The Golden Years of Intelligence Entrepreneurship in Austria and Germany, Part Two: Ladislas Faragó and András Zákó ©

 

"A Penchant for Cloak-and-Daggerism" 

 

Cloak-and-Dagger: Marked by melodramatic intrigue and often by espionage

 

American Heritage Dictionary

 

 

Hungarian-born Ladislas Faragó (1906 – 1980) was a journalist, historian, and the author of popular history books, including Burn After Reading, The Game of Foxes, and Spymaster. During World War II, he was associated with the U.S. Navy in psychological warfare and authored reports on German and Japanese psychological warfare. 

 

Below we will briefly look at his relationship with Radio Free Europe in the early Cold War.

 

Radio Free Europe’s Desk X

 

In his book, War of Wits: The Anatomy of Espionage and Intelligence, Ladislas Faragó wrote: "After the war, I had a share in an adventure in propaganda known as Radio Free Europe; there I headed a clandestine 'Desk X,' combatting Communism behind the Iron Curtain."

 

Faragó was employed as a consultant to Radio Free Europe's Hungarian Desk from October 1, 1950, to January 31, 1952. He used John L. Carver, as RFE did not want his connection known to the outside world. He worked out of two hotel rooms, not at the RFE office, thus the name “Desk X.”  He was let go, or perhaps he was allowed to get out of his contract because RFE in New York could not control "his penchant for cloak- and-daggerism," and "his activities were not in FE/RFE's interests." He had been paid 700 dollars a month for his consultancy.

 

Faragó’s “penchant for cloak-and-daggerism” presumably became known to RFE from the CIA is illustrated by his relationship with András Zákó, former head of Hungarian military intelligence who was then living in Salzburg, Austria.

 

In April 1951, two CIA officers using the cover of the U.S. Air Force representatives, traveled to Munich, met Faragó in the Excelsior hotel, and later wrote a report of their conversation. Faragó told them he was  “in charge of the Hungarian Desk of Radio Free Europe.” He explained the operation of RFE to them that “an amazing response has come out of Hungary.” Faragó told them of one RFE program, "Post Office Box 6220," that resulted in approximately 700 letters from Hungary to RFE per month. Another RFE program, "Doctor's Program" (actually "Radio Doctor"), gave medical advice to Hungarians and listeners in RFE’s other broadcast countries. A third program was the "Historian Program," which was popular among Hungarian amateur historians.

 

Faragó was then asked for details of his contact with Zákó in Austria. He told them that Nicholas Lazar of the Hungarian National Council (supported by the National Committee for Free Europe) had contacted him in New York. Farago then wrote a letter to Zákó and told him that RFE was interested in his organization MHBK.  Zákó replied and invited Farago to meet him the next time that Farago was in Europe.

 

Faragó then contacted U.S. Air Force Vandenberg in Washington about Zákó’s proposal. He was then put in touch with U.S. Air Force General John B. Ackerman, then Chief Collection Division, Directorate of Intelligence. In February 1951, General Ackerman then met Farago, who told him that Zákó authorized him to offer services from an underground organization having “high subversive potential and trained in intelligence collection. Ackerman told Faragó that the U.S. was, “generally in favor of genuine underground movements, whose probity could be demonstrated, and he would “undertake to investigate what could be done.”

 

Encouraged by the positive response from the U.S. Air Force, Faragó traveled to Munich and Invited Zákó to meet him there. They met for two days, during which time Zákó offered RFE “400 couriers, who would travel to Hungary at various times getting information.” According to Faragó, Zákó also offered to “kidnap any individual suggested by RFE," including the daughter of a Hungarian secret police officer, and deliver her to Salzburg.

 

Faragó went on to explain that he wanted to take over Zákó’s resources in Hungary to run an intelligence organization, which "should be capable of getting up-to-the-minute news of events within Hungary, of doing small acts of sabotage and of creating unrest within Hungary including even the kidnapping of prominent individuals."

 

He told the Air Force representatives that "RFE and the Air Force should cooperate in running this outfit," adding, "It was quite possible that technical parts of airplanes and engines could be brought out of Hungary by this network." 

