** war and social upheaval: World War II -- spying counter intelligence United States

World War II: Spying and Counter-intelligence--The United States

Figure 1.--.

The United States did not have a spy agency before World War II broke out While the Army and Navy had code breaking units. In fact, Secretary Stimpson was noted for an early remark he made at President Hoover's Secretary of State, "Gentlemen do not read other's mail." The story of how America developed a secret operations service is nothing short of shocking, Amazingly it began with the British who set up a covert operation to sway public opinion and disrupt Axis operatiins in the the United States. When the British asked for assistance from the Federal Bureau of Unvestigation, Bureau Director J. Edgar Hoover told them that the President would need to approve this. President Roosevelt did not hesitate. This was the beginnng of Anglo-American intelligence cooperation. One action was to advise the British Government that President Prrocevelt was sending over a personal mission in the person of William Donnovan, a long time acquauntence, although a committed Republican. The British gave him Red Carpet treatmentment and showed him things even Ambassador Kennedy and few Brits did not know about. He was shown Hitler's invasion orders (F�her Directive 16). Donovan knew instantly that the British had broken German codes, although he was not told of Ultra at the time. Donovan returned a firm proponent of aiding Britain and with an interest in secret operations. The British began training Americans in secret operations in Canada. Rossevelt asked Donovan to head the "office of information". This became the beginning of the Office of Strategic Services (OSS). American inteligence operations were developed by Donovan and the OSS. American operatives in Vichy North Africa collected a great deal of useful information in preparation for the Torch landings. American operatives also made contact with Admiral Canaris in both Turkey and Spain. Security operations in the United States and the Western Hempshere were conducted by the Federal Bureau of Investigations (FBI). The OSS after the War was by order of President Truman converted into the CIA.


The history of Anerican intelligemnce goes back to George Washington and the Revolutionary War. American spys played an importanr role in the Revolutionary War. The first American spy was apparently Gerneral Howe's wife in Boston. General Washington had awell-developed spy network, utilizing patriots in British-occupied areas. During the Civil War the Federal Government used the Pinkerton Dectetive Agency. The first formal American intelligence organizations were not created until well after the Civil War. The Navy established the Office of Naval Intelligence (1880s). The Army created the Military Intelligence Division. Officers representing these agencies were posted to embassies in several major European cities. They mostly pursued the open-source collection of military intelligence. With the outbreak of the Spanish American War, American military attches conducted more agressive efforts to obtain information, even espionage. They set up informant networks which might be called spy rings. They also conducted reconnaissance operations to acquire information on Spanish military intentions and capabilities. The major effort was dorected ans learning avbout the location of Spanish naval units. One U.S. military officer managed to recruit informants in the Western Union Telegraph office in Havana. This gave him access to communications between military headquaters in Madrid and military commanders in Cuba. The U.S. Secret Service was at the time responsible for domestic counterintelligence. They suceeded in breaking up a Spanish spy ring assigned to penetrate the U.S. Army. They were based in Montreal, Canada. The Secret Service broke up the spy ring at a very early stage.

World War I

European powers in the early 20th century engaged in an expensive arms race and intelligence agencies competed with earch other. This was the environment in which the celebrated Drefus Affait occurred in France. America after the Spanish American War cut back milutary expenditures and also foreign intelligence gathering. Thus the United States when World War I broke out had almost no intelligence on foreign mikitaries or the ability to gather it. America almost went to War with Germany after a U-boat sanl the Lusitania which was carrying many Americans. The State Deopartment did begin to collect some information on the Central Powers (1916). German U-boats did bring America into the War (April 1917). After war was deckared, increased budgets allow the Army and Navy to allow inteligence units to staff reasonable oprtations. There was not time, however, to launch significant operations before the War ended (November 1918). We know of no American espionage operations launched in Germany or the other Central Powers. The most notable step was the creation of a permanent communications intelligence agency in the Army. This was Y.O. Yardley's Black Chamber. This was the launch of what would become today's National Security Agency. Other than Yardkey's Black Chamber, the major American effort was directed at Germann espionage and sabatoge efforts in America. The Germans attempted to recruit recent German immigrants. The Secret Service, the New York Police Department (because of the importabnce of the port), and military counterintelligence were all active in this area. The German operarions began before American declared war. They were active in several areas, including psychological warfare, political and economic operations, and numeroud sabotage operations. Their primary target were British-owned companies and factories supplying munitions and other war supplies to the Allies (especially Britain and Russia). The Justice Department�s small Bureau of Investigation (the future FBI) launched a counterintelligence operation (1916). Congress passed the first Federal espionage law (1917).

