From page 5

"The government's use of Nazis and collaborators in intelligence programs has also left a mark on life in the United States itself.

This impact is what is known in spy jargon as "blowback," meaning unexpected - and negative - effects at home that result from covert operations overseas."

"BLOWBACK - The First Full Account of America's Recruitment of Nazis, And Its Disastrous Effect On Our Domestic and Foreign Policy.

By Christopher Simpson

Pub by Weidenfeld & Nicolson,

10 East 53rd St., NYC 10022

ISBN 1-555-84106-6 ................. 1988

Chapter 7 ............... page 88

................................ Through these channels and others like them Kennan, Thayer,and other American specialists on Soviet affairs learned of the details of German political warfare in the East. The Americans' later acts strongly suggest that they also accepted the basic features of Herwarth's version of what had taken place there: that the eastern troops were idealistic volunteers who had been motivated by a desire to overthrow Stalin's dictatorship; that they had not been involved in-and indeed had not even heard of-Nazi war crimes until the conflict was over; and that the collaborators were really pro-Western and prodemocracy at heart.

George Kennan's perspective on Nazi war crimes is relevant here because it bears on the question of how closely he was willing to look at the wartime careers of those in the Vlasov Army and similar groups during his service as a senior U.S. national security strategist. He has written that he viewed the Nuremberg war crimes tribunal with "horror," not because of the evidence of Nazi criminality presented there but rather because the trial and judgment of the Nazis themselves may have impeded improving U.S.-German relations in the wake of the war.

As Kennan saw it, a thorough purging of Nazis and even of war criminals from postwar German governments was undesirable for several reasons. He summed up his views on this topic in a wartime memo prepared for the European Advisory Commission in London, whose job it was to hammer out joint U.S.-British policies for relations with Germany after the war. First, he argued, ''it is impracticable," because the Allies could never cooperate efficiently enough to do the job.

"Second ....... whether we like it or not," the diplomat wrote, "nine tenths of what is strong, able and respected in Germany has been poured into those very categories which we have in mind" for purging from the German governmentÑnamely, those who had been "more than nominal members of the Nazi Party." Rather than remove the "present ruling class of Germany," as he put it, it would be better to "hold it [that class] strictly to its task and teach it the lessons we wish it to learn.''15

The actions of the Nazis and their collaborators reflected the "customs of warfare which have prevailed generally in Eastern Europe and Asia for centuries in the past," Kennan wrote to Ambassador John G. Winant at that time, "they are not the peculiar property of the Germans.... If others wish, in the face of this situation, to pursue the illumination of those sinister recesses in which the brutalities of this war find their record, they may do so," he concluded.

But "the degree of relative guilt which such inquiries may bring to light is something of which I, as an American, prefer to remain ignorant.''16

page 89

By 1947, then, a bold perspective on how to wage the cold war had begun to take shape in the minds of Kennan, 'Thayer [who by that time had been appointed director of the Voice of America], and most other national security strategists in Washington. As Thayer sums it up, this theory held that Hitler's wartime offensive in the East had failed primarily because of his failure to follow the advice of political warfare experts such as Herwarth. The German experience, however, had "proved" that the population of the USSR was eager for life without Stalin and that millions of people in the Soviet Union and its satellites could be rallied against communism through new promises of democracy, religious freedom, and an end to police state rule.

Not all the clandestine containment programs were aimed at the USSR and its satellites. Some of the most important early applications of these tactics began in Western Europe. The Italian elections of early 1948 marked another important milestone in the development of U.S. covert operations and in high-level U.S. support for use of former Nazi collaborators. Two developments of far-reaching importance for these programs took place during this election campaign. First, U.S. security agencies successfully tested a series of propaganda and political manipulation techniques that were later to come into widespread use around the world, including inside the United States itself.

