Over the next eight years, through his devotion to covert action, his disdain for the details of analysis, and his dangerous practice of deceiving the president of the United States, Allen Dulles did untold damage to the agency he had helped to create.

PART
TWO

"A Strange Kind of Genius"

The CIA Under Eisenhower

1953 to 1961

8. "WE HAVE NO PLAN"

Allen Dulles had been director of central intelligence for one week when, on March 5, 1953, Joseph Stalin died. "We have no reliable inside intelligence on thinking inside the Kremlin," the agency lamented a few days later. "Our estimates of Soviet long-range plans and intentions are speculations drawn from inadequate evidence." The new president of the United States was not pleased. "Ever since 1946," Eisenhower fumed, "all the so-called experts have been yapping about what would happen when Stalin dies and what we as a nation should do about it. Well, he's dead. And you can turn the files of our government inside out--in vain--looking for any plans laid. We have no plan. We are not even sure what difference his death makes."

Stalin's death intensified American fears about Soviet intentions. The question for the CIA was whether Stalin's successors--whoever they might be--would launch a preemptive war. But the agency's speculations about the Soviets were reflections in a funhouse mirror. Stalin never had a master plan for world domination, nor the means to pursue it. The man who eventually took control of the Soviet Union after his death, Nikita Khrushchev, recalled that Stalin "trembled" and "quivered" at the prospect of a global combat with America. "He was afraid of war," Khrushchev said. "Stalin never did anything to provoke a war with the nited States. He knew his weakness."

One of the fundamental failings of the Soviet state was that every facet of daily life was subordinated to national security. Stalin and his successors were pathological about their frontiers. Napoleon had invaded from Paris, and then Hitler from Berlin. Stalin's only coherent postwar foreign policy had been to turn Eastern Europe into an enormous human shield. While he devoted his energies to murdering his internal enemies, the Soviet people stood in endless lines waiting to buy a sack of potatoes. Americans were about to enjoy eight years of peace and prosperity under Eisenhower. But that peace came at the cost of a skyrocketing arms race, political witch hunts, and a permanent war economy.

Eisenhower's challenge was to confront the Soviet Union without starting World War III or subverting American democracy. He feared that the costs of the cold war could cripple the United States; if his generals and admirals had their way, they would consume the treasury. He decided to base his strategy on secret weapons: nuclear bombs and covert action. They were far cheaper than multibillion-dollar fleets of fighter jets and flotillas of aircraft carriers. With enough nuclear firepower, the United States could deter the Soviets from starting a new world war--or win the war if it came. With a global campaign of covert action, the United States could stop the spread of communism--or, as was Eisenhower's publicly proclaimed policy, roll back the Russians.

Ike bet the fate of the nation on his nuclear arsenal and his spy service. Questions about their best use arose at almost every meeting of the National Security Council early in his presidency. The NSC, created in 1947 to govern the use of American power abroad, had been rarely convened under Truman. Eisenhower revived it and ran it as a good general runs his staff. Every week, Allen Dulles left the slightly shabby confines of his offices and stepped into his black limousine; drove past the crumbling Temporaries, where Wisner and his covert operators worked; and entered the gates of the White House. He took his seat at the great oval desk in the Cabinet Room, facing his brother Foster, the secretary of state, along with the secretary of defense, the chairman of the Joint Chiefs of Staff, Vice President Richard M. Nixon, and the president. Allen typically opened each meeting with a tour of the world's hot spots. Then the talk turned to the strategies of secret war.

"WE COULD LICK THE WHOLE WORLD"

Eisenhower worried endlessly about a nuclear Pearl Harbor, and the CIA could not ease his mind. At the June 5, 1953, meeting of the National Security Council, Allen Dulles told him that the agency could not give him "any prior warning through intelligence channels of a Soviet sneak attack." A few months later, the CIA ventured a guess that the Soviets would be incapable of launching an intercontinental ballistic missile at the United States before 1969. The estimate proved to be off by a dozen years.

In August 1953, when the Soviet Union tested its first weapon of mass destruction--not quite a thermonuclear bomb, but near enough--the agency had no clue and gave no warning. Six weeks later, when Allen Dulles briefed the president on the Soviet test, Eisenhower wondered whether he should launch an all-out nuclear strike on Moscow before it was too late. He said it looked "as though the hour of decision were at hand, and that we should presently have to really face the question of whether or not we would have to throw everything at once against the enemy," say the NSC's declassified minutes. "He had raised this terrible question because there was no sense in our now merely shuddering at the enemy's capability," especially when the United States could not know if Moscow had one nuclear weapon or one thousand. "We were engaged in the defense of a way of life, and the great danger was that in defending this way of life we would find ourselves resorting to methods that endangered this way of life. The real problem, as the President saw it, was to devise methods of meeting the Soviet threat and of adopting controls, if necessary, that would not result in our transformation into a garrison state. The whole thing, said the President, was a paradox."

When Dulles warned the president that "the Russians could launch an atomic attack on the United States tomorrow," Eisenhower replied that "he didn't think anyone here thought the cost of winning a global war against the Soviet Union was a cost too high to pay." But the price of victory might be the destruction of American democracy. The president noted that the Joint Chiefs of Staff had told him, "we should do what was necessary even if the result was to change the American way of life. We could lick the whole world...if we were willing to adopt the system of Adolph Hitler."

Eisenhower had thought he could confront the paradox with covert action. But a bitter battle in East Berlin had revealed the CIA's inability to confront communism head-on. On June 16 and 17, 1953, nearly 370,000 East Germans took to the streets. Thousands of students and workers struck violently at their oppressors, burning Soviet and East German Communist Party buildings, trashing police cars, and trying to stop the Soviet tanks that crushed their spirits. The uprising was far larger than the CIA first realized, but the agency could do nothing to save the rebels. Though Frank Wisner weighed the risks of trying to arm the East Berliners, he balked. His liberation armies proved worthless. On June 18, he said that the CIA "should do nothing at this time to incite East Germans to further actions." The uprising was crushed.

The next week, Eisenhower ordered the CIA to "train and equip underground organizations capable of launching large-scale raids or sustained warfare" in East Germany and the other Soviet satellites. The order also called upon the CIA to "encourage elimination of key puppet officials" in the captive states. Elimination meant what it said. But the order was an empty gesture. The president was learning the limits of the CIA's abilities. That summer, in the White House Solarium, Eisenhower convened the men he trusted most in the realm of national security--among them Walter Bedell Smith, George Kennan, Foster Dulles, and retired air force lieutenant general James R. Doolittle, the pilot who had led the bombing of Tokyo in 1942--and asked them to redefine American national strategy toward the Soviets. By the end of the Solarium project, the idea of rolling back Russia through covert action was pronounced dead at age five.

The president began trying to redirect the agency. The CIA would fight the enemy in Asia, the Middle East, Africa, and Latin America--and wherever colonial empires crumbled. Under Eisenhower, the agency undertook 170 new major covert actions in 48 nations--political, psychological, and paramilitary warfare missions in countries where American spies knew little of the culture or the language or the history of the people.

Eisenhower often made his initial decisions on covert action in private conversations with the Dulles brothers. Typically, Allen spoke to Foster with a proposal for an operation, and Foster spoke to the president over a cocktail in the Oval Office. Foster went back to Allen with the president's approval and an admonition: don't get caught. The brothers steered the course of covert action in private conversations at their respective headquarters, on the telephone, or on Sundays by the swimming pool with their sister, Eleanor, a State Department officer herself. Foster firmly believed that the United States should do everything in its power to alter or abolish any regime not openly allied with America. Allen wholeheartedly agreed. With Eisenhower's blessings, they set out to remake the map of the world.

"A RAPIDLY DETERIORATING SITUATION"

From his first days in power, Allen Dulles polished the public image of the CIA, cultivating America's most powerful publishers and broadcasters, charming senators and congressmen, courting newspaper columnists. He found dignified publicity far more suitable than discreet silence.

Dulles kept in close touch with the men who ran The New York Times, The Washington Post, and the nation's leading weekly magazines. He could pick up the phone and edit a breaking story, make sure an irritating foreign correspondent was yanked from the field, or hire the services of men such as Time's Berlin bureau chief and Newsweek's man in Tokyo. It was second nature for Dulles to plant stories in the press. American newsrooms were dominated by veterans of the government's wartime propaganda branch, the Office of War Information, once part of Wild Bill Donovan's domain. The men who responded to the CIA's call included Henry Luce and his editors at Time, Look, and Fortune; popular magazines such as Parade, the Saturday Review, and Reader's Digest; and the most powerful executives at CBS News. Dulles built a public-relations and propaganda machine that came to include more than fifty news organizations, a dozen publishing houses, and personal pledges of support from men such as Axel Springer, West Germany's most powerful press baron.

Dulles wanted to be seen as the subtle master of a professional spy service. The press dutifully reflected that image. But the archives of the CIA tell a different story.

The minutes of the daily meetings of Dulles and his deputies depict an agency lurching from international crisis to internal calamities--rampant alcoholism, financial malfeasance, mass resignations. What should be done about a CIA officer who had killed a British colleague and faced trial for manslaughter? Why had the former station chief in Switzerland committed suicide? What could be done about the lack of talent in the clandestine service? The agency's new inspector general, Lyman Kirkpatrick, became a constant bearer of bad tidings about the caliber of the CIA's personnel, training, and performance. He warned Dulles that hundreds of the skilled military officers that the CIA had hired during the Korean War were quitting, and "it was most evident that a too-high percentage were leaving with an unfriendly attitude toward the CIA."

At the end of the war, a group of junior and midlevel CIA officers, appalled at the poor morale at headquarters, demanded and received permission to conduct an internal poll of their peers. They interviewed 115 CIA personnel and wrote a long, detailed report, completed at the end of Dulles's first year as director. They described "a rapidly deteriorating situation": widespread frustration, confusion, and purposelessness. Bright and patriotic people had been recruited with promises of exciting overseas service--"a completely false impression"--and then stuck in dead-end posts as typists and messengers. Hundreds of officers returned from foreign assignments to wander through headquarters for months, looking for new assignments without success. "The harm accruing to the Agency from inert personnel practices mounts in geometric, not arithmetic progression," they reported. "For every capable officer that the Agency loses through discontent or frustration, there may well be two or three more competent men (sharing the same educational, professional or social background) that the Agency will never have the opportunity to employ.... The harm done may be irreparable."

The CIA's young officers worked for "too many people in responsible positions who apparently don't know what they're doing." They watched "a shocking amount of money" going to waste on failed missions overseas. One of Frank Wisner's case officers wrote that the operations he worked on were "largely ineffectual and quite expensive. Some are directed at targets that are hardly logical--let alone legitimate. Thus, to protect jobs and prestige, both here and in the field, Headquarters' mission is to whitewash operational budget and programming justifications with, to say the least, exaggerated statements." They concluded that "the Agency is shot through with mediocrity and less."

These young officers had seen an intelligence service that was lying to itself. They described a CIA in which incompetent people were given great power and capable recruits were stacked like cordwood in the corridors.

Allen Dulles suppressed their report. Nothing changed. Forty-three years later, in 1996, a congressional investigation concluded that the CIA "continues to face a major personnel crisis that it has, thus far, not addressed in any coherent way.... Today the CIA still does not have enough qualified case officers to staff many of its stations around the world."

"SOMEBODY TO DO THE DIRTY WORK"

Eisenhower wanted to shape the CIA into an efficient instrument of presidential power. He tried to impose a command structure on the agency through Walter Bedell Smith. In the days after Eisenhower's election, the general had expected to be named chairman of the Joint Chiefs of Staff. He was devastated by Eisenhower's decision to make him the undersecretary of state. Bedell Smith did not want to be second-in-command to Foster Dulles, a man he regarded as a pompous blowhard. But Ike wanted him--and needed him--to serve as an honest broker between himself and the Dulles brothers.

Bedell Smith vented his anger to Vice President Nixon, his neighbor in Washington. From time to time the general would drop in for a visit, Nixon remembered, and "a couple of drinks would loosen his tongue a bit in an uncharacteristic way.... And I remember one night we were sitting having scotch and soda, and Bedell got very emotional, and he said, 'I want to tell you something about Ike.... I was just Ike's prat boy.... Ike has to have somebody to do the dirty work that he doesn't want to do so that he can look like the good guy.'"

Bedell Smith did that work as Ike's overseer of covert action. He served as the crucial link between the White House and the CIA's secret operations. As the driving force of the newly created Operations Coordinating Board, he carried out the secret directives from the president and the National Security Council, and he oversaw the CIA's execution of those orders. His handpicked ambassadors played central roles in carrying out these missions.

During the nineteen months that Bedell Smith served as the president's proconsul for covert action, the agency carried out the only two victorious coups in its history. The declassified records of those coups show that they succeeded by bribery and coercion and brute force, not secrecy and stealth and cunning. But they created the legend that the CIA was a silver bullet in the arsenal of democracy. They gave the agency the aura that Dulles coveted.

9. "CIA'S GREATEST
SINGLE TRIUMPH"

In January 1953, a few days before Eisenhower's inauguration, Walter Bedell Smith called Kim Roosevelt in at CIA headquarters and asked: "When is our goddamn operation going to get underway?"

Two months before, in early November 1952, Roosevelt, the CIA's Near East operations chief, had gone to Tehran to clean up a mess for his friends in British intelligence. Iran's prime minister, Mohammad Mossadeq, had caught the British trying to topple him. He had expelled everyone in their embassy, including the spies. Roosevelt had arrived to preserve and pay off a network of Iranian agents who had worked for the British but were happy to accept American largesse. On the way home, he stopped in London to report to his British colleagues.

He learned that Prime Minister Winston Churchill wanted the CIA to help overthrow Iran. Iran's oil had propelled Churchill to power and glory forty years before. Now Sir Winston wanted it back.

On the eve of World War I, Churchill, as first lord of the British Admiralty, had converted the Royal Navy from coal-burning to oil-burning ships. He championed the British purchase of 51 percent of the new Anglo-Persian Oil Company, which had struck the first of Iran's oil five years before. The British took a lion's share. Not only did Iranian oil fuel Churchill's new armada, but the revenues paid for it. The oil became the lifeblood of the British exchequer. While Britannia ruled the waves, British, Russian, and Turkish troops trampled northern Iran, destroying much of the nation's agriculture and sparking a famine that killed perhaps two million people. Out of this chaos arose a Cossack commander, Reza Khan, who seized power with guile and force. In 1925, he was proclaimed the shah of Iran. A nationalist politician named Mohammad Mossadeq was one of the four members of the Iranian parliament, the Majlis, who opposed him.