Lack of an Intelligence Agency

The United States did not have a civilian intelligence agency before World War II broke out. The Federal Bureau of Investigation (FBI) had an active domestic counter-intelligence operation which was also active in Latin Anerica, but it did not have any inteligence gathering operations in Europe and the Pacific. The Army and Navy did have very important code breaking units. Secretary of War Stimpson was noted for an earlier remark he made at President Hoover's Secretary of State, "Gentlemen do not read other gentlemen's mail." And he closed down the famed American Black Chamber code breaking operation. By the time President Roosevelt appointed him Secretary of War, he had changed his mind. The American code breakers had broken the Japanese diplomatic code--Purple (1940). And Secretary Simpson was thus reading Japanese diplomatic traffic. While there were Army and Navy code breaking operations, there was no American intelligence agency.

British Security Coordination--BSC (June 1940)

The story of how America developed a secret operations service is nothing short of shocking. Amazingly it began with the British who set up a covert operation to sway American public opinion and disrupt Axis operations in the the United States. It was arguably the most succeessful covert operation of the War. British Intelligence (MI6) ran the operation from their Passport Control Office in New York City. This innocuous sounding office was a cover the British used for the operations of the Secret Intelligence Service (MI6) around the world. This office was greatly expanded when a Canadian, William Stephenson, was personally placed in charge (June 1940). Stephenson had been a pilot in World War I and after being captured by the Germans escaped from a POW camp. He was a talented boxer and struck up a frienship with Gene Tunney during the inter-War era. He dabeled in radio and telcommuniction, designing radio set just as radio was making it big. He jointly developed a way of trbsmitting photogrohs. He amassed a personal fortune. He also got involved in steel and made another fortune. As a business man he traveled in Germany and reported back to the SIS (MI6). He proivided Churchill informrion used in th Parlimentry debates on Appeasement. The relationship is how he got the New York assignment. He named his group British Security Coordination (BSC), only because he needed an official and inocuous name when he registered with the FBI. His orders were to carry out "all that was not being done and could not be done by overt means to ensure sufficient aid for Britain and eventually bring America into the war." Tunney introduced Stephenson to Federal Bureau of Investigation, Bureau Director J. Edgar Hoover. He told Hoover that he wanted to work with the FBI. Hoover replied that the President would need to approve this. President Roosevelt did not hesitate. This eventually led to full scale Anglo-American intelligence cooperation, although Stephenson did not brief American officials on much of what he was doing. although President Roosevelt began receiving Ultra information through the FBI. The FBI for the most part conveniently ignored BSC operations, but was involved in other activities. The complete story on the extent of their cooperation has never been told, until Stephenson published his book--A Man Called Intrepid in 1976. Stephenson found larger accomodations in Rockefeller Center. The BSC operations were widespread, they planted pro-British stories in the press. They circulated false stories about German activities, especially Fifth Collumn activities. President Roosevelt used some of their misinformation (which he apparently took for fact) in one of his most famous speeches. They disrupted Axis activities in Britain, spreading information about German businessmen and interceoting mail from the French Vichy embassy. Important journalists like Walter Lippman and Walter Winchell carried stories planted by BSC. While many of these stories contained various degrees of misinformation, we now know of course that they did not begin to describe the horrors actually being perpetrated by Hitler's minions. The BSC also worked against the election of isolationist Congressmen, spreading reports that contained a range of falsehoods. The BSC was active in the draft Windel Wilkie campaign. Much of its work was carried out through friendly newspapers such as the New York Herald Tribune and New York Post, but it assiduosly cultivated press contacts. They even acquired a radio station--WRUL. The BSC wasnot limited to propagand and political maschinations. One of Stephenson's assignments was to help the United Stateset up a secret intelligence service, something it did not have as the country moved slowly but inevitably toward war.

