Return of the Leviathan: The Fascist Roots of the CIA and the True Origin of the Cold War

Cynthia Chung

In 1998, the Nazi War Crimes and Japanese Imperial Government Records Interagency Working Group (IWG), at the behest of Congress, launched what became the largest congressionally mandated, single-subject declassification effort in history. As a result, more than 8.5 million pages of records have been opened to the public under the Nazi War Crimes Disclosure Act (P.L. 105-246) and the Japanese Imperial Government Disclosure Act (P.L. 106-567). These records include operational files of the Office of Strategic Services (OSS), the CIA, the FBI and Army intelligence. IWG issued three reports to Congress between 1999 and 2007.

This information sheds important light and confirms one of the biggest-kept secrets of the Cold War – the CIA’s use of an extensive Nazi spy network to wage a secret campaign against the Soviet Union.

This campaign against the Soviet Union, which began while WWII was still raging, has been at the crux of Washington’s tolerance towards civil rights abuses and other criminal acts in the name of anti-communism, as seen with McCarthyism and COINTELPRO activities. With that fateful decision, the CIA was not only given free reign for the execution of anti-democratic interventions around the world, but anti-democratic interventions at home, which continues to this day.

With the shady origin of the Cold War coming to the fore, it begs the questions; ‘Who is running American foreign policy and intelligence today? Can such an opposition be justified? And in whose interest did the creation of the Cold War serve and continues to serve?’ This paper is part one of a three-part series which will address these questions.

Allen Dulles, the Double Agent who Created America’s Intelligence Empire

Allen Dulles was born on April 7^th, 1893 in Watertown, New York. He graduated from Princeton with a master’s degree in politics in 1916 and entered into diplomatic service the same year. Dulles was transferred to Bern, Switzerland along with the rest of the embassy personnel shortly before the US entered the First World War. From 1922 to 1926, he served five years as chief of the Near East division of the State Department.

In 1926, he earned a law degree from George Washington University Law School and took a job at Sullivan & Cromwell, the most powerful corporate law firm in the nation, where his older brother (five years his senior) John Foster Dulles was a partner. Interestingly, Allen did not pass the bar until 1928, two years after joining the law firm, however, that apparently did not prevent him in 1927 from spending six months in Geneva as “legal adviser” to the Naval Armament Conference.

In 1927 he became Director of the Council on Foreign Relations (whose membership of prominent businessmen and policy makers played a key role in shaping the emerging Cold War consensus), the first new director since the Council’s founding in 1921.

He became quick friends with fellow Princetonian Hamilton Fish Armstrong, the editor of the Council’s journal, Foreign Affairs. Together they authored two books: Can We Be Neutral? (1936) and Can America Stay Neutral? (1939). Allen served as secretary of the CFR from 1933-1944, and as its president from 1946-1950.

It should be noted that the Council on Foreign Relations is the American branch of the Royal Institute for International Affairs (aka: Chatham House) based in London, England. It should also be noted that Chatham House itself was created by the Round Table Movement as part of the Treaty of Versailles program in 1919.

By 1935, Allen Dulles made partner at Sullivan & Cromwell, the center of an intricate international network of banks, investment firms, and industrial conglomerates that helped rebuild Germany after WWI.

After Hitler took control in the 1930s, John Foster Dulles continued to represent German cartels like IG Farben, despite their integration into the Nazi’s growing war machine and aided them in securing access to key war materials.[1]

Although the Berlin office of Sullivan & Cromwell, (whose attorneys were forced to sign their correspondence with “Heil Hitler”) was shut down by 1935, the brothers continued to do business with the Nazi financial and industrial network; such as Allen Dulles joining the board of J. Henry Schroder Bank, the US subsidiary of the London bank that Time magazine in 1939 would call “an economic booster of the Rome-Berlin Axis.”[2]