The Majlis soon discovered that the British oil giant, now the Anglo-Iranian Oil Company, systematically cheated their government of billions. Hatred of the British and fear of the Soviets ran so high in Iran in the 1930s that the Nazis made deep inroads there--so deep that Churchill and Stalin invaded Iran in August 1941. They exiled Reza Khan and installed his pliant, dewy-eyed twenty-one-year-old son, Mohammad Reza Shah Pahlavi.

While Soviet and British armies occupied Iran, American forces used its airports and roads to transport roughly $18 billion worth of military aid to Stalin. The only American of consequence in Iran during World War II was General Norman Schwarzkopf, who organized Iran's Gendarmerie, the rural police (his son and namesake was the commander of the 1991 war on Iraq, Operation Desert Storm). Roosevelt, Churchill, and Stalin held a war conference in Tehran in December 1943, but the allies left behind a starving nation where oil workers made fifty cents a day and the young shah held power through electoral fraud. After the war, Mossadeq called upon the Majlis to renegotiate the British oil concession. Anglo-Iranian Oil controlled the world's largest known reserves. Its offshore refinery at Abadan was the biggest on earth. While British oil executives and technicians played in private clubs and swimming pools, Iranian oil workers lived in shanties without running water, electricity, or sewers; the injustice bred support for the communist Tudeh Party of Iran, which claimed about 2,500 members at the time. The British took twice as much income from the oil as the Iranians. Now Iran demanded a fifty-fifty split. The British refused. They tried to sway opinion by paying off politicians, newspaper editors, and the state radio director, among others.

The British intelligence chief in Tehran, Christopher Montague Woodhouse, warned his compatriots that they were courting disaster. It came in April 1951, when the Majlis voted to nationalize Iran's oil production. A few days later, Mohammad Mossadeq became Iran's prime minister. By the end of June, British warships were off the coast of Iran. In July, the American ambassador, Henry Grady, reported that the British, in an act of "utter folly," were trying to overthrow Mossadeq. In September, the British solidified an international boycott of Iran's oil, an act of economic warfare intended to destroy Mossadeq. Then Churchill returned to power as prime minister. He was seventy-six; Mossadeq was sixty-nine. Both were stubborn old men who conducted affairs of state in their pajamas. British commanders drew up plans for seventy thousand troops to seize Iran's oil fields and the Abadan refinery. Mossadeq took his case to the United Nations and the White House, laying on the charm in public while warning Truman in private that a British attack could set off World War III. Truman told Churchill flatly that the United States would never back such an invasion. Churchill countered that the price for British military support in the Korean War was American political support for his position in Iran. They reached an impasse in the summer of 1952.

"CIA MAKES POLICY BY DEFAULT"

The British spy Monty Woodhouse flew to Washington to meet with Walter Bedell Smith and Frank Wisner. On November 26, 1952, they discussed how to "unseat Mossadeq." Their plot began in the twilight of a presidential transition--as Truman's power faded, the coup plans grew. As Wisner said when the plot was in full cry, there were times when "CIA makes policy by default." The stated foreign policy of the United States was to support Mossadeq. But the CIA was setting out to depose him without the imprimatur of the White House.

On February 18, 1953, the newly installed chief of the British Secret Intelligence Service arrived in Washington. Sir John Sinclair, a soft-spoken Scotsman known to the public as "C" and to his friends as "Sinbad," met with Allen Dulles and proposed Kim Roosevelt as field commander for a coup. The British gave their plan the prosaic title of Operation Boot. Roosevelt had a grander name: Operation Ajax, after the mythical hero of the Trojan War (a strange choice, as legend has it that Ajax went mad, slew a flock of sheep thinking they were warriors, and killed himself in shame after he came to his senses).

Roosevelt ran the show with flair. He had been working for two years on political, propaganda, and paramilitary operations to fight off a feared Soviet invasion in Iran. CIA officers already had enough cash and guns stashed away to support ten thousand tribal warriors for six months. He had the authority to attack the Tudeh, the small, influential, outlawed Communist party of Iran. Now he shifted his target, aiming to undermine support for Mossadeq inside Iran's mainstream political and religious parties.

Roosevelt started stepping up a campaign of bribery and subversion. The agency's officers and their Iranian agents rented the allegiances of political hacks, holy men, and thugs. They bought the services of street gangs who broke up Tudeh rallies with their bare knuckles and mullahs who denounced Mossadeq from the mosques. The CIA did not have Britain's decades of experience in Iran, nor nearly as many recruited Iranian agents. But it had more money to hand out: at least $1 million a year, a great fortune in one of the world's poorer nations.

The CIA took its cues from the influence-buying network controlled by British intelligence. It was run by the Rashidian brothers, three sons of an Iranian Anglophile who controlled ships, banks, and real estate. The Rashidians had clout with members of the Iranian parliament. They held sway among the leading merchants of the bazaar, the unacknowledged legislators of Tehran. They bribed senators, senior military officers, editors and publishers, goon squads, and at least one member of Mossadeq's cabinet. They bought information with cookie tins filled with cash. Their circle even included the shah's chief manservant. It would prove a catalyst in the coup.

Allen Dulles walked into the March 4, 1953, National Security Council meeting with seven pages of briefing notes focused on the "consequences of Soviet take over" in Iran. The country faced "a maturing revolutionary set-up," and if it went communist, all the dominoes of the Middle East would fall. Sixty percent of the free world's oil would be in Moscow's hands. This disastrous loss would "seriously deplete our reserves for war," Dulles warned; oil and gasoline would have to be rationed in the United States. The president did not buy a word of it. He thought it might be better to offer Mossadeq a $100 million loan, in order to stabilize his government, rather than to overthrow it.

Monty Woodhouse tactfully suggested to his American counterparts at the CIA that they might take a different approach in presenting the problem to Eisenhower. They could not maintain that Mossadeq was a communist. But they could argue that the longer he remained in power, the greater the danger that the Soviets would invade Iran. Kim Roosevelt fine-tuned this pitch for the president's ear: If Mossadeq wobbled to the left, Iran would fall to the Soviets. But if he was pushed the right way, the CIA could make sure that the government fell into American control.

Mossadeq played straight into this trap. In a miscalculated bluff, he raised the specter of the Soviet threat with the American embassy in Tehran. He expected to be "rescued by the Americans," said John H. Stutesman, an American diplomat who knew Mossadeq well and served as the State Department officer in charge of Iranian affairs in 1953. "Mossadeq felt that if he kicked out the British, and threatened the Americans with Russian hegemony, that we'd rush in. He wasn't that far wrong."

On March 18, 1953, Frank Wisner informed Roosevelt and Woodhouse that they had an initial go-ahead from Allen Dulles. On April 4, CIA headquarters sent $1 million to the Tehran station. But Eisenhower still had his doubts, as did other key players in the plan to overthrow Iran.

The president made an eloquent speech a few days later called "The Chance for Peace," in which he declared that "any nation's right to form a government and an economic system of its own choosing is inalienable," and "any nation's attempt to dictate to other nations their form of government is indefensible." These ideas struck home with the CIA's station chief in Tehran, Roger Goiran, who asked headquarters why the United States would want to ally itself with the traditions of British colonialism in the Middle East. It was a historic mistake, he argued, a long-term disaster for American interests. Allen Dulles recalled him to Washington and dismissed him as station chief. The U.S. ambassador to Iran, Loy Henderson, who had been in on the plans from the start, strongly opposed the British choice of a dissolute retired major general, Fazlollah Zahedi, as the front man for the coup. Mossadeq had told the ambassador that he knew Zahedi was a British-backed traitor.

Despite that, the British nominated and the CIA seconded Zahedi, the only man openly bidding for power who was thought to be pro-American. In late April, he went into hiding after the kidnapping and murder of Iran's national police chief--with good reason, for the suspected killers were his own supporters. He did not resurface for eleven weeks.

In May, the plot gained momentum, though it still lacked the president's approval. It was now in its final draft. Zahedi, armed with $75,000 in CIA cash, would form a military secretariat and choose colonels to mount the coup. A group of religious fanatics called the Warriors of Islam--a "terrorist gang," says a CIA history of the coup--would threaten the lives of Mossadeq's political and personal supporters inside and outside the government. They would stage violent attacks on respected religious leaders that would look as if they were the work of the communists. The CIA drew up pamphlets and posters as part of a $150,000 propaganda campaign to control Iran's press and public, proclaiming that "Mossadeq favors the Tudeh Party and the USSR.... Mossadeq is an enemy of Islam.... Mossadeq is deliberately destroying the morale of the Army.... Mossadeq is deliberately leading the country into economic collapse.... Mossadeq has been corrupted by power." On D-Day, the coup plotters led by Zahedi's military secretariat would seize the army's general staff headquarters, Radio Tehran, Mossadeq's home, the central bank, police headquarters, and the telephone and telegraph offices. They would arrest Mossadeq and his cabinet. More money, $11,000 a week, immediately went to buy off enough members of the Majlis to ensure that a majority would proclaim Zahedi as the new prime minister. This last detail had the advantage of giving the coup an appearance of legality. Zahedi, in turn, would pledge fealty to the shah and restore his monarchy to power.

Would the weak-willed shah play his role? Ambassador Henderson did not believe he had the backbone to support a coup. But Roosevelt thought it would be hopeless to go ahead without him.

On June 15, Roosevelt went to London to show the plan to the boffins of British intelligence. They met in a headquarters conference room with a sign that read, "Curb Your Guests." No objections were raised. The Americans, after all, were footing the bill. The British had conceived the coup, but their leaders could not play a commanding role in its execution. On June 23, Foreign Minister Anthony Eden had major abdominal surgery in Boston. That same day, Winston Churchill suffered a severe stroke and almost died; the news was kept so quiet that the CIA heard nothing of it.

Over the next two weeks, the agency set up a two-pronged chain of command. One would run Zahedi's military secretariat. The other would control the political warfare and propaganda campaign. Both reported directly to Frank Wisner. Kim Roosevelt set out to fly to Beirut, drive through Syria and Iraq into Iran, and link up with the Rashidian brothers. The CIA awaited a green light from the president of the United States.

It came on July 11. And from that moment on, almost everything went wrong.

"AFTER YOU, YOUR MAJESTY"

The secrecy of the mission was blown before day one. On July 7, the CIA had monitored a Tudeh Party radio broadcast. The clandestine radio warned Iranians that the American government, along with various "spies and traitors," including General Zahedi, were working "to liquidate the Mossadeq government." Mossadeq had his own military and political intelligence sources, independent of the Tudeh, and he knew what he was up against.

Then the CIA discovered that its coup had no troops. General Zahedi had not a single soldier under his control. The agency had no map of the military situation in Tehran, no roster of the Iranian army. Kim Roosevelt turned to Brigadier General Robert A. McClure, the father of U.S. special-operations forces. McClure was Eisenhower's chief intelligence officer during World War II, ran the army's Psychological Warfare Division during the Korean War, and specialized in overseeing joint operations with the CIA. He had worked side by side with Dulles and Wisner, and he trusted neither man.

General McClure had gone to Tehran to run the American military assistance advisory group, established in 1950 to provide up-and-coming Iranian officers with military support, training, and advice. As part of the CIA's war of nerves, he cut off American contact with pro-Mossadeq commanders. Roosevelt relied entirely on McClure for a picture of the Iranian military and the political loyalties of its senior officers. President Eisenhower personally insisted that McClure receive a second star after the coup, noting his "very fine relationships with the Shah and other senior people in whom we are interested." The CIA recruited a colonel who had served as the Iranian liaison to McClure's military assistance group to help run the coup. He secretly enlisted about forty fellow officers.

Now all that was lacking was the shah.

A CIA colonel, Stephen J. Meade, flew to Paris to pick up the shah's strong-willed and unpopular twin sister, Princess Ashraf. The CIA's script called for her to return from exile and persuade the shah to back General Zahedi. But Princess Ashraf was nowhere to be found. The British intelligence agent Asadollah Rashidian tracked her down on the French Riviera. It took another ten days to coax her onto a commercial flight to Tehran. The inducements included a large sum of cash and a mink coat from the British intelligence service, along with a promise from Colonel Meade that the United States would bankroll the royal family should the coup fail. After a stormy face-to-face confrontation with her twin, she left Tehran on July 30, wrongly convinced that she had stiffened his spine. The CIA brought in General Norman Schwarzkopf to bolster the shah on August 1. The shah, fearing that his palace was bugged, led the general into the grand ballroom, pulled a small table to its center, and whispered that he would not go along with the coup. He had no confidence that the army would back him.

Kim Roosevelt spent the next week skulking in and out of the shah's palace, pressuring him mercilessly, warning him that his failure to follow the CIA could lead to a communist Iran or "a second Korea"--in either case, a death sentence for the monarch and his family. Terrified, the shah fled to his royal resort on the Caspian Sea.

Roosevelt improvised furiously. He commissioned a royal decree dismissing Mossadeq and appointing General Zahedi as prime minister. He ordered the colonel who commanded the shah's imperial guard to present a signed copy of this legally dubious document to Mossadeq at gunpoint and arrest him if he defied it. On August 12, the colonel chased after the shah on the Caspian and returned the next night with signed copies of the decrees. Now Roosevelt's Iranian agents cascaded into the streets of Tehran. Newspapermen and printing presses spewed propaganda: Mossadeq was a communist, Mossadeq was a Jew. The CIA's street thugs, posing as Tudeh Party members, attacked mullahs and defiled a mosque. Mossadeq counterattacked by shutting down the Majlis--under the law, only the Majlis could dismiss him, not the shah--rendering the senators and deputies whose votes had been purchased by the CIA useless.

Roosevelt forged ahead. He cabled headquarters on August 14 with an urgent request for $5 million more to prop up General Zahedi. The coup was set for that night--and Mossadeq knew it. He mobilized the Tehran garrison of the Iranian army and surrounded his home with tanks and troops. When the shah's imperial guardsman went to arrest the prime minister, loyal officers seized him. Zahedi hid at a CIA safe house, watched over by one of Roosevelt's officers, a rookie named Rocky Stone. The CIA's hastily assembled cadre of Iranian colonels disintegrated.

Radio Tehran went on the air at 5:45 a.m. on August 16 announcing that the coup had failed. CIA headquarters had no clue what to do next. Allen Dulles had left Washington a week earlier for an extended European vacation, blithely confident that all was well. He was out of touch. Frank Wisner was out of ideas. Roosevelt, on his own, decided to try to convince the world that it was Mossadeq who had staged the failed coup. He needed the shah to sell that story, but the monarch had fled the country. The American ambassador in Iraq, Burton Berry, learned a few hours later that the shah was in Baghdad, begging for help. Roosevelt fed the outlines of a script to Berry, who advised the shah to broadcast a statement saying he had fled in the face of a left-wing uprising. He did as instructed. Then he told his pilot to file a flight plan for the world capital of exiled monarchs: Rome.

