Military History Online - Operation Rusty: The Gehlen-U.S. Army Connection

One afternoon in early June 1945 Captain John R. Boker, an Army intelligence officer, strode into a loosely guarded villa located in a leafy residential area in Wiesbaden Germany where some high ranking German POWs were being held and asked to see Generalmajor (Brig. General)Reinhard Gehlen who was supposed to be an expert on the Soviet armed forces.

He found Gehlen, former head of the Fremde Heere Ost (FHO; Foreign Armies East), the intelligence branch of the German General Staff on the Eastern Front, napping in one of the upstairs bedrooms. Boker had Gehlen woken and politely told him he would wait down on the terrace while he got dressed. Boker's respectful attitude and the rapport both men soon established made Gehlen decide that he could trust the American army captain.

Boker had been asked to interrogate Gehlen because of his reputation as 12th Army Group Military Intelligence's (G-2) unofficial "Russian expert" through his recent interrogation of a group of Eastern Front Luftwaffe intelligence officers. Boker's tenuous expertise was indicative of the almost complete lack of knowledge in the military, except for a relative handful of officers, about the Soviet armed forces. And like many officers from Patton on down Boker had an antipathy toward the Soviet Union and its brand of communism that had only increased during his years of interrogation work when he learned, for example, about Soviet gulags holding millions of people. By late in the war Boker had become convinced that the Soviet Union was planning to take over all of Eastern Europe, and perhaps more. He believed that it was imperative to U.S. interests that it obtain as much information as possible about our Soviet ally even if it meant using the recently defeated Germans against them.

So Gehlen could hardly have chanced upon someone more receptive as he explained to Boker that in late 1943 he had concluded that Germany would lose the war leading to Europe's subsequent realignment with the Soviet Union opposing the Western allies. And like Boker, he was convinced that the Soviet's ultimate goal was to take over Europe. He had decided therefore that he would deliver to the allies, preferably the Americans, the intact FHO along with its files on the Soviet Union (Gehlen's ultimate goal, which he withheld from Boker, was to make the FHO the future Germany's intelligence service). To carry out his plan at the closing months of the war he had ordered his closest colleagues to hide the FHO files deep in the American Zone.

Boker had no illusions that what Gehlen was proposing would never receive official authorization. Not only were the political implications of using German General Staff officers against an ally insurmountable, especially at a time when anti-German feelings were running high, but Boker, a mere captain, could do little to carry out this plan without the support of much higher ranking officers. And any unofficial sanction for dealing with Gehlen would have to be gotten without provoking the Soviets or drawing attention to Gehlen, as the Soviets were combing allied POW camps for former Eastern Front intelligence officers.

Therefore Boker quickly and stealthily began preparing the groundwork to enact Gehlen's plan. The first step would be to convince the commander of the United States Forces European Theater (USFET) G-2, Major General Edwin L. Sibert, of Gehlen's value. Boker moved Gehlen and four other General Staff officers along with Boker's small team of fluent German speakers into a separate house. This enabled the group to not only work in secrecy on an intelligence report aimed to impress Sibert, but it kept the Germans out of the hands of other interrogators and the Army Counter-Intelligence Corps (CIC), that Boker believed included personnel with pro-Soviet leanings who might tip off the Russians about Gehlen. As a further precaution against this, Boker had Gehlen's name removed from the captured POW list.

While Gehlen worked on the report, Boker's team scoured POW camps around the American Zone for the core FHO members. These then unearthed the hidden FHO files and by mid-July Boker had basically reconstituted the nucleus of the FHO and its files. Included in this cache were many forged and genuine Soviet Army documents and inking stamps, hundreds of pay books (which could be used to create bogus identities), a library of Russian language books and Cyrillic type printing presses. Boker realized that he had assembled an intelligence goldmine. Now he just needed to convince Sibert of this.

Gehlen also saw how vital it was to impress General Sibert so he and his newly released colleagues churned out more reports; on Soviet tank production, Soviet army strength, Soviet manpower, and the probable Soviet demobilization policy which Boker then forwarded on to Sibert's office. But Gehlen had another card to play. He knew there were limitations to his reports that were mostly analysis based on earlier wartime intelligence. He claimed to Boker that he could actually produce current intelligence on the Soviet Union through a network of undercover agents operating in Soviet territory. These could be reactivated by reestablishing contact with the man who had run this agent network: Oberstleutnant (Lt. Col.)Hermann Baun.

In late July, supported by the commander of the U.S. Detention and Interrogation Center (U.S.D.I.C.) at Oberursel near Frankfurt who arranged the meeting, Boker met in conference with General Sibert. Fortunately for Boker and Gehlen, Sibert's response was positive. He agreed to a provisional use of the FHO to assess its intelligence capability. Meanwhile, he would see to it that all the remaining FHO members scattered around Western Germany were located. Boker did not inform Sibert about Baun and his agent network at this meeting.