The Dulles brothers’, especially Allen, worked very closely with Thomas McKittrick, an old Wall Street friend who was president of the Bank for International Settlements (BIS). Five of its directors would later be charged with war crimes, including Hermann Schmitz, one of the many Dulleses’ law clients involved with BIS. Schmitz was the CEO of IG Farben the chemical conglomerate that became notorious for its production of Zyklon B, the gas used in Hitler’s death camps, and for its extensive use of slave labour during the war.[3]

David Talbot writes in his The Devil’s Chessboard:

The secretive BIS became a crucial financial partner for the Nazis. Emil Puhl – vice president of Hitler’s Reichsbank and a close associate of McKittrick – once called BIS the Reichsbank’s only ‘foreign branch.’ BIS laundered hundreds of millions of dollars in Nazi gold looted from the treasuries of occupied countries.”

The Bank for International Settlements is based in Switzerland, the very region that Allen Dulles would work throughout both WWI and WWII.

The Office of Strategic Services (OSS) was formed on June 13, 1942 as a wartime intelligence agency during WWII. This was a decision made by President Franklin Roosevelt. William J. Donovan was chosen by Roosevelt to build the agency ground up and was created specifically for addressing the secret communication, decoding and espionage needs that were required for wartime strategy; to intercept enemy intelligence and identify those coordinating with Nazi Germany and Japan.

The OSS was the first of its kind, nothing like it had existed before in the US, it was understood by Roosevelt that such an agency held immense power for abuse in the wrong hands and it could never be allowed to continue once the war against fascism was won.

Allen Dulles was recruited into the OSS at the very beginning. And on Nov. 12^th, 1942 was quickly moved to Bern, Switzerland where he lived at Herrengasse 23 for the duration of WWII. Knowing the shady role Switzerland played throughout WWII with its close support for the Nazi cause and Allen Dulles’ close involvement in all of this, one should rightfully be asking at this point, what the hell were Donovan and Roosevelt thinking?

Well, Dulles was not the only master chess player involved in this high stakes game.

“He was a dangle,” said John Loftus, a former Nazi war crimes investigator for the US Justice Department. They “wanted Dulles in clear contact with his Nazi clients so they could be easily identified.”[4] In other words, Dulles was sent to Switzerland as an American spy, with the full knowledge that he was in fact a double agent, the mission was to gain intel on the American, British and French networks, among others, who were secretly supporting the Nazi cause.

One problem with this plan was that the British MI6 spy William Stephenson known as the “Man Called Intrepid” was supposedly picked to keep tabs on Dulles [5]; little did Roosevelt know at the time, how deep the rabbit hole really went.

However, as Elliott would write in his book As He Saw It, Roosevelt was very aware that British foreign policy was not on the same page with his views on a post-war world:

You know, any number of times the men in the State Department have tried to conceal messages to me, delay them, hold them up somehow, just because some of those career diplomats over there aren’t in accord with what they know I think. They should be working for Winston. As a matter of fact, a lot of the time, they are [working for Churchill]. Stop to think of ’em: any number of ’em are convinced that the way for America to conduct its foreign policy is to find out what the British are doing and then copy that!” I was told… six years ago, to clean out that State Department. It’s like the British Foreign Office…”

As the true allegiance of BIS and Wall Street finance became clear during the war, Roosevelt attempted to block BIS funds in the United States. It was none other than Foster Dulles who was hired as McKittrick’s legal counsel, and who successfully intervened on the bank’s behalf.[6]

It should also be noted that Bank of England Governor Montague Norman allowed for the direct transfer of money to Hitler, however, not with England’s own money but rather 5.6 million pounds worth of gold owned by the National Bank of Czechoslovakia.

With the end of the war approaching, Project Safehaven, an American intelligence operation thought up by Roosevelt, was created to track down and confiscate Nazi assets that were stashed in neutral countries. It was rightfully a concern that if members of the Nazi German elite were successful in hiding large troves of their wealth, they could bide their time and attempt to regain power in the not so distant future.

