LETTER TO MR. LEE S. STRICKLAND FROM BENEDICT K. ZOBRIST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP93B01194R001200140008-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 63
• Document Creation Date: December 23, 2016
• Document Release Date: January 23, 2014
• Sequence Number: 8
• Publication Date: March 28, 1986
• Content Type: LETTER

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STAT
STAT
STAT
Harry S Truman Library
March 28, 1986
Mr. Lee S. Strickland
Information and Privacy Coordinator
Room 1107, Ames Building
Central Intelligence Agency
Washington, D.C. 20505
Dear Mr. Strickland:
Independence, Missouri 64050
As a follow-up to a telephone conversation of this date
between of the CIA and Dennis Bilger of our
staff, we are sending you a copy of a report by Colonel
Richard Park, Jr., written in 1945 investigating the OSS
(Office of Strategic Services). said he needed this
copy for his files and he asked Mr. Bliger to mark in pencil
the portions of this report which are still classified. Mr.
Bilder has done this. Would you please give this report to
for his files.
Sincerely,
1f.BENEDI?. ZOBRIST
Director
Enclosure
A Presidential Library Administered by the National Archives and Records Administration
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STAT
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'HARRY S TRUMAN LlliKAKI.
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MEMORANDUM FOR THE PRESIDENT:
Attached hereto is my report on activities of
the Office of Strategic Services in three parts and three
appendices as follows:
Part I - Introduction
Part II - Summary and Conclusions
Part III - Recommendations
Appendix I - Information regarding the 0.5.5.
Appendix II - Compromise of the O.S.S. to Foreign
Governments.
Appendix XII - Possible Postwar Uses of the 0.5.5.
,e4.44r,
RICHARD PARK, JR.,
Colonel, GSC.
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PART I
.4.11Imig_tag?102a
0 03
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The day the late President departed for Warm Springs he
authorized me to make an informal investigation of the Office
of Strategic Services and report on my findings and conclusions.
Certain information had been brought to his attention which made
such an investigation both timely and desirable.
Information contained in this report has been gathered in an
informal manner and from personal impressions gained on a tour of
the Italian and Western Fronts. It seems logical to assume that
much more information of a similar nature might be obtained by a
detailed investigative process. Sources of information are being
withheld from this paper with the thought that they should be pro-
tected if this document were used as evidence in an open investiga-
tion. Incidents given can either be substantiated or at least
checked by reference to names, places, dates and other details.
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PART II
Summary and Conclusions
From the evidence on hand most of which is in three annexes,
the following summary and conclusions are presented:
1. If the 0.8.8. is permitted to continue with its present
organization, it may do further serious harm to citizens, business
interests, and national interests of the United States.
2. The security of the 0.5.8. which should be above question
is poor, both here and abroad.
3. Poor organization, lack of training and selection of many
incompetent personnel has resulted in many badly conceived, over?
lapping, and unauthorized activities with resulting embarrassment
to the State Department and interf-irence with other secret intelli?
gence agencies of this government. General MacArthur even refuses
to allow the 0.5.8. to operate in his theater. The State Department
likewise refuses to be responsible for the 0.8.8. in countries where
the State Department is accredited.
4. It appears probable that many improper persons have pene?
trated into 0.6.8. ? some who cannot handle themselves, some with
questionable backgrounds, and some who may be plants for foreign in?
telligence and counterintelligence agencies. The Communist element in
0.8.8. is believed to be of dangerously large proportions. This will
be revealed by a thorough investigation.
5. 0.8.8. is hopelessly compromised to foreign governments, par?
ticularly the British, rendering it useless as a prospective independent
postwar espionage agency. Further questioning of British intelligence
1` ?
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authorities will evince nothing but praise because the 0.5.5. is like
putty in their hands and they would be reluctant to forfeit a good tool.
?+4 ?,
b. If the 0.5.5. is investigated after the war it may easily
prove to have been relatively the most expensive and wasteful agency
of the government. With a $57,000,000 budget, $371000,000 of which
may be expended without provision of law governing use of public funds
for material and personnel, the possibilities of waste are apparent.
There are indications that some official investigation of 0.8.5. may
be forced after the war. It is believed the organization would have a
difficult time justifying the expenditure of extremely large sums of
money by results accomplished.
7. Last November, General Donovan made a proposal for the or-
ganization of a new secret world-wide intelligence agency which would
control all other U.S. intelligence agencies. There have been suggestions
that this proposal was motivated by his personal ambitions. It has all
the earmarks of a Gestapo system. This plan was subMitted to the JCS
who referred it to the JIC. While the matter was still under considera-
tion by JIG this plan and an alternate one, prepared by JIG, were pub-
lished verbatim in certain newspapers. It is reported that one of two
warring factions in 0.8.5. was responsible for releasing this very se-
cret material to the newspapers. Much unfavorable press and Congressional
comment resulted. On March 6 the JCS placed Donovan's plan in deferment.
8. All of the activities of the U.S.S., however, have not been
harmful. There are elements and personnel that can and should be sal-
vaged. It has performed some excellent sabotage and rescue work. Its
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Research and Analysis section has done an outstanding job. These have been
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PART III
Recommendatj.ons
k VI I 4-1_
1. It is therefore recommended that General Donovan be re-
placed at the earliest possible moment by a person who shall be
recommended by the Joint Chiefs of Staff, and who shall be in-
structed by the Joint Chiefs of Staff to re-examine the organi-
zation with the end of weeding out personnel and other elements
of the 0.3. S. detrimental to the interests of the U.S.
2. It is recommended that useful elements of O.S.S. such
as the Research and Analysis Section and certain valuable individuals
be retained either temporarily in the 0.3.3. or transferred to some
appropriate agency; e.g., State or G-2.
3. It is recommended that the 0.S.S. confine its activities
to the present theaters of operation and that, as these areas are fur-
ther limited, their operations should be correspondingly curtailed.
4. It is recommended that, although a world-wide secret intelli-
gence coverage for the benefit of this government in the postwar per-
iod is necessary, a new agency with such superstructure as Donovan
proposes be vetoed in favor of an organization along the lines of the
one now in operation in the Western Hemisphere in which President
Roosevelt appointed the Directors of Military Intelligence, Naval In-
telligence, and the Federal Bureau of Investigation to cooperate. Such
a plan however should have the appal of the JCS, FBI, and others
whom the President sees fit.
"r
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APPENDIX I
Information Relative to the O.S..
As background material for incidents to be mentioned, a brief
statement concerning 0.5.5. training should be helpful. An analysis
of available data on the 0.S.S. training system reveals a basic lack
of experience among its organizers who were evidently unequipped to
assume the responsibilities given them. As a result of failure to
benefit by tested training procedure in established intelligence or-
ganizations, the effect of inadequate training methods and lack of
experience multiplied as the organization expanded, even to the extent
of largely neutralizing the abilities of a few men who -were known to
be able and experienoed. This situation extended to the lower, and
very Important, field echelons where unfortunate incidents praying em-
barrassing to this Government and its agencies, such as the State De-
partment, have occurred in such frequency as to indicate a serious
lack of training for the duties involved. Such attempts at training as
were made were crude and loosely organized.
Training of personnel for espionage and sabotage in foreign coun-
tries has involved efforts to gain access to restricted areas here (in
some cases reportedly fraudulently employing the prestige of the office
of the President of the United States) which has resulted in considerable
investigative attention on the part of other Federal agencies charged
with the investigation of subversive activity. This took valuable time
away from investigation of matters more important to this country. An
unorthodox attempt in 1942 by 0..S. to acquaint its trainees with expion-
age technique Was responsible for the launching of an intensive spy hunt
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by the F.B.I. In another instance, in 1043, the combination of a
"practical training problem" and an anonymous letter sent by an 0.3.S.
employee could easily have resulted in gun play and needless injury
or loss of life.