Secondly, the CIA established much deeper and broader ties with the hierarchy of the Roman Catholic Church in Rome than had previously been the case. This not only had a powerful impact on the Italian political scene but also - as is discussed in a later chapter - laid the foundation for the agency's relationship with Intermarium, an influential [Roman] Catholic lay organization made up primarily of Eastern European exiles that operated under the protection of the Vatican. At least a half dozen senior leaders of Intermarium and its member groups can be readily identified as Nazi collaborators. Some were fugitive war criminals. However, Intermarium was later to emerge as one of the mainstays of Radio Free Europe, Radio Liberation from Bolshevism [later renamed Radio Liberty], and scores of other CIA-sponsored clandestine operations during the next two decades.

page 90

The Italian Communist party was favored to score heavily in the 1948 elections, and many analysts said that the party might democratically win control of the country's government. This prospect created such alarm in Washington that George Kennan - by then the foremost long-range strategist for the U.S. government - went so far as to advocate direct U.S. military occupation of the Foggia oil fields if the voting results went wrong from the point of the United States.17

Washington's apprehension was shared-indeed, was enthusiastically fueled - by the Holy See. The church's hierarchy, which was already under severe economic and political pressure in Eastern Europe, feared a Communist takeover of the very heart of its institution, or at least of its worldly resources. The prospect of a communist electoral victory in Italy coming close on the heels of Communist gains in Yugoslavia, Hungary, Czechoslovakia, and Poland was viewed by many of the hierarchy as the most profound material crisis the [Roman Catholic] church had seen in centuries. Pro-church Italian officials were "positively desperate and almost immobilized by the fear which hangs over them," Bishop James Griffiths, an American emissary to the Vatican, wrote at the time. They were afraid, the bishop said, of a "disastrous failure at the polls which will put Italy behind the Iron Curtain.''18

The election campaign became a major test of containment and of its accompanying clandestine political warfare strategy. Allen Dulles, Frank Wisner, James Angleton, William Colby, and a team of other top-ranked U.S. intelligence officials put together a crash program of propaganda, sabotage, and secret funding of Christian Democratic candidates designed to frustrate the Italian Communist party's ambitions. The CIA was a young organization in those days and was primarily limited [until June 1948] to simple information gathering and analysis. Therefore, much of this campaign was handled on an ad hoc basis out of the offices of Allen and John Foster Dulles at the Sullivan & Cromwell law firm in New York. Kennan watched events unfold from his vantage point at State Department headquarters in Washington, while Thayer kept up a steady cannonade of pro-West and anti-Communist broadcasts over the Voice of America.

Working in close coordination with the Vatican and with prominent Americans of Italian or [Roman] Catholic heritage, the CIA found that its effort in Italy succeeded well beyond its expectations. On a public level the United Slates dumped $350 million in announced civil and military aid into the country during this campaign alone.

page 91

Bing Crosby, Frank Sinatra, Gary Cooper, and a score of other prominent Americans were enlisted to make radio broadcasts to Italy warning against the Communist electoral menace.*

[* There is no evidence that Crosby, Sinatra, and Cooper were aware of the seamier aspects of the U.S. government's campaign in Italy or that they knew that U.S. intelligence was underwriting the publicity campaign to which they lent their names.]

A CIA financed media blitz showered Italian newspapers with articles and photographs expressing American munificence and Communist atrocities, both real and manufactured. The archbishops of Milan and Palermo announced that anyone who voted for the Communist party's candidates was prohibited from receiving absolution or confession. Eugene Cardinal Tisserant went further. Communists "may not have a Christian burial or be buried in holy grounds," he pronounced.

Francis Cardinal Spellman of New York served as a crucial go-between in CIA-Vatican negotiations. "The Vatican [has] been promised that American funds would be made available to assist in the presentation of the anti-Communist appeal to the Italian public," Spellman wrote following a meeting with U.S. Secretary of State Marshall.

The U.S. government, the cardinal said, had secretly "released large sums in 'black currency' in Italy to the [Roman] Catholic Church."19 This "black currency" did not come from the American taxpayers. Rather, a substantial part of the funding for clandestine activities in Italy came from captured Nazi German assets, including money and gold that the Nazis had looted from the Jews. The trail of this tainted money dates back to 1941, when the War Powers Act authorized the U.S. Treasury's Exchange Stabilization Fund to serve as a holding pool for captured Nazi valuables - currency, gold, precious metals, and even stocks and bonds - seized as the Germans or other Axis governments attempted to smuggle them out of Europe. The captured wealth, which eventually totaled tens of millions of dollars, included substantial amounts of blood money that the Nazis had pillaged from their victims. Indeed, it was precisely this type of criminal booty that overeager Nazis had most frequently attempted to export from Europe.