It was Allen Dulles who successfully stalled and sabotaged the Roosevelt operation, explaining in a December 1944 memo to his OSS superiors that his Bern office lacked “adequate personnel to do [an] effective job in this field and meet other demands.”[7]

And while Foster worked hard to hide the US assets of major German cartels like IG Farben and Merck KGaA, and protect these subsidiaries from being confiscated by the federal government as alien property, Allen had his brother’s back and was well placed to destroy incriminating evidence and to block any investigations that threatened the two brothers and their law firm.

“Shredding of captured Nazi records was the favourite tactic of Dulles and his [associates] who stayed behind to help run the occupation of postwar Germany,” stated John Loftus, former Nazi war crimes investigator for the US Justice Department.[8]

It is without a doubt that Roosevelt was intending to prosecute the Dulles brothers along with many others who were complicit in supporting the Nazi cause after the war was won. Roosevelt was aware that the Dulles brothers and Wall Street had worked hard against his election, he was aware that much of Wall Street was supporting the Germans over the Russians in the war, he was aware that they were upset over his handling of the Great Depression by going after the big bankers, such as JP Morgan via the Pecora Commission, and they hated him for it, but most of all they disagreed with Roosevelt’s views of a post war world.

In fact, they were violently opposed to it, as seen by his attempted assassination a few days after he won the election, and with General Smedley Butler’s exposure, which was broadcasted on television, of how a group of American Legion officials paid by JP Morgan’s men [9] approached Butler the summer of 1933 to lead a coup d’état against President Roosevelt, an attempted fascist takeover of the United States in broad daylight.

Roosevelt was only inaugurated March 4, 1933, thus it was clear, Wall Street did not have to wait and see what the President was going to do, they already had a pretty good idea that Roosevelt intended to upset the balance of imperial control, with Wall Street and the City of London as its financial centers. It was clear Wall Street’s days would be marked under Roosevelt.

However, Roosevelt did not live past the war, and his death allowed for the swift entry of a soft coup, contained within the halls of government and its agencies, and anyone who had been closely associated with FDR’s vision was pushed to the sidelines.

David Talbot writes in his “The Devil’s Chessboard”:

Dulles was more instep with many Nazi leaders than he was with President Roosevelt. Dulles not only enjoyed a professional and social familiarity with many members of the Third Reich’s elite that predated the war; he shared many of these men’s postwar goals.”

The True Origin Story of the Cold War

In L. Fletcher Prouty’s book “The CIA, Vietnam and the Plot to Assassinate John F. Kennedy,” he describes how in Sept 1944, while serving as a captain in the United States Army Air Forces and stationed in Cairo, he was asked to fly what he was told to be 750 US Air crewmen POWs who had been shot down in the Balkans during air raids on the Ploesti oil fields.

This intel was based off of his meeting with British Intelligence officers who had been informed by their Secret Intelligence Service and by the OSS.

Prouty writes:

In Prouty’s book, he discusses how even before the surrender of Germany and Japan, the first mumblings of the Cold War could be heard, and that these mumblings came particularly from Frank Wisner in Bucharest and Allen W. Dulles in Zurich, who were both strong proponents of the idea that the time had come to rejoin selected Nazi power centers in order to split the Western alliance from the Soviet Union.

Prouty writes:

The “official history” version has marked down the British as the first to recognise the “communist threat” in Eastern Europe, and that it was Winston Churchill who coined the phrase “Iron Curtain” in referring to actions of the communist-bloc countries of Eastern Europe and that he did this after the end of WWII.

However, Churchill was neither the originator of the phrase nor the idea of the Iron Curtain.

Just before the close of WWII in Europe, the German Foreign Minister Count Lutz Schwerin von Krosigk made a speech in Berlin, reported in the London Times on May 3, 1945, in which he used the Nazi-coined propaganda phrase “Iron Curtain,” which was to be used in precisely the same context by Churchill less than one year later.