Orianally, and when it was most important, many field personnel
or U... .J . were sent ref training in cierman Qraer
110,1.1w, ti L I. lin
fectly open G-2 school in the Pentagon Building. These people had
their pictures taken in various group photographs with their real names
listed. These photographs are not classified and probably could be ob-
tained easily by any foreign intelligence or counterintelligence agency.
It appears that no special security measures were considered necessary
by their superiors.
An 0.8.3. psychopathic training and test camp was maintained at a
country club in nearby Virginia. The staff consisted of four highly
paid doctors who processed twelve students at a time in a three-day test
called a government classification test. It is understood that the main
purpose of this school was to subject a man to liquor tests to see how
he would react to drinking. A person who apparently is going to be tested
is on his guard and his reaction to stimulants under known observation is
not likely to prove much. Eitish, German, French4 and other American
intelligence agencies make such tests under actual conditions and in mixed
company to discover the individual's unguarded reactions to both liquor and
women. Psychopathic tests given in an isolated spot seem a uaeless waste
of money.
Before leaving the subject of this school, it is worthy of note that
among the doctors connected with it were o German refugees,2ne,.cf)
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A specific instance of failure of drinking tests is the case ofpri;)
Lopez
an 0..S. agent, in Madrid. He became intoxicated one night and
told many people he was departing the next day for German-occupied France
as an agent for the "U.S. Secret Service." This was reported to the U.S.
Embassy in Madrid by the Spanish police and other persons and a check-up
proved the story. A cable from Madrid received 10 April 1944 includod
the story above, stated further that the Nazis were said to be aware of
all his activities and that our Ambassador wished him recalled at once
for security reasons.
It has been reliably reported that there were two O.S.S. under-
cover camps and finishing schools located some 15 miles from Washington.
One of these was an estate in Monkton, Maryland. A supposedly secret
lease was arranged for but it w8s general knowledge throughout the country-
side that the U.S. Government hold the lease from 1941 until its termina-
tion in August, 1944. After being started by a Dr. K. H. (Colonel) Baker,
"Pentagon" Building, the school was turned over to a Dr. Enders, a col-
lege professor. The experience of Dr. Enders in the field of secret in-
telligence is unknown. The secrecy of this school was further compromised
by a disagreement between 0.5.6. and the owners of the estate after the
former had 160 acres of Blue Grass dug up and sold to lundscape architects
without paying the actual owners thereof who tried to collect. O.S..
representatives stated that no one can sue the government without permis-
sion and that since the original lease and the school were secret, national
security prohibited the owners from taking any action.
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A further example of lack of training is the case of a prominent
businessman who was sent to unoccupied France and circulated between
unoccupied and occupied France. He received no training or instruction
of any kind. Due to his business experience in Europe he soon discovered
that the 0.5.S. was making many mistakes with regard to procedure and
security in Portugal, Spain, and France. He reported some of the out-
standing of these. In addition he refused to be dominated by the British
in FrancedThe net result was that he was recalled and dismissed from
0.S.S. Subsequently he learned that the British had subtly caused doubts
as to his loyalty to arise in our London Embassy so that he could no longer,
circulate even in the Western Hemisphere as.thpro was a check against him
at 41 ports of etJ It required approximately a year for him to clear
his record.
Proof that training has not improved with time can be found in case
which occurred in the latter part of 1944. One Henry T. Robertson of a
Bombay cotton firm was the O.S.S. representative of the X-2 (counterintel-
ligence) section in Bombay. He was so ignorant of his duties and the re-
quirements of his position that he asked advice of various persons there
on what to do and how to do it. Furthermore ha actually tried to enroll
British subjects as agents for the 0.S.S. in India. Documentary proof of
the latter is available in the form of a photostat of a letter from Bombay
, authorities to Robertson, a U.S. citizen, calling his attention to the fact
that "American Intelligence" cannot enroll or enlist British subjects ex-
cept through regular channels. This is a ridiculous situation for a sup-
posed secret intelligence operative to place himself. Adequate training
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might have prevented this.
0.3.5. agents in enemy country are trained in and use the one-time
literal pad system. Experienced secret intelligence people do not ap-
prove of this system as it not only definitely compromises the agent
carrying the pad on him if captured but also affords the enemy an oppor-
tunity to break in on the system by giving him possession of the keys.
Most secret intelligence agents and agencies use other cryptographic methods,
the keys for which are based on memory or standard books and present the
minimum chance of either incriminating the agent or falling into the hands
of the enemy. Some of the 0.3.3. cryptographic aids and instructions have
been lost in the field by its agents and subsequently recovered. Had they
fallen into the hands of the enemy they might well have compromised many
O.S.S. agents as well as the success of their operations. Competent auth-
ority has stated that most of the 0.3.3. cryptographic systems in the
Balkans were known to and read by German Intelligence.
The record of 0.3.3. personnel in Portugal has been described to an
official of the U.S. Government as appalling. 0.S.S. personnel were re-
ferred to as being especially poor in investigative and intelligence ex-
perience and as prone to engage in exceedingly foolish and expensive activi-
ties actually dangerous to our foreign policies. The reports of 0.3.3.
were said by this official to contain mainly hearsay and inaccurate ob-
servations of untrained and inexperienced personnel.
Investigative processes of the 0.3.3. also seem worthy of scrutiny.
The first security officer of 0.5.3. was a Colonel Ellery Huntington,
a former corporation lawyer with no intelligence experience. It is said
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that, at the time he was appointed to this position immediately after
his commissioning and enrollment in the O.S.S. from civilian life, he
did not know even the definition of security. In addition to security checks,
via 0.N.I., M.I.S., F.B.I., and State, or sometimes ignoring these channels,
he assigned security investigations of candidates for the O.S.S. to vari-
ous civilian detective agencies in the U.S., particularly in New York City.
Some of the
inefficient
investigations by these agencies were conducted in a highly
manner despite the fact, according to Col. Huntington, they
cost the 0..S. $500. per head. An example of one of these costly but in-
efficient investigations is the case of an individual who was approached by
a representative of a private agency in New York. This man stated he had
been assigned to investigate the prospect and that he would like to get the
whole story of his life. The agent had in his possession the prospect's
application form with references, former employers, etc., but said he would
like to fill out his report from what the prospect gave him since he had
already received a favorable impression from one or two persons he had ad-
dressed on the subject previously. The prospect complied with his request
and the agent turned in his report clearing him on security.
Present methods of investigation have changed but are hardly more
efficient though probably less costly. pidently Dun 4 Bradstreet,
Fe retained by 0.S.S They are well known in the mercantile field but
can hardly lay claim to investigative ability along detective, intelli-
gence, or security lines. Apparently they have streamlined their investiga-
tions whereby they have telephone conversations with some 27 references
given by any candidate for a position with the O.S.S. A stenographic trans-
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script is made of the conversations. Based on these, and these alone,
a report is made on the security of the eandidate.
An example of an unnecessary investigation due to inefficiency is
case of a naval officer with two years of overseas service who had
the
received the Purple Heart and who had previously worked for the 0.3.2.
in the European theater in 1943, who was reinvestigated by Dun & Brad-
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street after he had been hospitalized and returned to the U.S.
M- From a standpoint of economy it seems probable that the richest
and largest intelligence agency of the U.S. Government should, if properly
organized, be able to conduct its own investigations with its awn person-
nel at less cost to the taxpayer than through private agencies working on
profit basis.