Soon after Boker's meeting with Sibert, Pentagon G-2 ordered the FHO files with Gehlen and his colleagues be flown to Washington. Pentagon G-2 had learned about Gehlen from the British and was interested in the files, for historical reasons, and only incidentally in Gehlen. Much alarmed, Boker informed Sibert about the Baun agent network and convinced him to allow at least one member of Gehlen's group to remain behind in Wiesbaden to reestablish contact with Baun. Sibert agreed to this, and assumed responsibility for defying a direct order. The man chosen to stay behind, Captain Gerhard Wessel, was Gehlen's deputy and successor at FHO after Hitler had relieved Gehlen of his command at the closing months of the war.

In mid-August, Gehlen and six other Germans, dressed in ill-fitting civilian clothes (one carried his belongings in an old violin case, making them look, one historian has written, like "a group of down and out musicians"), along with twenty packing cases of FHO documents were put aboard Gen. Walter Bedell Smith's private plane and flown to Washington DC. From there they were taken to a top secret facility near Alexandria, Virginia, known by its cover name "Box 1142".

During the war Box 1142, or Fort Hunt as it was also known, had been used for interrogating high ranking German POWs (Boker had been stationed there before he was sent to Europe). With the end of the war Fort Hunt's primary function had shifted to historical interrogation, operating under Pentagon G-2's Document and Interrogation Operation branch, which took charge of the FHO files, indicating again that the Pentagon was more interested in the FHO files than Gehlen.

Boker much to his chagrin found Gehlen and the others locked up in cells and treated like the actual POWs they were when he visited them at Ft. Hunt. Although about to return to civilian life, Boker had one more important part to play in the Army's involvement with Gehlen. Angry and frustrated by the situation at Ft. Hunt and the Army's lack of interest in Gehlen and the files except for historical purposes, Boker was able to get the support of G-2's Eastern European Order of Battle (O.O.B.) branch at the Pentagon behind him. Officers from here accompanied him to a meeting with the head of the Documents branch. Boker, citing Sibert's interest in Gehlen, convinced this officer to allow the Gehlen group to work on the documents as they had done in Wiesbaden. Permission was granted and the Gehlen group with the documents were moved to an empty barrack at Ft. Hunt. Boker then cabled Wiesbaden to have Wessel make contact with Baun. Soon after this Boker left the Army.

The small Eastern European O.B. unit, particularly Lt. Eric Waldman, was quick to appreciate the intelligence value of the FHO files. Waldman had fled his native Austria during the 1930s and like most at the Pentagon was initially reluctant to work with the Germans, but he soon became the group's most enthusiastic supporter. During their year long stay at Fort Hunt the Gehlen group contributed to Army G-2's first postwar handbook on the Soviet Armed Forces. But Gehlen's work here was completely unrelated to the intelligence operation going on in Germany.

Meanwhile, General Sibert with Wessel's help was rounding up the remaining FHO members. Late that summer after a brief visit to the Pentagon and without even informing his own CIC, the OSS(which President Truman would soon deactivate), or the USFET commander Eisenhower, Sibert moved the Germans to a compound at the U.S.D.I.C., Oberursel. Their mission, under the codename "Operation X", was to spy on the Soviet armed forces in East Germany. Sibert gave command of the operation to Lt. Col. John Russell Deane, Jr., a twenty-six year old West Pointer with no intelligence background. Deane renamed the secret project "Operation Rusty" after his young son.

The enigmatic and secretive Hermann Baun, born among the Volga German community in Russia, initially joined the group at Oberursel but requested and got his own facility. From here, backed by the seeming unlimited resources of his American sponsors and with Sibert's personal support, Baun was given free rein to reactivate his old agent network and recruit many others eager to work for the Americans amid the mass poverty, hunger and desolation of postwar Germany. By the following year Baun had 125 agents operating throughout Western Germany. Through these he had forwarded to Wessel about 800 reports on the Soviet military generated from his agents operating inside the Soviet Zone. Wessel's group, which handled analysis and evaluation, then prepared the reports for circulation to G-2 headquarters in Frankfurt and intelligence agencies in Washington and Europe.

Baun's freewheeling style, although somewhat appropriate for the murky and chaotic intelligence jungle he was operating in, clashed with Wessel and Deane. And worse, the almost complete lack of supervision over Baun, his finances, and his personnel led to serious security problems that would plague Gehlen in the years to come. Besides some bona fide Soviet experts, including a former ambassador to Moscow, Baun also recruited many unsavory types with dubious credentials and questionable allegiances like the ex-Abwehr corporal and con man who he placed at the head of a counterintelligence operation that spied on the Soviet Liaison Mission in the U.S. zone.