On the night of August 16, one of Roosevelt's officers handed $50,000 to the station's Iranian agents and told them to produce a crowd posing as communist goons. The next morning, hundreds of paid agitators flooded the streets of Tehran, looting, burning, and smashing the symbols of government. Actual members of the Tudeh Party joined them, but they soon realized "that a covert action was being staged," as the CIA station reported, and "tried to argue demonstrators into going home." After a second sleepless night, Roosevelt welcomed Ambassador Loy Henderson, who flew in from Beirut on August 17. On the way to meet him at the airport, members of the American embassy passed a toppled bronze statue of the shah's father, with only the boots left standing.

Henderson, Roosevelt, and General McClure held a four-hour war council inside the embassy compound. The result was a new plan to create anarchy. Thanks to McClure, Iranian military officers were dispatched to outlying garrisons to enlist soldiers to support the coup. The CIA's Iranian agents were ordered to hire more street mobs. Religious emissaries were sent to persuade the supreme Shi'ite ayatollah in Iran to declare a holy war.

But back at headquarters, Wisner despaired. He read the assessment of the CIA's best analysts that day: "The failure of the military coup in Tehran and the flight of the shah to Baghdad emphasize Prime Minister Mossadeq's continued mastery of the situation and foreshadow more drastic action on his part to eliminate all opposition." Late on the night of August 17, he sent a message to Tehran saying that, in the absence of strong recommendations to the contrary from Roosevelt and Henderson, the coup against Mossadeq should cease. A few hours later, sometime after 2 a.m., Wisner placed a frantic telephone call to John Waller, who was running the Iran desk at CIA headquarters.

The shah had flown to Rome and checked into the Excelsior Hotel, Wisner reported. And then "a terrible, terrible coincidence occurred," Wisner said. "Can you guess what it is?"

Waller could not imagine.

"Think of the worst thing you can think of," Wisner said.

"He was hit by a cab and killed," Waller replied. "No, no, no, no," Wisner responded. "John, maybe you don't know that Dulles had decided to extend his vacation by going to Rome. Now can you imagine what happened?"

Waller shot back: "Dulles hit him with his car and killed him?"

Wisner was not amused.

"They both showed up at the reception desk at the Excelsior at the very same moment," Wisner said. "And Dulles had to say, 'After you, Your Majesty.'"

"A PASSIONATE EMBRACE"

At dawn on August 19, the agency's hired mobs assembled in Tehran, ready for a riot. Buses and trucks filled with tribesmen from the south, their leaders all paid by the CIA, arrived in the capital. Ambassador Henderson's deputy chief of mission, William Rountree, described what happened next as "an almost spontaneous revolution."

"It began with a public demonstration by a health club or exercise club--lifting barbells and chains and that sort of thing," he recounted. These were weightlifters and circus strongmen recruited by the CIA for the day. "They began shouting anti-Mossadeq, pro-Shah slogans and proceeded to march through the streets. Many others joined them, and soon there was a substantial demonstration in favor of the Shah and against Mossadeq. Shouts of 'Long live the Shah!' spread throughout the city and the crowd went in the direction of the building housing the Mossadeq cabinet," where they seized ranking members of the government, burned four newspaper offices, and sacked the political headquarters of a pro-Mossadeq party. Two of the men in the crowd were religious leaders. One was the Ayatollah Ahmed Kashani. Alongside him was his fifty-one-year-old devotee, Ayatollah Ruhollah Musavi Khomeini, the future leader of Iran.

Roosevelt told his Iranian agents to hit the telegraph office, the propaganda ministry, and police and army headquarters. By afternoon, after a skirmish that killed at least three people, the CIA's agents were on the air at Radio Tehran. Roosevelt went to Zahedi's hideout, in the safe house run by the CIA's Rocky Stone, and told him to be ready to proclaim himself prime minister. Zahedi was so frightened that Stone had to button him into his military tunic. At least a hundred people died on the streets of Tehran that day.

At least two hundred more were killed after the CIA directed the shah's Imperial Guard to attack Mossadeq's heavily defended home. The prime minister escaped but surrendered the next day. He spent the next three years incarcerated and a decade more under house arrest before he died. Roosevelt handed Zahedi $1 million in cash, and the new prime minister set out to crush all opposition and jail thousands of political prisoners.

"The CIA did remarkably well in creating a situation in which, in the proper circumstances and atmosphere, a change could be effected," remembered Ambassador Rountree, later the assistant secretary of state for the Near East. "Quite clearly the matter did not work out as they had anticipated, or at least hoped, but it did work out in the end."

In his hour of glory, Kim Roosevelt flew to London. On August 26, at two in the afternoon, he was received at 10 Downing Street by the prime minister. Winston Churchill was "in bad shape," Roosevelt reported, his speech slurred, his vision occluded, his memory fleeting: "The initials CIA meant nothing to him, but he had a vague idea that Roosevelt must be connected in some way with his old friend Bedell Smith."

Roosevelt was hailed as a hero at the White House. Faith in the magic of covert action soared. "Romantic gossip about the 'coup' in Iran spread around Washington like wildfire," remembered the CIA's Ray Cline, one of the agency's star analysts. "Allen Dulles basked in the glory of the exploit." But not everyone at headquarters saw the fall of Mossadeq as a triumph. "The trouble with this seemingly brilliant success" was "the extravagant impression of CIA's power that it created," Cline wrote. "It did not prove that CIA could topple governments and place rulers in power; it was a unique case of supplying just the right amount of marginal assistance in the right way at the right time." By renting the allegiances of soldiers and street mobs, the CIA had created a degree of violence sufficient to stage a coup. Money changed hands and those hands changed a regime.

The shah returned to the throne and rigged the next parliamentary elections, using the CIA's street gangs as enforcers. He imposed three years of martial law and tightened his control over the country. He called upon the agency and the American military mission in Iran to help him secure his power by creating a new intelligence service, which became known as SAVAK. The CIA wanted SAVAK to serve as its eyes and ears against the Soviets. The shah wanted a secret police to protect his power. SAVAK, trained and equipped by the CIA, enforced his rule for more than twenty years.

The shah became the centerpiece of American foreign policy in the Islamic world. For years to come, it would be the station chief, not the American ambassador, who spoke to the shah for the United States. The CIA wove itself into Iran's political culture, locked in "a passionate embrace with the Shah," said Andrew Killgore, a State Department political officer under the American ambassador from 1972 to 1976--Richard Helms.

The coup "was regarded as CIA's greatest single triumph," Killgore said. "It was trumpeted as a great American national victory. We had changed the whole course of a country here." A generation of Iranians grew up knowing that the CIA had installed the shah. In time, the chaos that the agency had created in the streets of Tehran would return to haunt the United States.

The illusion that the CIA could overthrow a nation by sleight of hand was alluring. It led the agency into a battle in Central America that went on for the next forty years.

10. "BOMB REPEAT
BOMB"

Colonel Al Haney parked his new Cadillac at the edge of a decrepit air base in Opa-Locka, Florida, a few days after Christmas in 1953, stepped out onto the tarmac, and surveyed his new domain: three two-story barracks buildings on the fringes of the Everglades. Colonel Haney had buried the human wreckage he had created as the station chief in South Korea under a top secret shroud. Then he conned his way into a new command. A handsome rogue, thirty-nine years old, newly divorced, wearing a crisp army uniform on a muscular six-foot-two frame, he was Allen Dulles's newly appointed special deputy for Operation Success, the CIA's plot to overthrow the government of Guatemala.

Plots for a coup against the president, Jacobo Arbenz, had been kicking around the agency for almost three years. They were revived the instant that Kim Roosevelt returned triumphant from Iran. An elated Allen Dulles asked him to lead the operation in Central America. Roosevelt respectfully declined. He determined after studying the matter that the agency was going in blind. It had no spies in Guatemala and no sense of the will of the army or the people. Was the military loyal to Arbenz? Could that loyalty be broken? The CIA had no idea.

Haney had orders to devise a path to power for a cashiered Guatemalan colonel selected by CIA headquarters, Carlos Castillo Armas. But his strategy was no more than an elaborate sketch. It said only that the CIA would train and equip a rebel force and point it toward the presidential palace in Guatemala City. Wisner sent the draft over to the State Department for a bolstering from General Walter Bedell Smith, who put a new team of American ambassadors in place for the operation.

"THE BIG STICK"

Pistol-packing Jack Peurifoy had made his name ridding the State Department of leftists and liberals in 1950. On his first tour abroad, as ambassador to Greece from 1951 to 1953, he worked closely with the CIA to establish covert American channels of power in Athens. Upon arriving at his new post, Peurifoy cabled Washington: "I have come to Guatemala to use the big stick." He met with President Arbenz and reported: "I am definitely convinced that if the President is not a communist, he will certainly do until one comes along."

Bedell Smith picked Whiting Willauer, a founder of Civil Air Transport, the Asian airline that Frank Wisner bought in 1949, as ambassador to Honduras. Willauer summoned pilots from CAT headquarters in Taiwan, with instructions to lie low and await orders in Miami and Havana. Ambassador Thomas Whelan went to Nicaragua to work with the dictator Anastasio Somoza, who was helping the CIA build a training base for Castillo Armas's men.

On December 9, 1953, Allen Dulles formally approved Operation Success and authorized a $3 million budget. He appointed Al Haney as field commander and named Tracy Barnes as its chief of political warfare.

Dulles believed in the romantic notion of the gentleman spy. Tracy Barnes was an exemplar. The well-bred Mr. Barnes had the classic CIA resume of the 1950s--Groton, Yale, Harvard Law. He grew up on the Whitney estate on Long Island with his own private golf course. He was an OSS hero in World War II and won a Silver Star by capturing a German garrison. He had dash and panache and the pride that goes before a fall, and he came to represent the worst of the clandestine service. "Like those who no matter how great their effort seem doomed never to master a foreign language, Barnes proved unable to get the hang of secret operations," Richard Helms reflected. "Even worse, thanks to Allen Dulles' constant praise and pushing, Tracy apparently remained unaware of his problem." He went on to serve as chief of station in Germany and England, and then on to the Bay of Pigs.

Barnes and Castillo Armas flew to Opa-Locka on January 29, 1954, where they started hammering out their plans with Colonel Haney. They awoke the next morning to discover that their scheme had been blown sky-high. Every major newspaper in the Western Hemisphere published President Arbenz's accusations of a "counterrevolutionary plot" sponsored by a "Northern government," led by Castillo Armas, and based in a rebel training camp on Somoza's farm in Nicaragua. The leak had come from secret cables and documents that a CIA officer--Colonel Haney's liaison with Castillo Armas--had left in a Guatemala City hotel room. The hapless officer was summoned to Washington and advised to take a job as a fire watcher somewhere deep in the forests of the Pacific Northwest.

The crisis quickly revealed Al Haney as one of the loosest cannons in the CIA's arsenal. He flailed for ways to distract Guatemalans from the accounts of the plot by planting fake news in the local press. "If possible, fabricate big human interest story, like flying saucers, birth sextuplets in remote area," he cabled CIA headquarters. He dreamed up headlines: Arbenz was forcing all Catholic troops to join a new church that worshipped Stalin! A Soviet submarine was on its way to deliver arms for Guatemala! This last idea captured the imagination of Tracy Barnes. Three weeks later he had his CIA staff plant a cache of Soviet weapons on the Nicaraguan coast. They concocted stories about Soviets arming communist assassination squads in Guatemala. But few among the press and the public bought what Barnes was peddling.

The CIA's charter demanded that covert action be conducted in ways so subtle that the American hand was unseen. That mattered little to Wisner. "There is not the slightest doubt that if the operation is carried through many Latin Americans will see in it the hand of the U.S.," he told Dulles. But if Operation Success was curtailed "on the grounds that the hand of the U.S. is too clearly shown," Wisner argued, "a serious question is raised as to whether any operation of this kind can appropriately be included as one of the U.S. cold war weapons, no matter how great the provocation or how favorable the auspices." Wisner thought that an operation was clandestine so long as it was unacknowledged by the United States and kept secret from the American people.

Wisner summoned Colonel Haney to headquarters for a come-to-Jesus meeting. "There is no operation regarded as being so important as this one and no operation on which the reputation of the Agency is more at stake," he told Haney. "The boss has to be satisfied that we have what it takes," Wisner said, but "Headquarters had never received a clear and concise statement of what the plans are with respect to what takes place on D-day." Colonel Haney's blueprint was a set of interlocking timelines scrawled on a forty-foot roll of butcher paper pinned to the wall at the Opa-Locka barracks. He explained to Wisner that you could understand the operation only by studying the scribbles on the Opa-Locka scrolls.

Wisner began "to lose confidence in Haney's judgment and restraint," Richard Bissell remembered. The fiercely cerebral Bissell, another product of Groton and Yale, the man once known as Mr. Marshall Plan, had just come aboard at the CIA. He had signed on as "Dulles's apprentice," as he put it, with promises of great responsibilities to come. The director immediately asked him to sort out the increasingly complicated logistics of Operation Success.

Bissell and Barnes represented the head and the heart of Allen Dulles's CIA. Though they had no experience in running covert action, and it was a mark of Dulles's faith that they were ordered to find out what Al Haney was up to in Opa-Locka.

Bissell said he and Barnes rather enjoyed the hyperkinetic colonel: "Barnes was very much pro-Haney and gung-ho about the operation. I believed Haney was the right man for the job because the person in charge of an operation of this kind had to be an activist and strong leader. Barnes and I both liked Haney and approved of the way he was running things. No doubt Haney's operation left a positive impression on me, because I set up a project office similar to his during the preparations for the Bay of Pigs invasion."

"WHAT WE WANTED TO DO WAS TO HAVE A
TERROR CAMPAIGN"

The "bold but incompetent" Castillo Armas (to quote Barnes), along with his "extremely small and ill-trained" rebel forces (to quote Bissell), waited for a signal from the Americans to attack, under the watchful eye of Haney's man Rip Robertson, who had run some of the CIA's ill-fated guerrilla operations in Korea.

No one knew what would happen when Castillo Armas and his few hundred rebels attacked the five-thousand-man Guatemalan military. The CIA subsidized an anticommunist student movement in Guatemala City, several hundred strong. But they served mainly, in Wisner's words, as a "goon squad," not as a resistance army. So Wisner hedged his bet and opened up a second front on the war against Arbenz. He sent one of the CIA's best officers, Henry Hecksher, the chief of the Berlin base, to Guatemala City with orders to persuade senior military officers to rebel against the government. Hecksher was authorized to spend up to $10,000 a month for bribes, and he soon bought the loyalty of a minister without portfolio in Arbenz's cabinet, Colonel Elfego Monzon. The hope was that more money would drive a wedge into an officer corps already beginning to crack under the twin pressures of an arms embargo imposed by the United States and the threat of an American invasion.