Despite the large sums of money spent by the U.S.S. for investiga-
tion, in addition to the four-way security check available through M.I.S.,
0.N.I., F.B.I., and State, security checks do not seem tu have been of
primary importance in accepting candidates. There are cases where personal
animosities on the part of 0.S.S. principals have prevented their accepting
qualified persons even though their security check was beyond question. On
the other hand, friends and acquaintances of persons in O.S.S. have been
admitted without question. These have included members of United Nations
who were doubtless loyal insofar as being anti-Nazi, but whose presence and
penetration into O.S.S. nullify future uses of 0.5.5. after the war as these
persons are subject to loyalty to their awn countf?:Lj An instance of this ,
occurred when a Chief of the Code Room of a United Nation's Embassy, which
I was closed after that country ras overrun by the Nazis, was taken into the
Code Room of the 0.S S
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There have also been instances where individuals with police records,
which an efficient check would have revealed, have been accepted. A
specific example is one John Torok who was certified to as being a member
of the 0.S.S. to various prominent Hungarians in the U.S. by a Col. Arm-
strong of 0.S.S. It was later denied that Torok was a member of 0.S.S.
Regardless of the merits of this, he frequently interviewed prominent
Hungarians in this country and tried to enroll them in the 0.S.S. He made
various claims as follows: that he was a friend of then Vice President
Wallace; that he was in charge of Hungarian affairs for the 0.S.S.; that
he and Armstrong, working under General Donovan, Hugh Wilson (former Am-
bassador to Germany), and John Wiley (former U.,S. Minister to Austria),
desired to form Hungarian sabotage groups; that the 0.5.5. desired to maneuver
themselves into the politics of Central Europe; that the 0.S.S. intended to
parachute agents into Austria and Hungary; and that the 0.S.S. desired to
pattern a popular front in Hungary. These facts can be proven and are
known to the State Department. His record indicates that in Pittsburg he
is alleged to have mulcted some well meaning people of funds in a com-
bined:.religious and real estate deal. He is believed to have been prose-
cuted for fraud and embezzlement. Later in Long Island he is alleged to
have disposed of fake paintings to artistically unsophisticated people
by a "front" which consisted of a large house and some very valuable ori-
ginal paintings which he borrowed from former art contacts of his. Another
source has indicated the existence of a criminal record. His activities
on the part of Bolshevism in Hungary in 1918 were not of a nature to lend
confidence in his record.
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intelligence and investigation of personnel is illustrated by a
cast in late 1943. One V. Prifti, listing a Washington, D.C., re-
turn address, corresponded by letter with a Peter Lumi in Greenfield,
MASS., offering him employment of an unspecified nature with ,an un-
named organization in Washington. Lumi did not -know Prifti although
the letters were in a personal style. After an offer had been made
for Lumi to come to Washington, expenses paid, for an interview, he
reported the facts to the F.B.I. in Boston because he felt this was
a peculiar way for an absolute stranger to do business. Investigation
revealed that the return address was a Post Office Box rented by the
0.5.3. and that Prifti was an employee of the Latin section of 0.5.3.
A more recent example is a case which occurred in January, 1945,
when a Major E. D. Parsons _f the 0.S.S., New York City, contacted
an individual in an American business firm with an international bus-
iness, saying he had obtained the individual's name from the list of
members of a club. Without further preliminaries, he asked the individ-
ual if he would be interested in a foreign assignment for this country;
explained the O.S.S. workings in detail, the type of operation involved
explaining that it was for the postwar period and to spy on some neutral
country as the U.S. would have to protect itself against all countries
after the war.
Such an untactful approach with utter disregard of se-
curity on such a delicate subject without investigation (which definitely
had not been conducted) is difficult to understand.
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Further examples of poor investigation follow:
1.
in Spain and later went to Paris. He claimed both in Lisbon and Madrid
that he was a member of the F.B.I., not the 0.5.5. He was a close friend
and associate of a well-known French Collaborationist. In December, 1943,
both he and his friend, at a dinner attended mostly by Frenchmen, spoke
H. Haas, French born 0iitEe7q operated as an 0.S.S. agent
violently against the British and the U.S. The F.B.I. stated tharffia's
_
was not connected with him but that very often 0.5.5. agents have claimed
to be F.B.I. men. An investigation in New York,revealed that, prior to
his departure for Europe from the U.S.,[he claimed to be a member of the
.French Secret service. His personal reputation in New York is not favor-
able.
_
He does not seem to be a person who should represent the U.S. in
any activity, particularly secret intelligence.
1 2 .Hans F. Benhardiwas in the employ of the 0.5.5. as a secret
agent. At one time he was employed as an agent by the Germans and he
may still be. The Western Defense Command considered him dangerous, un-
reliable and untrustworthy and thought he might be easily influenced by
financial considerations. It recommended that he be dismissed by 0.5.5.
and interned. In 1943, he was working, for a chemical plant in Cleveland
3. In 1943, an Army colonel was given a key job in 0.3.5. by Gen-
eral (then Colonel) Donovan. This colonel had been relieved from G-2 and
the General Staff Corps for a flagrant violation of security which in-
volved G-2 and the State Department. Despite this not only did the 0.3.S.
employ him but also assigned him to a task which brought him into contact
with the State Department classified material.
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4. Another representative of 0.8.3f, amuel Maegatight was
assigned for varying periods of time to the Canary Islands and Spain.
He has been described as a chronic drunkard and publicly indiscreet
in his behavior.
5. In the latter part of 1942 the dubious activities of a British
4
tsubject by the name of Mrs. Laurie Sha
alias Ilargaret -Black, were
called to the attention of another intelligence agency in the U.S. An
investigation disclosed among other things that she had been employed
by British on some shady intelligence work apparently in connection withi
the U.S. Navy, and still was in close touch wit,la a British Intelligencej
?Officerjin New York; further that she had two passports in her possession,
t-Zhe showing she was a British subject with residence in England and the
other indicating she was a Canadian citizen with residence in Canada.
She was employed by the 0..3.3. for "investigative" work in this country.
The 0.3.3. at first denied the employment of the woman but later ad-
mitted it and attempted to justify it by saying it was in connection with
certain allegedly "authorized" activities in Burope. In 1943 arrangements
were made so that, upon her departure on a Spanish vessel for Lisbon, a re-
entry visa would be denied her.
The liberalness of the 0.S.S. in its expenditures of public funds
has caused much comment. With a t57,000,000 budget, $37,000,000 of
which may be used without provision of lay covering expenditure of funds
for material and personnel, there obviously is a wide margin of error for
distribution of funds.
X Civilian personnel in many cases have been guaranteed at least the
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Taa.--ElaktaT
same salary they had in civilian life, regardless of the job they may
have. One instance, that of a Mrs. Frances Uatts Stevens, involved a
salary of about $4,000 (just a little under that of a colonel) for no
purpose that she could see. She was offered a job as receptionist af-
ter a period of doing nothing.
A check of the Civil Service Commission would probably reveal that
there were a greater number of jobs paying $8,000 per year and over in
the O.S.S. than in any other governmental agency, particularly in com-
parison to its size. The salaries and per diem paid to its field per-
sonnel are well out of proportion to that paid to members of other in-
telligence agencies, both American and foreign. An example of this is an
executive of an American company who was recently offered in New York a
base pay of $5600, overtime pay of $600 and a living allowance of $3240
or a total of $9440. In addition he would receive $7 per diem plus ex-
penses when traveling. He had been an important foreign executive of
his concern for many years, handling a sizeable organization and millions
of dollars of business and yet had not been paid that much. Naturally he
was interested in the offer which placed his company in an embarrassing
position with the government in wartime offering their man more than they
'paid him in peacetime.
In another specific example, an offer was made to a businessman
whereby he could go abroad and engage in some of his business. At the
same time if he would work for the O.S.S. ho would be compensated at the
rate of about $500 par year plus living expenses and per diem, sometimes
$12 per day, plus entertainment and extraordinary expenses.
