For their part, the Russians adopted Khorunshy’s scheme to murder Dr. Okolovich. In February 1954 they sent two East Germans plus Capt. Nikolai I. Khoklov to Frankfurt to execute the NTS leader. Operation Rhine, as the Russians called their plot, miscarried when Khoklov repented and confessed to Okolovich instead of killing him. The extent to which NTS had by this time become subordinated to the CIA is suggested by the ease with which the Americans then took Khoklov away from NTS.

  Michael Burke had had enough. Returning to Washington in April 1954, he went to dinner at Frank Wisner’s P Street home. Allen Dulles also attended. Burke worried about the long flights over Eastern Europe needed to deposit agents in Russia. On the most recent intrusion the CIA plane had been intercepted by two Russian fighters over Hungary during its return. The plane had escaped into nearby clouds, but the sign was ominous—Russian radar coverage had become so wide and air units so numerous that the flights were exceedingly dangerous. Opinion at the CIA base turned against more attempts. Burke worried that headquarters avoided telling operators of dangers to their missions. He needed reassurance—not only that CIA’s commitment remained strong but that the president wanted the missions. His bosses gave Burke only standard arguments. Facing a headquarters tour, supporting a growing family, Michael Burke gave up the CIA. He went to the circus instead. Burke became an executive with Ringling Brothers, later with Madison Square Garden, and ended up as general manager of the New York Yankees. The CIA could not afford to lose officers like him.

  Meanwhile the “Khoklov affair” became only one of a series of Soviet measures against emigré figures. Okolovich was beaten during an abortive kidnapping. NTS ideologist Poremski survived another miscarried murder attempt. The Russians were more successful with Ukrainian leader Lev Rebet, assassinated in 1957. Also killed were two senior Radio Free Europe broadcasters. This campaign climaxed on October 15, 1959, when Stepan Bandera died outside his Munich apartment building, dosed with cyanide from an ingeniously constructed gun.

  Secret warfare against Russia ground to a halt. On a trip from Munich to Washington in 1953, Allen Dulles told one of his senior specialists on Soviet affairs, “At least we’re getting the kind of experience we need for the next war.”

  Michael Burke, for one, could move on. Not so for many of the emigrés recruited by the CIA. One of the legacies of this secret war, the Anti-Bolshevik Bloc of Nations, went on to support dictators and help subvert democratic governments, the very antithesis of America’s commitment to democracy. Along the way many idealistic people mobilized by the secret wars lost their lives. Reflecting on this period three decades later, State Department Balkans expert John C. Campbell commented: “What did we offer these people? We did not have any means really of supporting a revolt which might break out. I think we were responsible for the loss of some good, patriotic people from those countries because we gave them money and instructions.”

  * Central Intelligence code names, or cryptonyms, have a two-letter combination preceding the name itself. The first element, in this case “BG,” identifies a geographical area or functional purpose to which the name is assigned. Such alphabetic elements are frequently confusing, and this narrative will avoid them wherever possible. Also, the CIA term of art for an operation is “project,” a word this narrative will use in that sense.

  5

  The Covert Legions

  IF HARRY TRUMAN had had his way, the deacon calling the shots in the secret wars would have been Gordon Gray. Gen. Walter Bedell Smith and William H. Jackson brought the word. Jackson, a Gray associate since the 1930s, represented the token of trust. General Smith told Gray that he, Smith, wanted Gray to succeed him as director of central intelligence and that service in a new NSC unit, the Psychological Strategy Board, would make him a logical choice to do so. Besides, said Smith, “The president is serious about setting up this board and we think that you are well-equipped to do it.”

  An insider’s insider, Gordon Gray’s discretion was exceeded only by his good sense. From the president’s point of view, revising his NSC covert action directive had the purpose of designating a new subcommittee of the National Security Council as the lead authority on approvals. Gray would be chief of that unit. Truman knew Gray from service as assistant secretary and secretary of the army between 1947 and 1950. Gordon Gray left Washington but only theoretically—he became head of the University of North Carolina in February 1950 yet actually did not give up his army post until April, and even then he stayed on as a special assistant to the president until November. President Truman’s summons became only the first of many callbacks for Gray, who served every president from Harry Truman to Gerald Ford.