[ All such money was gained at taxpayer expense, by taxpayer paid employees and rightfully belonged to the taxpayers .... The money was stolen from the US taxpayers and given to the Roman Catholic cult .... JP ]

The Exchange Stabilization Fund was authorized to safeguard the portion of the Nazi hoard that had been uncovered and confiscated by the United States in the Safehaven program, which sought to interdict the German smuggling efforts. The official purpose of the fund was to serve as a hedge against inflation and as a bankers' tool to dampen the effects of currency speculation in the fragile economies of postwar Europe and Latin America. In reality, this pool of money became a secret source of financing for U.S. clandestine operations in the early days of the CIA.20

The first known payments from the Exchange Stabilization accounts for covert work were made during the hotly contested Italian election. The CIA withdrew about $10 million from the fund in late 1947, laundered it through a myriad of bank accounts, then used that money to finance sensitive Italian operations. This was the "black currency" that Cardinal Spellman asserted was given to the Vatican for anti-Communist agitation.

Much of the CIA's $10 million Italian war chest was delivered through clandestine campaign contributions to Christian Democratic candidates. The agency, it is true, refused to fund openly Fascist candidates. A "conscious policy was made both in Washington and Rome," former CIA Director William Colby writes, "that no help of any kind was to go to the Neo-Fascists or Monarchists." Instead, the center parties were to be strengthened to form what Colby terms a "stable, viable and truly democratic governing majority." The reasons for this strategy were both ideological and pragmatic: "Any strengthening of the Neo-Fascists and Monarchists, we recognized, would inevitably weaken the Liberals and Christian Democrats [the CIA s favored parties in this case], for that was the only place from which added strength could come to them, not from the Communists.''21

Colby's comment is correct. What it fails to reveal, however, is the fact that many of the remnants of the Fascists' wartime ruling apparatus, as well as most of the police, had joined Christian Democratic ranks after 1945. The CIA's "black currency" in Italy may not have gone to the discredited diehard Fascist groups, but it did go to clerics and other leaders who were themselves closely tied to Fascist rule.

The curious events surrounding Monsignor Don Giuseppe Bicchierai of Milan are disturbing. Bicchierai had served during the closing months of the war as an intermediary in surrender negotiations between Allen Dulles of the OSS, on the one hand, and Walter Rauff of the SS and SD. Rauff, in turn, was representing SS General Karl Wolff and Field Marshal Albert Kesselring, who were the senior German police and military officials in Italy.

The OSS called these negotiations "Operation Sunrise." They played a large role in establishing the reputation of Allen Dulles as a consummate spy master, though a strong argument may be made for the contention that they failed to shorten the war in Italy by a single day.

page 93

Be that as it may, it is clear that Sunrise established a close working relationship between Dulles and Bicchierai that was to flower in the years ahead.

But first there is the matter of Walter Rauff. Rauff was a major war criminal. He had personally developed and administered the notorious gas truck execution program which took the lives of approximately 250,000 people, most of them Jewish women and children who died in unspeakable filth and agony. Rauff escaped from Europe in 1948, traveling first to Syria and later to South America. An extensive study of Rauff's life by the Simon Wiesenthal Center suggests that Monsignor Bicchierai may have helped Rauff and other Nazi fugitives escape from war crimes charges by aiding their flight from Europe. According to the Wiesenthal report, Rauff was interned at the Rimini POW camp for about eighteen months after the war but succeeded in slipping away under mysterious circumstances in December 1946. Wiesenthal believes that it was Bicchierai who sheltered Rauff after this escape and arranged for him to stay secretly "in the convents of the Holy See," as Rauff himself testified years later. Rauff hid in Rome for more than a year, then used false passports to travel to Syria and South America. Wiesenthal has repeatedly asked Pope John Paul II to open an investigation into Bicchierai's role in this affair. So far these requests have been ignored.*22

[*What Allen Dulles knew, if anything, of the circumstances of Rauff's escape from Europe is open to question. He fails to comment on the matter at all in his own history of the 1945 negotiations, 'The Secret Surrender'. State Department files, however, contain an intriguing top secret memorandum dated September 17, 1947, that casts some new light on the department's attitude concerning war criminals who participated in the Sunrise negotiations.

Sometime shortly before that date, the U.S. political adviser's office in Germany cabled Washington requesting information on how to handle war criminals who claimed that they had been involved with Sunrise. The text of this message is missing from State's archives, but the answer to the query has been located. It reads: ''Officials concerned with Operation Sunrise report no, repeat no, promises furnished.'' State's longtime head of security Jack Neal wired back to Germany, ''However, these officials are of the opinion ..... that allies owe some moral obligation in return for aid performed and risks taken Therefore, definite consideration should be given to those favorable aspects when weighing any war crimes with which they are charged."