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(LAJ
FF
GG
(2)
ed vd
There
There are numerous reports of the liberalness of the 0.5.5. both
here and abroad. In Portugal business people had a joke to the effect
that when one saw all of the Portuguese people on the streets in a hap-
py frame of mind, it was because it was pay day for 0.S.S. informants.
Experienced Army officers are agreed that the 0.S.S. is a good deal more
liberal than the Army both in respect to air travel and expense accounts.
A study of the payrolls and expense accounts of the 0.3.5. should furnish
adequate proof of high payments and waste when compared to those of the
Army and Navy.
The monies spent in the field, and also in New York, for entertain-
ment has attracted a good deal of attention. In Turkey, particularly in
Istanbul, reliable banking sources report that the 0.L).6, spends some
020,000 to 030,000 per month on parties and entertainment. While this
would be difficult to prove, it is believed that an affidavit might be
Obtained from someone who had access to banking records. However, this
would be dangerous to the person involved and also to the O.S.S.
Members of our legation in Stockholm can verify that large sums of
money are spent by the 0.5.3. for parties and entertainment there.
' reliable report from Stockholm stated that there are whore Norwe-
gian agents working for the British in Norway are paid by the 0.3.5.
Further, that in early 1944 some of these agents were approaching promi-
nent Norwegians with respect to their reaction of having Norway join the:
British Commonwealth,
In Bombay the 0.S.S. desired to gain friends among Allied Intelligence
agencies in Bombay and. "threw a big party." As too many guests had been
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(2P.)
invited for the hotel suite which had been engaged for the purpose,
the O.S.S. office was utilized. The party was evidently a real orgy
as source reports no mark was performed at the office for the follow-
ing three days. This same source stated that on one occasion 0.S.S.
imported into India approximately 025,000 worth of liquor which they
handed out freely in an attempt to gain information from Allied Intelli-
gence agencies who evidently held the 0.5.5. in Utter contempt and would
not give them any data except in exchange for liquor, hosiery or-lipsticks.
Late in 1943 a representative of the 0.S.S. reportedly approached a
Washington widow possessing unusual social connections and background and
employed in a government agency at a salary of 4;4600 per month. The rep-
resentative proposed that she lease a large apartment and undertake an
extensive program of entertainment in an attempt to gain information from
individuals whom 0.S.S. would ask her to invite to such parties. She was
told that all expenses would be paid, including rental of the apartment,
a suitable wardrobe, cost of entertainment, etc., and also her existing
salary, as "money means nothing."
Early in 1943 an 0.5.5. officer was sent to the Near East during
which time he spent $10,000 to 012,000 with no more specific assign-
ment than "to get a mental picture of the situation." He considered that
he had failed to accomplish anything whatsoever of value to the U.S. He
further stated that 0.S.6. had sent several hundred other men to the Near
East with similarly non-specific assignments who were "accomplishing noth-
ing but drawing large salaries and commercializing on unlimited expense
accounts."
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II
In November, 1943, information was received from an officer of O.S.S.
that 0.5.5. had had manufactured under a high priority rating about
1,000,000 cheaply constructed, one-shot, .45 caliber pistols, costing
about 45.00 each, which were to be dropped by parachute in occupied
countries for use by underground organizations. The plan was never car-
ried out. Another source, an officer in the Army, revealed that the 0.5.6.
official who fostered this project later attempted to have several thousand
of these pistols deposited by the Army In North Africa in any manner seen
fit. When it was pointed out that they could serve no useful purpose
there, the official said that the only thing he was interested in
was in getting rid of them prior to the time an investigation was started
into a poorly conceived program involving about 45,000,000.
?
Large sums of money are also being spent by the 0.S.S. in China
where it is generally known a tie-up has been made by the G.S.S. with
Chiang Kai-Shek's awn intelligence and are integrated with them as they
are with the British. It appears' that the arrangement here, as has been
the case elsewhere, that the 0.S.S. furnishes the money and the other peo-
ple the information which they can color if they so desire.
Another example of small wastes which mount up on a world-wide basis
is in Istanbul where, for over a year, the U.S. Consulate had been paying
450. per month to certain persons in e
olice
for daily reports.
The 0.3.6. offered to pay 4200 per month for the same reports with the
understanding they alone wculd receive them. Subsequently the Turks raised
the price to 4500 per month although, unknoWn to the 0.3.6., copies still
go to several other U.S. agencies for the price of a few drinks.
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JJ
KK
LL
The
The large "exclusive" payment of the 0.3.5. is general knowledge there.
In September, 1944, the 0.8.6. desired to have three individuals in
Istanbul shadowed. They hired Turk who was connected with the?Tarcr7
and paid 1him41200 per month. Unknown to 0.8.5. copies of hALS- reports
were supplied to others.
Another example of waste and compromise of security is the case of
r. Van Berkel alias Van de Steenhoven. The 0.3.5. picked him up in
Holland in September, 1944, and took him to Paris where he was put up in
style with all expenses paid. He claimed to be a loyalhutchman despite
4
stating he had made over 50 round trips to Berlin and other parts of Axis
Europe. The 0.S.S. planned to send him to Sweden and actually planned to
drop him in Germany although a study
Ian Berkel
now in the U.S., has
convinced many that he is either an imposter or an agent of some power.
Knowledge of security measures in Axis Europe leads to the belief that he
had some connection with the Gestapo or S.6. during the period of his
free circulation. While in London he was mysteriously assigned a publicity
job in the U.S for the Dutch Information Bureau, supposedly by Queen Wil-
Imina herse1f,4 Subsequent to his arrival here, he has toured and broad-
cast at will. The 0.S.S. officer who picked him up and entolled him was
Wajor Waterschoot Van de Gracht, A.U.S.4 who was connected with a family
%
involved with Nazis in Austria. The names of the 0.3.S. officers who were
his hosts in Paris and the 0.S.S. personnel who interviewed him in Washing-
ton are available. The money uselessly spent on him is probably only one
sum of many spent in a similarly useless manner.
The 0.3.3. seems to exercise anainfair leverage with its almost un-
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1944, stresses that he, Donovan, has large funds which can be spent
without accounting or red tape. A copy of this letter, as well as
Nimitz'sreply is in the possession of a certain Congressional Com-
mittee and some newspapers and may be used in a future attack on the
0.S.S. from whose files they were somehow obtained.
MM In 1942 the 0.3.S. purchased an ocean-going liner. For the better
part of a year it was not used in anyway and finally, it is reported,
the liner was resold at a loss. It appears that those who first evinced
interest in the ship luter could find no use for it.
NN Also in 1942 Donovan approved the expenditure of over $2,000,000
for a worldwide Secret Intelligence radio communications system and
radio listening posts. After the expenditure and commitment of over
$2,000,000 both projects were abandonoc_1;) It is understood that pressure
\[11
'by the British who desired to control all S.I. radio communications was
,
otiVating %factor. Reliable reports indicate that the listening posts
the ,
have only a token use to the 0.S.S. and because of this most of the'facili-
ties haze been turned over to the Army and Navy.
00 The O.S.S. was so loosely organized that sometimes detachments and
individual men in the field were overlooked. For example, eight radio
technicians were? sent to Liberia to set up a monitoring system for inter-
ception of massages from clandestine German radio stations along the
coast to submarines offshore. This involved shipment of a large quantity
of radio and electrical equipment. jubsequent disagreement between cer-
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PP
QQ
TirQi2=SeaeugiiierT \-1) E 01-1 A-C
tam n factions of 0.3.3. resulted in a decision to drop the plan although
the technicians and part of the equipment had loft for Liberia. The men
were left in Liberia for nine months, doing nothing, until they were re-
discovered and sent to England.
