The Golden Years of Intelligence Entrepreneurship in Austria and Germany: 1947-1952, Part One, András Zákó ©

Background 

Paper mills have been defined as “intelligence sources whose chief aim is the maximum dissemination of their product Their purpose is usually to promote special emigre-political causes while incidentally financing emigre-political organizations.” Fabricators were defined as “individuals or groups who, without genuine agent resources, invent their information or inflate it on the basis of overt news for personal gain or a political purpose.”

 

Richard Helms, one-time Director of Central Intelligence, has written in his memoirs: “The proliferation of reports ostensibly from widely different sources but presenting roughly similar fabricated data made false confirmations a constant threat. At one point it was estimated that some 50 percent of the information on file in the West on the USSR and Eastern Europe had come from such sources.” In addition, it was estimated that one-third of the CIA's intelligence officers in Austria were committed during June 1951 to the detection and neutralization of fabricators and paper mills. 

 

András Zákó was born on March 23, 1898, in Brasso, Hungary. He was one of the leaders of the “KOPJAS” military organization created at the end of World War II as a special Hungarian combat intelligence group, whose mission was to “infiltrate the Russian front to gather information and to commit acts of sabotage against the advancing Soviet army.” As the story goes, in 1945 he went to Germany with the retreating German army and was apprehended by the US Army and extradited to Hungary as a war criminal. He escaped and went to Austria, where he first worked as an agricultural worker under an assumed name in the British Zone. In 1947 he moved to Innsbruck, in the French Zone, and was used by French Intelligence to come up with information about Hungary. He approached both the American Counter Intelligence Corps (CIC) and the CIA's Office of Special Operations (OSO) to provide the same intelligence as he said he preferred to work for the Americans. 

 

András Zákó’s group Magyar Harcosok Bajtársi Közssége (MHBK) in Austria in 1949 was a World War II veterans association (World Federation of Hungarian Veterans). There were eventually networks in 22 countries; the MHBK had five branches in Austria alone. MHBK was known in the USA as “Comradeship of Hungarian Veterans” or “Collegial Society of Hungarian Veterans” (CHV).

 

All Western intelligence agencies were under extreme pressure to develop and prepare up-to-date information on the Soviet Union and East European countries believed to be preparing for war. András Zákó was one of the major intelligence entrepreneurs.  Under the guise of current intelligence information, MHBK prepared reports in multiple versions and sold them to the various Western military and intelligence agencies, including the CIA. 

 

The next post will examine the rise and fall of András Zákó and the MHBK in peddling intelligence information to Western intelligence agencies in Austria and Germany. Besides looking at the role of András Zákó, other leading personalities of MHBKwill be identified. 

Early Cold War Swedish Agent Infiltrations into the Baltics, Part Two: The Tilestone Project ©

The end of the 1940s witnessed the completion of Soviet domination of Eastern Europe, the Berlin airlift, the Marshall Plan, and the Iron Curtain. Eastern, Central, and Western Europe were physically divided by barbed wire, armed patrols, land mines, and guard towers. The Communist Party's monopoly and censorship of the domestic media effectively cut off and prevented the free flow of information to the peoples of Eastern Europe and the USSR. There was also a widespread fear of war between the two blocs. America's CIA was tasked with intelligence gathering to learn when the Soviet Union was about to attack the West. 

There was a significant problem: the CIA had no intelligence agents behind the Iron Curtain in a position to fulfill the CIA's tasks. But there were thousands of men who had escaped from the Baltic countries of Estonia, Latvia, and Lithuania, at the end of World War Two and who might be willing to work for the CIA and the British. The British Intelligence Service (SIS) started Operation "Jungle," and the CIA began Operation "Tilestone," both using recruited agents in Sweden.

CIA and SIS found an unlikely ally in this quest for intelligence: historically neutral Sweden (CIA cryptonym CF-Land). For example, the Swedish Defense Staff (CIA cryptonym TIEBARS) allowed the boat traffic between Sweden and the Baltics from Löfthammar and Bornholm island. Sweden also maintained a radio listening post in Gotland to send and receive wireless traffic between agents in the Baltics and Sweden. Additionally, prospective agents were trained for the infiltration operations in Sweden. 

In the early Cold War, British, the US, and Swedish agencies infiltrated at least forty-two Estonians, Latvians, and Lithuanians into their homelands. Here is one example of the planned use of an agent infiltration into Lithuania: The Tilestone Project. Here are excerpts from a declassified CIA file.

