKE.* According
to Bormann's plan, HACKE was set up according to the "V" pattern
(5 persons): members of one "V" became leaders of further "V"s,
and the leadership was anonymous to the lower circles. It was to
be numerically limited, but expanded as needed. Its objective
was to exercise clandestine influence over affairs of the Third
Reich, and to prepare the groundwork for continued activity after
the defeat. In early 1944 there were allegedly only 35 members;
by the end of that year, a half million dollars in concentration
camp booty had been smuggled abroad and clandestine bases had been
set up in Spain, Portugal, Argentina, Japan and Italy. HACKE
members were quite different from those who opposed Hitler on
more or less moral grounds and who organized the attempted
assassination of Hitler on 20 July 1944. They were war criminals,
fanatics and far-sighted opportunists who saw the handwriting on
the wall and moved early to assure their personal future. To
the extent that ideology as well as opportunism played a role,
their militance and authoritarianism brought them far closer to
Communism than to Western democracy. After the war, HACKE kept
alive the old Nazi slogan, "Fight the Jews and plutocrats in the
USA," and its goal was the founding of a Fourth Reich.
Typical of Soviet capabilities in this milieu, is the fact
that the Soviets learned of HACKE at its inception. Bormann
consulted with Gestapo Chief Heinrich Mueller concerning the
This codename was originally coined by Michal Goleniewski for
use in reporting on this subject while he was still in place as a
CIA penetration of the Polish Intelligence Service. Since we do
not know the actual name of the organization, the codeword HACKE
has stuck and is still used for want of any better term.
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organization, both for advice on conspiratorial organization and
to gain Mueller's protection vis-a-vis SS Chief Himmler, who was
an enemy of Bormann and who Bormann feared might learn of the
organization. Gestapo Chief Mueller, in turn, was reportedly
already in contact with the Soviets at least as early as the
beginning of 1944, and he informed them of Bormann's plan.* The
Soviet operation with Mueller was directed personally by Gen.
Abakumov, then Chief of SMERSH (Military Counterintelligence) and
subsequently head of the entire MGB, predecessor of the KGB.
Abakumov immediately recognized the importance of HACKE and did
everything possible to penetrate the organization and direct it
toward long range Soviet goals. Mueller's knowledge of HACKE was
limited.. He was only used by Bormann; he was not fully trusted
nor was he a member of HACKE himself. But his knowledge was
sufficient to identify other members of the organization, and
without waiting for the end of the war, Abakumov allegedly
recruited several HACKE members by blackmail and threat of
denunciation to Hitler and Himmler.
One member of HACKE with whom the Soviets reportedly were in
touch during the war is SS Colonel Otto Skorzeny, who is famous for
leading the airborne rescue of Mussolini from Allied imprisonment,
Skorzeny was under active development by Abakumov's unit as early
as 1942. He was suspected for a while of playing a double game,
but was reportedly firmly recruited by the Soviets in mid-1944.
For a brief period shortly before the end of the war, Skorzeny
was maneuvered into position as chief of Nazi military intelligence.
Mueller was well-known as a student and admirer of the NKVD,
and this apparently led him to general sympathy with the Soviet
cause. In his memoires, Gen. Walter Schellenberg, a senior SS and
SD officer, quotes Mueller as saying in Spring 1943: "I cannot
help it; I incline more and more to the conviction that Stalin is
on the right road. He is immensely superior to the Western heads of
state, and if I had anything to say about it we would Very quickly
come to an agreement with him." It was not long after this that
Mueller apparently did make his own personal accommodation with the
Soviets. The Soviet contact to him was reportedly arranged by Maj.
Loelgen, the Gestapo chief in Danzig, who had been recruited by
the Soviets sometime in 1943. Mueller's post-war whereabouts is a
much-debated mystery. It was first believed that he died in the
siege of Berlin, but there have been a number of reports that he
escaped successfully to the Soviet Union.
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Through Skorzeny, Abakumov hoped to catch in time and exploit
for Soviet purposes the Nazi Abwehr agents in the U.S. and South
America.* It is not known whether Skorzeny is still a Soviet
agent. Deryabin tells us the KGB was trying to locate him in
1952, perhaps to reestablish contact. He is presently living in
Spain, from where he maintains active contact with wartime friends
and associates.
After the war, the Soviets concentrated on maximum investigation
of HACKE and maximum infiltration of agents into its membership. The
organization expanded in 1947-48, and this opportunity was exploited.
Several war criminals who were knowledgeable on HACKE were located
in various Eastern European jails. Goleniewski, for example, has
described the two-year effort to break HACKE member Foerster, the
former Nazi Gauleiter of Danzig, who had been sentenced to death
as a war criminal in Poland. It was Goleniewski himself, who in
mid-1952 after six months of patient debriefing and persuasion,
finally induced Foerster to reveal what he knew about HACKE. In
this case, as in a number of others, Goleniewski operated on direct
instructions from the Soviets, wholly independent of his own
Polish service. As soon as Foerster began to talk about HACKE, he
was immediately removed from prison and flown to Moscow in a
special plane. Our only source of direct knowledge on HACKE is
Goleniewski, and most of Goleniewski's knowledge comes from his
involvement in the Foerster case and subsequent discussion with
KGB officers who specialized in German operations. Deryabin has
provided circumstantial confirmation, however. He reports that
the voluminous files on Abakumov's wartime operations against
high level Nazis were known in the KGB as "Abakumov's legacy,"
and that they read like a novel. There was renewed interest in
these files about November 1952 (i.e. after Foerster began talking
about HACKE); at that time the files were removed from the Austro-
German Section to a separate location, and a high degree of
compartmentation was put into effect with regard to all files
pertaining to former Nazi officers.