In France an Army staff officer, Colonel Rufus Bratton, stated that
some members of the G.S.S. Secret Intelligence took over a German Army
ammunition dump, installed their own guards there and refused to permit
anyone else in the vicinity. They awaited instructions from their super-
iors only to be blown up by an explosion caused by members of the S.O.
of the same organization.
Despite continual warnings from the State Department, the 0.5.5. or-
ganization in North Africa, in Spain, and in France made serious errors,
which greatly embarrassed the State Department and caused the U.S. loss
of prestige and good will. Some of these are attributed to the poor and
loosely knit organization of the 0.5.5. It is believed that the files of
the State Department contain substantiating evidence covering numerous
incidents. One Assistant Secretary of State said the 0.5.-i. has made mis-
takes which not even the Boy Scouts could be guilty of had they entered
this field. As late as March, 1945, the AP printed a story about five U.S.
saboteurs who were dropped in Sweden by mistake with large amounts of muni-
tions and explosives. Ambassador Hayes probably can furnish ample proof
of the most outstanding and unusual orrors of the C.S.S. in Spain and Span-
ish Morocco which might prove incompetence through poor organization. An
4ja.?94,1 1) ev1-1
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tuhiluENTIAL
example: Once the 0..S. armed, equipped and financed about eight
Spanish Republicans and clothed some of them in U.S. uniforms - in
Spain. These men plotted against the existing Franco Government,
were arrested and, it is believed, executed.
Even in the United States the naive methods used by the O.S.S. have
caused embarrassment to this government. In January, 1943, the Portu-
guese Consul at Boston was contacted by telephone by an 0.S.S. representa-
tive, R. H. Howland, and asked to furnish any available photographs or
plans of Portuguese harbors and shore lines on the Continent and on Por-
tuguese Islands. It was reported that these photographs and plans were
being sought on behalf of the War and Navy Departments of the United States.
It will be remembered that this occurred about years before our invas-
ion of the Continent and at a time when the topic of conversation was where,
and when, an invasion would occur. The unusualness of this request for
highly confidential and restricted data made in such an open and caslaal
manner could only result in embarrassment to the U. S. Government. Both
the Portuguese Minister in Washington and the Portuguese Government in
Lisbon were informed by the Consul at Boston of the receipt of this re-
quest.
Two employees of the C.B.S. in Madrid, one Queseda and a Schoon-
macher, on their awn initiative and contrary to the specific instructions
of the American Embassy, reportedly attempted to engage on behalf of the
U.S. Government in an exceedingly delicate black market money transaction
involving about $125,000. Queseda was arrested by the Spenish Intelligence
4,1 I-11A nmirne or tevinr to consummate this transaction. He was released
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`201-1---S-BeitET
CONFIDENTIAL
after several days but apparently watched as Schoonmacher was in turn
arrested as soon as he contacted him.
It is reported that it was neces-
sary for the American Ambassador to conceal 6choonmacher, after he was
released, and arrange for his secret removal from Spain. This attempted
transaction on the part of two North Americans was accorded front-page
publicity in Uadrid newspapers.
RR The O.S.S. seemed rather short-sighted in appointing to key posi-
tions aliens who not only had no intention of becoming American citizens
but whose business connections were in direct competition to American
interests. The appointment of such personnel in key executive positions
where they were able to pentrate into the organization, obtain uny informa-
tion on personnel, organization and information acquired, and were able
to influence policies, seems a questionable procedure.
UU A specific instance is the case of Guepin,ione of the Chiefs
of the 0.5.5. in the Near East with headquarters in Cairo. He is the
manager of he Oil interests
it the Near East. He is not an Ameri-
can citizen nor-does he intend to become one. He has jokingly confided
in friends that all .hmerican businessmen in that area who joined the 0.5.5.
will never live it down and that many of them who have resigned and are
no longer with 0.3.5. are still pointed out by the British and other na-
tionals as U.S. Secret Agents. Their business careers and the progress
of their U.S. companies are likely to be handicappegito the advantage of
the British and the Dutch. In the majority of cases they are with U.S.
oil companies competitive to British interests.
The Italian manager of
a largo American oil company in Cairo who was imprisoned by the authori-
ties, was never paroled although he was and always had been an anti-Fascist
rv-lw in rtrtN, IT! AI
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11:'CLISLE-CRET
CONFIDENTIAL
All other anti-Fascist Italians were paroled,and allowed to continue
their employment. Several sources in Cairo indicate he was not allowed
to be paroled because of the influence of the 0.3.5. and its Shell Oil
-
non-American executive.
VV The early systems employed by 0.S.S. in supplying money to the
field were so amateurish that they tipped off the Gestapo and other
intelligence agencies, pointing the way to 0.3.5. agents in the field
with the result that they were either apprehended or kept under close
surveillance and fed false information. In Spain and Portugal the Gestapo
knew that most of the money supplied came through Pan-American Airways
and the manager of Pan-American Airways in Lisbon. In Spain and Turkey the
0.5.3. were so naive they considered flooding the black market with Ameri-
can currency was a safe procedure. Repercussions of these operations can
be found in State Department records.
YNI In July, 1943, security was compromised even more by a visit of a
Lt. Col. Rehm from the 0.S.S. headquarters in Washington who openly went
to London, North Africa, Spain, Portugal, Sweden, etc., and almost openly
inspected field offices and contacted agents in an attempt to introduce
some order into 0.5.6. financial chaos. This incident was known to the se-
cret police of the British and the Germans, among others. Many chains of
distribution still intaot are well known to various foreign intelligence
agencies due to poor organization and open attempts to try to improve meth-
ods.
XX
An interesting case of poor distribution is one in which 420,000 was
to be made available to the account of alGunnur G. Mykland in Lloyds Bank I
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To:PriteRrips_.
CONFIDENTIAL
through the Army Finance Officer in Calcutta.
YY Another example of an attempt by the 0.S.S. to chec17 up on itself
in a manner which not only exposed the effort but the lines which were
being checked is the case of a young man, about 18 years old, who went
to Istanbul from Cairo. The U.S. Consulate thought he WAS most unquali-
fied for this assignment. Within a week of his arrival the Turkish police
were aware of his background and kept him under close surveillance. He
began to spend large sums of money and became involved with the traffic
officers of the city police for not following instructions in connection
with his "permit-de-Sejour" and also for his acrobatics in getting on and
off moving street cars. He made himself most conspicuous when the opposite
was necessary. It took the U.S. Consulate four days to straignten him out
with the police. The record of this can be verified at the U.S. Consulate
in Istanbul or on the police blotter in that city.
Examples of breach of security follow:
One George Sharp, a former New York lawyer, is an executive of the
0.5.3. He worked out a rather insecure method of interviewing candidates
for appointment as secret agents in Washington. By appointment he meets
them in a park or a square in Washington, interviews them, and then openly
takes them to have cocktails in some public place.
Several days before the departure of the German diplomats from the
U.S. to Germany, one James Warburg, Assistant Director of the O.S.S.
at the time, was cr:erheard in a Pullman car to tell two travelling
.ABB
ABC
CONFIDENTIAL
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ABD
ABE
?T.Dp__BeREFT-7-
CONFIDENTIAL
companions that a Father Schulte a German-American priest, was to be
smuggled onto a boat with the German diplomats in the hope he would be
able to get into Germany and organize an underground there for the 0.3.5.
This breach of security reaChed the Swedish Embassy in ffashinton
and
probably was conveyed overseas. It also reached the ears of some friends
of Palher Schul4who conveyed the information to the State Department
with the request that an attempt be made Father Schult
departing for Germany.
to dissuade
from
At a social gathering in ilew York a naturalized Frenchman told peo-
ple he was undergoing 0.3.S. training after which he was going to England
for them. Be exhibited a knife which he Was being trained to use against
enemy counterintelligence agents.