But Hecksher soon became convinced that only an actual attack by the United States would embolden the Guatemalan military to overthrow Arbenz. Hecksher wrote to Haney: "The 'crucial spark' has to be generated by heat--United States heat"--in the form of bombing the capital.

CIA headquarters then sent Haney a five-page roster of fifty-eight Guatemalans marked for assassination. The targeted killing was approved by Wisner and Barnes. The list encompassed "high government and organizational leaders" suspected of communist leanings and "those few individuals in key government and military positions of tactical importance whose removal for psychological, organizational or other reasons is mandatory for the success of military action." Castillo Armas and the CIA agreed that the assassinations would take place during or immediately after his triumphant arrival in Guatemala City. They would send a message underscoring the seriousness of the rebels' intent.

One of the many myths about Operation Success, planted by Allen Dulles in the American press, was that its eventual triumph lay not in violence but in a brilliant piece of espionage. As Dulles told the story, the trick was turned by an American spy in the Polish city Stettin, on the Baltic Sea--the northern terminus of the iron curtain--posing as a bird watcher. He saw through his binoculars that a freighter called the Alfhem was carrying Czech arms to the Arbenz government. He then posted a letter with a microdot message--"My God, my God, why hast thou forsaken me?"--addressed to a CIA officer under deep cover in a Paris auto parts store, who relayed the coded signal by shortwave to Washington. As Dulles told the story, another CIA officer secretly inspected the hold of the ship while it docked at the Kiel Canal connecting the Baltic to the North Sea. The CIA, therefore, knew from the moment that the Alfhem left Europe that she was bound for Guatemala carrying guns.

A wonderful yarn, repeated in many history books, but a bald-faced lie--a cover story that disguised a serious operational mistake. In reality, the CIA missed the boat.

Arbenz was desperate to break the American weapons embargo on Guatemala. He thought he could ensure the loyalty of his officer corps by arming them. Henry Hecksher had reported that the Bank of Guatemala had transferred $4.86 million via a Swiss account to a Czech weapons depot. But the CIA lost the trail. Four weeks of frantic searching ensued before the Alfhem docked successfully at Puerto Barrios, Guatemala. Only after the cargo was uncrated did word reach the U.S. Embassy that a shipment of rifles, machine guns, howitzers, and other weapons had come ashore.

The arrival of the arms--many of them rusted and useless, some bearing a swastika stamp, indicating their age and origin--created a propaganda windfall for the United States. Grossly overstating the size and military significance of the cargo, Foster Dulles and the State Department announced that Guatemala was now part of a Soviet plot to subvert the Western Hemisphere. The Speaker of the House, John McCormack, called the shipment an atomic bomb planted in America's backyard.

Ambassador Peurifoy said the United States was at war. "Nothing short of direct military intervention will succeed," he cabled Wisner on May 21. Three days later, U.S. Navy warships and submarines blockaded Guatemala, in violation of international law.

On May 26, a CIA plane buzzed the presidential palace and dropped leaflets over the headquarters of the presidential guard, the most elite of the army's units in Guatemala City. "Struggle against Communist atheism!" they read. "Struggle with Castillo Armas!" It was a deft blow. "I suppose it really doesn't matter what the leaflets say," Tracy Barnes told Al Haney. He was right. What mattered was that the CIA had swooped down and dropped a weapon on a country that had never been bombed before.

"What we wanted to do was to have a terror campaign," said the CIA's E. Howard Hunt, who worked on the political-warfare portfolio for the operation--"to terrify Arbenz particularly, to terrify his troops, much as the German Stuka bombers terrified the population of Holland, Belgium and Poland at the onset of World War Two."

For four weeks, starting on May Day 1954, the CIA had been waging psychological warfare in Guatemala through a pirate radio station called the Voice of Liberation, run by a CIA contract officer, an amateur actor and skilled dramatist named David Atlee Phillips. In a tremendous stroke of luck, the Guatemalan state radio station went off the air in mid-May for a scheduled replacement of its antenna. Phillips snuggled up to its frequency, where listeners looking for the state broadcasts found Radio CIA. Unrest turned to hysteria among the populace as the rebel station sent out shortwave reports of imaginary uprisings and defections and plots to poison wells and conscript children.

On June 5, the retired chief of the Guatemalan air force flew to Somoza's farm in Nicaragua, where the broadcasts originated. Phillips's men fueled him with a bottle of whisky and induced him to talk about his reasons for fleeing Guatemala. After the tape was cut and spliced at the CIA's field studio, it sounded like a passionate call for rebellion.

"CONSIDER UPRISING A FARCE"

When Arbenz heard about the broadcast the next morning, his mind snapped. He became the dictator the CIA had depicted. He grounded his own air force for fear his fliers would defect. Then he raided the home of an anticommunist student leader who worked closely with the CIA and found evidence of the American plot. He suspended civil liberties and began arresting hundreds of people, hitting the CIA's student group the hardest. At least seventy-five of them were tortured, killed, and buried in mass graves.

"Panic spreading in government circles," the CIA station in Guatemala cabled on June 8. That was exactly what Haney wanted to hear. He sent orders to fan the flames with more falsehoods: "A group of Soviet commissars, officers and political advisers, led by a member of the Moscow Politburo, have landed.... In addition to military conscription, the communists will introduce labor conscription. A decree is already being printed. All boys and girls 16 years old will be called for one year of labor duty in special camps, mainly for political indoctrination and to break the influence of family and church on the young people.... Arbenz has already left the country. His announcements from the National Palace are actually made by a double, provided by Soviet intelligence."

Haney started flying bazookas and machine guns down south on his own initiative, issuing unauthorized orders to arm peasants and to urge them to kill Guatemalan police. "We question strongly...that Campesinos be enjoined kill Guardia Civil," Wisner cabled Haney. "This amounts to incitement civil war...discrediting movement as terrorist and irresponsible outfit willing sacrifice innocent lives."

Colonel Monzon, the CIA's agent in Arbenz's cabinet, demanded bombs and tear gas to kick off the coup. "Vitally important this be done," the CIA station told Haney. Monzon was "told he better move fast. He agreed.... Said Arbenz, Commies, and enemies will be executed." The CIA station in Guatemala pleaded again for an attack: "We urgently request that bomb be dropped, show strength be made, that all available planes be sent over, that army and capital be shown that time for decision is here."

On June 18, Castillo Armas launched his long-awaited assault, more than four years in the making. A force of 198 rebels attacked Puerto Barrios, on the Atlantic coast. They were defeated by policemen and dockworkers. Another 122 marched toward the Guatemalan army garrison at Zacapa. All but 30 were killed or captured. A third force of 60 rebels set out from El Salvador, only to be arrested by local police. Castillo Armas himself, clad in a leather jacket and driving a battered station wagon, led 100 men from Honduras toward three lightly defended Guatemalan villages. He camped out a few miles from the border, calling on the CIA for more food, more men, more weapons--but within seventy-two hours, more than half of his forces were killed, captured, or on the verge of defeat.

On the afternoon of June 19, Ambassador Peurifoy commandeered the CIA's secure communications line at the American embassy and wrote directly to Allen Dulles: "Bomb repeat Bomb," he pleaded. Haney weighed in less than two hours later with a blistering message to Wisner: "Are we going to stand by and see last hope of free people in Guatemala submerged to depths of Communist oppression and atrocity until we send American armed force against enemy?...Is not our intervention now under these circumstances far more palatable than by Marines? This is the same enemy we fought in Korea and may fight tomorrow in Indo-China."

Wisner froze. It was one thing to send legions of foreigners to their deaths. It was quite another to send American pilots to blow up a national capital.

The morning of June 20, the CIA's Guatemala City station reported that the Arbenz government was "recovering its nerve." The capital was "very still, stores shuttered. People waiting apathetically, consider uprising a farce."

The tension at CIA headquarters was almost unbearable. Wisner became fatalistic. He cabled Haney and the CIA station: "We are ready authorize use of bombs moment we are convinced would substantially increase likelihood of success without disastrous damage interests of United States.... We fear bombing of military installations more likely to solidify army against the rebellion than to induce defection and we are convinced attacks against civilian targets, which would shed blood of innocent people, would fit perfectly into Communist propaganda line and tend to alienate all elements of population."

Bissell told Dulles that "the outcome of the effort to overthrow the regime of President Arbenz of Guatemala remains very much in doubt." At CIA headquarters, "we were all at our wit's end as to how to proceed," Bissell wrote years later. "Grappling with continual operational snafus, we were only too aware how perilously close to failure we were." Dulles had limited Castillo Armas to three F-47 Thunderbolt fighter-bombers, in the name of deniability. Two were out of commission. Now, Bissell recorded in his memoirs, "the Agency's reputation and his own were at stake."

Dulles secretly authorized one more air strike on the capital as he prepared to meet with the president. On the morning of June 22, the single plane still flying for the CIA set a small oil tank ablaze on the outskirts of town. The fire was out in twenty minutes. "Public impression is that attacks show incredible weakness, lack of decision, and fainthearted effort," Haney raged. "Castillo Armas efforts widely described as farce. Anti-Commie anti-government morale near vanishing point." He cabled Dulles directly, demanding more aircraft immediately.

Dulles picked up the phone and called William Pawley--one of the richest businessmen in the United States, the chairman of Democrats for Eisenhower, one of Ike's biggest benefactors in the 1952 elections, and a CIA consultant. Pawley could provide a secret air force if anyone could. Then Dulles sent Bissell to see Walter Bedell Smith, whom the CIA had consulted daily on Operation Success, and the general approved the back-channel request for aircraft. But at the last minute the assistant secretary of state for Latin America, Henry Holland, objected violently, demanding that they go to see the president.

At 2:15 p.m. on June 22, Dulles, Pawley, and Holland walked into the Oval Office. Eisenhower asked what the rebellion's chances of success were at that moment. Zero, Dulles confessed. And if the CIA had more planes and bombs? Maybe 20 percent, Dulles guessed.

The president and Pawley recorded the conversation almost identically in their memoirs--with one exception. Eisenhower erased Pawley from history, and it is clear why: he cut a secret deal with his political benefactor. "Ike turned to me," Pawley wrote, "and he said: 'Bill, go ahead and get the planes.'"

Pawley telephoned the Riggs Bank, a block away from the White House. Then he called the Nicaraguan ambassador to the United States. He drew $150,000 in cash and drove the ambassador to the Pentagon. Pawley handed over the cash to a military officer, who promptly transferred ownership of three Thunderbolts to the government of Nicaragua. The planes arrived, fully armed, in Panama from Puerto Rico that evening.

They flew into combat at dawn, unleashing a barrage against the same Guatemalan army forces whose loyalties were the linchpin of the plan to topple Arbenz. CIA pilots strafed troop trains carrying soldiers to the front. They dropped bombs, dynamite, hand grenades, and Molotov cocktails. They blew up a radio station run by American Christian missionaries and sank a British freighter docked on the Pacific coast.

On the ground, Castillo Armas failed to gain an inch. Turning back, he radioed the CIA, pleading for more air power. The Voice of Liberation, its signal relayed from a transponder atop the American embassy, broadcast craftily concocted stories that thousands of rebel troops were converging on the capital. Loudspeakers atop the embassy roof blasted the tape-recorded sounds of P-38 fighters soaring into the night. President Arbenz, drinking himself into a stupor, saw through his fog that he was under attack from the United States.

On the afternoon on June 25, the CIA bombed the parade grounds of the largest military encampment in Guatemala City. That broke the will of the officer corps. Arbenz summoned his cabinet that night and told them that elements of the army were in revolt. It was true: a handful of officers had secretly decided to side with the CIA and overthrow their president.

Ambassador Peurifoy met with the coup plotters on June 27, victory within his grasp. But then Arbenz ceded power to Colonel Carlos Enrique Diaz, who formed a junta and vowed to fight Castillo Armas. "We have been double-crossed," Peurifoy cabled. Al Haney sent a message to all CIA stations identifying Diaz as a "Commie agent." He ordered a silver-tongued CIA officer, Enno Hobbing, Time's Berlin bureau chief before joining the agency, to have a little talk with Diaz at dawn the next day. Hobbing delivered the message to Diaz: "Colonel, you are not convenient for American foreign policy."

The junta vanished instantly, to be replaced in quick succession by four more, each one increasingly pro-American. Ambassador Peurifoy now demanded that the CIA stand down. Wisner cabled all hands on June 30 that it was time for "the surgeons to step back and the nurses to take over the patient." Peurifoy maneuvered for two more months before Castillo Armas assumed the presidency. He received a twenty-one-gun salute and a state dinner at the White House, where the vice president offered the following toast: "We in the United States have watched the people of Guatemala record an episode in their history deeply significant to all peoples," Richard Nixon said. "Led by the courageous soldier who is our guest this evening, the Guatemalan people revolted against communist rule, which in collapsing bore graphic witness to its own shallowness, falsity, and corruption." Guatemala was at the beginning of forty years of military rulers, death squads, and armed repression.

"INCREDIBLE"

The leaders of the CIA created a myth about Operation Success, just as they did with the coup in Iran. The company line was that the mission was a masterwork. In truth, "we really didn't think it was much of a success," said Jake Esterline, who became the new station chief in Guatemala at summer's end. The coup had succeeded largely through brute force and blind luck. But the CIA spun another story at a formal White House briefing for the president on July 29, 1954. The night before, Allen Dulles invited Frank Wisner, Tracy Barnes, Dave Phillips, Al Haney, Henry Hecksher, and Rip Robertson to his house in Georgetown for a dress rehearsal. He listened in growing horror as Haney began a rambling discourse with a long preamble about his heroic exploits in Korea.

"I've never heard such crap," said Dulles, and he ordered Phillips to rewrite the speech.

In the East Wing of the White House, in a room darkened for a slide show, the CIA sold Eisenhower a dressed-up version of Operation Success. When the lights went on, the president's first question went to the paramilitary man Rip Robertson.

"How many men did Castillo Armas lose?" Ike asked.

Only one, Robertson replied.

"Incredible," said the president.

At least forty-three of Castillo Armas's men had been killed during the invasion, but no one contradicted Robertson. It was a shameless falsehood.

This was a turning point in the history of the CIA. The cover stories required for covert action overseas were now part of the agency's political conduct in Washington. Bissell stated it plainly: "Many of us who joined the CIA did not feel bound in the actions we took as staff members to observe all the ethical rules." He and his colleagues were prepared to lie to the president to protect the agency's image. And their lies had lasting consequences.