One of the reasons Abakumov rather than Merkulov became chief
of the MGB in 1946 was that Stalin agreed with his demonstrated
policy of maximum emphasis on intelligence operations against
the United States.
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The HACKE story is regarded by many knowledgeable persons as
an important backdrop to understanding post-war German security
problems, and particularly to an understanding of Soviet penetration
of German intelligence and security services as illustrated by the
Felfe case. It shows how early in the game and with what apparent
success the Soviets moved to penetrate and exploit the various
formal and informal groupings of former Nazis. Former SS and SD
officers were particularly vulnerable to Soviet blackmail, as
the Soviets systematically sought out and exploited the evidence
of their war crimes guilt. In this group for which conspiracy had
become a way of life, the Soviets could also make an ideological
appeal -- continued hatred of the United States combined with
respect for authoritarian Soviet power. Many of these former
Nazi officers, including some with a record of hushed-up war
crimes, obtained important or sensitive positions in the West
German government. This group exercised a particularly fatal
attraction on the renascent West German intelligence and security
services, which had an obvious need for experienced personnel to
counter the growing threat of Soviet espionage.
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ANNEX B:
The LILLI MARLEN Case
Using information gathered (we believe) by several penetrations
of Gehlengs CE branches, the KGB prepared a comprehensive document
on the personnel, organization and operations of GV"L". The
document had the appearance of a report from an agent in place
in GV"L" or near the chief of GV"L" and was signed with the name
"Artur." The content was genuine and implied a real Soviet
penetration or penetrations, but there were some discrepancies in
the use of organizational terminology which suggested that the
document itself might be a fabrication, The document was photographed
on microfilm and the microfilm placed in a dead drop at the base of
a lamp post in the West German city of Ludwigsburg by an agent
whom we have never identified.
The document was brought to the attention of West German
police by a KGB agent who was briefed to report to the police
that he had accidentally discovered the dead drop. Another KGB
agent was briefed to empty the dead drop and in doing so, unwittingly,
to walk into the police stake-out, be arrested and thus provide
confirmation of the existence of a Soviet penetration in GV"L".
The account of the recruitment, preparation and handling of these
two agents (drawn largely from their tonfessions) provides some
excellent examples of tactical deception techniques. In general
it should be noted that both agents were of very low calibre - too
low to be used in any real intelligence operation; both had already
been blown in one capacity or another to various Western intel-
ligence agencies. The KGB presumably used them in the LILLI
MARLEN operation not only in spite of their low agent quality,
but because of it!
The Agents:
"The Informer": Bodo Fromm, born in 1915, was a former
Wehrmacht Lieutenant from the Dresden area. He joined the Western-
sponsored Fighting Group against Inhumanity in early 1951, was
caught distributing leaflets in East Germany and recruited by the
KGB in Dresden. Fromm continued to work for the Dresden KGB
office as a penetration of the Fighting Group and staged a
"flight" to West Berlin when the Soviets arrested his colleagues.
Subsequently he tried, on Soviet instruction, but without success,
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to get agent work with the French, the British and the Americans
in West Berlin. Later he was able to operate as a penetration
of the Committee for Liberation from Totalitarianism, a group
which was eventually taken over by the Gehlen Organization. At
this point Fromm was introduced to a new case officer in Berlin who
told him that his targets were the BfV and the Gehlen Organization.
In the fall of 1953 all the West German agents whom Fromm had been
able to identify to the Soviets were arrested in the Soviet Zone
(except one - so that Fromm might not be suspect), and Fromm was
ordered to move from West Berlin to West Germany where he was to
await further instructions.
"The Throw-Away": Walter Kunde, born in 1908 in Berlin, was
a periodically unemployed salesman. In 1950 and 1951 Kunde worked
for British intelligence in Berlin, but was dropped on charges of
being a swindler and a fabricator. While employed in a West Berlin
department store in 1951 and 1952, Kunde made the acquaintance of an
East Berlin customer named Rolf Rhodin. Rhodin was an old German
Communist Party member from Dresden, a long time Soviet and MfS
principal agent, spotter and recruiter. He was already documented
in the files of various Western intelligence services. (Of interest
in connection with the LILLI MARLEN case is the fact that Rhodin
had also appeared in the case of Wolfgang Hoeher, a Soviet
penetration of one of GY"L"'s sub-bases in Berlin who had returned
to the East through a staged kidnapping in 1953, and who could
very well have provided some of the information contained in the
LILLI MARLEN document.)
Kunde lost his job in mid-1952 and was destitute for the next
year and a half. In late November 1953 he accidentally met Rhodin
on the street; he told Rhodin his troubles and accepted Rhodin's
offer of help in return for "favors," to be specified at a later
date. Kunde thought at the time that Rhodin was referring to
matters connected with East-West trading. Between November 1953
and mid-May 1954, Rhodin met Kunde fairly often without making
any specific points, but was apparently assessing him closely.
The Operation:
As of spring 1954 both Fromm and Kunde were on call for the
KGB's CE section. Fromm was a completely initiated Soviet agent
and was in direct contact with KGB officers. Kunde knew only
Rhodin and had no precise idea of whom or what Rhodin represented.
Neither agent knew the other.