Each of the SS officers involved in Operation Sunrise managed to escape serious punishment after the war despite the fact that each was a major war criminal. A U.S. military tribunal tried Walter Schellenberg, who had helped trap and exterminate the Jews of France. He was convicted but freed shortly thereafter under a clemency from the U.S. high commissioner for Germany, John McCloy. Schellenberg became an adviser to the British intelligence service. The gas truck commander Rauff, as noted in the text, escaped under mysterious circumstances to South America. SS Obersturmbannfuhrer Eugen Dollman, who had been instrumental in the killing programs directed at Italian Jews, was in American hands in 1947 yet managed to escape to Switzerland in the early 1950s.

Himmler's personal adjutant SS Gruppenfuhrer Karl Wolff was sentenced to "time served" in a denazification proceeding in 1949, then released altogether without any objection from the U.S. occupation authorities. Fifteen years later a West German court tried Wolff a second time. Then, he was convicted of administering the murder of 300,000 persons, most of them Jews, and of overseeing SS participation in slave labor programs at I.G. Farben and other major German companies.

Wolff served seven years of a life sentence, then was released again.]

page 94

Walter Rauff was still hiding in the "convents of the Holy See," as he put it, when the CIA provided his sponsor Monsignor Bicchierai with enough money to buy Jeeps, bedding and guns for an underground squadron of some 300 anti-Communist Italian youths for use during the 1948 elections.23 The job of this hand was beatings of left-wing candidates and activists, breaking up political meetings, and intimidating voters. Bicchierai's troops became the forerunners of a number of other similar paramilitary gangs funded by the CIA in Germany, Greece, Turkey, and several other countries over the next decade.

The CIA's strategy in Italy, including Monsignor Bicchierai's strong-arm squad, was a great success. The Italian Communists lost by a comfortable margin, and the American intelligence services emerged with the Catholic Church as a powerful new ally. Perhaps most important of all, the strategy of using covert operations to achieve political goals in peacetime was firmly implanted in the minds of Washington's foreign policy elite as a powerful weapon in an increasingly dangerous cold war.

The utility of the new covert operations apparatus seemed clear at the time: It permitted the White House to circumvent the cumbersome bureaucracy of Congress and the Department of State in the field of foreign affairs; it extended the reach of the United States with what appeared to be relatively little risk; and it permitted the president secretly to carry out actions that would discredit the United States if they were undertaken openly. Covert action was also relatively cheap, at least compared with the costs involved in maintaining a permanent military presence throughout the world.

George Kennan, in particular, "was deeply impressed by the results achieved in Italy," according to Sig Mickelson, the longtime chief of Radio Free Europe. "And [Kennan] foresaw similar crises arising in the future." Kennan was "directly concerned with the refugee problem and worried about the weakness of the nation's intelligence apparatus," Mickelson writes. "[He] advocated the creation of a covert action capability designed to complement covert psychological operations somewhere in the government structure .......

page 95

His intention was to create a mechanism for direct intervention in the electoral processes of foreign governments," the former Radio Free Europe president continues. "It would be under the control of the Department of State, specifically [Kennan's own] policy planning staff, but it would not be formally associated with the department. State was still skittish about dealing openly with foreign governments on the one hand [while] carrying out covert destabilizing efforts on the other."24

Greece in 1947 and Italy in 1948 also taught the CIA that it could employ former Nazi collaborators on a large scale in clandestine operations and get away with it. U.S. national security planners appear to have concluded that extreme-right-wing groups that had once collaborated with the Nazis should be included in U.S.-sponsored anti-Communist coalitions, for the participation of such groups became a regular feature of U.S. covert operations in Europe in the wake of the Greek and Italian events.

A case may be made for the idea that doing so was simply real politik. Former collaborators were, after all, a substantial organized force, so why not make use of them? At the time the benefits of using former Nazi collaborators appeared to outweigh any draw backs. The American media - and the American people, for the most part - warmly welcomed the victories of European center parties over their Communist rivals. There were few public questions concerning exactly how these successes had been brought about. The long-range implications for this policy were, as shall be seen, more problematic.

From page 98

Describing American government/CIA policy toward USSR-

"But actual warfare is 'not' what he had in mind. The idea, rather, was to encourage every split and crisis inside the USSR and the Soviet camp that could lead to the collapse of the USSR from within, while at the same time maintaining an official stance of nonintervention in internal Soviet affairs".

[above policy presently being executed toward the USA ... JP ]