11. "AND THEN WE'LL
HAVE A STORM"

"Secrecy now beclouds everything about the CIA--its cost, its efficiency, its successes, its failures," Senator Mike Mansfield of Montana said in March 1954.

Allen Dulles answered to a very few members of Congress. They protected the CIA from public scrutiny through informal armed services and appropriations subcommittees. He regularly asked his deputies to supply him with "CIA success stories that might be used at the next budget hearing." He had none up his sleeve. On rare occasions, he was prepared to be candid. Two weeks after Mansfield's critique, Dulles faced three senators at a closed-door hearing. His briefing notes said the CIA's rapid expansion of covert operations might have been "risky or even unwise for the long pull of the Cold War." They conceded that "unplanned, urgent, one-shot operations not only usually failed, but also disrupted and even blew our careful preparations for longer-range activities."

That kind of secret could be kept safe on Capitol Hill. But one senator posed a grave and gathering threat to the CIA: the red-baiting Joseph McCarthy. McCarthy and his staff had developed an underground of informants who had quit the agency in anger toward the end of the Korean War. In the months after Eisenhower's election, McCarthy's files grew thick with allegations that "the CIA had unwittingly hired a large number of double agents--individuals who, although working for the CIA, were actually Communist agents whose mission was to plant inaccurate data," as his chief counsel, Roy Cohn, recounted. Unlike many of McCarthy's charges, this one was true. The agency could not withstand a whit of scrutiny on the issue, and Allen Dulles knew it. If the American people had learned, in the heat of the red scare, that the agency had been duped all over Europe and Asia by the Soviet and Chinese intelligence services, the CIA would be destroyed.

When McCarthy privately told Dulles face-to-face "that CIA was neither sacrosanct nor immune from investigation," the director knew its survival was at stake. Foster Dulles had opened his doors to McCarthy's bloodhounds in a public display of sanctimony that devastated the State Department for a decade. But Allen fought them off. He rebuffed the senator's attempt to subpoena the CIA's Bill Bundy, who out of old-school loyalties had contributed $400 to the defense fund of Alger Hiss, the suspected communist spy. Allen refused to let the senator scourge the CIA.

His public stance was a principled one, but he also ran a down-and-dirty covert operation on McCarthy. The clandestine campaign was outlined in a CIA officer's secret testimony before McCarthy's Senate committee and its twenty-eight-year-old minority counsel, Robert F. Kennedy, which was unsealed in 2003. It was detailed in a CIA history declassified in 2004.

After his private confrontation with McCarthy, Dulles organized a team of CIA officers to penetrate the senator's office with a spy or a bug, preferably both. The methodology was just like J. Edgar Hoover's: gather dirt, then spread it. Dulles instructed James Angleton, his counterintelligence czar, to find a way to feed disinformation to McCarthy and his staff as a means of discrediting him. Angleton convinced James McCargar--the officer who had been one of Wisner's first hires--to plant phony reports on a known member of the McCarthy underground at the CIA. McCargar succeeded: the CIA penetrated the Senate.

"You've saved the Republic," Allen Dulles told him.

"THIS FUNDAMENTALLY REPUGNANT PHILOSOPHY"

But the threat to the CIA grew as McCarthy's power began fading in 1954. Senator Mansfield and thirty-four of his colleagues were backing a bill to create an oversight committee and order the agency to keep Congress fully and currently informed about its work. (It would not pass for twenty years.) A congressional task force led by Eisenhower's trusted colleague General Mark Clark was getting ready to investigate the agency.

At the end of May 1954, the president of the United States received an extraordinary six-page letter from an air force colonel. It was an impassioned cry by the first whistle-blower from inside the CIA. Eisenhower read it and kept it.

The author, Jim Kellis, was one of the agency's founding fathers. An OSS veteran who had fought guerrilla warfare in Greece, he had gone to China and served as the first station chief in Shanghai for the Strategic Services Unit. At the CIA's birth, he was among its few experienced China hands. He went back to Greece as an investigator for Wild Bill Donovan, who as a private citizen had been asked to investigate the 1948 murder of a CBS reporter. He determined that the killing came at the hands of America's right-wing allies in Athens, not ordered by the communists, as was commonly believed. His findings were suppressed. He returned to the CIA, and during the Korean War he was in charge of the CIA's paramilitary operations and resistance forces worldwide. Walter Bedell Smith had sent him on troubleshooting investigations in Asia and Europe. He did not like what he saw. A few months after Allen Dulles took command, Kellis quit in disgust.

"The Central Intelligence Agency is in a rotten state," Colonel Kellis warned Eisenhower. "Today CIA has hardly any worthwhile operations behind the Iron Curtain. In their briefings they present a rosy picture to outsiders but the awful truth remains under the TOP SECRET label of the Agency."

The truth was that "CIA wittingly or unwittingly delivered one million dollars to a Communist security service." (This was the WIN operation in Poland; it is unlikely that Dulles told the president about the ugly details of the operation, which blew up three weeks before Eisenhower's inauguration.) "CIA unwittingly organized an intelligence network for the Communists," Kellis wrote, referring to the debacle created by the Seoul station during the Korean War. Dulles and his deputies, "fearing any aftereffects on their reputation," had lied to Congress about the agency's operations in Korea and China. Kellis had personally investigated the question on a trip to the Far East in 1952. He had determined that "CIA was being duped."

Dulles had been planting stories in the press, burnishing his image as "a scholarly affable Christian missionary, the country's outstanding intelligence expert," Kellis wrote. "For some of us who have seen the other side of Allen Dulles, we don't see too many Christian traits. I personally consider him a ruthless, ambitious and utterly incompetent government administrator." Kellis pleaded with the president to take "the drastic action needed to clean up" the CIA.

Eisenhower wanted to counter the threats to the clandestine service and clean up its problems in secret. In July 1954, shortly after the conclusion of Operation Success, the president commissioned General Jimmy Doolittle, who had worked on the Solarium project, and his good friend William Pawley, the millionaire who had provided the fighter-bombers for the Guatemala coup, to assess the CIA's capabilities for covert action.

Doolittle had ten weeks to report back. He and Pawley met with Dulles and Wisner, traveled to CIA stations in Germany and London, and interviewed senior military and diplomatic officers who worked in liaison with their CIA counterparts. They also talked to Bedell Smith, who told them that "Dulles was too emotional to be in this critical spot" and that "his emotionalism was far worse than it appeared on the surface."

On October 19, 1954, Doolittle went to see the president at the White House. He reported that the agency had "ballooned out into a vast and sprawling organization manned by a large number of people, some of whom were of doubtful competence." Dulles surrounded himself with people who were unskilled and undisciplined. The sensitive matter of "the family relationship" with Foster Dulles arose. Doolittle thought it would be better for all concerned if the personal connection were not a professional connection: "it leads to protection of one by the other or influence of one by the other." An independent committee of trusted civilians should oversee the CIA for the president.

The Doolittle report warned that Wisner's clandestine service was "filled with people having little or no training for their jobs." Within its six separate staffs, seven geographic divisions, and more than forty branches, "'dead wood' exists at virtually all levels." The report recommended a "complete reorganization" of Wisner's empire, which had suffered from its "mushroom expansion" and "tremendous pressures to accept commitments beyond its capacity to perform." It observed that "in covert operations quality is more important than quantity. A small number of competent people can be more useful than a large number of incompetents."

Dulles was well aware that the clandestine service was out of control. The CIA's officers were running operations behind their commanders' backs. Two days after Doolittle presented his report, the director told Wisner that he was worried that "sensitive and/or delicate operations are carried out at lower levels without being brought to the attention of the appropriate Deputy, the Deputy Director of Central Intelligence or the Director of Central Intelligence."

But Dulles handled the Doolittle report the way he usually dealt with bad news, by burying it. He would not let the highest-ranking officers at the CIA see it--not even Wisner.

Though the full report remained classified until 2001, its preface was made public a quarter century before. It contained one of the grimmest passages of the cold war:

It is now clear that we are facing an implacable enemy whose avowed objective is world domination by whatever means and at whatever cost. There are no rules in such a game. Hitherto acceptable norms of human conduct do not apply. If the United States is to survive, long-standing American concepts of "fair play" must be reconsidered. We must develop effective espionage and counterespionage services and must learn to subvert, sabotage and destroy our enemies by more clever, more sophisticated and more effective methods than those used against us. It may become necessary that the American people be made acquainted with, understand and support this fundamentally repugnant philosophy.

The report said the nation needed "an aggressive covert psychological, political and paramilitary organization more effective, more unique, and, if necessary, more ruthless than that employed by the enemy." For the CIA had never solved "the problem of infiltration by human agents," it said. "Once across borders--by parachute, or any other means--escape from detection is extremely difficult." It concluded: "The information we have obtained by this method of acquisition has been negligible and the cost in effort, dollars and human lives prohibitive."

It placed the highest priority on espionage to gain intelligence on the Soviets. It stressed that no price was too high to pay for this knowledge.

"WE DIDN'T RAISE THE RIGHT QUESTIONS"

Dulles was desperate to place an American spy inside the iron curtain.

In 1953, the first CIA officer he had dispatched to Moscow was seduced by his Russian housemaid--she was a KGB colonel--photographed in flagrante delicto, blackmailed, and fired by the agency for his indiscretions. In 1954, a second officer was caught in the act of espionage, arrested, and deported shortly after his arrival. Soon thereafter, Dulles called in one of his special assistants, John Maury, who had traveled in Russia before World War II and spent much of the war at the American embassy in Moscow representing the Office of Naval Intelligence. He asked Maury to join the clandestine service and to train for a mission to Moscow.

None of Wisner's officers had ever been to Russia, Dulles said: "They know nothing about the target."

"I don't know anything about operations," Maury responded.

"I don't think they do either," Dulles replied.

Such men could hardly provide the president with the intelligence he wanted most: strategic warning against a nuclear attack. When the National Security Council convened to talk about what to do if that attack came, the president turned to Dulles and said: "Let's not have another Pearl Harbor." That was the task the president assigned to the second secret intelligence commission he created in 1954.

Eisenhower told James R. Killian, the president of the Massachusetts Institute of Technology, to lead a group seeking ways of preventing a Soviet bolt from the blue. He pressed for techniques the Doolittle report strongly recommended: "communications and electronic surveillance" to provide "early warning of impending attack."

The CIA redoubled its own efforts to listen in on the enemy. It succeeded, in its own fashion.

Up in the attic of the Berlin base headquarters, a washed-up baseball player turned lawyer turned spy named Walter O'Brien had been photographing papers purloined from the East Berlin post office. They described the underground routes of the new telecommunications cables used by Soviet and East German officials. This espionage coup turned into the Berlin Tunnel project.

The tunnel was regarded at the time as the CIA's greatest public triumph. The idea--and its undoing--came from British intelligence. In 1951, the British had told the CIA that they had been tapping into the Soviets' telecommunications cables through a network of tunnels in the occupied zones of Vienna since shortly after the end of World War II. They suggested doing the same in Berlin. Thanks to the stolen blueprints, it became a real possibility.

A secret CIA history of the Berlin tunnel, written in August 1967 and declassified in February 2007, laid out three questions that faced William K. Harvey, a hard-drinking, gun-toting ex-FBI agent who took over as chief of the Berlin base in 1952: Could the agency dig a 1,476-foot tunnel into the Soviet zone of East Berlin and hit a target two inches in diameter--and twenty-seven inches underneath a major highway--without being caught? How could it get rid of the spoils--some three thousand tons of sandy soil--in secret? And what kind of cover story would serve to disguise the construction of an installation for the dig in a squalid district of refugees' shacks at the edge of the American zone?

Allen Dulles and his British counterpart, Sir John Sinclair, agreed in December 1953 on terms of reference for a set of conferences on the tunnel operation, which was to be code-named JOINTLY. The talks led to a plan of action the following summer. A building covering a full city block would rise amid the rubble, with antennae bristling from the roof, and the Soviets would be given to understand that it was a station for intercepting signals intelligence from the atmosphere--the magician's trick of diverting the eye. The Americans would dig the tunnel eastward, to a point beneath the cables. The British, relying on their experience in Vienna, would drive a vertical shaft from the end of the tunnel to the cables and then install the taps. A London office that grew to 317 officers would process the spoken conversations recorded by the CIA. In Washington, the agency would set 350 personnel to work transcribing teletype transmissions intercepted in the tunnel. The Army Corps of Engineers did the digging, with technical assistance from the British. The biggest problem, as ever, proved to be translating the words intercepted by the operation: "We were never successful in obtaining as many linguists as we needed," the CIA history noted, for the agency's language capabilities in Russian and even in German were sorely lacking.

The tunnel was completed at the end of February 1955, and the British began to set the taps one month later. Information began flowing in May. It came to tens of thousands of hours of conversations and teletypes, including precious details about Soviet nuclear and conventional forces in Germany and Poland, insights into the Soviet Ministry of Defense in Moscow, and the architecture of Soviet counterintelligence operations in Berlin. It provided pictures of political confusion and indecision among Soviet and East German officialdom, and the names or cover identities of several hundred Soviet intelligence officers. It delivered news--even if it took weeks or months of translation--at a cost of $6.7 million. Once it was revealed, as the CIA anticipated it would be one day, the tunnel was seen as a sign that "the U.S., almost universally regarded as a stumbling neophyte in espionage matters, was capable of a coup against the Soviet Union, which has long been the acknowledged master in such matters," the CIA history poignantly reported.

The agency had not expected the operation would be blown quite so soon. It lasted less than a year--until the following April, when the tunnel was uncovered. For the Kremlin had known about it from the start, before the first shovel of earth was turned. The plan was uncovered by a Soviet mole in British intelligence, George Blake, who had switched his allegiances while a prisoner of war in North Korea and who had let the Soviets in on the secret back in late 1953. The Soviets valued Blake so highly that Moscow let the tunnel operation run for eleven months before exposing it in a blaze of heavy-handed publicity. Years later, even after realizing that the other side had known of the tunnel from the start, the CIA still believed it had dug a gold mine. To this day, the question remains: did Moscow deliberately feed deceptive information into the tunnel? The evidence suggests that the CIA gained two invaluable and untainted kinds of knowledge from the taps. The agency learned a basic blueprint of the Soviet and East German security systems, and it never picked up a glimmer of warning that Moscow intended to go to war.

"Those of us who knew a little bit about Russia viewed it as a backward Third World country that wanted to develop along the lines of the West," said the CIA's Tom Polgar, the Berlin base veteran. But that view was rejected at the highest levels in Washington. The White House and the Pentagon presumed that the Kremlin's intentions were identical to theirs: to destroy their enemy on the first day of World War III. Their mission was therefore to locate Soviet military capabilities and destroy them first. They had no faith that American spies could do that.

