Newsletter Blessed be the Ties that Bind: The CIA and the BND

On May 22, 1945, a German Wehrmacht General, Reinhard Gehlen, the former head of the German Army High Command’s Foreign Armies East, surrendered along with his key staff members to the United States military at Fischhausen in southern Germany.

Gehlen’s unit was responsible for gathering and analyzing military intelligence on the Soviet Union. His staff accomplished this by interrogating prisoners in army POW camps—captured Soviet military personnel and, in their headquarters—Soviet defectors. They also studied battlefield intelligence from captured Soviet documents, maps and code books. Further material was obtained by signals intelligence which listened to Soviet non-coded, low-level combat unit radio traffic. These methods of gathering combat intelligence are standard procedures still used by all armies.

During the war, Gehlen did not have intelligence agents in the Soviet Union. The General was not accustomed to gathering and analyzing Soviet political data.

Gehlen dealt strictly with combat intelligence.

Reinhard Gehlen was born in 1902 in Erfurt, Germany, the son of a publisher in Breslau. In 1920, he joined the Reichswehr, rising slowly through the ranks as an artillery officer. In 1933 he was sent to the General Staff College, and in 1935, Gehlen became a captain, the lowest rank in the General Staff.

Except for a brief period in 1938 when he was posted to the 18th Artillery Regiment as a battery commander, Gehlen spent his entire career in the German Army as a General Staff officer. On April 1, 1942, Lt. Colonel Gehlen of the General Staff was appointed head of Foreign Armies East in the High Command of the Army (OKH), a position he held until April 9, 1945 when he was fired by Hitler.

Gehlen had microfilmed all his files before the end of the war and he offered them, plus himself and his staff, to U.S. Army intelligence. The offer was accepted.

On August 26, 1945, Gehlen and four of his closest assistants were flown to Washington for substantive talks with U.S. authorities. Gehlen was the subject of an inter-agency struggle when Allen Dulles of the OSS, once their station chief in Switzerland during the war, and General William Donovan, commander of the agency, attempted to secure Gehlen and his files for themselves. Dulles eventually won and his assistant Frank Wisner was appointed to oversee the former head of Foreign Armies East.

The Gehlen team was based at Fort Hunt, near Washington. Gehlen began his new career by preparing a series of reports which were well received. In July of 1946, Gehlen returned to Germany, and set up shop at Pullach, a former housing project for elite Nazi officials such as Martin Bormann. Gehlen was instructed to build an intelligence agency capable of conducting the highest level surveillance of the Soviets. His microfilmed files were sold to U.S. intelligence for $5 million. Considering that these files only contained material on Soviet military units that had long been disbanded or were no longer combat ready, Gehlen was very well paid for very cold coffee.

Since Gehlen had no experience with internal Soviet intelligence or with their foreign intelligence, he was hard-pressed to use his former army staff officers to supply the United Stateswith relevant material. In 1946, Gehlen hired Willi Krichbaum, formerly the deputy chief of the Gestapo, as his senior agent recruiter. While Gehlen had no experience with Soviet spies, the Gestapo certainly did, and Krichbaum immediately sought out to hire many of his old associates.

At the same time, Krichbaum contacted his former chief, Heinrich Müller, who was now a resident in Switzerland, and a respected and wealthy citizen. Müller was, by no means, inactive in his enforced retirement and was in contact with Krichbaum almost from the beginning of his exile. Lengthy handwritten reports from Krichbaum to Müller spanning nearly three years exist and, while Müller’s correspondence to Krichbaum is not in his files, the Krichbaum correspondence indicates without a doubt, that “Gestapo” Müller was supplying his former deputy with reams of information on prospective employees for the new Gehlen organization, as well as a flood of concise directives on the structure necessary to implement the needs of the US intelligence.

In 1946, Gehlen began the construction of his new agency, while the Soviet military machine in the East Zone of Germany was in the process of downsizing. The Second World War had proven to be a terrible economic disaster to Stalin. His troops were in the process of dismantling German factories which were still intact, ripping up the railroad system, and sending their spoils back to Russia.

The American armed forces were also being sharply reduced, since the war in the Pacific had ended in 1945. Military units were disbanded and their soldiers returned to civilian life as quickly as possible. On the economic front, businesses that had enjoyed lucrative government military contracts found themselves with empty assembly lines and tens of thousands of laid off workers.

It has been said that there never was a good war nor a bad peace. While the latter was certainly beneficial to the Soviets and permitted them to rebuild their economy, it certainly was not beneficial for either the rapidly-shrinking military or business communities in the United States.

This situation permitted the development of the Gehlen organization and secured its position as a vital American political resource. The U.S. had virtually no military intelligence knowledge of the Soviet Union. But the Germans, who had fought against them for four years, had. Gehlen and his military staff only had knowledge of wartime Soviet military units which were either reduced to cadre or entirely disbanded. However, this was of no interest to the senior officials of U.S. intelligence. Gehlen was to become a brilliant intelligence specialist with an incredible grasp of Soviet abilities and intentions. This preeminence was almost entirely fictional. It was designed to elevate Gehlen in the eyes of American politicians including President Truman and members of Congress, and to lend well-orchestrated weight to the former General’s interpretation of his employer’s needs.