  Both brilliant and modest, Gray was the son of Bowman Gray, tobacco baron and chairman of the R. J. Reynolds Corporation. Bowman’s son could have gone anywhere but chose the state college. Yale Law followed, and Gray worked a couple of years at Frank Wisner’s Wall Street firm, Carter, Ledyard and Milburn. Then it was back to Winston-Salem where Gray hung out his shingle, then became a newspaper publisher. His two papers, the Winston-Salem Journal and the Twin-Cities Sentinel, and the radio station WSJS eventually morphed into a media empire. In 1937 Gray ran for state senator as a Democrat. He won reelection four years later. After Pearl Harbor Gray volunteered but refused a commission, entering the army as a private. The military gave Gray a commission anyway. He was assigned as intelligence and public affairs officer at Fort Benning before heading to Europe, where, as befitted his media experience, he set up propaganda radio broadcasts for Gen. Omar Bradley, including a powerful transmitter at Luxembourg City.

  Shortly before Congress created the CIA, Gray, from his post with the army, nominated himself for director of central intelligence to replace Hoyt Vandenberg. This major departure from his usual manner suggests how serious Gray must have felt the international situation to be. President Truman chose Roscoe Hillenkoetter instead. Sidney Souers soured on Gray after that, but Truman had such confidence in the man that when it came time to set up the new NSC subcommittee, the president could not be dissuaded from appointing him. After Souers left Washington early in 1950, Gray had a clear field. Years later Souers told a CIA historian that he had had high expectations for the effectiveness of the Psychological Strategy Board until he learned who Truman had picked to lead it, making out the Gray appointment as some kind of patronage. Souers recalled complaining to the president, but it was already too late. Gray began by commuting to and from Chapel Hill once a week. He continued as university president throughout his new stint in Washington.

  The task President Truman thought so important was to energize U.S. efforts in psychological warfare. Psywar remained a deep presidential interest, and indeed it lay behind the original Truman directive that started the CIA on its road to covert operations. Not only the agency had been involved. The State Department created a coordinating staff for “information”—Truman’s lieutenants avoided use of the word propaganda—under the assistant secretary for public affairs. The Pentagon got into the act in early 1949, pressing Admiral Souers at the NSC to report on peacetime planning for wartime psychological warfare. That spring the NSC executive secretary circulated a draft directive mandating a fresh initiative, again located at State, which set up the Interagency Foreign Information Organization. Edward W. Barrett, a former Newsweek reporter, became the chairman. None of this satisfied the Defense Department, now worried about gaps between peacetime efforts and those contemplated in war. Barrett tried to mollify the Pentagon with a scheme for overt and covert psychological warfare activities plus domestic information and censorship. President Truman approved that proposal in March 1950. Thinking the problem solved, a few weeks later Truman announced a new American “Campaign of Truth” to be the antidote to Soviet propaganda.

  While Truman struggled to regularize U.S. psychological warfare, the CIA, hardly indifferent, forged ahead with a plethora of initiatives. Youth organizations were funded to match those that received Soviet support. Labor unions were a special agency target, given the long histories and strength of Communist-affiliated labor units in Italy and France. The Committee for a Free Europe and Radio Free Europe remained major priorities. Frank Wisner personally attended planning conferences of these organizations in 1949 and 1950 and initialed their budgets. Allen Dulles, a former board member and the chairman of the Committee for a Free Europe, resolved not to abandon them. The agency still had problems—but CIA seems to have accepted that stimulating creativity required making certain allowances. These were people who in 1950 spent $34 million in Europe alone for their programs.