In mid-May 1954 Fromm received a summons from the KGB to come
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from West Germany to Karlshorst for a meeting. Rhodin at the
same time called on Kunde and told him to prepare himself to
make a trip to West Germany. (Kunde had to apply for the
appropriate travel documents.) On 24 May Fromm met his case
officer in Karlshorst and was told that in the near future he
was to receive instructions to do something (not specified)
within a 50 km. radius of his home in Stuttgart. The case officer
gave Fromm instructions in S/W, a cipher, and open code signals to
be used for making meeting arrangements.
On the 10th of June 1954, Fromm received a telegram summoning
him again to Karlshorst, but Fromm was unable to travel until the
17th. He let four days go by, however, before he informed the KGB
of this fact. In the meantime Rhodin had told Kunde to keep in
very close touch with him since he was waiting daily for a telegram
from West Germany which would give him some idea of when Kunde
could make his trips. Kunde had his travel documents ready by the
11th of June.
On 17 June 1954 Fromm arrived in Karlshorst for his meeting
with the KGB case officers. They were annoyed that he had not
been able to come earlier and said that Fromm's task concerned a
very important matter which had "already cost many thousands of
marks." It was crucial that Fromm be in Ludwigsburg on 18 June at
precisely 0700 hours. Fromm was then given his mission: he was
to look for a minox box concealed at the base of a certain lamp
post. If he found it he was to leave it there and go punctually
at 0800 to the Chief of the Ludwigsburg police and tell him the
story of seeing a man put something near the base of the lamp
post. He was to give a plausible excuse for being at that spot
himself early in the morning and was to say that the man had
acted suspiciously, making Fromm suspect some spying activity. The
Soviets also gave Fromm a physical description for the man, which
they said was notional and which he could relay to the police.
Fromm was to be sure to report only to the Chief of the Ludwigsburg
Police, since he was known to be very pro-American and would
certainly inform American agencies and have the dead drop surveilled.
The Soviet case officers further explained that another man
would empty the dead drop, would be arrested and would confess
that he worked for the Soviets in Karlshorst. (Here they relied
on Rhodin's personal assessment of Kunde's character.) As soon
as Fromm had completed this assignment he was to send a report to
Rolf Rhodin,
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CONFIDENTIAL
While Fromm was being thus briefed, Kunde was meeting with
Rhodin. Rhodin explained that the matter of Kunde's trip to
West Germany (task still unspecified) would become acute two days
later, on the 19th of June. Rhodin would meet Kunde on the
morning of the 19th and give him the exact details of his mission.
On the 18th of June Fromm arrived in Ludwigsburg, found the
minox in its cache as predicted and reported to the Chief of Police
at 0800 precisely as instructed. Later in the day he returned to
Stuttgart and sent his report to Rhodin. On the 19th Rhodin informed
Kunde how to travel to Ludwigsburg and where to find the dead drop.
He instructed Kunde to empty it between 0600 and 0700 on Monday,
21 June. He then told Kunde that he should wrap up the film
capsule and mail it to his own address in West Berlin, then
return to Berlin and give the package to Rhodin on either the
22nd or the 24th of June, when Rhodin would meet him. He
promised Kunde a reward of a new suit, a pair of shoes and full
set of dentures. Kunde was given no advice about what to say if
he was picked up by the West German police. The bewildered man
was arrested exactly according to Soviet expectations and willingly
told all he knew about his contact with Rhodin.
Not according to KGB plan, however, was the fact that Fromm
was an unconvincing actor and aroused the suspicions of the
Ludwigsburg police when he made his first report about accidentally
finding the dead drop. Also contrary to Soviet hopes was the
initial Gehlen Organization reaction to the LILLI MARLEN document;
owing to errors in the use of organizational terminology, it
suspected Soviet deception. Surveillance and mail intercept
coverage was instituted on Fromm, and he was detected mailing a
letter to Rolf Rhodin in East Berlin. This was evidence of a
direct link between Fromm and Kunde and the KGB. Fromm was
eventually arrested and confessed his role in'the Soviet deception.
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ANNEX C:
The SOKOLOV Case
The Sokolov case illustrates how the Soviets were able,
through Felfe, to monitor a double agent operation against the RU
involving the interests of a number of German and American services
and necessitating rather elaborate liaison coordination arrange-
ments. At the same time, the KGB was able to monitor a Western
attempt to induce the defection of an apparently inept, insecure
and disaffected RU case officer (Sokolov). There is reason to
suspect that the Soviets manipulated the case (a) so as to make
it more attractive to the Western services and thus prolong its
life, and (b) to involve the BND which was not originally connected
with the case in order to enable the KGB to monitor it closely
through Felfe. In the end, the KGB was willing quietly to observe
and permit the roll-up of an RU net in West Germany consisting of
five agents and a Soviet high speed W/T transmitter.
The case involved considerable expenditure of time on the
part of the American and German services affected, and if one of
the Soviet aims was to divert the efforts of the Western services
to non-productive activities, they must be credited with having
succeeded. In addition to the extensive liaison involved in the
unsuccessful attempt to induce Sokolov's defection, the West
German services investigated approximately 200 security suspects.
We have only two items of collateral information which offer some
insight into the objectives of the case as seen from the KGB point
of view. Clemens told his interrogators that when he expressed
to Alfred his concern that the Soviets would deliberately allow
an agent from East Germany to walk into a trap and be arrested in
West Germany, the KGB officer shrugged and said "...this has
nothing to do with my office, ...Sokolov will certainly be
arrested." This suggests that at least by the end of the operation,
the investigation and arrest of Sokolov, who may have been
genuinely vulnerable to Western blandishments, had become a
principal KGB objective justifying the sacrifice of the GRU
agents and the bonus Felfe received for his role. A second
indication of KGB objectives is from the UB officer, Michal
Goleniewski, who reported on a briefing given to-Soviet and
satellite CI officers in late 1958 and early 1959 by General
Gribanov, chief of the KGB's Internal Counterintelligence Directorate.