Following this German speech, only three days after the German surrender, Churchill wrote a letter to Truman, to express his concern about the future of Europe and to say that an “Iron Curtain” had come down.[10]

On March 4 and 5, 1946, Truman and Churchill traveled from Washington to Missouri, where, at Westminster College in Fulton, Churchill delivered those historic lines:

From Stettin in the Baltic to Trieste in the Adriatic, an Iron Curtain has descended across the continent.”

The implications of this are enormous. It not only showcases the true origin of the source that trumpeted the supposed Cold War threat coming from Eastern Europe, the very Nazi enemy of the Allies while WWII was still being waged, but also brings light to the fact that not even one month after Roosevelt’s death, the Grand Strategy had been overtaken. There would no longer be a balance of the four powers (US, Russia, Britain and China) planned in a post war world, but rather there would be an Iron Curtain, with more than half of the world covered in shadow.

The partners in this new global power structure were to be the United States, Great Britain, France, Germany, and Japan, three of the WWII victors and two of the vanquished. It did not matter that Russia and China fought and died on the side of the Allies just moments prior.

With Ho Chi Minh’s Declaration of Independence on Sept. 2^nd, 1945, the French would enter Vietnam within weeks of WWII ending with the United States joining them a few months after Churchill’s Iron Curtain speech. And thus, in little over a year after one of the bloodiest wars in history, the French and the Americans set off what would be a several decades long Indochinese war, all in the name of “freedom” against a supposed communist threat.

Prouty writes:

The Godfather of the CIA

“And ye shall know the truth, and the truth shall make you free.”
The inscription chosen by Allen Dulles for the Lobby of CIA Headquarters from John 8:31-32

On Sept. 20^th, 1945, President Truman disbanded the OSS a few weeks after the official end of WWII. This was the right thing to do, considering the OSS was never intended to exist outside of wartime and President Roosevelt would have done the same thing had he not passed away on April 12^th, 1945.

However, Truman was highly naïve in thinking that a piece of paper was all that was required. Truman also had no understanding of the factional fight between the Roosevelt patriots who truly wanted to defeat fascism versus those who believed that it was always about war with the Soviet Union, and would even be open to working with “former” fascists in achieving such a goal.

Truman thought of the OSS as a homogenous blob. He had no comprehension of the intense in-fighting that was occurring within the United States government and intelligence community for the future of the country. That there was the OSS of Roosevelt, and that there was the underground OSS of Allen Dulles.

Soon thereafter, on Sept. 18^th, 1945, the CIA was founded, and was to be lamented by Truman as the biggest regret of his presidency. Truman had no idea of the type of back channels that were running behind the scenes, little did he know at the time but would come to partially discover, the disbanding of the OSS which took control away from William J. Donovan as head of American intelligence opened the door to the piranhas.

The FDR patriots were purged, including William J. Donovan himself, who was denied by Truman the Directorship of the CIA. Instead Truman foolishly assigned him the task of heading a committee studying the country’s fire departments.

In April 1947, Allen Dulles was asked by the Senate Armed Services Committee to present his ideas for a strong, centralized intelligence agency. His memo would help frame the legislation that gave birth to the CIA later that year.

Dulles, unsatisfied with the “timidity” of the new CIA, organised the Dulles-Jackson-Correa Committee report, over which Dulles of course quickly assumed control, which concluded its sharply critical assessment of the CIA by demanding that the agency be willing to essentially start a war with the Soviet Union. The CIA, it declared “has the duty to act.” The agency “has been given, by law, wide authority.” It was time to take full advantage of this generous power, the committee, that is Dulles, insisted.

