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Blind Spot

The Secret History of American Counterterrorism

by Timothy Naftali

Hardcover, 399 pages, Perseus Books Group, List Price: $26 |


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The Secret History of American Counterterrorism
Timothy Naftali

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Book Summary

Presents a history of counterterrorism efforts on the part of the federal government, from its beginnings following the aftermath of World War II through the miscalculations, oversights, and mistakes of the 1990s which culiminated in September 11th.

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Excerpt: Blind Spot

Chapter One The Plot to Kill General Eisenhower

"WHAT IS THE CAPITAL OF ILLINOIS, SIR?" A U.S. army jeep flying a gold-braided pennant with four stars had just driven up to the roadblock, and the young American sentry had the unenviable task of quizzing the man in the passenger seat wearing those stars. It was mid-December 1944, and as part of a major counteroffensive on the Western front, the Nazis had sent saboteurs across the lines dressed in U.S. Army uniforms. To separate friend from foe, the U.S. military in northwestern France had tightened security and started this game of trivial pursuit.

"Springfield," replied the general, who at that moment was probably not wearing the familiar grin captured frequently by Life magazine.

During the chaos of what became known as the Battle of the Bulge, General Omar Bradley would be asked questions ranging from detailed football tactics to the name of silver-screen star Betty Grable's latest boyfriend. These unusual precautions seemed necessary at the time because in its desperation, the Nazi leadership had chosen to violate the laws of war.

Allied concerns about these new Nazi tactics reached an even higher level a few days later. On December 19, a German Air Force officer, wearing a U.S. Army uniform, had given himself up near Lige, in eastern Belgium. Stating that he was ashamed of his country's conduct in the war, he offered full cooperation. Along with seven other men who had been captured wearing the American blue serge, the officer presented a frightening picture of German ambitions to his interrogators at U.S. First Army headquarters. He told them that SS-Sturmbannfhrer Otto Skorzeny, the notorious Nazi special operations specialist, had personally led a contingent of between fifty-four and sixty men across the lines on December 13. The German officer warned that the Skorzeny team was planning to assassinate General Dwight Eisenhower, the supreme allied commander, at his headquarters outside Paris. The deed would take place that very day or on December 21. This information was passed up the chain of command and among Allied counterespionage specialists. "Their mission is to gun for Eisenhower," reported the counterespionage representative of the Office of Strategic Services (OSS) at the U.S. First Army to OSS headquarters in Paris.

If there was any SS officer capable of this audacious scheme it was the blue-eyed, six-foot-five-inch Otto Skorzeny, disfigured by a menacing scar from his left ear to his chin. His daring airborne rescue of Italian dictator Benito Mussolini from Allied detention in September 1943 had received international press attention. Since then, through intercepted messages, Allied counterintelligence had been able to monitor the progress of the sabotage organization he had created for Heinrich Himmler. In liberated France, a joint Anglo-American team led by Lord Victor Rothschild, of the famous banking family, had already started turning up sabotage dumps left by Nazi intelligence for use against the Allied occupiers.

Skorzeny represented a new kind of threat to the Allied war effort. As the German army continued to lose conventional battles on both fronts, evidence was accumulating that rather than surrender, the Nazis planned to launch a guerrilla war, led by Skorzeny and the other SS chiefs. The plot to kill Eisenhower turned out to be a false alarm. Nevertheless, by early 1945, a consensus developed among Allied intelligence officers that the liberation of Germany would unleash an unprecedented terrorist campaign. Led by Skorzeny, Nazi collaborators in liberated Europe were expected to "cause political upheaval by assassinations, terrorism, and acts of violence at political meetings, in such a manner as to make the blame appear to rest with Left-wing elements and Communists." The goal of this upheaval would be to inspire the liberated governments to choose authoritarian regimes that promised order. Within Germany, it was predicted, "these operations ... will be directed toward the perpetuation of the Nazi terror with a view to dominating the German population and preventing collaboration with the Allies. The knowledge that there is still a Nazi headquarters and the possibility of a Nazi revival would keep alive Nazi doctrines and encourage the formation of autonomous underground movements throughout Germany."

The origins of modern U.S. counterterrorism are to be found in the mobilization of a group of gifted amateurs to meet this threat in the last months of the war. Located in the counterespionage branch of the Office of Strategic Services-the so-called X-2 branch-these six hundred men and women participated in an international effort to track and neutralize an enemy terrorist organization. Sixty years before Osama bin Laden, Otto Skorzeny focused the collective mind of U.S. intelligence and inspired the actions of a nimble, centralized secret organization. Many of the techniques that would become useful in that later struggle were first learned in 1944-45.

