3. Donovan and the CIA: A History of the Establishment of the Central Intelligence Agency by

598 Pages·2009·36.02 MB·English

DONOVAN
;~~CI
A HISTORY OF. THE ESTABLISHMENT
OF THE CENTRAL INTELLIGENCE AGENCY
/
,/
.,. /,
BY
THOMAS F. TROY
...... ... ... ...
D'ONOVAN AND THEClA
A HISTORY OF THE ESTABLISHMENT
OF THE
CENTRAL INTELLIGENCE AGENCY
THOMAS F. TROY
CENTRAL INTELLIGENCE AGENCY
CENTER FOR THE STUDY OF INTELLIGENCE
1981
This volume, though the product of official re
search, is the work of the author alone. It must be
construed as personal only and not as constituting
the official position of the Director of Central In
telligence or of the Central Intelligence Agency.

Table of Contents
Page
Preface .............................................................................................................. . v
Preface to First Edition ...................................................................................... VII
Acknowledgments .............................................................................................. . Vlll
Acknowledgments in First Edition .................................................................... IX
Abbreviations... ....... ..... ....... ............... ....... ........ ....... ....... ...... ....... ......... .............. Xl
List of Figures .................................................................................................... Xlll
List of Appendices .............................................................................................. XIV
List of Illustrations .......................................................................................... . XV
Part One: Prewar-The COl Story
I. A Question of Paternity
II. The Prewar U.S. Intelligence Services .............................................................. 3
1. A "National Intelligence Service" ................................................................ 3
2. The Intelligence Services, 1929-36 ...................................................... 5
3. Spying and Counterintelligence, 1936-39 .................................................... 11
4. G-2 and ONIon the Eve of War ........... .................................................... 14
5. Towards Clandestine Foreign Intelligence ................................................ 16
III. Col. William J. ("Wild Bill") Donovan .............................................................. 23
1. A Look Backwards, 1883-1929 ......................................... ,.......................... 23
2. Law and National Politics, 1929-37 ............................................................ 26
3. Foreign Trips and Foreign Affairs, 1935-39 .............................................. 27
4. Roosevelt's Emissary, July 1940 ................................................................. 29
5. Donovan in London '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' 32
6. Donovan and Stephenson .............................................................................. 34
7. Roosevelt's Emissary a Second Time .................................... ..................... 36
IV. Establishment of the Coordinator of Information (COl) .................................. 43
1. The First Chance: A Joint Intelligence Committee .................................... 43
2. The Second Chance: Interagency Dissemination of Information .............. 44
3. The Third Chance: A Coordinator for a "Twilight Zone" . ...................... 46
4. The IIC: Opposition to a Coordinator ""'"'''''''''''''''''''''''''''''' 49
5. Donovan's Adoption of an Intelligence Role .......................................... 52
6. "A Movement ... Fostered by Col. Donovan" ............... 55
7. A New Intelligence Chief ........................................................................... 59
8. Issuance of the COl Order of July 11, 1941 .............................................. 65
V. The First Six Months ........................................................................................ 73
1. Donovan's Task """""""'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' 73
2. Space, Money, and People .......................................................................... 74
3. British Advice and Assistance .............. , ................ """."."".""""".""""." 80
4. Empire~Building .................................................................... .............. 84
table of contents
Page
5. Jurisdictional Conflicts ..... . 94
6. Expansion and Consolidation 104
7. Serving the President .............. . 111
Part Two: W artime-The OSS Story
VI. From COl to OSS .............. . 117
I. A New Problem 117
2. South America Again . ... ........... . 118
3. The Budget Bureau Proposal 120
4. At the White House. 125
5. The JCS Angle .............. . 129
6. The Donovan-JCS Counterproposal. 133
7. Back at the White House 137
8. A Solution in Sight. 145
9. Wrap-Up ...... . 148
VII. Summer Skirmishes 155
I. The Military Take Over 155
2. The JPWC Chairman. 159
3. The OSS Director .... 162
4. Issues: Control and Guerrillas 165
5. More Issues: Militarization and Functions 168
6. The TORCH Tinderbox. 172
7. The End of Skirmishing .. 174
VIII. Mid-Winter Battles 179
I. Battle No. I: Strong vs. Donovan 179
2. General McNarney's Compromise. 184
3. JCS Endorsement of OSS 187
4. Battle No.2: Davis vs. Donovan. 191
5. Walking Papers ........... . 197
6. The JCS to the Rescue .... 199
7. P.S. I-Another Revision 204
8. P.S. 2-A Treaty with OWl 207
IX. Donovan's Plan ............................... . 209
I. Wartime Intelligence-Topsy ... . 209
2. A "Popgun" and Other Plans 213
3. Genesis of Donovan's Plan. 217
4. Lobbying at the White House 221
5. Donovan's Plan-Fat in the Fire 222
X. Up the JCS Ladder-Almost 231
I. Two New Plans 231
2. Stalemate in the JIS . 235
3. Debate in the JIC . 238
4. The JIC Compromise 248
5. Up to the JSSC 252
6. But Not to the JCS-Sabotage ................ . 255
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table of contents
Page
XI. OSS on the Offensive and Defensive.................................................................. 261
1. Another Attempt ....................................... .............................................. 261
2. The New President ........................................................................................ 265
3. Rebuffed ................ ....................................................................................... 268
4. Now What? ............ ....................................................................................... 271
5. Assaulted Again .................................... .................................................. 277
XII. The Abolition of OSS ...................... ............................................. 287
I. A Last-Ditch Effort ............................. .............................................. 287
2. Revival of JCS-1181 / 1 ......... ...... .......... ..... .... ......... ....... ....... ........ ... 292
ass ..................... ............................................