William Joseph "Wild Bill" Donovan

William Joseph Donovan became a Major General United States Army. He came from a working-class Irish family. The Irish fleeing famine had played a major role in building the Erie Canal from New York to Buffalo. That was not a background for someone that would become an ardent advocate of aising Britain in World War II. He was born in Buffalo, New York (January 1, 1883). He was a classmate of Franklin Roosevelt at Harvard Law School. He commanded the 69th Fighting Irish Division on the Western Front during World war I. After the War he became a sucessful Wall Street lawyer. He did a lot of work in Europe, especially Germany, He developed numerous contacts there. He was a very early opponent of NAZIism. FBI Hoover thought he was a NAZI symphetizer. Nothing could have been further from the truth. Donovan did a lot of work in Germany trying to defend Jewish clients and Jewish-owned corporations. [Waller] Before the Nuremberrg Laws were decreed (1935), German Jews had some access to the courts, especially before the NAZIs purged the judiciary. Donovan this had a much better understanding of what was going on in Germany than most Americans. Donovan came to see Hitler and the NAZIs as the 'incarnation of evil'. His aggressive command earned him the nickname "Wild Bill" and the Congressional Medal of Honor. After the War he became a highly successful layyer and an unsuccesful Republican candidate for Governor of New York. He accepted assignments from the Government to serve as an official American observer in Ethiopia and Spain, early victims of Fascism. President Roosevelt asked him to be Secretary of War, but Donovan turned him down because of differences over domestic issues. He was, however, in complete agreement about the War and the impact of Britain falling to the NAZIs.

Office of the Coordinator of Information (COI)

President Roosevelt selectedof William Donovan to undertake liaison missions to London. A major early effort was American and British codebreaking successes against the Germans and Japanese. The American military did not, however, want Donovan invomved in codebreaking. Roosevelt's appointmented Donovan to head the Office of the Coordinator of Information (COI), which would evolve into the Office of Strategic Services (OSS). The President liked having a spy service under his personl control which could provide data unfiltered by the Beayreacracy. Both he and Churfchi; like these adventures, what Elenor would call 'Boys' Own' games. One author writes, "Franklin Roosevelt's love of manipulation, bureaucratic competition, and secrecy, plus Donovan's administrative incompetence, greatly increased the difficulty of building an effective intelligence system. Indeed, if left to their own devices, FDR and Donovan would have failed miserably." [Persico]

Donovan Mission (July-August 1940)

Donovan knew BSC director Stephenson. They had met in England before America entered World War I. Donovan was working for the Rockefeller Foundation on a war relief project. The two kept in touch after the War. Donovan was also a close friend with Navy Secretary, Frank Knox, another Republica, He arranged for Knox and Secretary of War Stimpsin to meet Stephenson and discuss aid to Britain. At the time, many believed that Britain could not hold out. Ambasador Kennedy was submitted very gloomy assessments of Brtain's chances. The three proposed that Donovan go to Britain as see for himself what the military situation was. Obviously America would be making a grave mistake if the British were not prepared and had the ability to resist the NAZIs. When the idea was placed before the President, he imediately consented. Stephenson immediately advised the British Government that President Roosevelt was sending over a personal mission in the person of William Donovan, a long time acquaitence, although a committed Republican. Donovan set off by Pan Am clipper (July 14). Ambassador Kennedy was not inform and furious when he found out. The British gave him Red Carpet treatment. He was shown things even Ambassador Kennedy and few Brits did not know about. Churchill personlly showed him Hitler's invasion orders (F�her Directive 16) which had just been decoded. Donovan knew instantly that the British had broken German codes, although he was not told of Ultra at the time. Among the British officiald briefing Donovan was Colonel Stewart Menzies, the head of MI6. His position was a state secret that only a handfull of British officials knew. The two who could not have more different backgrounds, struck up a friendship. Donovan was flown back in a British flying boat to New York (August 4). He took the night train to Washington and the next morning was in Stimpson's office (August 5). He returned a firm proponent of aiding Britain and with an interest in secret operations. He then spent two days brirfing the President along with Knox and Stimpson on the presidental yacht Potomac. Along with assurances of British resolve and capability, he brought up the British request for destroyers.