In 1948, Stalin sent troops into Czechoslovakia after a minority but efficient communist coup that overthrew the Western-oriented government. This act, in February of 1948, combined with the blockade of West Berlin, then occupied by the British, French and Americans in June of the same year, gave a group of senior American military leaders a heaven-sent opportunity to identify a new and dangerous military enemy—an enemy which could and would attack Western Europe and the United States in the immediate future.

To facilitate the acceptance of this theory, Gehlen was requested to produce intelligence material that would bolster it in as authoritative a manner as possible. This Gehlen did and to set the parameters of this report, Gehlen, General Stephen Chamberlain, Chief of Intelligence of the U.S. Army General Staff, and General Lucius D. Clay, U.S. commander in occupied Germany met in Berlin in February of 1948, immediately after the Czech occupation but before the blockade.

After this meeting, Gehlen drew up a lengthy and detailed intelligence report  categorically stating that 135 fully-equipped Soviet divisions, many armored, were poised to attack western Europe. General Clay forwarded this alarming example of creative writing to Washington and followed up with frantic messages indicating his fear that the Soviets were about to launch an all-out land war on the United States.

Although the sequence of events might indicate that Clay was involved in an attempt to mislead U.S’ leaders, in actuality, he was misled by Chamberlain and Gehlen. They managed to thoroughly frighten General Clay and used him as a conduit to Washington. He was not the last to fall victim to the machinations of the war party.

The Gehlen papers were deliberately leaked to Congress and the President. This resulted in the Cold War between the Soviet Union and the United States. This was not a historical first by any means. Elements in England at the beginning of the 20th century, alarmed at the growing economic threat of a united Germany, commenced a long public campaign designed to frighten the British public and their leaders into adopting a bellicose re-armament program based on a fictional German military threat.

Gehlen and his organization were considered vital to U.S. interests. As long as the General was able to feed the re-armament frenzy in Washington with supportive, inflammatory secret reports, then his success was assured.

The only drawback to this deadly farce was that the General did not have knowledge of current Soviet situations in the military or political fields. He could only bluff his way for a short time. To enhance his military staffs, Gehlen developed the use of former SS Sicherheitsdienst (SD) and Gestapo people, brought to him by Krichbaum, his chief recruiter

In 1948, control of the Gehlen organization was assumed by the new CIA and put under the direction of Colonel James Critchfield, formerly an armored unit commander and now a CIA section chief.

At this point, Gehlen had a number of powerful sponsors in the U.S. military and intelligence communities. These included General Walter Bedell Smith, former Chief of Staff to General Eisenhower and later head of the CIA; General William Donovan, former head of the OSS; Allen Welch Dulles, former Swiss station chief of the OSS and later head of the CIA; Rear Admiral Roscoe Hillenkoetter, first head of the CIA; General Edwin Sibert of U.S. Army military intelligence and Generals Chamberlain and Clay.

American military intelligence officers were well aware that the Soviet Army threat was hollow and that the Soviets’ act of dismantling the eastern German railroad system was strong proof that an attack was not in the offing, but they were strongly discouraged by their superiors from expressing their views.

In 1954, General Arthur Trudeau, chief of U.S. military intelligence, received a copy of a lengthy report prepared by retired Lt. Colonel Hermann Baun of Gehlen’s staff. Baun, who had originally been assigned to the German High Command (OKW) as an Abwehr specialist on Russia, eventually ended up working for Gehlen’s Foreign Armies East which was under the control of the Army High Command (OKH). Baun was an extremely competent, professional General Staff officer who, by 1953, had taken a dim view, indeed, of the creatures foisted on him by Gehlen. Baun detested Gehlen who had forced him out of his post-war intelligence position with the West. Baun’s annoyance was revealed in a lengthy complaint of Gehlen’s Nazi staff members which set forth, in detail, their names and backgrounds.

General Trudeau was so annoyed with this report that in October of 1954, he took West German Chancellor Konrad Adenauer aside as Adenauer was making an official visit to Washington, Trudeau passed much of this information to the horrified Adenauer, who had spent time in a concentration camp during the war. Adenauer, in turn, raised this issue with American authorities and the matter was leaked to the press. Allen Dulles, a strong Gehlen backer and now head of the CIA, used his own connections and those of his brother, John, Eisenhower’s Secretary of State, to effectively silence Trudeau by transferring him to the remote Far East.

Trudeau’s warning to Adenauer did not have a lasting effect and on April 1, 1956, former General Reinhard Gehlen was appointed as head of the new West German Federal Intelligence Service, the Bundesnachrichtendiesnt or BND.

It is well-known in international intelligence circles that at the present time, the German BND has the closest relationship with the CIA and there are no secrets between them

This situation, however, refers to German governmental secrets which always end up in Langley, not American secrets that do not end up in Pullach or now, in Berlin.

In this case, as in so many other similar ones, virtue is certainly not its own reward.