Allen Dulles and the compromise of OSS codes in WWII

During the war several organizations run agents in occupied Europe for the allied side. Britain had SIS and SOE and the US had OSS.

The Office of Strategic Services was the predecessor of the CIA and it was headed by General William Donovan. An important person in that organization was Allen Dulles.

Dulles came from a prominent family, studied at Princeton University and in 1916 became a State Department diplomat. After receiving a law degree in the 1920’s he became a successful New York lawyer with the firm of Sullivan & Cromwell. His political position in the 1930’s was for intervention on the side of the British.

During the war Dulles joined the OSS and in November 1942 he was sent to Berne, Switzerland to head the OSS station on “Hitler’s doorstep”.

Berne was a hotspot of agent activity both Allied and Axis. The goal of the OSS was to recruit informants and gather intelligence on European affairs. Especially important was the need to recruit German agents to report on that country’s internal condition and policies. The Berne station also had contact with members of the German resistance.

Obviously there was a need for absolute secrecy in communications between the Berne station and Washington. Unfortunately for the Americans it seems some of the OSS communications were read by the Germans and their Finnish and Hungarian allies.

Since OSS was in the business of dealing in secrets such a security compromise must have had important consequences.

The British learned through an agent of theirs that OSS codes were compromised and were distrustful of the OSS organization.

Moreover the OSS people were warned by General Schellenberg of the SD that their codes were being read but instead of doing something about it they decided it was a provocation…

Let’s take a look at the rather limited amount of information available:

From ‘The secret front: the story of Nazi political espionage’ by Wilhelm Höttl, p268

In the autumn of 1944 the Headquarters of the Secret Service in Berlin received its first intimation that an American office existed in Switzerland, the duties of which appeared to be more than those of a normal Intelligence Center. The head of it was a lawyer name Allen Welsh Dulles, who had become prominent at the end of first war as a member of the American diplomatic service in the Versailles peace treaty negotiations, and particularly in the Austro-Yugoslav disputes. The fact that he had been installed in the American Legation in Berne, gave some indication of his real activities. And from his wireless messages to Washington that were picked up and for the most part deciphered and passed to the Germans by the Hungarian monitor service, the German Secret Service was able to obtain accurate knowledge of his views on the great problems of world politics. Unlike the American Minister in Berne, who forwarded to Washington as established facts the wildest and stupidest rumors, which emanated from Germany, Dulles showed himself to be only a man of high intelligence, but also an implacable enemy of Bolshevism, whose opposition was based on knowledge, reasoned argument and clear-sighted vision. This unequivocal attitude seemed to their group, which had for years sought contact with an authoritative American organization, to offer the very chance they had been seeking so long. They set about trying to get in touch with Dulles. Through the intermediary of an Austrian industrial magnate and the German Deputy Air Attache in Berne they quickly succeeded in doing so.

Höttl was head of SD foreign intelligence  for Southeastern Europe.

From ‘U.S. intelligence and the Nazis’ by Richard Breitman, p25

By the time the COI became the OSS in 1942, high officials had recognized the value of having a well-stocked base in neutral Switzerland, nearly surrounded by the Axis powers, prepared to defend itself if attacked, but otherwise steering a delicately balanced course. Switzerland had so many economic links with both Germany and Italy that there was bound to be leakage of information through corporate channels. Prominent exiles from Nazi Germany in the country still had lines of information into Berlin. The  Swiss government, the International Red Cross, and the Bank of International Settlements might each yield some Nazi secrets if the right people plied their officials. Dulles had just the right qualifications. He almost left for Switzerland too late the journey was strewn with obstacles, and Dulles barely made it across the French border before Germany shut off this route in response to the Allied invasion of French North Africa. Dulles was given the cover of being special assistant to the American minister in Bern, Leland Harrison. Dulles had regular contact with Embassy officials, including Harrison; he even used some State Department codes when his own facilities for communication with Washington were overloaded.

p107:

To prove his bona fides, Schellenberg also gave Hewitt another message for Washington: the Gestapo was “onto” Allen Dulles’ espionage work in Bern. They were feeding him false information from informants, and they had broken his codes. Both items turned out to be essentially false—apparently designed to disrupt Dulles’ effective operations. Dulles made little secret of what he was doing, but he was good at separating valuable informants from Nazi plants, and his codes were never broken. He recognized Schellenberg’s ploy.