Office of Strategic Services (OSS)

President Roosevelt appointed Donovan Coordinator of Information (1941). In fact his assignment was to create an American intelligence service. The BSC offered to assist him. They set up a secret camp in Canada to train Americans in espionage and subversion. Soon after Pearl Harbor, the President appointed Donovan to be the director of the Office of Strategic Services. This would be the agency that would conduct covert American operations during the War.

OSS Operations

OSS operations were extensive. Details were secret after World war II. As a result, there was a lot of misinformation or speculation about the OSS written after the War. Now almost all of the OSS papers have been declassified and available to historians. So more modern histories are able to deal with OSS operations more accurately. American operatives in Vichy North Africa collected a great deal of useful information in preparation for the Torch landings. American operatives also made contact with Admiral Canaris in both Turkey and Spain. Historians disagree on the extent of these contacts.


The U.S. Navy reached China first and signed an agreement with General Dai Li, Nationalist China's spy master. The Navy's interest was initially in obtaining meterological data. As weather moess easterly, data from China was very useful for the Pacific Fleet. Operatives from what was to become the OSS followed quickly behind the Navy. Donovan and Lusey met with Xiao Bo from the Chinese Embassy in Washington. They suggested broadening the initial deal with the U.S. Navy to make an Office of the Coordinator of Information (COI) deal. The COI was the forerunner of the OSS. One author writes, "COI could supply the Nationalists with radios and expertise in exchange for intelligence and permission to launch missions within China's borders. Donovan practically salivated over the idea-through the COI, he had a chanceto direct saboteurs and guerrillaunits: all over the world, even if he could not perform the heroics himself. Immediately after Pearl Harbor, he had even considered approaching Dai Li about working with his guerillas, but Stilwell has utterly rejectyed the scghme. Now with Mailes (U.S. Navby operative in China) and Dai olanning aguerrilla training program, Donovan could conceivably commandeer its graduates for OSS missions." [Kush] Chang Kai-Shek gave Dai Li permission to forge a program beyond the limited meterological relationship with the Navy relationship. Meetings were arranged in the U.S. with the American military attaches and Chinese military officers from the Military Statistics Bureau. [Wakeman, p. 287.]

North Africa: Torch Invasion (November 1942)

The Torch invasions in North Africa were the first Allied offensive in the European theater (November 1942). OSS operatives supplied the planners detailed information on the French military capabilities. The OSS was, however, unable to convince the Vicy officials to welcome the Allies. This probably was too mmuch to ask. The OSS ooeratives were not allowed to explain the extent and strength of the landings. There was a fear that it might be something like Deppe. There was also a concern about the German reaction in France.

Operation Greenup (February-April 1945)

Operation Greenup is a not very well known OSS operation carried out in Austria during the final months of the War. The OSS dropped agents into the Austrian Alps. Their assignment was to gather intelligence on German activities around Innsbruck. At the time, the United States was concerned that the Germnanswere building a NAZI redoubt in the mountains of Bavaria and Austria for Hitler's last stand. [O'Donnell] In fact the NAZis made little effort to do this and Hitler decided to remain in Berlin for the final battle. The IOSS agents were inserted by a modified B-24 Liberator (February 1945). The agents included two recently naturalized Jewish OSS enlisted men and an Austrian-born Wehrmacht officer who had deserted and then volunteered for this assignment. Franz Weber, the former German officer, was selected because of this personal knowledge and contacts in the area. He was born in Oberperfuss, near Innsbruck, and had relatives and acquaintances in the area. He was able to arrange transportation and safe houses. Hans Wynberg, a German-speaking Dutch-American, was the team's radio operator. The team was lead by Frederick Mayer, a German Jewish refugee. German Jewish refugees as long as they did not look Jewish were especially useful because as they grew uo in Germany theu could easily blend into the population. The group proved to effective. They obtaining detailed and reliable information about German industry, transportation nodes, and even specific locations of NAZI leaders. This was useful targeting informnation for the strategic bombing campaign which was rapidly running out of targets. Mayer assumed the identity of a German officer and later changed to inpersonating a French electrician working in a German military plant. He was finally arrested by the Gestapo. He was subjected to intense interrogation and beatings, but did not divulge the names and locations of his team nembers. He was saved by the fact that the ThirdReich as desintegrating. The US Army 103d Infantry Division was approaching Innsbruck. The Gestapo agents and local NAZI officials realizing the war was lost began to be concerned about their future. They used Mayer to meet advancing U.S. Army forces and coordinate the peaceful surrender of Innsbruck as an open city. [Schwab]