Gen. Gribanov stressed the need to collect information and
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documentation on "coordination" among the Western services, as this
information could be exploited in propaganda against these services.
Thus fostering and monitoring the elaborate inter-service coordina-
tion mechanism which was set up to handle the Sokolov case may
have been one of the specific KGB objectives.
We do not know whether the KGB apprised the RU that Sokolov's
net was penetrated. If it did, this would have enabled the KGB
to direct the RU's further handling of the case and would have
facilitated greatly its manipulation. On the other hand, if the
KGB suspected Sokolov from the beginning, it may have kept the RU
in the dark about the status of Sokolov's agents. In this event,
it would have been considerably more difficult for the KGB to
manipulate the case, and some of the developments which appear to
have been the result of KGB manipulation may have to be regarded
as not the result of KGB direction or control.
The central figures in the Sokolov case were:
(1) Major Sokolov, a GSFG RU Transborder Intel-
ligence Point officer at Erfurt, East Germany, who ran
a network targeted against an American airfield at
Sembach;
(2)
member of
and later
(3)
suspected
Karl Heinz Kiefer, a German railway employee,
Sokolov's net, who was doubled first by CIC
turned over to the BfV;
Bruno Droste, a refugee from Erfurt who is
of having been played into CIA by the Soviets;
(4) Lore Poehlmann, a long-time Soviet and MfS
agent who served as principal agent and safehouse keeper
for Sokolov, with her husband;
(5) Waldemar Poehlmann, an RU Transborder Intelligence
Point agent; and
(6) Wilhelm Haller, a BND agent who reported on MfS
activities but who is suspected of having been under Soviet
control.
The Soviet case officer, Major Sokolov, had been running
agents to collect OB data on various US air bases since the early
1950's. Numerous traces on him, under various names, rested in
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CIC files. The consensus of information indicated that he was an
almost unbelievably careless operator: a drunkard, an insecure
talker, a flamboyant and promiscuous type, well-known around
Erfurt for exactly what he was.
One of Sokolov's longer-lived operations involved a net of
low-level West German agents whose main target was-'the collection
of information on the American airfield at Sembach, When one of
these agents, a railway employee named Kiefer, confessed and
volunteered his services to CIC, the latter promptly doubled him.
CIC's handling of the operation can perhaps best be characterized
as defensive; there was apparently no particular CIC interest in
Sokolov's vulnerabilities. (Kiefer, himself, complained that CIC
dalliance was causing the Soviets to become suspicious.) Never-
theless, CIC continued to run him from 1954 until March 1959, when
after five years of relatively unproductive activity, they turned
the case over to the BfV and the local LfV with the recommendation
that the case be terminated and the network rolled-up.
However, since the operation appeared still to be viable,
the BfV. was in no hurry to roll it up. In keeping with BfV
philosophy that W/T agents should be doubled if at all possible
rather than arrested, they were particularly interested in one
agent in the net who happened to be Kiefer's brother-in-jaw and
who was reported by Kiefer to have been issued a W/T set by the
Soviets. (Although this agent was later judged to be unsuited
for a D/A role, he continued to be of key interest.) The BfV
was also intrigued by the relatively large number of fringe
personalities who appeared in the case as agent suspects. They
felt that further inVestigation of these individuals woUld make
for a more effective roll up if this line of action were to be
taken later. Finally, they also felt that more positive handling
of the case including the release of more build up material, might
lead to additional interesting developments.
CIC had requested that all action be closely coordinated
with them. Although the main RU targets were U.S. Air Force
installations and activities, OSI had not been apprised of the
case by CM'. The BfV now felt obligated to coordinate with OSI.
In order to preclude simultaneous coordination with several
American agencies on one case the BfV requested CIA to act as
coordinator and represent the total American interest vis-a-vis
the Germans. CIA agreed to do this. After reading into the
case CIA also became strongly interested in Sokolov as a
recruitment/defection target.
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At this point, the case began to take on greater interest.
Sokolov gave Kiefer an OWVL system; and he engaged him operationally
with two Erfurt-based agents previously known to Kiefer who were
to help him recruit a source at the Sembach airfield. These agents,
a married couple named Lore and Waldemar Poehlmann, acted as
principal agents and safehouse keepers for Sokolov. Frau Poehlmann
was already a long-time Soviet and MfS agent; her husband had for
some time been listed in CIC files as an RU Transborder Intelligence
agent. From Sokolov's action, it appeared that he did not consider
Kiefer to be under Western control.
There maybe special significance to Kiefer's being given OWVL
just after the BfV took over the case from CIC. We now realize
(although we did not at the time) that it is normal for the Soviets
to supply agents whom they know or strongly suspect have been
doubled by the opposition with more elaborate communications systems.*
If we presume that this development in the Sokolov case is related
to the fact that the KGB had discovered by this time that Kiefer
At least as early as 1958, the RU was deliberately continuing
to run such cases with increasingly elaborate communications. �This
is indicated by information from our former penetration of the GRU,
Lt. Col. Popov. In July of that year, Popov was discussing with
an RU colleague several Transborder cases aimed at Holland. The
Soviet remarked to Popov that his "entire Dutch residency had been
compromised." Significantly, it was after this conversation that
the RU trained one of these agents (Dutch Cryptonym PARKER) in
OWVL. In considering the reasons why the RU gave their agents
OWVL after they knew them to be controlled by Western services, we
surmise that this action served several purposes. It was a new
development which whetted the interest of the doubling service
and indicated that the agent was well-regarded by the Soviets. At
the same time, it provided a measure of protection to the RU, as
it allowed them to keep the cases running with a minimum of direct
personal contact between case officer and agent. It also allowed
a formal contact to be dragged out for a considerable length of
time without any real substantive content. For example, the
number of Kiefer's OWVL broadcasts consisting simply of a call-up
signal and a negative message indicator is impressive. So is
the number of broadcasts which were unintelligible for technical
reasons.