  When Allen Dulles came to the CIA he hired a special assistant, Thomas D. Braden, a sturdy thirty-two-year-old Iowan who, before joining OSS, had fought with the British against Rommel in the Saharan desert. Afterward Braden and Stewart Alsop collaborated on an early book about OSS. Braden had advocated a peacetime intelligence agency. Then Dulles called him to CIA service. Unlike the usual Washington “special assistant,” holding the boss’s hand had little importance for Dulles’s aides. His standard practice (Dulles would do it again with Dick Bissell) was to use assistants to handle certain projects outside usual channels. Dulles’s outside projects concerned political and cultural warfare in Europe, and that became Braden’s battlefield. He arranged CIA funding for women, youth, lawyers, and media to counter Russian efforts in these same fields.

  Once Dulles had settled in as deputy director for operations, Braden suggested the creation of an International Organizations Division, putting his vest-pocket activities on a more formal basis. Frank Wisner reacted like a stuck pig—the unit cut across regional boundaries of his OPC branches, duplicating other works. Wisner vetoed the initiative. Tom Braden marched into Allen Dulles’s office and handed in his resignation. Instead Dulles picked up the telephone, called Wisner, and told him to cease and desist. Braden formed his division. Once Wisner succeeded Dulles as DDO, Braden continued to rely on his direct link to the high boss, ignoring Wisner and going to Dulles whenever necessary. The International Organizations Division became one more CIA barony.

  Suddenly the Korean War made concrete all the previous belly-thinking about peacetime/wartime distinctions in psychological warfare. State Department resources in the Far East had to be transferred to the regional supreme commander, Gen. Douglas MacArthur. Officials agreed on the need for a new independent agency, but the State Department, as it had in the days of the creation of the Office of Policy Coordination, wanted control, which both the CIA and Pentagon opposed. The wrangling continued through the fall and winter of 1950. President Truman scheduled this issue for the agenda of his National Security Council meeting on January 4, 1951, but the lengthy, desultory discussion settled nothing. Truman then gave NSC members one month to reconcile their differences. When that did not happen the president took psychological warfare off the NSC action list. He would settle the matter himself. And he did. On April 4 he issued orders establishing the Psychological Strategy Board (PSB).

  A subcommittee of the National Security Council, the board actually looked very much like the 10/2 panel that monitored covert operations, with a central staff added. At the initial meeting on July 2 members agreed that the CIA would chair the group, which would direct agencies with regard to psychological warfare issues, coordinate and evaluate operations, and report to the NSC on effectiveness. The PSB staff, under Gordon Gray, constituted the central planning authority. In effect the PSB staff aimed to become the U.S. command center for psychological warfare.

  But something went wrong along the way. General Smith sought a small elite staff to evaluate covert operations. In pushing for revision of the NSC-10/2 directive he wanted the Psychological Strategy Board to replace the 10/2 panel as approval authority. Psywar experts wanted a larger entity that actually planned operations, within the more rarified and arcane sector that was psywar. The best the PSB finally achieved was to help prevent interagency rivalries from crippling ongoing field efforts. Gray brought in OSS veteran Tracy L. Barnes as his deputy director. By 1952 the PSB staff had become the largest element of the National Security Council machinery, with a budget two and a half times bigger than that of the NSC staff itself. The CIA viewed the Psychological Strategy Board as a paper mill.

  Gordon Gray tried to make the PSB work. Starting from three small buildings across Jackson Square from the White House, within months Gray moved the PSB to new offices in the K Building of the CIA headquarters complex. That put his people right in with the spooks and could have encouraged cooperation. Better than that, Gray had been Frank Wisner’s colleague as a Wall Street lawyer. Deputy Tracy Barnes had also been with Wisner on Wall Street as well as Allen Dulles’s subordinate at the OSS, and thus had relationships with key agency people. But Wisner had no intention of cooperating. He did not want the PSB as a command or an operating agency. He refused to go to PSB meetings even though Gray held them in the building next door. Wisner encouraged “Beetle” Smith, as the DCI was nicknamed, to form a covert action staff within the CIA that became central to operations approvals, keeping the PSB out of this action. That “murder board” let most proposals pass through.