 

Faragó's activities and statements were not known or sanctioned by Radio Free Europe, but the Air Force representatives believed that they were, and their report of their meeting with Farago ended with,

 

From this discussion, a jurisdictional intelligence flap is about to happen. It might be well for USFA to determine the conditions of RFE's charter in Europe and determine the extent to which they are authorized to dip into the intelligence-gathering business. They seem to have unlimited funds but a limited number of capable personnel, and many of the mistakes made by USFA and CIC throughout the past years are about to be repeated. It looks as if the business will soon become good for the intelligence factories of Austria.

 

As for Genera Zákó, the author of a detailed CIA February 1952 declassified internal staff study, “Paper Mills and Fabrication,” concluded:

 

Zákó’s intelligence chief stated recently that the MHBK now had no regular channels of communications or organized sources of information in Hungary…Zákó admitted that there were at most nine persons in Hungary on whom he could reasonably depend… MHBK reports as based entirely on refugee debriefings’ or clever rewriting of overt publications garnished with out-and-out fabrication. 

For more information about MHBK and Zákó , see the recent article: 

 

Katalin Kádár Lynn & Mark Stout (2024) Early Cold War intelligence paper mills: the case of the Association of Hungarian Veterans, Cold War History, 24:1, 23-44, DOI: 10.1080/14682745.2023.2191948

ABSTRACT

During the early Cold War, it was difficult for American intelligence to penetrate the Iron Curtain but a potential solution soon arose: émigré intelligence groups such as the Magyar Harcosok Bajtársi Közössége (MHBK) or ‘Association of Hungarian Veterans’. This group, however, turned out to be an intelligence ‘paper mill’. Attempts at trans-Atlantic cooperation with the MHBK and similar groups failed as they lost most of their good sources and were penetrated by communist security services. By the mid-1950s, US intelligence cut these groups off, took over their good sources, and established a source registry to prevent recurrence of the problem.

 

 

 

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

May 3, 1952, First Radio Free Europe Program from Munich to Poland

Radio Free Euope's experimental radio broadcasting began on July 14, 1950, to Romania; to Hungary and Poland on August 4, 1950; and to Bulgaria on August 11, 1950. RFE also broadcast to Albania from late 1950 to September 30, 1953. Full-schedule broadcasts to Romania began on May 1, 1951, and to Hungary in October 1951. On May 1, 1951, Radio Free Europe began broadcasting on medium-wave frequencies from the newly constructed transmitter station, nicknamed “Carola,” at Holzkirchen, south of Munich. The new transmitter, with antenna towers four hundred feet high, was at that time three times more powerful than any medium-wave transmitter in the United States.

 

The first Polish-language program broadcast from Holzkirchen was on May 3, 1952, at 11:00 a.m.:

Music: Bells, interrupted by fanfares.

Announcer: Radio Free Europe calling—Voice of Free Poland.

Music: Fanfares.

Announcer : Attention! Attention! On our National Day, on the anniversary of the third May Constitution, you will listen to the inaugurating program of our radio station, which will be broadcast daily to our countrymen in Poland. A solemn dedication to this new radio station will take place in a few moments.

Attention! Attention! Our voice will reach you from today on new and more powerful antennae.

Attention! Attention! Poles speak to Poles.

We speak to our brothers in Poland thanks to the American National Committee for a Free Europe.

 

Harold Miller, president of the National Committee for a Free Europe, in a prepared speech translated into Polish, then gave the ideological foundation of RFE broadcasts to Poland, which was to last until the collapse of Communism in 1989:

This superb instrument is to carry the new Voice of Free Poland. Over its pulsing waves, the free Poles hope to make this echo audible to the dauntless people of their enslaved homeland, that you may share with us the knowledge that the people of Poland are not forgotten and that we in America and in the West have faith in Poland and in the certainty of her ultimate victory.

The Polish Station of Radio Free Europe, organized by the National Committee for a Free Europe, is a station run by Poles for their countrymen. It aims at piercing the Iron Curtain with words of truth. It does not propose to tell the people of Poland what to think or what to do. When they know what goes on in the Free World, when they know that their brothers in exile and their friends in the West have not forgotten them, they will be able to draw their own conclusion and form their own ideas.