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had been doubled, then it must also be presumed that the KGB
shared this knowledge with the RU perhaps including Sokolov.
However, adequate information to support this premise is lacking;
in fact, some of Felfe's statements after his arrest suggested
that the KGB may not have informed the RU.
During the summer of 1959 Kiefer's information was investigated
more fully and a plan was devised for the roll-up of his net
sometime in the fall. In September, however, two developments
delayed this action: (1) CIA came upon what appeared to be an
independent lead to Sokolov; and (2) a BND agent appeared who was
in a position to provide information on the Poehlmann's.
The new CIA lead was through one Bruno Droste, a refugee
from Erfurt of obscure loyalties, who was then giving music
lessons to Americans in Frankfurt. To one of his pupils, an
American officer, he offered information about a Soviet intel-
ligence officer named "Starov" with whom he was in contact in
Erfurt. Droste described "Starov" as a remarkably insecure
drunkard, who ran operations against US installations in Wiesbaden
Contrary to CIA orders to disregard Soviet attempts to contact
him, Droste met "Starov" in a safehouse in Karlshorst, East
Berlin, in September 1959. From Droste's description of this
encounter, "Starov" was identified as Sokolov. At the same time,
it was also discovered that Droste had earlier reported having
seen blank East German residency permits in "Starov's" Safehouse
which were signed with the name "Kiefer." This information led
to speculation that Droste and Kiefer might be part of the same
net. Droste, consequently, was turned over for handling to the
BfV. Droste continued to meet with Sokolov under BfV direction, and
it was decided to use him in an operation to induce Sokolov's
defection at the time of the planned roll-up of the Kiefer net in
December.
The other development involved a resident of Erfurt named
Haller. Haller had been spotted by another BND agent in Erfurt
who reported that Haller would be amenable to recruitment and
that he could provide information on MfS activities. Haller
was easily recruited and proved to be a prolific source of
information on Frau Poehlmann. In September 1959, Haller stated
that the Poehlmann's were both MfS and Soviet agents. A short
time later, he reported that Frau Poehlmann was working for a
Soviet intelligence officer named Sokolov, and that the two were
having an affair. This report that Frau Poehlmann was being run
by the Soviets rather than by the MfS caused her case to be turned
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over by the BND's MfS section to the direct control of Felfe in
the Soviet CE section. In mid-November, Haller reported that
Frau Poehlmann was going to West Germany for a "holiday." The
BND, under Felfe's direction, then began to plan an operation
against Frau Poehlmann, to use her as a means of access to Sokolov.
Until this time, there had been no official coordination
between the BND and the BfV on this case although it is possible
that Felfe learned about the case informally through his contacts
within the BfV. It was not until the BND submitted a priority
namecheck request on the Poehlmanns to the BfV and CIA that it
came into the open that all services were working on the same
target, Sokolov. If we presume that Felfe learned about the case
informally from the BfV and reported this to the KGB, or that the KGB
had already learned about the case from another penetration of
Western intelligence, then a further interesting premise presents
itself, i.e., that the lead to the Poehlmanns through Haller was
contrived by the KGB and fed to the BND in order to bring the
latter into the case and enable the KGB to monitor all further
developments through Felfe. The KGB could have done this without
cutting in the RU.
By the time the BfV and CIA learned of the BND lead to Frau
Poehlmann, she was already in the Federal Republic taking a rest
cure. A BND man, Richard Schweizer, acting on Hailer's information,
had contacted her on her arrival in West Germany and had easily
established a liaison with her.* He reported that he found Frau
Poehlmann more than approachable; that, in fact, she seemed to
go about the business of being promiscuous as though it were a
duty. This lead to Frau Poehlmann gave the BND a significant
equity in the operation against Sokolov, as both the BfV and
CIA agreed that she offered the best access to him.
At this time, the case took on some additional interest when
the BfV/LfV reported that Kiefer had been able to improve his
previously somewhat strained relations with his relative, the
W/T operator, and it seemed that he might be able to develop
some additional information on the network's communications
system.
With all of these developments it was agreed that a thorough
Schweizer will be remembered for his participation in the
CAMPUS operation.
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reassessment of the operation was essential. A general
coordinating conference was scheduled, and on 11 February 1960
representatives of the BfV, BND and CIA met in Cologne to discuss
further procedures. It was decided that coordination at the
respective headquarters would be supplemented by working level
operational coordination by the various case officers from the
three services. The rather elaborate coordination mechanism on
the German side (BfV/LfV and BND) as well as on the American side
(CIA, CIC, OSI) plus the large number of investigative leads
developed, resulted in one CIA officer being engaged,virtually
full time for about six months on this one liaison operation.
As developments unfolded throughout the spring and early
summer, coordination activities continued at a rather brisk pace.
The basic agreement was that "no service will undertake any action...
without coordinating.. .with the other services concerned... (and)...
there will be a free and full exchange of information...," By
July 1960, the number of suspect agents among the fringe personalities
radiating from Kiefer, other members of his net, from Droste, the
Poehlmanns, and from Haller, amounted to some 200 people located
in 11 West German cities and in East Berlin and East Germany.