  The Psychological Strategy Board never established itself as the nerve center for covert action. The members were essentially the 10/2 panelists. An early representative of the secretary of defense, John Magruder, safeguarded Defense interests. The State Department repeatedly construed PSB inquiries as infringements on its interests too. General Smith was CIA’s delegate, Frank Wisner the alternate. James E. Webb sat in for the State Department. Rear Adm. Leslie Stevens represented the Joint Chiefs of Staff and also handled military participation in covert operations. But the CIA consulted the board only when absolutely necessary, as when the agency needed PSB’s help to get other agencies to lend a hand with its projects. Just one PSB staffer handled all the CIA liaison work. Of the mass of PSB paper, the documents on relations with the agency fill just one file. The CIA held back cards of its own, such as access to its library, upon which PSB staff depended, to encourage the board’s staff to acquiesce. In the spring of 1952 the issue of the board’s role in approving covert operations under NSC-10/5 came to a head. The CIA got its way. The Truman administration approved eighty-one covert operations during this period, few of them with more than cursory input from the Psychological Strategy Board.*

  If Frank Wisner needed to know anything from the PSB he would go to Tracy Barnes, who became something of a CIA spy at the board. Thus, although Director Smith arranged through the board for other agencies to assist CIA in an expanded program of covert actions, the Cold War agency cut the PSB out of the loop. Gray protested, but only made Beetle Smith angry.

  In November 1951 Gray began to host private luncheons of the PSB members where differences could be thrashed out before the monthly meetings. In December Gray held a briefing to show General Smith and DDO Wisner that the board would not trespass on agency turf. That didn’t work either. Gray appealed to Smith to ensure that CIA representatives attended the meetings, but Smith refused. In January 1952 Gordon Gray resigned. He would be succeeded by Raymond B. Allen, president of the University of Washington. Allen’s background in medical administration proved no challenge to the spooks, who did as they pleased. In mid-1952, Beetle Smith blew up when told that his agency had not cooperated with the Psychological Strategy Board. The final director of the PSB was Adm. Alan Kirk, who with his background in naval intelligence might have improved the CIA relationship. But by that time the White House had decided to have done with the board.

  Evidence indicates that the Psychological Strategy Board failed as the U.S. high command for covert action due to the opposition of the line agencies, not because of Gordon Gray, as Sidney Souers would have it. The close relationship between psychological warfare and covert operations is further demonstrated by what happened to U.S. programs. Rather than restraining and coordinating propaganda and covert activities, the Psychological Strategy Board that Harry Truman created instead became a stimulant for an intensification of the Cold War.

  The Psychological Strategy Board had a second problem, just as big, in the amorphous nature of its task “evaluating” and “coordinating” U.S. psywar plans. Gray’s staff had orders to assemble overall, regional, country, and subject plans that the board could then review. Planning for propaganda and psychological warfare, and later monitoring national efforts in this regard, became the job of a PSB staff office. In one typical case, in August 1951 Director Gray suggested at a PSB meeting that the staff do an “inventory” paper surveying Cold War “weapons”—ranging from private media to government agencies to public associations—that could be used in political warfare. Then he set up the overall study with three panels: to examine the policy basis, the intelligence framework, and finally the actual inventory. First the intelligence component had to be dropped when it aroused CIA ire. The inventory panel’s draft report, finished that fall, ran to a hundred pages. Director Gray made the group cut a quarter of the content but found the State Department willing to read only a three-page paper. The CIA and the Pentagon restricted themselves to bland comments. Gray resorted to putting out the full paper just before Christmas, labeling it as simply for information, not action.

  More and more the pattern became one of fierce bureaucratic warfare. The State Department proved the worst offender, objecting that master plans were not practical and infringed on basic foreign policy. Gordon Gray countered that he would take the issue to Truman. State then went the other way, heaping work on the board, sending over mountains of papers, scheduling multitudinous meetings, briefings, and consultations with diplomats and returning ambassadors. The board became so inundated that “it could not think strategically, much less write a long-range concept.” Gray finally gave up and concentrated on his university work, a job he kept through 1955.