After Waldman's (now a captain) arrival in Germany to pave the way for Gehlen's return, Baun's days were numbered. Both Waldman and Deane distrusted Baun and sided with Gehlen in the ensuing power struggle after Gehlen's return in July 1946. Gehlen won this after Deane eventually reorganized Operation Rusty with Gehlen in overall command of both Baun's intelligence gathering and Wessel's evaluation sections which by the late forties came to be known as the Gehlen Organization, or simply the Org. Gehlen planted his own people in Baun's group and when some financial irregularities were discovered Baun was gradually eased out of the Org, dying in 1951.

Once at the helm Gehlen strived to make his organization indispensable to the Americans with intelligence operations that included planting agents disguised as returning POWS into East Germany and listening to Soviet air traffic. But Gehlen's real value to the Army was in counterintelligence, like the operation launched against Soviet Czechoslovakia that involved defectors, a school for spies, and the Orient Express.

Gehlen has been accused of capitalizing on and exaggerating the Soviet threat to consolidate his power and to maintain the U.S.'s support (the debate over the extent of the Soviet threat to the Western Bloc continues even today). The U.S. Army and the CIA have also been faulted for their moral lapse in working with the "Nazi" Gehlen. A counter argument made to this is one of expediency; in mid-1946 when most of the American public still viewed the Soviet Union as benign, many in the military, especially those stationed in Germany, saw the Soviet threat as very large and real (only two divisions and a border constabulary remained in Germany after the massive U.S. troop pullout from Europe. These faced dozens or more Soviet combat divisions scattered around Eastern Europe).

This is apparent by a meeting General Sibert organized before his final departure from Germany. At the meeting, attended by Deane, Waldman, Gehlen, Wessel and Baun, Sibert laid out his plans for Operation Rusty. This included the startling proposal, at least to the Germans, that Operation Rusty should become an American organization, incorporated into American intelligence with the Germans and their families given U.S. citizenship. Further, in the event of a Soviet attack on Western Europe, the Germans and their dependents would be evacuated to the United States except for Baun's organization which would remain behind as agents in place with neutral Spain chosen as their European operating base. Waldman and Gehlen later traveled down to Spain to investigate the viability of this and after a positive response from the Spanish, a detailed evacuation plan was drawn up that even stipulated the bus each person would be assigned to. But after Sibert returned to the U.S. in September 1946 his plan for the Americanization of Rusty never got traction.

However real the Soviet threat, there were always strong misgivings in Washington about Operation Rusty. In Germany the well funded and minimally supervised operation with its members enjoying (some said flaunting)the freedom and privileges their yet undefined status accorded them was envied and resented; the CIC referred to them as "a bunch of Nazis"(in later interviews both Waldman and Deane insisted that during the period the Army had control of it there were no Nazis in the organization. The British, French and Russian intelligence services did however employ former members of the Sicherheitsdienst (SD),the SS security service, during this period).

Lt. Col. Deane, who saw military intelligence as a career dead end and wanted out, had attempted in late Autumn 1946 to get the Central Intelligence Group (CIG), the precursor to the CIA interested in taking Operation Rusty over but was unsuccessful. Deane's replacement at Oberursel disliked Germans and was completely ineffectual in reigning them in and his tenure there only served to exacerbate the "us and them mentality" the Germans had toward their American patrons.

Operation Rusty was moved in December 1947 to Pullach, outside Munich, to a compound that had once belonged to Martin Bormann and came equipped with its own PX and kindergarten. For the first time G-2 in Frankfurt gave Operation Rusty a cover: the 7121 Composite Group, consisting of 10 U.S. Army officers and 15 enlisted men. But questions persisted about what to do with the political hot potato the Army had on its hands. Ideas ranged from liquidation to again offering it to the CIG, which the CIG refused again; the specter of a revived German General Staff always loomed large. But both agreed that Operation Rusty needed more supervision and control now that Germany was no longer a chaotic mess and had become the front line of the Cold War.

Finally in 1948 after pressure from the Pentagon and the White House the newly created CIA sent their representative James H. Critchfield to Pullach on a fact finding mission. Based on Critchfield's recommendation, the CIA would then decide whether the Gehlen Org, which had now grown to about 300 persons, should be disbanded or taken over by them. One of the items Critchfield wanted to know was whether Gehlen was employing Nazis or war criminals and he found that this was not the case. He recommended that the CIA take control of the Org which it did in July 1949.

It would take another seven years for Gehlen's dream, formulated at the beginning of Germany's slide into defeat, to be realized when he became the head of the Bundesnachrichtendienst (BND);West Germany's intelligence service. At its center was his former FHO General Staff colleagues.

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Copyright © 2007 Geoffrey Duin

Written by Geoffrey Duin. If you have questions or comments on this article, please contact Geoffrey Duin at: brazed-78762@mypacks.net.

About the author:
Geoffrey Duin has been a lifelong military history buff and lives in the Pacific Northwest. His freelance articles have appeared in publications in Japan and the U.S. including for Military History magazine.

Published online: 07/15/2007.

* Views expressed by contributors are their own and do not necessarily represent those of MHO.

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