Moreover, the crisscrossing of trace information seemed to imply
overlaps with GRU, KGB, East German and Polish cases, and even
with one or two Algerian FLN operations in West Germany. With
rare exceptions, however, these people were of no interest except
as security suspects and of little or no relevance to the goal of
recruiting Sokolov.
In mid-July, Sokolov again sent Frau Poehlmann to West
Germany. There, she came into close operational contact. with
Kiefer, who thought that she was susceptible to defection. More
important, he reported that she had quoted Sokolov as being willing
to accept American asylum rather than return to the USSR for re-
tirement in September. The coordinating cOmmittee
decided to move to recruit Frau Poehlmann at once. If she would
refuse to cooperate with the Western services she would be
arrested, Sokolov would be approached by letter, and his West
German agents would be arrested.
Frau Poehlmann was detained on 23 July. Under questioning
she indicated, among other things, that she considered Sokolov to
be immoral and insincere, and claimed that he had expressed
"Western tendencies." Although she agreed to work as a double
agent, her interrogators suspected strongly that she was confessing
only to those matters with which she was confronted. Thus, being
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judged unreliable, she was arrested formally on 25 July. She
agreed to write a letter to her husband enclosing another letter
for delivery to Sokolov which contained our defection preposition.*
The letters were written and mailed shortly after her arrest.
On 27 July the roll-up of Sokolov's net began, starting with
a tentative list, including suspects compiled on the basis of
Kiefer's information, of 23 persons. The W/T operator was among the
first. Some ten days later, both Kiefer's OWVL and the W/T operator's
communications system were still producing messages from the East -
indicating, to all appearances, that the RU was still in the dark.
The ensuing interrogations revealed that the evidence against most
of the suspects was not as firm as had been concluded from some of
Frau Poehlmann's earlier statements to Kiefer. In the end only
five agents were convicted in court. Under questioning Frau
Poehlmann admitted that some of her statements to Kiefer concerning
the involvement of some of the suspects had been exaggerated. She
attributed this to a compulsion to exaggerate and boast about the
importance and scope of her activities and of the agent net of which
she was a part.
In early August, Haller reported that Herr Poehlmann had been
unable to deliver the letter to Sokolov because the latter was out
of town. Meanwhile, when Frau Poehlmann didn't return from her
trip to the health resort, her husband opened the letter, thinking
it might offer some clue to her whereabouts. Although he couldn't
read the Russian text, he recognized that a telephone number in it
(the one through which Sokolov was to contact an American officer)
was located in West Berlin. Accompanied by Haller (who claimed
he was helping Poehlmann because Poehlmann was partially deaf),
Poehlmann traveled to Berlin, called the number, and by this means
came into direct contact with CIA's Berlin Base. Poehlmann agreed
to cooperate with the West. He and Haller reported that Sokolov
had been in an auto accident, but that he was due to be released
soon from the hospital, CIA gave him a second letter for Sokolov.
Three weeks later Poehlmann reported that Sokolov still had not
reappeared.
Extracts of the official West German protocol containing Lore
Poehlmann's derogatory statements about Sokolov were sent by Felfe
to his KGB case officer.
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At this point, whatever hopes had originally existed for
persuading Sokolov to defect had pretty well faded. The Berlin
Base officers concerned with the case had begun to become somewhat
chary of both Haller and Poehlmann. Although they felt that
Poehlmann was probably sincere in his relations with us, they
doubted the truth of his story about the letter to Sokolov, and
they thought that the Soviets might be monitoring his actions.
With regard to Haller, the Base concluded from their discussions
with BND case officers that the latter had not investigated him
very thoroughly, and that their control over him was very loose.
Although they had no firm evidence that he was controlled by the
MfS or the Soviets, they felt that he was perhaps lying about his
personal affairs.
On 17 September, Frau Haller appeared in West Berlin and
reported to BND officers that Poehlmann had learned that Sokolov
had gone to Moscow, but was expected back in two months. Sokolov,
of course, never reappeared. On 2 October, the Hallers requested
refugee status in Berlin. Haller reported that Herr Poehlmann had
been questioned in late September by the MfS about his relations
with Sokolov. He claimed that he himself had also been. questioned
by the MfS about his Western connections, but that he had been
released for labk of evidence. Later, after receiving word from
his brother that the MfS no longer considered him a "Western spy,"
Haller returned home. CIA opposed this move, but the BND, thinking
that he might provide further leads to MfS operations in Erfurt,
encouraged it.
Felfe's role in the Sokolov case was unusually passive (for
Felfe) His first official exposure to it occurred in the fall
of 1959 when he received an official briefing on it from the
BfV.* As already stated it is possible, however, that he had
learned about the case informally some months earlier, when
Kiefer was first turned over to the BfV by CIC. In February
1960, Felfe was one of the three officers who represented the
BND at the coordinating committee meeting in Cologne. His
German colleagues later remarked that his behavior on that occasion
as well as in subsequent liaison meetings, was somewhat unusual.
Instead of railing at them for their incompetence, as was his
custom, he appeared content to allow the BfV free rein in handling
Felfe at that time sent some pertinent documents on the
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the Kiefer side of the affair. The Poehlmann contact was run
solely by the BND Frankfurt field office. In his directives to
this office, Felfe represented as BND consensus his opinion
that the handling of the Kiefer net should be such as to best
serve the primary goal of recruiting Sokolov or inducing him to
defect.