But American machines might.

The Killian report was the beginning of the triumph of technology and the eclipse of old-fashioned espionage at the CIA. "We obtain little significant information from classic covert operations inside Russia," the report told Eisenhower. "But we can use the ultimate in science and technology to improve our intelligence take." It urged Eisenhower to build spy planes and space satellites to soar over the Soviet Union and photograph its arsenals.

The technology was within America's grasp. It had been for two years. Dulles and Wisner had been too busy with operational matters to pay attention to a July 1952 memo from their colleague Loftus Becker, then the deputy director for intelligence, on a proposal to develop "a satellite vehicle for reconnaissance"--a television camera launched on a rocket, to survey the Soviet Union from deep space. The key was building the camera. Edwin Land, a Nobel laureate who had invented the Polaroid, was sure that he could do it.

In November 1954, with the Berlin Tunnel under way, Land, Killian, and Dulles met with the president and won his approval to build the U-2 spy plane, a powered glider with a camera in its belly that would put American eyes behind the iron curtain. Eisenhower gave the go-ahead, along with a glum prediction. Someday, he said, "one of these machines is going to be caught, and then we'll have a storm."

Dulles gave the job of building the plane to Dick Bissell, who knew nothing about aircraft but skillfully created a secret government bureaucracy that shielded the U-2 program from scrutiny and helped speed the plane's creation. "Our Agency," he proudly told a class of CIA trainees a few years later, "is the last refuge of organizational privacy available to the U.S. government."

Bissell paced down the CIA's corridors with long strides, a gawky man with great ambitions. He believed that he someday would be the next director of central intelligence, for Dulles told him so. He became increasingly contemptuous of espionage, and disdained Richard Helms and his intelligence officers. The two men became bureaucratic rivals and then bitter enemies. They personified the battle between spies and gadgets, which began fifty years ago and continues today. Bissell saw the U-2 as a weapon--an aggressive blow against the Soviet threat. If Moscow "couldn't do a goddamn thing to prevent you" from violating Soviet airspace and spying on Soviet forces, that alone would sap Soviet pride and power. He formed a very small and secret cell of CIA officers to run the program, and he assigned the CIA's James Q. Reber, the assistant director for intelligence coordination, to decide what the plane should photograph inside the Soviet Union. Reber rose to become the longtime chairman of the committee that chose the Soviet targets for the U-2 planes and the spy satellites that succeeded them. But in the end, the Pentagon always set the requirements for reconnaissance: How many bombers did the Soviets have? How many nuclear missiles? How many tanks?

Later in life, Reber said that the cold war mentality blocked the very idea of photographing anything else.

"We didn't raise the right questions," Reber said. If the CIA had developed a bigger picture of life inside the Soviet Union, it would have learned that the Soviets were putting little money into the resources that truly made a nation strong. They were a weak enemy. If the CIA's leaders had been able to run effective intelligence operations inside the Soviet Union, they might have seen that Russians were unable to produce the necessities of life. The idea that the final battles of the cold war would be economic instead of military was beyond their imagination.

"THERE ARE SOME THINGS HE DOESN'T TELL
THE PRESIDENT"

The president's efforts to investigate the capabilities of the CIA led to a leap of technology that revolutionized the gathering of intelligence. But they never got to the root of the problem. Seven years after its creation, there was no oversight or control of the CIA. Its secrets were shared on a need-to-know basis, and Allen Dulles decided who needed to know.

No one was left to look into the agency after Walter Bedell Smith quit the government in October 1954. By sheer force of personality, Bedell Smith had tried to rein in Allen Dulles. But when he left, the ability of anyone but Eisenhower to control covert action went with him.

In 1955, the president changed the rules by creating the "Special Group"--three designated representatives of the White House, State, and Defense, charged with reviewing the secret operations of the CIA. But they had no ability to approve covert action in advance. If he chose to do so, Dulles might make passing mention of his plans at informal lunches with the Special Group--the new undersecretary of state, the deputy secretary of defense, and the president's national-security assistant. But more often he did not. A five-volume CIA history of Dulles's career as director of central intelligence noted that he believed they had no need to know about covert action. They were in no position to judge him or the agency. He felt that "no policy approval was required" for his decisions.

The director, his deputies, and his station chiefs abroad remained free to set their own policies, plot their own operations, and judge the results for themselves, in secret. Dulles advised the White House as he saw fit. "There are some things he doesn't tell the President," his sister confided to a State Department colleague. "It is better that he doesn't know."

12. "WE RAN IT IN A
DIFFERENT WAY"

One weapon the CIA used with surpassing skill was cold cash. The agency excelled at buying the services of foreign politicians. The first place where it picked the future leader of a world power was Japan.

Two of the most influential agents the United States ever recruited helped carry out the CIA's mission to control the government. They had been cell mates, charged as war criminals, and imprisoned for three years in Tokyo after the end of World War II under the American occupation. They walked free at the end of 1948, the day before many of their fellow inmates were taken to the prison gallows.

With the CIA's help, Nobusuke Kishi became Japan's prime minister and the chief of its ruling party. Yoshio Kodama secured his freedom and his position as the nation's number-one gangster by helping American intelligence. Together they shaped the politics of postwar Japan. In the war against fascism, they had represented everything America hated. In the war against communism, they were just what America needed.

In the 1930s, Kodama had led a right-wing youth group that attempted to assassinate the prime minister. He was sentenced to prison, but Japan's government put him to use as a procurer of spies and strategic metals for the coming battle. After five years spent running one of the war's biggest black markets in occupied China, Kodama held the rank of rear admiral and possessed a personal fortune worth roughly $175 million. Upon his release from prison, Kodama began to pour part of his fortune into the careers of Japan's most conservative politicians, and he became a key member of a CIA operation that helped bring them to power. He worked with American businessmen, OSS veterans, and ex-diplomats to pull off an audacious covert operation, bankrolled by the CIA, during the Korean War.

The American military needed tungsten, a scarce strategic metal used for hardening missiles. Kodama's network smuggled tons of it out of Japanese military caches into the United States. The Pentagon paid $10 million for it. The CIA provided $2.8 million in financing to underwrite the operation. The tungsten-smuggling network reaped more than $2 million. But the operation left Kodama in bad odor with the CIA's Toyko station. "He is a professional liar, gangster, charlatan, and outright thief," the station reported on September 10, 1953. "Kodama is completely incapable of intelligence operations, and has no interest in anything but the profits." The relationship was severed, and the CIA turned its attention to the care and feeding of up-and-coming Japanese politicians--including Kishi--who won seats in the Diet, Japan's parliament, in the first elections after the end of the American occupation.

"WE'RE ALL DEMOCRATS NOW"

Kishi became the leader of the rising conservative movement in Japan. Within a year of his election to the Diet, using Kodama's money and his own considerable political skills, he controlled the largest faction among Japan's elected representives. Once in office, he built the ruling party that led the nation for nearly half a century.

He had signed the declaration of war against the United States in 1941 and led Japan's munitions ministry during World War II. Even while imprisoned after the war, Kishi had well-placed allies in the United States, among them Joseph Grew, the American ambassador in Tokyo when the Japanese attacked Pearl Harbor. Grew was under detention in Tokyo in 1942 when Kishi, as a member of the war cabinet, offered to let him out to play a round of golf. They became friends. Days after Kishi was freed from prison, Grew became the first chairman of the National Committee for a Free Europe, the CIA front created to support Radio Free Europe and other political-warfare programs.

Upon his release, Kishi went directly to the residence of the prime minister, where his brother, Eisaku Sato, the chief secretary of the cabinet under the occupation, handed him a business suit to replace his prisoner's uniform.

"Strange, isn't it?" Kishi said to his brother. "We're all democrats now."

Seven years of patient planning transformed Kishi from prisoner to prime minister. He took English lessons from Newsweek's Tokyo bureau chief and gained introductions to American politicians from Newsweek's foreign affairs editor, Harry Kern, a close friend to Allen Dulles and later in life a CIA conduit to Japan. Kishi cultivated American embassy officials like rare orchids. He moved cautiously at first. He was still a notorious man, routinely followed by the police.

In May 1954, he staged a political coming-out at the Kabuki Theater in Tokyo. He invited Bill Hutchinson, an OSS veteran who worked with the CIA in Japan as an information and propaganda officer at the American embassy, to attend the theater with him. He paraded Hutchinson around the ornate foyers of the Kabuki-za at intermission, showing him off to his friends among the Japanese elite. It was a highly unusual gesture at the time, but it was pure political theater, Kishi's way of announcing in public that he was back in the international arena--and in the good graces of the United States.

For a year, Kishi met in secret with CIA and State Department officials in Hutchinson's living room. "It was clear that he wanted at least the tacit backing of the United States government," Hutchinson remembered. The talks laid the groundwork for the next forty years of Japan's relations with the United States.

Kishi told the Americans that his strategy was to wreck the ruling Liberal Party, rename it, rebuild it, and run it. The new Liberal Democratic Party under his command would be neither liberal nor democratic, but a right-wing club of feudal leaders rising from the ashes of imperial Japan. He would first work behind the scenes while more senior statesmen preceded him as prime minister, and then take charge. He pledged to change the foreign policies of Japan to fit American desires. The United States could keep its military bases in Japan and store nuclear weapons there, a matter of some sensitivity in Japan. All he asked in return was secret political support from America.

Foster Dulles met with Kishi in August 1955, and the American secretary of state told him face-to-face that he could expect that support--if Japan's conservatives unified to help the United States fight communism.

Everyone understood what that American support would be.

Kishi told Sam Berger, the senior political officer at the American embassy, that it would be best for him to deal directly with a younger and lower-ranking man, unknown in Japan, as his primary contact with the United States. The assignment went to the CIA's Clyde McAvoy, a marine veteran who had survived the storming of Okinawa and joined the agency after a stint as a newspaper reporter. Shortly after McAvoy arrived in Japan, Sam Berger introduced him to Kishi, and one of the stronger relationships the CIA ever cultivated with a foreign political leader was born.

"A GREAT COUP"

The most crucial interaction between the CIA and the Liberal Democratic Party was the exchange of information for money. It was used to support the party and to recruit informers within it. The Americans established paid relationships with promising young men who became, a generation later, members of parliament, ministers, and elder statesmen. Together they promoted the LDP and subverted Japan's Socialist Party and labor unions. When it came to bankrolling foreign politicians, the agency had grown more sophisticated than it had been seven years earlier in Italy. Instead of passing suitcases filled with cash in four-star hotels, the CIA used trusted American businessmen as go-betweens to deliver money to benefit its allies. Among these were executives from Lockheed, the aircraft company then building the U-2 and negotiating to sell warplanes to the new Japanese defense forces Kishi aimed to build.

In November 1955, Kishi unified Japan's conservatives under the banner of the Liberal Democratic Party. As the party's leader, he allowed the CIA to recruit and run his political followers on a seat-by-seat basis in the Japanese parliament. As he maneuvered his way to the top, he pledged to work with the agency in reshaping a new security treaty between the United States and Japan. As Kishi's case officer, the CIA's Clyde McAvoy was able to report on--and influence--the emerging foreign policy of postwar Japan.

In February 1957, on the day Kishi was to be installed as prime minister, a crucial procedural vote on the security treaty was scheduled in the Diet, where the LDP held the biggest block of votes. "He and I pulled off a great coup that day," McAvoy remembered. "The United States and Japan were moving toward this agreement. The Japan Communist Party found it especially threatening. On the day of this vote, the communists planned an uprising in the Diet. I found out about this through a left-wing Socialist member of the secretariat who was my agent. Kishi was to meet the Emperor that day. I called for an urgent meeting. He made it--he showed up at the door of our safe house in top hat, striped pants and a cutaway coat--and though I had no approval to do so, I told him of the communists' plans for a riot in the Diet. Now, the custom was for members to take a break and go to the eating and drinking stalls around the Diet at 10:30 or 11 a.m. Kishi told his own party: don't take a break. And after everyone but the LDP peeled off they ran to the Diet and passed the bill."

In June 1957, barely eight years after shedding his prison uniform, Kishi traveled to the United States for a triumphal visit. He went to Yankee Stadium and threw out the ceremonial first ball. He played a round of golf at an all-white country club with the president of the United States. Vice President Nixon introduced him to the Senate as a great and loyal friend of the American people. Kishi told the new American ambassador to Japan, Douglas MacArthur II, the general's nephew, that the new security treaty would be passed and a rising left-wing tide could be stemmed if America helped him consolidate his power. Kishi wanted a permanent source of financial support from the CIA rather than a series of surreptitious payments. He convinced the American envoy that "if Japan went Communist it was difficult to see how the rest of Asia would not follow suit," Ambassador MacArthur remembered. Foster Dulles agreed. He argued that the United States had to place a big bet on Japan, and that Kishi was the best bet the United States had.

President Eisenhower himself decided that Japanese political support for the security treaty and American financial support for Kishi were one and the same. He authorized a continuing series of CIA payoffs to key members of the LDP. Politicians unwitting of the CIA's role were told that the money came from the titans of corporate America. The money flowed for at least fifteen years, under four American presidents, and it helped consolidate one-party rule in Japan for the rest of the cold war.

Others followed in Kishi's path. Okinori Kaya had been the finance minister in Japan's wartime cabinet. Convicted as a war criminal, he was sentenced to life in prison. Paroled in 1955 and pardoned in 1957, he became one of Kishi's closest advisers and a key member of the LDP's internal security committee.

Kaya became a recruited agent of the CIA either immediately before or immediately after he was elected to the Diet in 1958. After his recruitment, he wanted to travel to the United States and meet Allen Dulles in person. The CIA, skittish about the appearance of a convicted war criminal meeting with the director of central intelligence, kept the meeting secret for nearly fifty years. But on February 6, 1959, Kaya came to visit Dulles at CIA headquarters and asked the director to enter into a formal agreement to share intelligence with his internal security committee. "Everyone agreed that cooperation between CIA and the Japanese regarding countersubversion was most desirable and that the subject was one of major interest to CIA," say the minutes of their talk. Dulles regarded Kaya as his agent, and six months later he wrote him to say: "I am most interested in learning your views both in international affairs affecting relations between our countries and on the situation within Japan."

Kaya's on-and-off relationship with the CIA reached a peak in 1968, when he was the leading political adviser to Prime Minister Eisaku Sato. The biggest domestic political issue in Japan that year was the enormous American military base on Okinawa, a crucial staging ground for the bombing of Vietnam and a storehouse of American nuclear weapons. Okinawa was under American control, but regional elections were set for November 10, and opposition politicians threatened to force the United States off the island. Kaya played a key role in the CIA's covert actions aimed to swing the elections for the LDP, which narrowly failed. Okinawa itself returned to Japanese administration in 1972, but the American military remains there to this day.