Schellenberg was head of SD foreign intelligence. During the war he tried to come in contact with allied personalities who could promote a peace initiative between the Reich and the Western Powers. It seems the information he gave Dulles was supposed to prove he was not a provocateur but the outcome was the exact opposite.

From ‘History of MI-6’, p511:

The potential for disaster was demonstrated by Dulles's first contact with the Abwehr representative, Hans Bernd Gisevius, in January 1943, which he reported back to Washington on a cypher which the British ascertained (through their Polish agent Halina Szymariska) had been broken by the Germans. In the middle of April Dulles told Vanden Heuvel that he had seen Gisevius, who had just returned from Berlin and had told him that forty large flying boats had recently been built in Rotterdam to be used for the heavy bombing of London manned by suicide squads. Despite having been alerted to the problem with the cypher, Dulles had reported this to Washington in two telegrams. Dansey thought that Dulles had been 'stuffed' by a deliberate piece of German disinformation. Clearly agitated, he told Vanden Heuvel: 'could you report to the fool [Dulles] who knows his code was compromised if he has used that code to report meetings with anyone, Germans probably identified persons concerned and use them for stuffing. He swallows easily.

British report ZIP/D-S/G.9 of 10^th April 1943 mentions the OSS M-138 strip:

It is not clear whether these compromised alphabet strips belonged to the OSS or the State Department. Report SRH-366 ‘History of Army Strip Cipher devices’ says that the Army’s Signal Intelligence agency provided M-138 strips for OSS use in 1944. This would imply that they did not have their own strips in 1943 so the compromised system could have been diplomatic.

On the other hand a report found in SRH-145 ‘Collection of memoranda on operations of SIS intercept activities and dissemination 1942-45’, dated 16 October 1943 says that the OSS was using an early version of the SIGABA cipher machine, the Hagelin machine (presumably the M-209), the M-138 strip cipher and double transposition.

The official ‘War Report, Office of Strategic Services , volume 2 – Operations in the field’, p163 says:

‘A Bern-Algiers-London-Washington net, for example, had a transposition type of cipher and used US State Department wireless and cable facilities’

General Schellenberg’s interrogation

SS-General Walter Schellenberg was head of the Sicherheitsdienst’s foreign intelligence department during the war. Due to his high ranking position he received daily intelligence summaries containing decoded foreign messages from the codebreaking agencies OKW/Chi and the Forschungsamt. According to ‘Report on interrogation of Walter Schellenberg 27 June- 12 July 1945’, p30 (which can be found in British national archives folder KV 2/95) these decodes often contained US diplomatic and intelligence traffic from Bern, Switzerland.

Report of Sturmbannführer Huegel

SS-Sturmbannführer Dr. Klaus Huegel was an important SD official with knowledge of German intelligence operations in Switzerland and Italy. In CSDIC/CMF/SD 20, he says that when he was working at the SD HQ he saw US intelligence reports from Bern:

‘A daily bulletin from the German High Command Cryptographic Service, OKW CHI, was sent to SS Brigadefuehrer SCHELLENBERG, the Head of Amt VI of the RSHA. It was signed by Generalmajor THIELE. From Apr 43 till Mar 44, source was in Amt VI, and often saw the bulletins. He remembers that the following links were intercepted and their traffic read, translations of matters of interest to Amt VI appearing in the bulletins:

USA Minister HARRISON in BERNE - WASHINGTON: Three or four signals daily, on the average, were intercepted. All traffic was read. This enabled Amt VI to judge the Swiss attitude to GERMANY as seen through American eyes, and also gave a good picture of conditions in GERMANY. Source says that Mr. HARRISON seemed to be particularly well-informed on the situation in MUNICH, for instance on the morale of the people and on rifts between various High Party officials, between GOERING and HIMMLER, RIBBENTROP and HIMMLER, etc. A conclusion drawn on several occasions in the messages was that though the population was restive, no organised underground resistance on a large scale was possible because of the power of the SS and Gestapo and other security bodies. Source says that Amt VI found these messages of great interest, and if any points raised required investigation, it was often found that the information had been correct.’