The relationship between the OSS and the Soviet NKVD is an interesting subject and one that historians are still working on to fully understand. Donovan tried to plant people in the NKVD and the Siviet Union. Oil experts sent to the Soviet Union under Lend Lease wetre briefed by the OSS. Donovan hoped to exchange liason units with the Soviet Union. He flew to Moscow and signed an agreement with the NKVD (winter 1943). He saw this as a way og getting agenys in the Soviet Union which of course was much more duifficult for the United states than it was for the Siviets to get agents into America. When he retuned to America, FBI Director Hoover went balistic and President Roosevelt cancelled the agreement. Even so, there was a fairly 'robust' exchange between the OSS and NKVD on inteligence and gadgets. After the Red Army advanced into Eastern Europe, the OSS agents were forced out. [Waller]

Intercept Efforts

Donovan after Marshal denied him access to Magic, set up his own intercept opertation--FBQ. Marshal had it shut down, apparently fearful that it might akert the Axis to Magic. Ironically, the British allowed him access to Ultra. The OSS was allowed to set up a small liason unit at Bletchley Park. And they were given access to the raw intake.

Soviet Codes

Finland after being attacked by the Soviets in the Winter War (1940-41) was a cobeligerant with the Germans on the Eastern Front (1941-44). The Finns managed to break some Soviet codes. They sold decoded documents and the codes to the OSS for $82,000. The Japanese bought them for $70,000. The Finns also provided them to the Germans, although I do not think the Germans had to pay. This caused a political flap in Washington. Donovan was ordered to return the codes and documents to the Soviet Embassy. [Waller] This ended work on Soviet codes, at least so far as OSS was concerned. The OSS for some very good reasons was cut out of Ultra by the U.S. Army. (The British code breakers at Bletchely Park interestingly were more willing to cooperate with the OSS.) The OSS was also ordered to cease its rather amerish efforys at ciode breaking. The reason fir this was Ultra and the possibility that OSS work would compromise Ultra. Once the Army Ultra operation was in full gear at Arlington Hall and facilities and staff permitted, the Army began to work on the 'Russian Problem'. As a result of Lend Lease, large numbers of Soviet officils were assined to work at defense plants building equipment for the Soviets. This resulted in a substantial increase in coded messages back to Miscow. Most of this traffic was legitimate commercial and diplmatic messages, but mixed into the legitimate traffic was messages from the very active Soviet espionage activity in the United States. This would eventually lead to the Venona Papers, some of whivh were not cracked until the 1970s.

Psychological profile of Hiler

Donovan had the OSS do a psycholgical porofile of Hitler. It prived to be a very perceptive assessment. The OSS predicted that he would never surrender. It included a detailed assessment of his sex life. Some of that was released for Allied propaganda. [Waller]

Manhattan Project

We do not know to what extent Donovan knew about the Manhattan Project. Manhattan Project Director General Grives did meet with him. Just what he told Donovan, we do not know. Groves did ask Donovan to use his agents to acquire information on German and Italian scientific research efforts. He must have provided some idea of what kind of scientific reserach he was inteted in. So Donovan must have realized that the United states had an atmoic bomb program. This led to the Azuzu Project and Mo Berg's efforts. The conclusion the OSS reached was that the Germans did not have a major atmomic program.

OSS Counter Intelligence

The British helped the OSS set up a counter-intelligence unit.