An outstanding example of official lack of security, proven by photo-
stat copies, is a routine letter sent to an employee, possibly an agent,
of the 0.3.5. It is supposedly non-incriminating and was mailed from a
"blind." The check is personal and innocent enough looking except for the
fact it was accompanied by an income tax statement clearly showing that
a certain portion of salary had been withheld by the U.S. Government as an
employer. This is such a fundamental error it shows conclusively how in-
secure the organization is on the simplest security precautions. Not only
is the employee exposed but also the bank, the "blind," or alleged employer,
and others can be traced if an alert intelligence agency desires to follow
other payments. Some six other local "blind" aceounts in the U.S. alone
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CONFIDENTIAL
are known as a result of similar fundamental errors.
ABF An 0.3.3. agent, Paul Blum by name, while undergoing training in
the U.S. told a friend he was going to Portugal as an agent, with a
cover as a State Department official in Lisbon. Ho is now in London
and expects to continue with 0.S.S. if it functions in the postwar period.
However, he is probably known as an 0.3.3. man by the State Department,
the Portuguese, the British and possibly others. In the postwar period,
it is questionable if the State Department will be helped by having some
of its 0.3.3. "plants" known to foreign countries.
ABG Two 0.8.3. agents, dressed in civilian clothes, were transported
on ATC planes to Miami enroute to the Near East. They registered in
Miami as members of the O.S.S., thus identifying their organization as
well as their destination.
ABH One Bruno UMberti, let Lt., M.O., is a naturalized citizen who was
born in Trieste, IJ,y By his awn statement he is actually under orders
of the 0.3.8. and will be working for them in the Trieste area. This is
a breach of security which identifies not only the area of operation but
also the individual agent.
ABI A Major Lowell J. Bradford, Cavalry, underforders of OPD, left for
Australia and New Guinea in March, 1944, to make a survey of CIC and MI
activities. By his awn statement, he is also working unofficially for
the O.S.S. and hoped to transfer to O.S.S. on his return.
ABJ AIaiLeau of the aocony-Vacuum Oil Company has been in the ser-
vice of the 0.3.3. in Turkey. His wife informed a reliable source that
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ABK
ABL
(ARM)
he feared his future business activities had been jeopardized. 0.S.S.
has ins istod an returning him to Turkey but he has refused for this
reason and is planning to return Yugoslavia=as a company representa-
tive in the postwar period.
As the result of poor security reliable sources have obtained a
number of 0.5.5. documents in the field. These include instructions
to French agents in sabotage; identification materials, pamphlets on
radio communication and schedule for sending and receiving; crypto-
graphic pads; and instructions to French agents behind German lines
with respect to what documents and maps were wanted by the 0.S.S. In
connection with the latter item, many of these are not only in the possession
of the G-2 Army Map Service :but in some cases are available at public li-
braries in the U.S.
Through a breach of security, three agents of the 0.3.5.? disguised
as British officers, contacted in Austria six leading underground fol-
lowers. The same day after the meting all six Austrians were arrested
by the Gestapo and executed. It appears that this action of the 0.S.S.
had been well-known. This information was obtained from associates of
the executed men now in Switzerland,
In February, 1944, it was reported that an unnamed Washington cor-
respondent had requested General Somervell to verify a report to the
effect that the Army had requested 0.S.S. to assassinate certain out-
standing scientists in Germany who were supposedly working on an importent
secret scientific project. It was said that an extremely significant an-
gle connected with this request lies in the fact that a high official of
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ABN
ABO
ABP
ABQ
TOP ZECRE,-
CONFIDENTIAL
the U.S. Army Engineers in charge of scientific experiments had ac-
tually asked 0.5.5. to kidnap a German scientist known to be conducting
these same experiments in Norway. The similarity which this request of
0.5.3. bore to the subsequent inquiry by the columnist made it quite Ob-
vious to the source of this report, another Army officer, where the leak of
this information had occurred and that undoubtedly the high Army officer
referred to regretted that he ever asked the assistance of 0.3.5.
Before Pearl Harbor General Donovan made a trip to the Balkans and
lost his briefcase containing important papers in Bucharest. The brief
case was turned over to the Gestapo by a Rumanian dancer who was invited
to attend a party at which he was present.
There is an instance of an individual who was second in command of
the O.S.S. in Istanbul who came uninvited to a table in a restaurant at
which four foreigners were seated, one of whom was known to be connected
with the Gestapo. The 0.5.3. man talked openly about his position in the
0.S.S. which he stated was actually the American Secret Service.
Also in Istanbul the local police found strips of paper in the trash
pail of the 0.3.3. headquarters which contained printed letters from which
an expert had no difficulty ascertaining the secret cipher being used.
Through various intermediaries the 0.3.3. in Turkey made contact with
a loyal anti-Nazi Colonel Kadar of the Hungarian General Staffjln Budapest.
He was a trusted friend of the Regent and a member of the Hungarian oppo-
sition organization which was working closely with the United Nations In-
telligence Agency. Despite many warnings, the 0.S.S. employed a well-.
, ___ - ? ?_-_-.i.
knawn Hungarian double agent named Gyorgyrose reputation was bad. Through
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him they arranged for the delivery of a portable radio set to Colonel
Kadar. Before any benefit could result, Col. Radar and his mistress,
-
popular Hungarian actresslat whose home the transmitter was hidden, were
arrested. The'colonel, according to a reliable source, was executed.
Another Hungarian colonel) one of the intermediaries, was recalled from
Turkey and imprisoned. Several months lateii2rrived in Istanbul
on a German courier plane, bearing a special passport. It was well known
there that he worked with the O.S.S. and enjoyed their confidence. He was
finally arrested as a German agent by the Turkish police. This story of
an apparently stupid blunder in the field of secret intelligence can be
checked in Istanbul.
In Stockholm the 0.3.3. maintatns a staff of some thirty people.
Operations are divided among several sections of the American Legation,
one of which is in the Chancery and has a special door with a peephole
marked "Secret - Keep Out." All of the 0.5.8. personnel and activities
are well known to the Swedish secret police.
In December, 1942, several 0.S.S. agents, compromised themselves in
their open correspondence or in letters home from Afghanistan.
The lack of security of the 0.3.8. is so evident that it is not
only dangerous from an operational standpoint but also has given rise
to so many questions and fears in the minds of numerous people as to
lead to the belief that a Congressional investigation might easily oc-
cur after the war.
In addition some newspapers may be interested in
exposing what many claim to be an American Gestapo.
ABT For example: In June r...?...1.9,14-1?a?prartittent businessman was told, at
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TO? SEGRET-
CONFIDENTIAL
a formal dinner in Washington
by a member of the 0.3.5., that they
had just received an increase in authorized strength of Lop() officers,
3,000 enlisted men and 5,000 Was, two-thirds for foreign service and
one-third for duty within this country. lie asked why the large number
of people for the U.S. when 0..$.S. already hod so many personnel in
Washington. He was told that the 0.S.$. planned to enter the field of
domestic investigation and would be sort of a U.S. Gestapo with power to
penetrate every government agency, trade union, large corporation, etc.
Frequently personnel in various governmental agencies in Washington
publicly claim to be working also for the 0.S.S. Specific example: A
ierre Crenier, with the ATO division of the theni.Board of Bconomic War-
fare, stated to a friend that the 0.3.5. had plants everywhere through
the government and that he himself was working for the 0.5.3. in the
B.EX.