Although the operation in the end did not result in the
recruitment or defection of Sokolov it was, nevertheless con-
sidered a Western success, in that a net of RU agents, albeit
low level, had been rolled up and two W/T sets, one of them a
Soviet high speed transmitter* and cipher material confiscated.
In addition the BfV gained some favorable publicity from the
case.
It was only after Felfe's arrest that we learned (from
Felfe himself -- a man who couldn't resist bragging occasionally)
that the KGB was apparently also pleased with its outcome; it had
paid him a rare 1,000 DM bonus for his contribution to the KGB
side of the operation.
The high speed transmitter was supposed to have been the
"newest" kind , but by this time the GRU knew this equipment had
already been compromised by Popov.
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ANNEX D:
ZUVERSICHT Case
This case summary illustrates certain problems of source
protection. The KGB learned from Felfe, or possibly from another
penetration of the BND, that an agent of the RU had been doubled.
The KGB informed the RU of this fact, but requested that the RU
continue to run the agent in order to protect the KGB source. Our
source for this information was Lt. Col. Popov, a CIA penetration
of the GRU. The RU did continue to run the operation as requested,
but only in the most nominal way. Not having quite the same
operational interest in the matter, its handling was reduced to the
barest minimum so as to comply with the KGB request yet provide
protection of their own assests.
ZUVERSICHT (TKD cryptonym) was a West German Merchant Marine
Captain, who was recruited in 1951 by the then RU Naval Point in
Karlshorst while on a visit to his family in East Germany. When
he returned to West Germany he reported the recruitment to the
Criminal Police and was eventually turned over to the BfV. For
four years, 1953 to 1957, ZUVERSICHT was run by the BfV (which
used the cryptonym SEEBAER) as a double agent. MI-6 (cryptonym
ILLUSTRIOUS) acted as advisor on the case from about May 1954 on.
During this period ZUVERSICHT joined the West German Navy
(Bundeswehr Marine) at RU urging. The RU gave him S/W, dead drops
OWVL and promised to instruct him in a new kind of W/T. When it
was determined, however, that ZUVERSICHT would not be able to
obtain a commission in the Navy (because of his agent status), he
decided to resign and enter the Merchant Marine. At this point,
since the agent's activities would undoubtedly take place outside
the Federal Republic, his case was transferred to the BND. This
occurred formally in September 1957, but the BND received detailed
operational briefings on the case in mid-July.
In July 1957 the RU case officer requested ZUVERSICHT to meet
him in Vienna in August. On 24 July the BND held a conference
with �the BfV on plans for the meeting. The BND offered the use
of its Vietiba-based surveillance personnel to the BfV and proposed
the photographing of the RU case officer. The BfV later decided
to reject this offer and to use its own personnel. Shortly before
the meeting the BfV surveillance personnel were instructed not to
attempt to photograph the RU officer. The BfV and BND also agreed
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that ZUVERSICHT should not yet inform the RU officer that he was
transferring to the Merchant Marine, because they feared that the
RU might lose interest in giving him the new W/T training if they
knew this. The meeting took place as scheduled, but, contrary to
BfV hopes, the RU officer informed ZUVERSICHT that he would not
have W/T training after all, but would henceforth work through a
dead drop, which would be serviced by a W/T operator he never met.
Shortly after this, in September 1957, Lt. Col. Popov informed
us that this RU officer was Captain Yuriy Pavlovich Sklavets of the
Naval operational group in Karlshorst, and that his case had recently
been discussed at a routine meeting of RU officers At this meeting
it was announced that the KGB had recently informed the RU Naval
group that Sklavets agent was doubled and that Sklavets had been
photographed by a Western CI service during his meeting in Vienna.*
The KGB requested the RU to keep on running it in order to protect
the KGB source.
After ZUVERSICHT's return from Vienna, he informed the RU of
his impending transfer to the Merchant Marine. He told them that
his office in the Bundeswehr Marine was undergoing a security
review and that he had taken fright and decided to resign and go
back into the Merchant Marine. This story had been concocted -
an actual security review was staged - by the BfV and the BND in
order to avoid giving the RU the real reason for the transfer, and
in order to provide an excuse for the abrupt notification. The
RU replied to ZUVERSICHT by ordering him to stop operating and to
send his family to East Germany, but by the time the letter reached
ZUVERSICHT's home address he was already on the Atlantic bound for
a year's duty in Mexico.
After the meeting with Sklavets in Vienna in 1957, ZUVERSICHT
had no further personal contact with the RU; he received no EEI.
Messages were few and far between and inevitably timed to arrive
in his home port just after ZUVERSICHT's ship had put out on a
This was a clear indication of staff penetration, as only a
penetration could have known of the original plan to photograph
the case officer, which was in fact never implemented. It also
gave some indication of the position and knowledgeability of the
penetration, i.e. he knew of the plan but was unaware of its
cancellation.
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cruise of many months. The method of communication became more
and more "insecure" from ZUVERSICHT's point of view. The RU
officer simply wrote a letter using ordinary postal channels and
a very simple open code. The only sign of assertiveness was one
request that ZUVERSICHT try to get a berth on a ship putting in
to Baltic ports! Felfe kept his end of the game up with
characteristic style. He frequently elaborated on the theme that
the RU is generally an incompetent organization (as indeed it
seemed in this case), and he had ZUVERSICHT write a letter of
complaint to his RU case officer criticizing him for the insecure
communications and generally shabby treatment. The ZUVERSICHT
case ran in this manner until 1961!