 

DATE: 19 January 1948 

SUBJECT: Tilestone Project

 

Tilestone will leave Stockholm on 19 or 20 January for the south of Sweden. He will be accompanied by (redacted) or one of his assistants. He has been furnished the papers of a Swedish seaman and will board a Swedish vessel at some Southern port. He will be taken to Gdynia where he expects to be able to land without difficulty. He plans to travel to Warsaw and from there to the neighborhood of the Lithuanian frontier. He expects to meet several members of the Lithuanian resistance who have been awaiting his arrival on the Polish side of the border for some two weeks. He hopes to be able to return to Sweden within a month, coming back on another Swedish vessel. 

 

The primary purpose of Tilestone's trip is to set up radio communication with the Lithuanian underground. He is carrying 16 American radio crystals and an elaborate cipher code furnished by the Swedes. 

 

The code is a numerical cipher similar to that used by the Russians in broadcasts from Lithuania to Moscow. It is based on a Lithuanian book, a copy of which Tilestone had in Stockholm. Tilestone has spent the last two weeks working with Swedish cryptographic experts setting up the code and arranging a series of questions in which his group and the Swedes are interested. Transmissions will be made from Sweden once a week, and it is expected that answers will be received twice a month from Lithuania. 

 

The agent was not dispatched at this time but at a later date in 1949. There is evidence, however, that he then became a Soviet double agent codenamed Petrauskas" until 1970.

Early Cold War Swedish Agent Infiltrations into the Baltics, Part One: Historical Background

It now appears certain that Sweden and Finland will join NATO. Below is a look at early Cold War agent infiltrations into the Soviet Union--in particular the Baltics:

By the middle of July 1945, 21,300 Estonian, 3,400 Latvian, and 300 Lithuanian refugees were in Sweden. Another 6,500 Swedish-speaking Estonians had been evacuated in different waves during the war.

Most of the refugees arrived in small boats that on a more or less commercial basis were trafficking the war-ridden sea, with peaks in August-October 1944 (Estonia and Latvia except Kurzeme) and February-May 1945 (Kurzeme). Some of them, probably about 1100-1500, came with boats that were financed by the Swedish Defence Command for intelligence tasks 

The Swedish Defense Command has largely burnt the archives that could have given a precise account of this, but from what we know of the intelligence traffic that between 1947-1957 was pursued for intelligence reasons by British, American, and Swedish authorities we can establish that both convinced Nazis and ardent democrats were among the Baltic volunteers.

In order to prepare their own program of infiltration into the Soviet Union, the intelligence corps of the Swedish Army renewed its contacts among the Balts in Sweden already in 1947. Seen from a national security perspective, the Soviet Baltic republics remained an area of specific interest especially for the military leadership in Sweden, as they hosted a large concentration of heavily armed Red Army units in considerable proximity to Swedish territorial waters. 

Thus, a secret training program was set up, whose aim it was to organise the selection, education and smuggling of potential infiltrators recruited among the Balts in Sweden. Inside the Soviet Union, they were supposed to establish a network of informants, who would organise the transmission of relevant information of particular political and military interest to Sweden via radio communication. These activities were conducted in close consultation with the British SIS, which was closely involved in the infiltration of Soviet territories by émigré spies.

The key figure among the Estonians in Sweden was the former officer Arkadi Valdin, who, as his Latvian and Lithuanian counterparts, was a direct subordinate of Thede Palm, the head of the secret intelligence unit of the Swedish military. Valdin had his own contacts among the agents of the SIS and, most probably, also the CIA, and was responsible for the educational training of the selected candidates in a Stockholm suburb as well as the coordination of their clandestine passage to Soviet Estonia.

The Baltic operatives that managed to land on the Soviet coastline were either immediately killed or imprisoned, while others were turned into double agents, who after their conversion actively engaged in the KGB’s misinforming operations.  After a failed evacuation effort, which resulted in the death of all involved agents that were supposed to leave Soviet Estonia for Sweden in September 1951, the Swedish intelligence service completely withdrew from the infiltration operations.

Text Source; Lars Fredrik Stöcker, Bridging the Baltic Sea. Networks of Resistance and Opposition during the Cold War Era. The Harvard Cold War Studies Book Series, ed. Mark Kramer. Lanham, MD: Lexington Books. 2018.

Map Source: https://upload.wikimedia.org/wikipedia/commons/thumb/9/92/Baltic_Sea_map.png/800px-Baltic_Sea_map.png