As an example of how dangerous lack of security and poor judgment
on the part of 0.S.3. agents can be from an operational standpoint the
following case is cited:
In 1943 certain 0.8.5. representatives in Lisbon attempted to plant
some agents in the Office of the Japanese Naval Attache there. A reliable
source has stated that the attempts were amateurish and further that it
seemed probable to him that the alleged agents were double agents whose
principal job was to report to the Japanese on 0.3.S. activities in Lisbon.
Neither the F.B.I., 0.N.I., or M.I.S. in Lisbon had attempted any such
activity for foar of alarming the Japanese. In July, 1943, it was learned
that the Japanese were very much concerned over reports they had received
with regard to an American espionage activity in Lisbon knowing all the
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books. A memorandum was written at that time by another U.S. intelligence
agency that the Japanese were so alarmed that there was a danger of their
changing codes which we had been able to break. Pour days After that mem-
orandum was written, the Japanese did change their code and it resulted
in a complete blackout of vital military information for some ten weeks.
The writer of the original memorandum, in confirming that Japanese code
had been changed, made this statement - "Haw many American lives in the
Pacific represent the cost of this stupidity on the part of 0.S.S. is un-
Imawn."
ABW Probably because of lack of experience in secret intelligence and
investigative work the 0.3.S. is not organized as are some of the leading
3.1. organizations in the world. These have insulated compartments having
no connection with each other which are, in fact, unknown to each other,
thus giving internal security. In the C.S.S. General Donovan tries to
control completely every activity and the policy boards, deputy directors
and various components of the organization are all fairly well known to
each other. At various times severe disagreements have arisen between then.
In addition to the clumsy handling of intelligence matters by 0.3.S.
personnel some of the intelligence produced by it has been incorrect with
unfortunate results sustained by action taken with that intelligence as a
basis.
Soon after the full of Rome the Allies determined to invade the
Island of Elba in order to protect a main supply base in Corsica. The
problem of ascertaining the enemy strength and disposition on Elba was
given to the C.S.S. After an extended period of reconnaissance the 0.3.S.
reported there were only 900 German troops on the island and these were de-
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a U.S. Naval officer, reports that on the basis of this information the
proper force for the invasion was determined to be some 11,000 French
troops of all categories. Instead of 900 Germans there were encountered
almost 3,000. These were not only in different localities than reported
by the 0.S.S. but also were found to be crack, highly trained troops.
Largely as a result of these errors and miscalculations of the enemy for-
ces by 0.S.S., some
1,100 French troops were killed in this invasion.
Methods by which intelligence has been Obtained have been misrepre-
sented in some instances in an apparent attempt to create the impression
with the President and the War and Navy Departments that it had operatives func-
tioning successfully in enemy occupied territory when, in fact, only a few
if any, 0.S.S. operatives wore known to be in any occupied country in tlurope.
This came from an officer of 0.S.S. In substantiation it was said that MID
had requested O.S.S. to seoure information about certain refinery installa-
tions in an occupied country. MID was advised by 0.S.S. that an operative ?
within the particular country would obtain the data. The informant stated
that 0.5.3. did not have a representative in the locality referred to but
was successful in ascertaining that the oil refinery in question had been
built several years previously by Standard Oil Company of New Jersey and a
somewhat detailed report was prepared from an examination of the files of
that company. The report was forwarded to MID with the comuent that O.S.S.
operatives in the occupied country had Obtained the information, proceeded
to a neutral country, and cabled it to the U.S. At the time the comment
was made that, while it was realized more details would have been desirable,
it was the best that could be accomplished in the allotted time.
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CONFIDENTIAL
interesting commentary on information supplied by U.S.S., a report was
prepared in November, 1944, concerning political disturbances in Columbia.
Subsequent inquiries indicated that it was merely a rewrite of an earlier
report which had been ropared by British intelligence and distributed to
practically the same places that the 0.3.3. report was distributed.
ACA In several instances the 0.3.3., violating 0.S.S. and government
regulations, employed lawyer friends not only for legal matters but
also on a retainer basis to supposedly direct or advise competent Army
officers and others how to run 0.3.3. activities about which they knew
less than the officers. This is not an accusation of graft. It is possi-
ble, although not guaranteed that photostats of monthly retainer checks
can be furnished in one specific case. They exist and are in the hands of
persons who may use them in a future attack or investigation of the 0.3.3.
ACB While there is no implication of graft, it is generally known that
most of the leading 0.3.3. officials and executives employed various rela-
tives in departments of the U.S.b. thus endangering security as making
secret intelligence a family matter is not good practice. Among the of-
ficials who assigned 0.3.3. jobs to relatives were General Donovan, Col-
onel Goodfellow and Colonel Huntington, to name a few. The wives of the
latter two, with no particular experience, received excellent positions
shortly after their husbands had joined the 0.3.3. In addition many ap-
pointments followed lines of politics, law firms, the Social Register, etc.
All of the partners of certain law firms, including most of the members of
General Donovan's firm, became important officers in the 0.3.3. The social
director of the St. Regis Hotel, where General Donovan resides when in New
York attained the rank nf Tt. enlnInml n
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RET
CONABENTIAL
Therehave been numerous instances of interference or lack of coop-
eration by the 0.3.5. with other U.S. intelligence agencies, also in-
stances of overstepping the limits within which their activities, as de-
fined by law, are confined.
A certain Colonel Juan Beigheder was former Foreign Minister of
Spain during the Civil War and until 1940 when he was removed due to his
anti-Nazi and pro41onarchist sentiments. He was invited to the United
States on a military mission on behalf of the Spanish Army although his
real mission, of which the War and State Departments were aware, appar-
ently was to attempt the correlation of Spanish Monarchists in this hemis-
phere in anticipation of the reestablishment of the Monarchy. At the re-
quest of MID in Washington, his activities were kept under observation by
\,the F.B.I. from the time of his arrival in February, 1943. In November,
1943, it was learned that the 0.5.3. was endeavoring to inquire into his
,
activities using Mrs. urie harp, alias Miss Margaret Black (see Item ,
Lage 11 of this section) who was attempting to become his mistresa. The
assignment and purpose of her activities were ascertained only after ex-
tensive investigation by the agency primarily concerned in this matter.
By Presidential Directive the 0.S.S. has been restricted from active
operations in South America. Early in 1943, Mr. Stephen Greene,ia repre-
sentative of 0.S.S., proceeded to Buenos Aires to serve as a contact for
other employees of 0.5.3. leaving for Europe from that point. Other in-
terested agencies of the U.S. agreed to his presence in Buenos Aires with
the understanding that his activities would be restricted to the purpose
mentioned above. Despite this,I Greene)Lmmediately interested himself in
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CONFI9E:NI-1AI
many matters completely outside the jurisdiction of 0.S.S. in the
Western Hemisphere and in such a manner as to needlessly hamper and
confuse the intelligence operations of U.S. agencies already established
in the South American field. Reliable information indicates he formed
a large group of informants for checking into reported subversive activi-
ties on the Buenos Aires water front, the investieation of alleged smug-
gling of strategic materials from that port to neutral European ports, and
alleged infiltration of German sympathizers into shipping companies.
,-,
I
Greene also injected himself into the investigation of a number of espion-
age suspects already the subject of intensive investigation by represen-
tatives of appropriate U.S. Intelligence Agencies thereby seriously
threatening the proper handling of these investigations. Indiscreetness
on his part also endangered the usefulness of a certain double agent of
another U.S. Intelligence Agency.