The Channels Theory

The story of X-2 begins with an unusual offer from the British in 1942 to teach Americans their theory of counterespionage, the art and science of defeating foreign agents. The scale of the British empire, which spanned all five continents, was too great to permit man-to-man coverage of potential spies, saboteurs, and guerrillas. Instead, the British established a system of channels through which those who wished to move or communicate within the empire had to pass. Each time an enemy moves, is paid, or communicates to a headquarters, an opening is created in that agent's security system. The British sought to exploit that vulnerability by controlling the channels through which the agent could travel, receive money, or communicate. The technology of the 1930s and 1940s facilitated this mission. Although Charles Lindbergh had first flown a nonstop transatlantic flight in 1927, commercial nonstop air travel had not yet begun. Planes flying from New York to London stopped to refuel either at Gander, Newfoundland and Ireland, or in Bermuda and Lisbon. At each stop the plane's hold would be checked secretly by British intelligence.

By the late 1930s the British had become expert at rapidly steaming open letters and breaking and replacing the official seals on foreign governments' diplomatic bags, which carried official correspondence. At the Hamilton Princess hotel in Bermuda, for example, a censorship staff of over two hundred opened transiting mail using tools as rudimentary as a tea kettle. The British used secret agents and private agreements to obtain passenger manifests on airplanes and cruise ships. Relationships were established with concierges at hotels in major cities to determine who was staying where and when. British intelligence also controlled transatlantic telegraph cables. The system was by no means foolproof, but it was an eye-opener for American investigators who had never conceived of an imperial system to control the movement of individuals into areas of special U.S. interest and, of course, into the American homeland itself.

A few months after Hitler invaded Western Europe, the British found that they could control a new channel used by spies: Intercepted radio messages quickly displaced opened letters as the principal source of intelligence on the movements and activities of enemy agents. In December 1940, British code breakers began attacking the hand cipher of the Abwehr, the German military intelligence service. Abwehr agents used this cipher to disguise radio messages sent from the field. A year later, the British cracked the Abwehr's machine cipher, which was used to protect communications between headquarters and their stations in neutral and occupied countries. The deciphered messages revealed the movement of German agents, and though the identities of these agents were usually hidden behind a code name, at least the intercepts revealed how many agents the Allies had to look for. With this powerful resource, British investigators acquired a new sense of self-confidence. It created the possibility not simply of capturing almost every enemy agent and saboteur but of making double agents out of many of them. In the words of Norman Holmes Pearson, who would lead the U.S. counterespionage effort in Western Europe, the British "were the ecologists of double agency: everything was interrelated, everything must be kept in balance." By 1942, the British would be running double agents in Great Britain and Spain and using them to pass disinformation to the Nazi regime.

The British decision to share this powerful and highly sensitive source of information forced a change in the structure of U.S. intelligence. A year after Pearl Harbor, the United States still lacked a counterespionage service that tracked spies in Europe and Asia. The Federal Bureau of Investigation (FBI) managed counterespionage in the United States and since 1940 had been responsible for all intelligence collection and man-hunting in Latin America. On the eve of joint military operations in North Africa, what would become known as the Torch invasion, the British approached the United States with a recommendation that a foreign counterespionage service be established. London was eager to share its signals intelligence with an American group, and they had some ideas on how that sharing might occur.

The British suggested that the most experienced FBI counterespionage officer be named to head this new organization. Percy "Sam" Foxworth was special agent in charge of the bureau's New York office. For three years he had been running some double agent operations against the Germans and the Japanese. The British had worked closely with him on a few of these cases and thought highly of his skills. The British proposal was that Foxworth be transferred to the newly created OSS, a U.S. overseas intelligence service that reported to the Joint Chiefs of Staff and was headed by the legendary World War I hero Colonel (later General) William J. Donovan. The British wanted this unit to be self-contained, with its own communications system. Any American officers cleared for using British signals intelligence would be vetted by the British and would be trained by them in London.

Had J. Edgar Hoover accepted this offer, the FBI would have effectively controlled counterespionage throughout the world. However, the FBI chief did not trust the British. The bureau had evidence that the British had been breaking into the Italian and Spanish embassies in Washington. And Hoover had an additional reason to be suspicious of the British offer: Foxworth, while a gifted and professional intelligence officer, was in Hoover's eyes a bit of a disciplinary problem. Pudgy and a poor shot, Foxworth did not match the ideal picture of the model G-man, and despite a series of cautionary letters accumulating in his personnel file, Foxworth seemed unwilling to lose his excess weight and appear regularly at the FBI shooting range. Moreover, Hoover mistrusted Donovan and did not want to lose his agent to a rival.