Dulles, impatient with the slow pace of the CIA in unleashing chaos on the world, created a new intelligence outpost called the Office of Policy Coordination in 1949. Frank Wisner (who worked as a Wall Street lawyer for the law firm Carter, Ledyard & Milburn and was former OSS, obviously from the Dulles branch) was brought in as OPC chief, and quickly brought the unit into the black arts of espionage, including sabotage, subversion, and assassination[11]. By 1952, the OPC was running forty-seven overseas stations, and its staff had nearly three thousand employees, with another three thousand independent contractors in the field.

Dulles and Wisner were essentially operating their own private spy agency.

The OPC was run with little government oversight and few moral restrictions. Many of the agency’s recruits were “ex” Nazis.[12] Dulles and Wisner were engaged in a no-holds-barred war with the Soviet bloc with essentially no government supervision.

As Prouty mentioned, the shady evacuation of Nazis stashed amongst POWs was to be the first of many, including the evacuation of General Reinhart Gehlen, the German army’s chief intelligence officer, to Washington on September 20, 1945.

Most of the intelligence gathered by Gehlen’s men was extracted from the enormous population of Soviet prisoners of war – which eventually totaled four million – that fell under Nazi control. Gehlen’s exalted reputation as an intelligence wizard derived from his organization’s widespread use of torture.[13]

Gehlen understood that the US-Soviet alliance would inevitably break apart (with sufficient sabotage), providing an opportunity for at least some elements of the Nazi hierarchy to survive by joining forces with the West against Moscow.

He managed to convince the Americans that his intelligence on the Soviet Union was indispensable, that if the Americans wanted to win a war against the Russians that they would need to work with him and keep him safe. Therefore, instead of being handed over to the Soviets as war criminals, as Moscow demanded, Gehlen and his top deputies were put on a troop ship back to Germany![14]

Unbelievably, Gehlen’ spy team was installed by US military authorities in a compound in the village of Pullach, near Munich, with no supervision and where he was allowed to live out his dream of reconstituting Hitler’s military intelligence structure within the US national security system. With the generous support of the American government, the Gehlen Organization –as it came to be known – thrived in Pullach, becoming West Germany’s principal intelligence agency.[15]

And it should have been no surprise to anyone that “former” SS and Gestapo officials were brought in, including the likes of Dr. Franz Six. Later, Six would be arrested by the US Army counterintelligence agents. Convicted of war crimes, Six served a mere four years in prison and within weeks of his release went back at work in Gehlen’s Pullach headquarters![16]

For those who were able to believe during the war that the Russians were their true enemies (while they died for the same cause as the Americans by the millions in battle) this was not a hard pill to swallow, however, there was pushback.

Many in the CIA vehemently opposed any association with “former” Nazis, including Admiral Roscoe Hillenkoetter, the CIA’s first director, who in 1947 strongly urged President Truman to “liquidate” Gehlen’s operation. It is not clear what stood in the way of this happening, but to suffice to say, Gehlen had some very powerful support in Washington, including within the national security establishment with primary backing from the Dulles faction.[17]

Walter Bedell-Smith, who succeeded Hillenkoetter as CIA Director, despite bringing Allen Dulles in and making him deputy, had a strong dislike for the man. As Smith was getting ready to step down, a few weeks after Eisenhower’s inauguration, Smith advised Eisenhower that it would be unwise to give Allen the directorship of the agency.[18] Eisenhower would come to deeply regret that he did not heed this sound advice.

With the Eisenhower Nixon victory, the culmination of years of political strategizing by Wall Street Republican power brokers, the new heads of the State Department and the CIA were selected as none other than Foster and Allen Dulles respectively; and they would go on to direct the global operations of the most powerful nation in the world.

It is for this reason that the 1952 presidential election has gone down in history as the triumph of “the power elite.”[19]

Soon to follow in this series ‘The Fascist Roots of the CIA’: Part 2 Cold War Lessons from Vietnam and Part 3 Dulles vs Kennedy: The Last Stand. The author can be reached at [email protected]

Cynthia Chung is a lecturer, writer and co-founder and editor of the Rising Tide Foundation, she can be contacted at [email protected].

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