Communist Penetration

One subject that has not been fully explored yet is the level of Communist penetration of the OSS. Of course at the time the Soviet Union and the Uninted states were allies. And Communists were a major part of the Resistance movement in NAZI occupied Europe. One estimate suggests that there were as many as 40 Communist symptheizers working in the OSS. Donovan's record here is controversial. He did fire several OSS agents for Communist agents. There it is no evidence that they caused any disruption to OSS efforts. [Waller] Of course at the tiome there was a united effort to defeat the Axis.

FBI Operations

Security operations in the United States and the Western Hempshere were conducted by the Federal Bureau of Investigations (FBI). FBI Director Herbert Hoover disliked Donovan and the OSS intensely and worked to undercut the operations. He had only limited success with Roosevelt, but Hoover seems to have gotten to President Truman who did not care for Donovan personally.

John Franklin Thomas

President Roosevelt had his own small intelligence unit in the White House headed by John Franklin Thomas.

The Pentagon Pound

Army inteligence was run by Geotge W. Strong. The military, especially General Marshal, deeply distrusted Donovan and the OSS. He denied Donovan access to Magic. Strangely, the British allowed Donovan access to Ultra.


The United States used the SIGABA telegraph and SIGSALY telephone encryption devices. It and the telephone encyrption system (SIGSALY) made by Bell labs were in service after late-1941/mid '42 . This put the Germns "in the dark". There appedars to have been some disinformation broadcast on a broken code system. SIGABA was the only unbroken encryption device of World War II. It remained unbroken until it was taken out of service (1959). The patent wasn't released/declassified until the mid-1990s.

Central Intelligence Agency (CIA)

Donovan made a lor of enemies in Washington because of his blunt style and beaureacratic infightging. Donovan wanted to create a Centeal Intelifence Unit and head it. The enemies he made during the War would mean that he would not head the agency which was eventuslly created. The Washington Times published an expose on Donovan's plans and lsbeled it the American Gestapo. FBI Director Hoover who disliked Donovan personally and for beaureaucratic reasons had the FBI spread rumors about Donovan's personal life, making sure Truman's staff learned of it. (Donovan has extramarital affairs.) The Pond, a Pentagon unit, spying on both the Axis and the OSS reported a variety of allergeded misdeeds. While Roosevelt like Donovan despite his Republican affiliation, the chemistry was not there with Truman. SucessfulmWall Street lawyers do not generally get on with failed Missouri haberdashers. Immediately after the War, President Truman orderd the OSS shut down and its assestts divided between the military and State Department (September 20, 1945). Truman did not object to the CIA idea, he just did not want Donovan to head it. Trumamn created the CIA (1947). The OSS that was created was quite close to the Donovan vision. Donovan hoped to be appointed director after Republican Dwight Eisenhower was elected president (1952). Eisenhower appointed, however, appointed Allen Dulles to head the agency. Dulles had been OSS statiion chief in Bern Switzerland during the War. Donovan was appointed ambassadoir tio Thiland. [Waller]


Kush, Kinda. The Rice Paddy Navy: U.S. Sailors Undercovr in China (2012).

O'Donnell, Patrick K. They Dared Return: The Untold Story of Jewish Spies Behind the Lines in Nazi Germany (Da Capo), 256p.

Persico, Joseph E. Roosevelt's Secret War: FDR and World War II Espionage (Random House: New York, 2001). 564p.

Schwab, Geraold. OSS Agents in Hitler�s Heartland (Praeger Publishers: Westport, Connecticut, 1996), 208p.

Stevenson, William. A Man Called Intrepid: The Incredible WWII Narrative of the Hero Whose Spy Network and Secret Diplomacy Changed the Course of History (1976). The British after the War sought to keep both Ultra and the BSC a secret. The BSC in particular was a potentenially sensitive secret. Stevenson decided to publish his story after spy Kim Pilby defected to the Soviet Union. Philby had penetrated MI-5 and was aware of both Ultra and the BSC and had begun reporting on both to Moscow during the War. The British decided that the best way to prevent the Soviets from using his knowledge for propaganda and misinformation was to publish a truthful account.

Wakeman, Frederic E. Spymaster: Dai Li and the Chinese Secret Service

Waller, Douglas C. Willim Bill Donovan : The Spymaster Who Created the OSS .


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Created: 11:41 AM 8/21/2008
Last updated: 10:04 PM 8/9/2021