3. Budget Bureau Moves on 295
4. A Pentagon Plan. ....... ...... ....... ......... ... ....... ...... ....... ........ ...... ........ ...... .......... 297
5. A Rescue Attempt .................... .................................... ....................... 300
6. Finis ........ ............................ ..................................... .............................. 301
Part Three: Postwar-The CIA Story
XIII. A Question of Leadership ................................................................................ 305
I. State's Guide: The Bureau of the Budget . .... ....... ........ ....... ....... ..... ....... .... 305
2. State Takes the Lead .................................................................................... 309
3. Pressure from the Pentagon .................... ..................................................... 313
4. The Military Take the Lead .. ...... ...... ........ ...... ..... .. ..... ...... ........ ....... ...... 319
XIV. Truman's NIA and CIG . .. ....... ....... ....... ...... ...... ....... ....... ....... ...... ....... ... 325
I. State Gets a Plan ..... ....... ...... ..... ....... ........ ..... ..... ... ........ ...... ... 325
2. Deadlock, Revision, and Deadlock .... ..... ........ ........ ....... .... .. ...... ...... ........... 329
3. The President Takes Over ... ......... ...... ..... ... ...... ..... ......... ....... ...... ....... ...... .... 336
4. A New Peacetime Intelligence System ........................................................ 340
XV. Progress and Problems .............. ....................................................................... 351
I. The Souers Administration .. ....... ..... ......... ...... ....... ....... ...... ....... ........ ...... .... 351
2. Vandenberg's Transformation of CIG .......................................................... 359
3. Legislative Routes .......................................................................................... 365
4. "The President's Bill" ....... .... ...... ........ .... .. ....... .... ................ ........ ..... ....... ..... 371
XVI. The Establishment of CIA .................................................................................. 377
I. Easy Going in the Senate ... ....... ............. ......... ...... ....... ...... ....... ....... ...... ..... 377
2. Worries and Fears in House Hearings ........................................................ 386
3. Out of Committee at Last ............................................................................ 393
4. Debate, Passage, Signature . ..... ........ ........ ..... ....... ....... ...... ........ ....... ...... ...... 394
5. Paternity Reconsidered ............. ......... ..... ....... ........ ....... ...... ....... ....... ....... ...... 402
XVII. Epilogue: Years Later ...................................................................................... . 411
Appendices .......................................................................................................... 417
Notes .................................................................................................................. . 479
Bibliography ...................................................................................................... . 555
Index .................................................................................................................... 567
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Preface
As conceived, this history was aimed at satisfying the need of employees of the Central
Intelligence Agency, especially new or young professional ones, for a comprehensive and
detailed account of the agency's origin. It was completed in 1975, classified SECRET, and
reproduced in sets of two volumes each.
The security classification has recently been reviewed, and the manuscript, shorn of no
more than six typewritten pages of material, is now declassified. Thus released for leisurely
reading outside the office, and printed in one volume, this history should better serve its
original purpose.
It has, of course, been re-edited. For reasons of accuracy and clarity, and because of
changes in judgment, I have added or deleted some words, phrases, and a sentence or two in
the text. I have been permitted by the family of the late James Grafton Rogers to add a score
of lines from his unpublished diary. I have not felt it necessary to revise or rewrite this history,
although I know it would read differently here and there if it had been written at the end,
rather than the beginning, of the last several years of accusations, revelations, investigations,
and reforms that have centered on the CIA and American intelligence generally.
The work has not otherwise been revised. There are, consequently, three matters which
particularly need updating here as a result of additional research or recent developments.
The first of these is the unexpected decision of President Hoover in 1929 not to appoint
the then Colonel Donovan as Attorney General in the new administration. The text says
(p. 26) that the reason had "something to do with Donovan as a Catholic." It is clear from
Hoover's own handwritten statements, which I have reviewed at the Hoover Library in Iowa,
that the explanation is complex, personal, and even contradictory rather than simple as the
text suggests and as has hitherto been proposed.
While Hoover and Donovan were reputedly long-standing personal friends, the new
President felt for a variety of reasons touching Donovan-his "immaturity of mind,"
administrative inexperience, pressure tactics involving religion, philosophical and policy
differences on prohibition, and political liabilities agitating powerful senators-that Donovan
could not be brought into the Cabinet either as Attorney General or as Secretary of War, an
alternative position often considered open to him.