Reports received from members of the German Resistance

In 1943 and 1944 Dulles received copies of German political and intelligence reports from the German officials Hans Bernd Gisevius and Fritz Kolbe .Some of them contained actual decoded US messages from the Bern embassy. These reports can be found in NARA-RG 226-Entry 123. For example:

Report on compromise of OSS station in Switzerland

An interesting report titled ‘Penetration and compromise of OSS in Switzerland and Western Europe’ can be found in the personal papers of general Hoyt Vandenberg, director of Central Intelligence in the period 1946-1947. The report says that Dulles was warned that his communications systems might have been compromised in late 1943 and early 1944.

The Finnish connection

In September 1944 Finland signed an armistice with the Soviet Union. The people in charge of the Finnish signal intelligence service anticipated this move and fearing a Soviet takeover of the country had taken measures to relocate the radio service to Sweden. This operation was called Stella Polaris (Polar Star).

In late September roughly 700 people, comprising members of the intelligence services and their families were transported by ship to Sweden. The Finns had come to an agreement with the Swedish intelligence service that their people would be allowed to stay and in return the Swedes would get the Finnish crypto archives and their radio equipment. At the same time colonel Hallamaa, head of the signals intelligence service, gathered funds for the Stella Polaris group by selling the solved codes in the Finnish archives to the Americans, British and Japanese.

The Finns revealed to the American representatives that they had solved several State Department codes and could read the messages from a number of embassies including Bern. 

In September 1944 colonel Hallamaa met with the US official L. Randolph Higgs and gave him information on the solution of US diplomatic codes by his codebreakers. This information was summarized in a report called the ‘Higgs memorandum’.

According to that report the Finns were able to decode intelligence reports from Bern:

‘Replying to my request for information regarding the contents of the messages from our Legation in Bern to the Department, Col. Hallamaa said the great bulk of them were intelligence messages dealing with conditions in Germany, France, Italy and the Balkans. He spoke in complimentary terms about ‘Harrison’s’ information service.

I encouraged him to continue discussing the Bern messages, hoping he would eventually describe their one characteristic not common to messages from other missions. Eventually he did so and without any guidance whatsoever from me: He said that when they first began reading the Bern messages they named the sources of information; then the Legation stopped giving the names in the messages but referred to previous messages therefore; and finally they gave informants numbers with the result that messages read ‘according to X241….’. This is an accurate account of the Bern messages, according to my personal knowledge of them.’

Obviously the OSS leadership was interested in finding out whether OSS communications passing over diplomatic links were also read. Two messages from November 1944 show that there was an investigation of the cipher systems used by the Bern embassy:

However the relevant files do not reveal the final outcome of this investigation.

David Kahn interviewed some of the Finnish codebreakers in the 1990’s (Aalto, Loimaranta, Pale) and they clearly remembered US telegrams containing intelligence reports and information on the German Resistance:

‘Q:  Why did you think the Americans used such weak codes?

A: They had no idea about that, the question was why the ambassador's telegram, everything in ….. cipher or ambassador send a list, a long, long telegram about conspiracy against Hitler with all the names. It was a very, very terrible business,

Another voice:  gave them away.

Q: Is that how they caught the conspirators.’

Messages in the Finnish national archives

Decoded US diplomatic traffic for the years 1943-44 can be found in the Finnish national archives, folders T-21810/4 and T-21810/5. Many of these messages are from Bern and include reports on the German military’s manpower, dispositions and the production of the German war industry. It is probably safe to assume that these reports were prepared by the OSS Bern Station and the US military attaché Barnwell R. Legge. For example No 1.926 of 26/3/1943 and the original telegram from NARA, collection RG 59:

No 2.181 of 7/4/1943:

OSS messages from other stations can also be found, for example:

From Washington to Ankara. 22 April 1943. No 369 [/Finnish numbering]. Personal(ly) to the Ambassador.

[Regarding] your telegrams 378 (Announcement 336 [/Finnish numbering) and 433 (the previous).