The Japanese came to describe the political system created with the CIA's support as kozo oshoku--"structural corruption." The CIA's payoffs went on into the 1970s. The structural corruption of the political life of Japan continued long thereafter.

"We ran Japan during the occupation, and we ran it in a different way in these years after the occupation," said the CIA's Horace Feldman, who served as station chief in Tokyo. "General MacArthur had his ways. We had ours."

13. "WISHFUL BLINDNESS"

Enthralled by covert action, Allen Dulles ceased to focus on his core mission of providing intelligence to the president.

He handled most of the CIA's analysts and much of their work with studied contempt. Dulles would keep them waiting for hours when they came to prep him for the next morning's meeting at the White House. As afternoon turned to evening, he would burst out his door and blow past them, rushing to keep a dinner date.

He had fallen into "the habit of assessing briefings by weight," said Dick Lehman, a senior CIA analyst for three decades and latterly the man who prepared the president's daily briefing. "He would heft them and decide, without reading them, whether or not to accept them."

An analyst admitted to the inner sanctum in midafternoon to advise Dulles on the crisis of the moment might find the director watching a Washington Senators baseball game on the television in his office. Lounging in a reclining chair, his feet up on an ottoman, Dulles followed the game while the hapless aide faced him from the back of the TV set. As the briefer reached his crucial points, Dulles would analyze the ball game.

He became inattentive to the life-and-death questions at hand.

"INDICT THE WHOLE SOVIET SYSTEM"

Dulles and Wisner together had launched more than two hundred major covert actions overseas over the course of five years, pouring American fortunes into the politics of France, Germany, Italy, Greece, Egypt, Pakistan, Japan, Thailand, the Philippines, and Vietnam. The agency had overthrown nations. It could make or break presidents and prime ministers. But it could not get a handle on the enemy.

At the end of 1955, President Eisenhower changed the CIA's marching orders. Recognizing that covert action could not undermine the Kremlin, he revised the rules written at the start of the cold war. The new order, labeled NSC 5412/2 and dated December 28, 1955, remained in effect for fifteen years. The new goals were to "create and exploit troublesome problems for International Communism," to "counter any threat of a party or individuals directly or indirectly responsive to Communist control," and to "strengthen the orientation toward the United States of the people of the free world"--great ambitions, but more modest and nuanced than what Dulles and Wisner tried to achieve.

A few weeks later, the Soviet leader, Nikita Khrushchev, created more trouble for international communism than the CIA dreamed possible. In his February 1956 speech to the Twentieth Congress of the Communist Party of the Soviet Union, he denounced Stalin, dead less than three years, as "a supreme egotist and sadist, capable of sacrificing everything and anybody for the sake of his own power and glory." The CIA picked up rumors about the speech in March. My kingdom for a copy, Allen Dulles told his men. Could the agency finally obtain some intelligence from inside the Politburo?

Then as now, the CIA relied heavily on foreign intelligence services, paying for secrets it could not uncover on its own. In April 1956, Israel's spies delivered the text to James Angleton, who became the CIA's one-man liaison with the Jewish state. The channel produced much of the agency's intelligence on the Arab world, but at a cost--a growing American dependence on Israel to explain events in the Middle East. The Israeli perspective colored American perceptions for decades to come.

In May, after George Kennan and others judged the text as the genuine article, a great debate arose inside the CIA.

Both Wisner and Angleton wanted to keep it secret from the free world, but leak it selectively abroad, to sow discord among the world's communist parties. Angleton thought by tweaking the text with propaganda, "he could have used it to such advantage that he would have discombobulated the Russians and their security services and perhaps used some of these emigre groups that we still at that time hoped to activate, and liberate the Ukraine or something," said Ray Cline, one of Dulles's most trusted intelligence analysts at that time.

But above all, they wanted it cut for bait to lure Soviet spies, in order to salvage one of Wisner's longest-running, least effective operations--Red Cap.

A worldwide program that began in 1952, taking its name from the railroad porters who helped baggage-laden travelers, Red Cap aimed to induce Soviets to defect from their country and work for the CIA. Ideally, they would serve as "defectors in place"--remaining in their government posts while spying for America. Failing that, they would flee to the West and reveal their knowledge of the Soviet system. But the number of important Soviet sources developed under Red Cap was zero at the time. The Soviet division of the CIA's clandestine service was run by a narrow-minded Harvard man named Dana Durand, who held his position through a combination of accident, default, and alliance with Angleton. The division was dysfunctional, according to an inspector general's report issued in June 1956 and declassified in 2004. The Soviet division could not produce "an authoritative statement of its missions and functions," much less grasp what was going on inside the Soviet Union. The report contained a list of the CIA's twenty "controlled agents" in Russia in 1956. One was a low-ranking naval engineering officer. Another was the wife of a guided missile research scientist. The others were listed as laborer, telephone repairman, garage manager, veterinarian, high school teacher, locksmith, restaurant worker, and unemployed. None of them could have had any idea what made the Kremlin tick.

On the first Saturday morning of June 1956, Dulles called Ray Cline into the director's office. "Wisner says you think we ought to release the secret Khrushchev speech," Dulles said.

Cline stated his case: it was a fantastic revelation of "the true feelings of all these guys who had to work under that old bastard Stalin for many years.

"For God's sake," he told Dulles, "let's get it out."

Dulles held his copy in trembling fingers gnarled with arthritis and gout. The old man put his carpet slippers up on the desk, leaned back, pushed his glasses up on his head, and said, "By golly, I think I'll make a policy decision!" Cline recalled. He buzzed Wisner on his intercom, "and kind of coyly talked Frank into a position where Frank could not disagree with releasing it, and using the same kind of arguments that I had, that it was a great historical chance to, as I think I told him to say, 'indict the whole Soviet system.'"

Dulles then picked up the phone and called his brother. The text was leaked through the State Department and ran three days later in The New York Times. The decision set events in motion that the CIA had never imagined.

"CIA REPRESENTED GREAT POWER"

For months thereafter, the secret speech was beamed behind the iron curtain by Radio Free Europe, the CIA's $100 million media machine. More than three thousand emigre broadcasters, writers, and engineers and their American overseers put the radios on the air in eight languages, filling the airwaves up to nineteen hours a day. In theory, they were supposed to play their news and propaganda straight. But Wisner wanted to use words as weapons. His interference created a split signal at Radio Free Europe.

The on-air emigres at the radios had been begging their American bosses to give them a clear message to deliver. Here it was: the speech was recited over the air night and day.

The consequences were immediate. The CIA's best analysts had concluded a few months before that no popular uprising was likely in Eastern Europe during the 1950s. On June 28, after the speech was broadcast, Polish workers began to rise up against their communist rulers. They rioted against a reduction in wages and destroyed the beacons that jammed Radio Free Europe's transmissions. But the CIA could do nothing but feed their rage--not when a Soviet field marshal ran Poland's army and Soviet intelligence officers oversaw the secret police, who killed fifty-three Poles and imprisoned hundreds.

The Polish struggle led the National Security Council to search for a crack in the architecture of Soviet control. Vice President Nixon argued that it would serve American interests if the Soviets pounded another upstart satellite state, such as Hungary, into submission, providing a source for global anticommunist propaganda. Picking up that theme, Foster Dulles won presidential approval for new efforts to promote "spontaneous manifestations of discontent" in the captive nations. Allen Dulles promised to pump up a Radio Free Europe program that floated balloons east over the iron curtain, carrying leaflets and "Freedom Medals"--aluminum badges bearing slogans and an imprint of the Liberty Bell.

Then Dulles took off on a fifty-seven-day world tour, circling the earth in a zippered flight suit aboard a specially configured four-engine DC-6. He dropped in on the CIA stations in London and Paris, Frankfurt and Vienna, Rome and Athens, Istanbul and Tehran, Dhahran and Delhi, Bangkok and Singapore, Tokyo and Seoul, Manila and Saigon. The journey was an open secret: Dulles was received as a head of state, and he reveled in the limelight. The trip was "one of the most highly publicized clandestine tours ever made," said Ray Cline, who accompanied the director. Cloaked yet flamboyant--that was the CIA under Allen Dulles. It was a place where "truly clandestine practices were compromised" while "analysis was clothed in an atmosphere of secrecy that was unnecessary, frequently counterproductive, and in the long run damaging," Cline thought. Watching foreign leaders fawn over Dulles at state dinners, he learned another lesson: "CIA represented great power. It was a little frightening."

"WISHFUL BLINDNESS"

On October 22, 1956, shortly after Dulles returned to Washington, a deeply weary Frank Wisner flicked out the lights in his office, walked down the corridors of decaying linoleum and peeling walls in Temporary Building L, went home to his elegant house in Georgetown, and packed for his own tour of the CIA's biggest stations in Europe.

Neither he nor his boss had a clue about the two greatest events going on in the world. War plans were afoot in London and Paris, while a popular revolution was at hand in Hungary. In the course of a crucial fortnight, Dulles would misinterpret or misrepresent every aspect of these crises in his reports to the president.

Wisner sailed out over the Atlantic in darkness. After his overnight flight to London, his first order of business was a long-scheduled dinner date with Sir Patrick Dean, a senior British intelligence officer. They were to discuss their plans to topple the Egyptian leader, Gamal Abdel Nasser, who had come to power three years earlier in a military coup. The issue had been brewing for months. Sir Patrick had been in Washington a few weeks before, and the two had agreed that one way or another, their objectives required Nasser's removal from power.

The CIA had supported Nasser at first, handing him millions, building him a powerful state radio station, and promising him American military and economic aid. Yet the agency was taken by surprise by events in Egypt, despite the fact that CIA officers outnumbered State Department officials by about four to one in the American embassy in Cairo. The biggest surprise was that Nasser did not stay bought: he used part of the $3 million in bribes that the CIA had slipped him to build a minaret in Cairo on an island in front of the Nile Hilton. It was known as el wa'ef rusfel--Roosevelt's erection. Because Roosevelt and the CIA could not come through on their promises of American military aid, Nasser agreed to sell Egyptian cotton to the Soviet Union in exchange for arms. Then, in July 1956, Nasser challenged the legacies of colonialism by nationalizing the Suez Canal Company, the corporation created by the British and the French to run the Middle East's man-made maritime trade route. London and Paris roared with outrage.

The British proposed to assassinate Nasser and contemplated diverting the Nile River to destroy Egypt's bid for economic self-rule. Eisenhower said it would be "dead wrong" to use lethal force. The CIA favored a long, slow campaign of subversion against Egypt.

That was the issue that Wisner had to work out with Sir Patrick Dean. He was first perplexed and then furious when Sir Patrick failed to appear at their long-scheduled meeting. The British spy had another engagement: he was in a villa outside Paris, putting the final touches on a coordinated military attack on Egypt by Britain, France, and Israel. They aimed to destroy Nasser's government and take the Suez back by force. First Israel would attack Egypt, and then Britain and France would strike, posing as peacekeepers while seizing the canal.

The CIA knew none of this. Dulles assured Eisenhower that reports of a joint Israeli-UK-French military plan were absurd. He refused to heed the CIA's chief intelligence analyst and the American military attache in Tel Aviv, both convinced that Israel was about to go to war against Egypt. Nor did he listen to an old friend, Douglas Dillon, the American ambassador in Paris, who called to warn that France was in on the plot. The director instead chose to listen to Jim Angleton and his Israeli contacts. Having won their undying gratitude for coming up with a copy of Khrushchev's secret speech, the Israelis dazzled Dulles and Angleton with disinformation, warning that there would be trouble elsewhere in the Middle East. On October 26, the director conveyed their falsehoods to the president at the National Security Council meeting: The king of Jordan has been assassinated! Egypt would soon attack Iraq!

The president pushed those headlines to the side. He declared that "the compelling news continued to be Hungary."

A great crowd had gathered at the Parliament in Budapest two days before, led by student demonstrators rising up against the communist government. The hated state security police confronted a second crowd at the government radio station, where a party functionary was denouncing the protests. Some of the students were armed. A shot rang out from the radio building, the security police opened fire, and the protestors fought the secret police all night. At the Budapest City Park, a third crowd tore a statue of Stalin from its pedestal, dragged it to the front of the National Theater, and smashed it into shards. Red Army troops and tanks entered Budapest the next morning, and the demonstrators persuaded at least a handful of the young Soviet soldiers to join their cause. Rebels rode toward the Parliament on Soviet tanks flying the Hungarian flag. Russian commanders panicked, and in a terrible moment at Kossuth Square a blinding crossfire erupted. At least a hundred people died.

Inside the White House, Allen Dulles tried to tell the president the meaning of the Hungarian uprising. "Khrushchev's days may well be numbered," he said. He was off by seven years.

Dulles contacted Wisner in London the next day, October 27. The chief of covert action wanted to do everything he could to help the uprising. He had been praying for a moment like this for eight years.

The National Security Council had commanded him to keep hope alive in Hungary. "To do less," his orders said, "would be to sacrifice the moral basis for U.S. leadership of free peoples." He had told the White House he would create a nationwide underground for political and paramilitary warfare through the Roman Catholic Church, peasant collectives, recruited agents, and exile groups. He had failed completely. The exiles he sent to cross the border from Austria were arrested. The men he tried to recruit were liars and thieves. His efforts to create a clandestine reporting network inside Hungary collapsed. He had buried weapons all over Europe, but when the crisis came, no one could find them.

There was no CIA station in Hungary in October 1956. There was no Hungarian operations section in the clandestine service at headquarters, and almost no one who spoke the language. Wisner had one man in Budapest when the uprising began: Geza Katona, a Hungarian American who spent 95 percent of his time doing his official work as a low-level State Department clerk, mailing letters, buying stamps and stationery, filing papers. When the uprising came, he was the only reliable set of eyes and ears the CIA had in Budapest.

During the two-week life of the Hungarian revolution, the agency knew no more than what it read in the newspapers. It had no idea that the uprising would happen, or how it flourished, or that the Soviets would crush it. Had the White House agreed to send weapons, the agency would have had no clue where to send them. A secret CIA history of the Hungarian uprising said the clandestine service was in a state of "wishful blindness."

"At no time," it said, "did we have anything that could or should have been mistaken for an intelligence operation."