At the same time, however, Hoover offered Donovan, as a substitute, the governor-gen
eralship of the Philippines, which was, wrote Hoover, "the greatest position at the disposal of
the President-greater than any Cabinet position"; but he felt he was doing so "at great per
sonal risk in case through immaturity he (Donovan) should fail." Clearly this was a decision
which needs greater study than can be given here.
A second subject requiring comment is the role of Sir William S. Stephenson as Britain's
intelligence chief in the United States in World War II. His story was first told in H.
Montgomery Hyde's The Quiet Canadian or, in its American edition, Room 3603. It has been
recently retold, more successfully but not more reliably, in A Man Called INTREPID by the
homonymously-named William Stevenson. The story, an impressive and fascinating one, has
never been told, however, on the basis of publicly available primary sources, and consequently
many claims or details remain undocumented. Two of these need mention here.
preface
The first is the remarkable quotation attributed by author Stevenson to Donovan (p. 5
of A Man Called INTREPID) detailing the time, place, and subject of conversation of the
first meeting of Donovan and INTREPID-1916, England, and German military and
psychological weaknesses. This quotation directly contradicts the assertion made by Donovan
himself in 1944 (p. 36, in/raj that he "did not know" INTREPID in July 1940 but "met him
only '.after [my] return" from London in August. How Donovan and INTREPID can be
reconciled on the latter's claim to a long-standing, pre-1940 acquaintanceship with Donovan
remains an open question.
Another controversial point is the equally, perhaps more, remarkable claim put forward
by author Stevenson that INTREPID regularly met with President Roosevelt in 1940-41 in
Washington not only clandestinely but also without the knowledge of any other American or
local British officials. Until evidence for this claim can be advanced it must be treated with
reservation. My own opinion is that whatever contact INTREPID had with Roosevelt prior
to Pearl Harbor went through either J. Edgar Hoover or FD R 's personal friend Vincent
Astor.
A final subject for comment is the "leak" in 1945 to reporter Walter Trohan of the
Chicago Tribune of both the Donovan and the JCS plans for a postwar, peacetime central
intelligence organization (pp. 255-60, in/ra.). As for the identity of the culprit, Donovan's
suspicion fell immediately upon J. Edgar Hoover, and his suspicion has become the
conventional wisdom on the subject. As the text indicates, however, I had developed doubts
about Hoover's sole, if any, guilt in the matter. The pattern of similar leaks later in the year
suggested that elements in G-2 might well have been involved. Even so, I was not ready for
the revelation made to me, first in correspondence, then in face-to-face meetings, by Trohan
himself, when I was finall~ able to get in touch with him.
\
Who "leaked" the do·cuments? Trohan says he was called by Steve Early, the
President's secretary, given the documents, and told that "FDR wanted the story out." How
this revelation can be squared with what I have written here about the Donovan-Roosevelt
relationship, how FDR's purpose, strategy, and tactics can be determined and assessed, also
requires more exploration than can be offered here. Suffice it to say that I think, and
Trohan agrees, that both history and fairness to Hoover require that Trohan's story at last
be put in the record. \
\
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Preface to First Edition
The coupling "Donovan and CIA" in the title of this work is intended to focus attention
on a felt need of people interested in the origins of the Central Intelligence Agency.
Such people have never felt too sure as to the precise connection-if any-between the
man and the organization. They have known of course that his Office of Strategic Services
preceded CIA in time and left it a legacy of personnel, experience, techniques, principles,
and traditions. They have known that late in 1944 Donovan sent to President Roosevelt a
plan for the establishment of a permanent, peacetime central intelligence organization.
They have also known, however, that the OSS was abolished by President Truman on
September 20, 1945, that some salvageable parts were sent to the State and War
departments, and that Donovan went back to New York to the practice of law. They have
also known that four months later Truman, using the remains of OSS, created the Central
Intelligence Group and then eighteen months later he and Congress replaced that by the
present CIA.
What, then, asks the inquiring reader, was the connection between Donovan and CIA?
Was Donovan merely a testator leaving property to a distant and unrelated heir? Was OSS
anything more than a valuable precedent and example? Had Truman actually created a new
building out of old bricks? Or is there, asks the more perceptive reader, an organic-a
substantial, lineal-connection between Donovan and OSS? [s there, in fact, a "missing
link" which makes CIA not only a successor but also a descendant-a blood relative-of
OSS?
The thesis of this volume is that there is such a "missing link" * and that CIA
historically and substantively embodies Donovan's creative conception of a central intel
ligence organization. What follows in these pages, then, is not a series of episodes in
intelligence history but a continuous narrative tracing the evolutionary development of CIA
as an integral element of the structure of the U.S. government.
* Those readers who cannot wait to discover that missing link may turn to p. 409 for a preliminary slaking of
their curiosity.
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