OSS (Office of Strategic Services) [/Finnish clarification] has left 10 000 dollars to the Department requesting that you would pay equal sum to the Albanian minister in Turkey for the purpose presented in your telegram 378. OSS wants you to inform the Minister that the Government of the United States wants to act independently in this matter, because it has an opinion that the first acts of aggression [literally: "the first acts of invasion"] done by the Americans would be far pleasant to the Albanians than any other acts made by the [other] Allied.

Furthermore, the Government announces that if Dshadshuli would not prefer to act in complete secrecy with only such persons absolutely necessary for the operation, it would seem wise to not to give any money and inform the Minister that the Government of the United States has to come up with some other mean to establish contact with the guerrillas. Dshadshuli must be informed that the radio receivers are to be delivered only if a mean to deliver them is found and if an assurance is given that they have capable users.

Since OSS has no representative in Turkey, the Department has agreed to give permission for you to give the payment according to instructions given by the OSS, if You have no objections. However, all other acts are to be left out for the OSS's agents to handle.

Please inform about any act you have done for the matter [in hand].

Hull.

For Maddox from Dulles

An interesting message can be found in the US National Archives, in collection RG 457 ‘Records of the National Security Agency’ - Entry 9032 - box 209 ‘German decrypts of US diplomatic messages 1944’

It is Nr. 218 from Bern to London (11/3/1944) and is addressed to ‘Maddox’ from ‘Dulles’. These should be Allen Dulles of the OSS Bern station and William P. Maddox of the London station.

Translation provided by Frode Weierud:

De Leusse asks that the message below should be sent to Dastier.

"In beginning of February I sent Cardinal Tissérant a detailed report on the situation in the Catholic church in France and the attitude of certain bishops, likewise the last number of Cahier des Témoignages Chrétiens (Notebook of Christian testimonies). In a letter of 1. March the Cardinal thanked me and said  he had given the Pope a copy of my report and that he had made several copies of the Cahier (Notebook) for distribution. He asked me to keep him informed in the future about further developments. I have certain possible connections to Rome. When these can be of use for you then please send me instructions." 

I have seen the original of the letter above and I confirm its content. Can you please send a resume to Washington in case it exists an interest there in this connection line. Further inform Washington that Nr. 509 de Leusse has been assigned to actively work together with us on the communication lines to France. He was recently the French consul in Lugano and he was previously with General Weygand.

Harrison

‘De Leusse’ was Pierre de Leusse, Consul of France in Lugano, Switzerland from 4 December 1941 to 23 January 1943, then Chief of Mission of the Swiss Commission for Prisoners, Deportees and Refugees, May-October 1944.

The message has the tag Am10 on the lower right side which was the German code for the M-138-A strip cipher. Since the signature says ‘Harrison’ (meaning Leland B. Harrison, US ambassador to Switzerland) I assume it was sent on the US diplomatic strip cipher and not an OSS cryptosystem.

Conclusion

What can we conclude from the information presented so far?

First of all the OSS station used diplomatic codes when their own systems were overloaded or simply for reasons of convenience. The Germans could read State Department codes Gray, Brown, A1, C1 and the M-138 strip. OSS messages enciphered with these systems were vulnerable in 1941-44. This is proven not only by the German testimonies but also the decoded message of Allen Dulles and the messages in the Finnish national archives.

The OSS also had available their own codes, which included a set of M-138 strips in 1944. It is not clear if the Germans could read these.

OSS communications were read not only by the Germans but also by the Finns and the Hungarians. It is not clear what systems the Hungarians could decode. However Höttl praised the work of their codebreakers in his book.

The information we have uncovered so far points to considerable security problems for OSS communications from Berne. The full story however is not known.

Acknowledgements: I have to thank Randy Rezabek of TICOM Archive for collaborating with me on the research project that uncovered the OSS message and Frode Weierud for translating it. 

I also have to thank the researcher Martti Kujansuu for copying and translating the OSS message to the US embassy in Turkey and Patrick Kerwin of the Library of Congress Manuscript Division for the Vandenberg report.

Additional information: The following reports have information on OSS ciphers:

Joint Chiefs of Staff evaluation of Office of Strategic Services ciphers

Staff Study on OSS Cryptographic Plan - January 1945