When Hoover strongly discouraged Foxworth from leaving the bureau, U.S. foreign counterespionage and British liaison in such matters became the unchallenged responsibility of William J. Donovan. In 1943, the OSS created X-2, a counterespionage service that would use British signals intelligence to capture agents in the field, turn some of them, and feed deception to the Germans. The Americans came to London to study this new craft, and their British tutors found them very adept.

Sam Foxworth died in a plane crash in South America in 1943, and his name was forgotten. But the legacy of Hoover's decision not to allow him to run U.S. foreign counterespionage in World War II would live on for the next sixty years. Had an FBI agent led Donovan's group, the active and occasionally debilitating rivalry between the OSS's and later the Central Intelligence Agency's counterespionage officers and the FBI might have been averted or at least would have been considerably muted. Instead, two separate services were created, and as each later undertook the counterterrorism mission, this divide would continue.

The War Room

In the months before the Battle of the Bulge, the X-2 branch of the OSS had organized a network of double agents in liberated France. In Cherbourg, the first port captured by the Allies, X-2 turned a German "stay-behind" agent named Juan Frutos. A pathetic Spanish national who had been bullied into working for the Nazis, Frutos became the first double agent ever run by the United States overseas. As agent Dragoman, he also became the first American deception channel in Europe to the German high command. In the south of France, X-2 also built a network of agents to support deception operation Jessica, designed to distract the Germans from the long supply line from the French Riviera to Switzerland. In Italy, X-2 ran other double agents, penetrating the new Italian intelligence services, launching operations that would prevail until the last of these men retired in the 1970s. Finally, because of concern that German renegades could use stolen art to fund their activities after the war, X-2 also set up the Art Looting Investigation Unit (ORION Project). ORION enlisted American art historians to track down the masterpieces that the Nazi leadership-primarily Hitler and Luftwaffe chief Hermann Gring-had looted for their own collections.

Uncertainty about the postwar plans of German intelligence drove the creation of even tighter cooperation between X-2 and its Allied counterparts. The idea of a central clearinghouse to make Allied counterintelligence information more readily available to field officers came from Dick Goldsmith White, a British intelligence officer who was the number-two counterespionage official in General Eisenhower's headquarters. "The War Room," he later recalled, "were the masters of detail." Although White dismissed concerns in December 1944 that the Nazis were planning to kill the supreme allied commander, he agreed that the Nazis would not surrender without launching a terrorist campaign.

Called the SHAEF G-2 CI War Room, this central clearinghouse opened on March 1, 1945. Its director was British and its deputy came from X-2. The French secret service was also invited to join. The goal of the War Room was to use signals intelligence, captured documents, and prisoner of war interrogation reports to destroy the Nazi intelligence system and prevent an outbreak of terrorism. To assist the work of Allied counterintelligence officers in the field, the War Room produced tactical information: target lists, analyses, and questions for interrogators. The War Room also issued tactical and strategic appreciations of the status and objectives of the German intelligence services (GIS). The Anglo-American leadership studied each subgroup within the Nazi services with care, as if each were a separate organism with unique characteristics. One of the War Room sections wrote assessments of cases and briefed interrogators who were going into the field, while another stepped back from ongoing operations with the task of "studying the GIS as a whole and appreciating its overall organization and development." The heart of the War Room was a card registry. In 1945, the Allies used computers to crack German ciphers, but not yet to organize intelligence data. The registry therefore consisted of shelves of three-by-five-inch index cards that pointed to relevant information in subject and personal files. Ultimately, the War Room registry contained information on one hundred thousand individuals in two thousand personal files and four hundred subject files.

By the spring of 1945, Allied counterespionage's conclusion that a Nazi terrorist campaign would follow the collapse of the German army was impressing policymakers. In London, a decision was made at "a very high level" to use British commandos to assassinate leading members of the SS intelligence service. The British and American directors of the War Room argued against assassinating these potential terrorists, sensing that it was better to capture these individuals alive so that they could be turned or at least used as sources of intelligence. If the Churchill government insisted, then the War Room at least wanted to have a veto "before any action is taken against any of these individuals." The assassination plan was ultimately dropped.