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ANNEX E:
MERKATOR Case
Whereas ZUVERSICHT illustrates a situation in which the GRU
continued to tolerate a doubled agent at KGB request and did it
with the least effort possible, giving itself the appearance of
incompetence, the MERKATOR case shows a more creative reaction
to the presence of a double agent. The more purposeful handling
is perhaps attributable to the fact that MERKATOR was an agent of
the East German foreign intelligence (MIS/HVA) and as such more
directly controllable by a KGB advisor.
MERKATOR was a student at Bonn University in 1957 and worked
part time as a waiter at state receptions. He was spotted by an
MfS/HVA agent in the CDU/Ost (Section of the Christian Democratic
Party fOr East Germany) and recruited for the East German service
in East Berlin in Hanuary 1957 (BTA cover name OFEN) to report on
security precautions at state receptions in Bonn, and to spot
agent candidates among personnel concerned with the organization
of receptions, handling of hotel accommodations (for the purpose
of making audio installations), etc. He was put in contact with
an HVA principal agent in West Germany. MERKATOR turned, himself
in to security authorities and the BfV subsequently ran him as a
double in what was considered a good and productive operation.
Not long after MERKATOR's doubling, Felfe paid a visit to
some BfV colleagues and was briefed off-the-record about the case
because it was so interesting. Felfe was told he could mention
the case informally at BND Headquarters. About six months after
this, about mid-1958, the operation underwent a major change.
What happened was subsequently explained to us by MERKATOR's HVA
case officer, Max Heim, who defected to the West in May 1959. Heim
reported that just when be thought his operation was going very
well, the Soviet advisor to the HVA approached him and informed
him that his agent had been "doubled" by Gehlen" (sic). Heim
had then been instructed to turn his agent over to another section
(Heim specialized in operations against the Christian Democratic
and Christian Social Union parties) which 'would continue to run
the case as an operation known to be controlled by a Western
service. At this point the HVA objectives in the operation were
changed, the HVA principal agent who had been supporting MERKATOR
in West Germany was withdrawn, and future communications were
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handled through personal contacts in East Berlin.
The revised objective of the operation was to pass diversionary
leads and disinformation to the BND, which was thought by the HVA
to be the controlling opposition service. The HVA endeavored to sow
seeds of distrust within the BND concerning the governmental office
under which it functioned, i.e. the office of the State Secretary
in the Chancellor's Office, by generating the suspicion that the
senior official in this office was an East German agent. The HVA
also tried to further aggravate the distrust between the BND and
the BfV, by giving the BND "proof" that the BfV was penetrated.
MERKATOR was given the assignment to obtain information about a
specific BfV officer, and in the course of discussing the assignment
the HVA case officer implied the BfV officer was already cooperating
with the East but was not fully trusted. Political disinformation
was also channeled through MERKATOR. The operation was far less
effective than it might have been, as the KGB erred in telling
the HVA MERKATOR had been doubled by "Gehlen." The doubling
service was actually the BfV rather than the BND, so some of the
disinformation missed its mark.* For example, the BfV reaction
to MERKATOR's report that one of its officers was an HVA agent
was far different than the BND reaction would have been to the
same report. Although the BfV was concerned about the implications
of MERKATOR's reports and 4Vestigated them, it viewed the sudden
changes in the MERKATOR operation with some reservation. The
operation was broken off after Helm's defection in May 1959.**
There are several possible plausible explanations of the KGB
error.
** In connection with Helm's defection, there was an interesting
development in the PANOPTIKUM case, which Felfe had taken over
about that time. In July 1959, the PANOPTIKUM double agent,
General Panzinger, received a KGB requirement via OWVL to find out
if Heim had been a BND or a BfV agent in place prior to his
defection. This was a totally unrealistic requirement for General
Panzinger, as it was not the type of information he had access to at
all, but the requirement could serve Felfe as an excuse to inquire
into the Heim case.
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7 4
ANNEX F:
Glossary of German Words and Abbreviations
Abwehr Intelligence service of the Supreme
Command of the German Army.
Amt Blank Predecessor organization of the
West German Ministry of Defense.
BfV Federal Office for the Protection
of the Constitution, principal
West German internal security
organization.
BND Federal Intelligence Service, the
organization responsible for foreign
intelligence, but which also has
some internal security and offensive
CE funotions.
DDR German Democratic Republic, i.e.
East Germany.
Fremde Heere Ost (FHO) General Staff section dealing with
information concerning armies of
countries to the East of Germany,
with special emphasis on Soviet
forces.
Gestapo Political police.
GV"L" Gehlen Organization's field base
for CE and CI operations, located
in Karlsruhe.
HVA Foreign intelligence component of
the East German Ministry of Security.
Karlshorst Section of East Berlin where the
large East German Headquarters of
the KGB was located.
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Kaiserministerium Predecessor organization of the
West German Ministry for All-German
Affairs.
Land or Laender Political subdivision(s) of West
Germany, roughly equivalent to a
province or state.
LfV A L4nd security service. While not
directly subordinate to the BfV, it
cooperates closely with it.
MfS East German Ministry of State Security.
RSHA Central Security Office Of the Reich;
in 1939 it took over control of the
Gestapo, SD, and criminal police.
SD Security Service of the SS, in effect
the intelligence service of the SS
and the Nazi Party.
SED Socialist Unity Party, the Communist
Party of East Germany.
SfS Predecessor organization of the MfS,
the East German Ministry of Security.
SPD West German Socialist Party.
SS Elite Guard of the Nazi Party.
Waffen SS Militarized branch of the Elite
Guard of the Nazi Party.
L L
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