 

For more information, see

New Book of Interest: Covet Legions: U.S. Army Intelligence in Germany, 1944-1949

 

COVERT LEGIONS: U.S. Army Intelligence in Germany, 1944-1949 

Published by Center of Military History United States Army Washington, D.C., 2022

by Thomas Boghardt 

Germany was ground zero of the early Cold War. From 1944 to 1949, the U.S. Army, along with America’s allies, occupied the defeated nation, and the Army’s intelligence services guided and executed U.S. policy in central Europe. Covert Legions tells the dramatic story of America’s secret soldiers as they battled Nazi resistance, built democracy, and monitored the Soviet threat. Covert Legions is based on official intelligence records, including many documents declassified especially for this volume

Thomas Boghardt was born in the Rhineland and grew up in Hamburg, Germany, and Venice, Florida. From 1990 to 1991, he served with the 183d Panzerbataillon of the German army. He received his master’s degree in history from the University of Freiburg in 1996, and his Ph.D. in modern European history from the University of Oxford in 2002. Dr. Boghardt taught history at the University of Management Sciences in Lahore, Pakistan, in 2002 before joining Georgetown University’s Edmund A. Walsh School of Foreign Service as the Fritz Thyssen Fellow from 2002 to 2004. For the next six years, he worked as a historian at the International Spy Museum in Washington, D.C. In 2010, he joined the U.S. Army Center of Military History as a senior historian. 

Dr. Boghardt has published numerous articles and books on intelligence in the twentieth century, and he lectures frequently on this subject. 

From the Introduction:

This volume provides a comprehensive organizational and operational history of Army Intelligence in Germany from the time U.S. forces entered the country in September 1944 to the end of the military occupation five years later. Although it seeks to address all facets of this subject, it does so through the prism of the changing relationship between the United States and the Soviet Union. The U.S.-Soviet rivalry turned Germany into the principal battleground of the early Cold War. As such, it became the dominating factor of the American occupation and affected virtually every aspect of U.S. intelligence operations in central Europe.

The book is can be downloaded as a .pdf file at

https://history.army.mil/html/books/045/45-5/index.html

CIA Cold War Project AEROOT Extracts ©

AEROOT was the cryptonym for an early CIA Cold War Foreign Intelligence (FI) project involving Estonia and Estonian nationals of the USSR.  Below is a look at the 1957 project renewal request:

28 June 1957

The attached project, originating in the Soviet/Russia Division, provided for the utilization of all practicable channels of communication with the Estonian SSR to develop, recruit, establish and direct legal resident agents to collect operational and positive intelligence information.

The original AEROOT Project was approved on 13 May 1953 under Basic Plan AEBASIN and continued using renewals and extensions until 31 October 1956. The renewal request for 1 November 1956 through 31 March 1958 included the following Summary of accomplishments from 5 April 1955 to 1 November 1956: 

·      Recruited two Soviet Estonian residents as informers. 

·      Detected and followed up three Russian Intelligence Service (RIS) agents from Estonian SSR in cooperation with Swedish and British intelligence services. 

·      Interrogated and caused confessions of two RIS agents from Estonian SSR. 

·      Spotted one Principal/Agent candidate for work in cooperation with Finnish Intelligence Service. 

·      Recruited one agent for a repatriation mission to Estonian SSR. 

·      Recruited a merchant seaman qualified to visit Soviet ports. 

·      Recruited two mail drops for Secret/Writing correspondence with the Estonian SSR. 

·      Detected RIS control of a Swedish IS agent in Estonian SSR, with whom we also were in 

unilateral communication. 

The objectives of the AEROOT project were:

1.     Establish several legal resident agents in Estonian SSR. 

2.     Utilize all practicable channels of communication between Estonian SSR and the Western World to develop, recruit and direct legal resident agents.

3.     Spot, recruit, brief, and, when practicable, train legal travelers between Estonian SSR and the West. 

4.     Extract operational and positive intelligence information from visitors to and from Estonian SSE, one-time Estonian-resident Volks-Deutsche Prisoners of War clean and unclean escapees from Estonian SSR. 

The following agent personnel, carried in Project AEROOT in the past, were terminated: 

a. Hanks Augusti Toomla, was dispatched to Estonia in the spring of 1954. He lost his life apparently while in Soviet hands. Payment of death benefits to his heirs, provided in his contract with the Agency, is pending settlement of his estate. 

b. Kalja Nikolai Kukk was dispatched into Estonia with Toomla. It was reported he was captured by HIS forces in the spring of 1954. According to a Soviet announcement, he was tried by a Soviet military tribunal in 1955. He is now presumed to be dead. His contract with the Agency provides for payment of death benefits to his designated heirs upon settlement of his estate