Despite the absence of any jurisdiction or responsibility for counter-
intelligence operations in the Western Hemisphere, an officer of O.S.S. was
reliably reported to have attenpted in November, 1942, to secure the per-
mission of an official of a commerical organization doing business ln South
America to use the companies represented by his organization as cover com-
panies for counterespionaee work in Latin America. 0.S.S., presumably
knowing its lack of jurisdiction in such matters, was reported to be in-
tending to withhold from the State Department and other interested Federal
agencies the identity of its operatives to be sent to Latin America. While
it is not known that this plan was consummated, it is understood prepara-
tions for its execution had developed to the point whore a school for these
0.S.S. operatives was scheduled to begin in Washington on January 25, 1943.
n telephone tapping, use of secret listen-
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LONFIDENTIAL
ing devices and other intelligence modus operandi. The possibilities that
such a project might have results embarrassing to U.S. intelligence agen-
cies already operating in Latin America, and to the United States Govern-
ment itself, are obvious.
In January, 1945, the F.B.I. made tentative plans with the 0.5.5.
to bring ne William Kirotar, a former Estonian diplomat, to the United
States as a double agent to be used against the Japanese. It was agreed
with Col. Robert Pfaff, Acting Road of X-2 Section a 0.S.S., and with a
. Carlsonii 0.5 5. representative from Sweden, thattarfson /ould re-
. I
turn to Sweden and immediately commence negotiations to put Kirotart in
touch with the Japanese so that he might be sent to the U.S. on an espionage
mission for them. An informant
in touch with both Japanese
and German officials in Sweden, had been requested to recruit just such an
individual asEtrotar who possessed every qualification expected by the
Awo*ARWR.,
representatives of the enemy and was willing to undertake the role of dou-
ble agent.
On February 5, 1945,1&1. Pfaff4attempted to arrange a personal inter-
view with the Director of the F.B.I. on behalf of:Count Carl Bonde, Head
of Swedish CE. He was informed that the Director was out of town and would
not be back before Count Bondefskscheduled departure on February 15, 1945.
However, a complete tour of the Bureau and other courtesies were offered
Count Donde through Pfaff. Pfaff(seemed completely unable to appreciate
the inability of the Director to see
ount Bonde
as a result of not being
in the city and persisted in attributing the failure to accord Count Bonde
a personal interview to an uncooperative attitude on the part of the Bureau.
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CONFIDENTIAL
He permitted his feelings to take him to the length of dropping all plans
which had been made to bring
to this country, thus depriving the U.S.
? Government of an excellent opportunity to establish, through the F.B.I., a
channel of communication directly with the Japanese espionage organization.
AGH Certain reliable sources believe, though without definite proof, that
a properly authorized investigation would prove that the O.S.S. has been
conducting a public relations campaign in the U.S. through several well-
known public relations counselors to enhance the stature of 0.S. . and
discredit G-2 and Navy intelligence. Newspaper clippings and radio commen-
tators have almost uniformly commented favorably on the 0.8.8. and sur-
rounded it with an aura of secrecy and accomplishment. On the other hand,
negative remarks and discrediting statements against G-2 and Navy Intelli-
gence seem to be the rule. The F.B.I. uses aids in public relations but
not to the detriment of Army and Navy intelligence which seems possible in
the case of 0.8.8. There are wveral articles available which appear to con-
tain a bid by the 0.8.5. for a postwar build-up and at the same time seem
to be a breach of security.
A completely reliable source has advised that an official identified
with 0.8.8. stated late in 1944 that 0.8.8. plans a tremendous publicity
program as soon as military security permits'. He said that the well-known
author, John Steinbeck, has been charged with keeping abreast of O.S.S.
activities so that he will be in a position to-wtite-a,bbok exploiting them
when the proper time comes.
This same official stated that another evidence of a desire for pub-
licity is illustrated by one occasion in Italy when 0.8.8. members were
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the front lines to he photographed by the Signal Corps so that when
the pictures were published the American public would be given the im-
pression that these men had just returned from enemy territory with
captured enemy guns.
The photographers did not appear as expected and the
Espionage Section of 0.6.6. was repotted to be very much annoyed about the
matter.
(ACK) He further stated. that it was the policy of his agency not to give
any more information than necessary to the F.B.I. He pointed out that
0.S.S. school instructors in the United States had discussed the F.B.I.
in an unfavorable light and had painted the picture of 0.3.6. replacing
the F.B.I. not only outside the U.S. but also in the domestic field. The
publicity campaign referred to was to be one of the means adopted to ac-
complish this purpose.
From all of the foregoing examples, it would appear that the 0.3.3.
had done no good whatsoever. This is not the case as there are examples
of some excellent sabotage and rescue work which have been of material
assistance to the war effort. Also the Research and Analysis Branch of
0.6.6. has been of great value in supplying necessary background material
and naps.
General Stilwell, in a letter to General Donovan, dated May 30, 1944,
and written from C-B-I, stated that he expected to call on 0.S.S. Detach-
ment ii101 for more and more operations and intelligence as the campaign
progresses to the south. He approved the request for 35 additional officers
and 150 men, all with 0.S.S. training, for arrival in the Theater before
September 1, 1944, as necessary for handling increased requirements.
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CONFIDENTIAL
General Arnold, in a letter written September 19, 1944, thanked
General Donovan for the important role played by the 0.5.5. in the res-
cue of American airmen from the Balkans, stating that the success of
rescue missions has been directly dependent upon excellent 0.S.S. coopera-
tion.
General Spaatz, .in a letter to General Donovan, dated January 16, 1945,
expressed his appreciation for the material aid which the 0.5.5. has rendered
to the U.S. Strategic Air Forces in the European Theater. He stated that it
would seem unfair to single out any particular aid but did stress the wealth
of timely assistance given by 0.S.S. sections dealing with the periodio con-
dition of the various German industrial complexes. He further stated that
he sincerely hoped thet the type of services presently being rendered by
0.S.S. sections dealing with complexes will not end with this war but will
continue to develop throughout the future of our country.
Lt. General Smith, Chief of Staff for SHAEF, in a letter uated September
13, 1944 to the Joint Chiefs of Staff, stated that 0.8.5. has established in
the European ThcJAter an extensive intelligence and research organization
which is staffed by well qualified personnel and further that an extension
of its activities into the period of occupation would be of great value
to the U.S. Group, Control Council, particularly In connection with dis-
armament and military government activities.
Major General Davidson of the 10th Air Force in India, in a letter
of Auf;ust 1, 1944, to General Donovan, also commended 0.S.S. Detachment
W101 for its excellent work in Burma.
't ,rtu1T
ULtv,
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CONFILiENTIAL
Major General Ridgeway of the XVIII Corps (Airborne) in a letter
dated November 1, 1944, addressed to Commanding General, First Allied
Airborne Army, commended the close cooperation, intelligence and general
all around ability displayed by the various members of 0.S.S. who had worked
with his headquarters in the planning phases of operations which have been and
still were under consideration. In a first indorsement, forwarding the let-
ter to General Donovan, the Commanding General adde.d. his commendation
for the excellent services performed by 0.S.S, for the First Allied Air-
borne Army.
Colonel Hitchens, of the G-2 section, Allied Force Headquarters, in
a memorandum dated October 30, 1944, stated that the very considerable
contribution of O.S.S. towards providing intelligence material for the in-
vasion of Southern Frqnce merited special emphasis, not only because of its
intrinsic worth but also because the results obtained are an example of what
can be done by an agency of this kind when it consents to work in closest
cooperation with the Operational Headquarters which it in serving. He con-
sidered the results achieved by 0.S.S. in Southern France before the invasion
so outstanding that they should be brought to the attention of interested
authorities together with the names of the principal individuals concerned.
Offsetting these laudatory comments, are a few others which should be
mentioned.
ACI) In October, 1943, the opinion was exprpssed by an official of an in-
telligence agency of the Army that operations of 0.5.3. in connection with
the Sicilian Campaign had been practically useless.
(ACM) It was learned from an official of the U.S. Government in December, 1943,
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AON)
ACO)