"THE FEVER OF THE TIMES"

On October 28, Wisner flew to Paris and convened a few trusted members of an American delegation attending a NATO conference on the question of Eastern Europe. Its members included Bill Griffith, the senior policy adviser at Radio Free Europe's Munich headquarters. Wisner, exultant at a real revolt against communism in the making, pushed Griffith to pump up the propaganda. His exhortations produced a memo from Radio Free Europe's director in New York to the Hungarian staff in Munich: "All restraints have gone off," it read. "No holds barred. Repeat: no holds barred." Beginning that evening, Radio Free Europe urged the citizens of Hungary to sabotage railroads, tear down telephone lines, arm the partisans, blow up tanks, and fight the Soviets to the death. "This is RFE, the Voice of Free Hungary," the radio announced. "In the case of a tank attack, all the light weapons should open fire at the gun sights." Listeners were advised to throw "a Molotov cocktail...a wine bottle of one liter filled with gasoline...on the grated ventilation slit over the engine." The sign-off was "Freedom or Death!"

That night, Imre Nagy, a former prime minister who had been expelled from the Communist Party by hardliners, went on the state radio station to denounce the "terrible mistakes and crimes of these past ten years." He said that Russian troops would leave Budapest, that the old state security forces would be dissolved, and that a "new government, relying on the people's power," would fight for democratic self-rule. In seventy-two hours, Nagy would form a working coalition government, abolish one-party rule, break with Moscow, declare Hungary a neutral country, and turn to the United Nations and the United States for help. But as Nagy took power and sought to dismantle Soviet control over Hungary, Allen Dulles deemed him a failure. He told the president that the Vatican's man in Hungary, Cardinal Mindszenty, newly released from house arrest, could and should lead the nation. That became the party line on Radio Free Europe: "A reborn Hungary, and the appointed leader sent by God, have met each other in these hours."

The CIA's radios falsely accused Nagy of inviting Soviet troops into Budapest. They attacked him as a traitor, a liar, a murderer. He once had been a communist and so he was forever damned. Three new CIA frequencies were on the air at this hour. From Frankfurt, exiled Russian Solidarists said an army of freedom fighters was heading for the Hungarian border. From Vienna, the CIA amplified the low-wattage broadcasts of Hungarian partisans and beamed them back to Budapest. From Athens, the CIA's psychological warriors suggested that the Russians be sent to the gallows.

The director was ecstatic when he briefed Eisenhower on the situation in Budapest at the next National Security Council meeting on November 1. "What had occurred there was a miracle," Dulles told the president. "Because of the power of public opinion, armed force could not be effectively used. Approximately 80 percent of the Hungarian army had defected to the rebels and provided the rebels with arms."

But Dulles was dead wrong. The rebels had no guns to speak of. The Hungarian army had not switched sides. It was waiting to see which way the wind from Moscow blew. The Soviets were sending more than 200,000 troops and some 2,500 tanks and armored vehicles into the battle for Hungary.

On the morning of the Soviet invasion, Radio Free Europe's Hungarian announcer, Zoltan Thury, told his listeners that "the pressure upon the government of the U.S. to send military help to the freedom fighters will become irresistible." As tens of thousands of frantic, furious refugees poured over the border into Austria over the next few weeks, many spoke of this broadcast as "the promise that help would come." None came. Allen Dulles insisted that the CIA's radios had done nothing to encourage the Hungarians. The president believed him. It would be forty years before transcripts of the broadcasts were unearthed.

In four brutal days, Soviet troops crushed the partisans of Budapest, killing tens of thousands and hauling thousands more away to die in Siberian prison camps.

The Soviet onslaught began on November 4. That night, Hungary's refugees began besieging the American embassy in Vienna, begging America to do something. They had barbed questions, said the CIA station chief, Peer de Silva: "Why hadn't we helped? Didn't we know the Hungarians had counted on us for assistance?" He had no answers.

He was bombarded by commands from headquarters to round up nonexistent legions of Soviet soldiers who were throwing down their weapons and heading for the Austrian border. Dulles told the president about these mass defections. They were a delusion. De Silva could only guess that "headquarters was caught up in the fever of the times."

"STRANGE THINGS ARE APT TO DEVELOP"

On November 5, Wisner arrived at the CIA station in Frankfurt, commanded by Tracy Barnes, so distraught he could barely speak. As Russian tanks slaughtered teenage boys in Budapest, Wisner spent a sleepless night at the Barnes residence playing with toy trains. He took no joy in Eisenhower's re-election the following day. Nor did the president appreciate awakening to a fresh but false report from Allen Dulles that the Soviets were ready to send 250,000 troops to Egypt to defend the Suez Canal from the British and French. Nor was he happy at the CIA's inability to report on the actual Soviet attack in Hungary.

On November 7, Wisner flew to the Vienna station, thirty miles from the Hungarian border. He watched helplessly as the Hungarian partisans sent their final messages to the free world over the wires of the Associated Press: "WE ARE UNDER HEAVY MACHINE GUN FIRE...GOODBYE FRIENDS. GOD SAVE OUR SOULS."

He fled Vienna and flew to Rome. That night he dined with the American spies of the CIA's Rome station, among them William Colby, the future director of central intelligence. Wisner raged that people were dying as the agency dithered. He wanted "to come to the aid of the freedom fighters," Colby recorded. "This was exactly the end for which the agency's paramilitary capability was designed. And a case can be made that they could have done so without involving the United States in a world war with the Soviet Union." But Wisner could not make a coherent case. "It was clear that he was near a nervous breakdown," Colby recorded.

Wisner went on to Athens, where the CIA station chief, John Richardson, saw him "revved up to an extreme velocity and intensity." He soothed his nerves with cigarettes and alcohol. He drank whisky by the bottle, in a swoon of misery and rage.

On December 14, he was back at headquarters, listening to Allen Dulles assess the CIA's chances for urban warfare in Hungary. "We are well-equipped for guerrilla fighting in the woods," Dulles said, but "there is a serious lack of arms for street and close-in fighting and, in particular, anti-tank devices." He wanted Wisner to tell him what were "the best weapons to put into the hands of the Hungarians" and "freedom fighters of other iron curtain countries who might revolt against the Communists." Wisner gave a grandiose answer. "The wounds to the communists in Russia brought about by recent world developments are considerable and some of them are very deep," he said. "The United States and the free world seem to be pretty much out of the woods." Some of his fellow officers saw a case of battle fatigue. Those closest to Wisner saw something worse. On December 20, he lay in a hospital bed, delirious, his underlying disease misdiagnosed by his doctors.

That same day, at the White House, President Eisenhower received a formal report of a secret investigation into the clandestine service of the CIA. If it had ever become public, it would have destroyed the agency.

Ambassador David K. E. Bruce was the report's principal author, and David Bruce was one of Frank Wisner's very best friends in Washington--close enough to run over to Wisner's house for a shower and a shave one morning when the hot water in his magnificent Georgetown mansion ran out. He was an American aristocrat, Wild Bill Donovan's number-two at the OSS in London, Truman's ambassador to France, Walter Bedell Smith's predecessor as undersecretary of state, and a candidate for director of central intelligence in 1950. He knew a great deal about the CIA's operations at home and abroad. Bruce's personal journals show that he met Allen Dulles and Frank Wisner for dozens of breakfasts, lunches, dinners, drinks, and discreet chats in Paris and Washington between 1949 and 1956. He recorded his "great admiration and affection" for Dulles, who personally recommended that Bruce serve on the president's new intelligence board of consultants.

Eisenhower had wanted his own set of eyes on the agency. Back in January 1956, following the secret recommendation of the Doolittle report, he had publicly announced his creation of the president's board. He wrote in his diary that he wanted the consultants to report every six months on the value of the CIA's work.

Ambassador Bruce requested and received the president's authorization for a close look at the covert operations of the CIA--the work of Allen Dulles and Frank Wisner. His personal affection and the professional regard for them added immeasurable weight to his words. His top secret report has never been declassified--and the CIA's own in-house historians have publicly questioned whether it ever existed. But its key findings appeared in a 1961 record created by the intelligence board and obtained by the author. Some of its passages are reproduced here for the first time.

"We are sure that the supporters of the 1948 decision to launch this government on a positive psychological warfare and paramilitary program could not possibly have foreseen the ramifications of the operations which have resulted from it," the report said. "No one, other than those in the CIA immediately concerned with their day to day operation, has any detailed knowledge of what is going on."

The planning and the approval of exquisitely sensitive and extremely costly covert operations were "becoming more and more exclusively the business of the CIA--underwritten heavily by unvouchered CIA funds.... The CIA, busy, monied and privileged, likes its 'King-making' responsibility (the intrigue is fascinating--considerable self-satisfaction, sometimes with applause, derives from successes--no charge is made for 'failures'--and the whole business is very much simpler than collecting covert intelligence on the USSR through the usual CIA methods!)."

The report continued:

[T]here is great concern throughout the State Department over the impacts of CIA psychological warfare and paramilitary activities on our foreign relations. The State Department people feel that perhaps the greatest contribution this board could make would be to bring to the attention of the President the significant, almost unilateral influences that CIA psychological warfare and paramilitary activities have on the actual formation of our foreign policies and our relationships with our "friends."...

CIA support and its maneuvering of local news media, labor groups, political figures and parties and other activities which can have, at any one time, the most significant impacts on the responsibilities of the local Ambassador are sometimes completely unknown to or only hazily recognized by him.... Too often differences of opinion regarding the U.S. attitude toward local figures or organizations develop, especially as between the CIA and the State Department.... (At times, the Secretary of State-DCI brother relationship may arbitrarily set "the U.S. position.")...

Psychological warfare and paramilitary operations (often growing out of the increased mingling in the internal affairs of other nations of bright, highly graded young men who must be doing something all the time to justify their reason for being) today are being conducted on a world-wide basis by a horde of CIA representatives [deleted] many of whom, by the very nature of the personnel situation [deleted] are politically immature. (Out of their "dealings" with shifty, changing characters their applications of "themes" suggested from headquarters or developed by them in the field--sometimes at the suggestion of local opportunists--strange things are apt to, and do, develop.)

The CIA's covert operations were conducted "on an autonomous and freewheeling basis in highly critical areas involving the conduct of foreign relations," said a follow-up report by the president's intelligence board in January 1957. "In some quarters this leads to situations which are almost unbelievable."

For his next four years in office, President Eisenhower tried to change the way the CIA was run. But he said he knew he could not change Allen Dulles. Nor could he think of anyone else to run the agency. It was "one of the most peculiar types of operation any government can have," he said, and "it probably takes a strange kind of genius to run it."

Allen had accepted no overseers. A silent nod from Foster had sufficed. There had never been a team quite like the Dulles brothers in American government, but age and exhaustion were wearing them down. Foster was seven years older than Allen, and he was dying. He knew he had a fatal cancer, and it killed him slowly over the next two years. He fought bravely, flying all over the world, rattling every saber in the American arsenal. But he dwindled, and that created a disturbing disequilibrium in the director of central intelligence. He lost a vital spark as his brother weakened. His ideas and his sense of order became as evanescent as his pipe smoke.

As Foster began to fail, Allen led the CIA into new battles across Asia and the Middle East. The cold war in Europe might be a stalemate, he told his chieftains, but the struggle had to go on with a new intensity from the Pacific to the Mediterranean.

14. "HAM-HANDED
OPERATIONS OF ALL
KINDS"

"If you go and live with these Arabs," President Eisenhower told Allen Dulles and the assembled members of the National Security Council, "you will find that they simply cannot understand our ideas of freedom and human dignity. They have lived so long under dictatorships of one kind or another, how can we expect them to run successfully a free government?"

The CIA set out to answer that question by trying to convert, coerce, or control governments throughout Asia and the Middle East. It saw itself wrestling with Moscow for the loyalties of millions of people, grappling to gain political and economic sway over the nations that geological accident had given billions of barrels of oil. The new battle line was a great crescent reaching from Indonesia across the Indian Ocean, through the deserts of Iran and Iraq, to the ancient capitals of the Middle East.

The agency saw every Muslim political chief who would not pledge allegiance to the United States as "a target legally authorized by statute for CIA political action," said Archie Roosevelt, the chief of station in Turkey and a cousin to Kim Roosevelt, the CIA's Near East czar. Many of the most powerful men in the Islamic world took the CIA's cash and counsel. The agency swayed them when it could. But few CIA officers spoke the language, knew the customs, or understood the people they sought to support or suborn.

The president said he wanted to promote the idea of an Islamic jihad against godless communism. "We should do everything possible to stress the 'holy war' aspect," he said at a September 1957 White House meeting attended by Frank Wisner, Foster Dulles, assistant secretary of state for the Near East William Rountree, and members of the Joint Chiefs. Foster Dulles proposed "a secret task force," under whose auspices the CIA would deliver American guns, money, and intelligence to King Saud of Saudi Arabia, King Hussein of Jordan, President Camille Chamoun of Lebanon, and President Nuri Said of Iraq.

"These four mongrels were supposed to be our defense against communism and the extremes of Arab nationalism in the Middle East," said Harrison Symmes, who worked closely with the CIA as Rountree's right-hand man and later served as ambassador in Jordan. The only lasting legacy of the "secret task force" was the fulfillment of Frank Wisner's proposal to put King Hussein of Jordan on the CIA's payroll. The agency created a Jordanian intelligence service, which lives today as its liaison to much of the Arab world. The king received a secret subsidy for the next twenty years.

If arms could not buy loyalty in the Middle East, the almighty dollar was still the CIA's secret weapon. Cash for political warfare and power plays was always welcome. If it could help create an American imperium in Arab and Asian lands, Foster was all for it. "Let's put it this way," said Ambassador Symmes. "John Foster Dulles had taken the view that anything we can do to bring down these neutralists--anti-imperialists, anti-colonialists, extreme nationalist regimes--should be done.

"He had given a mandate to Allen Dulles to do this.... And, of course, Allen Dulles just unleashed people." As a result, "we were caught out in attempted coups, ham-handed operations of all kinds." He and his fellow diplomats tried "to keep track of some of these dirty tricks that were being planned in the Middle East so that if they were just utterly impossible, we'd get them killed before they got any further. And we succeeded in doing that in some cases. But we couldn't get all of them killed."

"RIPE FOR A MILITARY COUP D'ETAT"

One such "dirty trick" went on for a decade: the plot to overthrow the government of Syria.

In 1949, the CIA installed a pro-American colonel, Adib Shishakli, as the Syrian leader. He won direct American military assistance along with covert financial aid. The CIA station chief in Damascus, Miles Copeland, called the colonel "a likeable rogue" who "had not, to my certain knowledge, ever bowed down to a graven image. He had, however, committed sacrilege, blasphemy, murder, adultery and theft." He lasted four years before he was overthrown by Ba'ath Party and communist politicians and military officers. In March 1955, Allen Dulles predicted that the country was "ripe for a military coup d'etat" supported by the agency. In April 1956, the CIA's Kim Roosevelt and his British Secret Intelligence Service (SIS) counterpart Sir George Young tried to mobilize right-wing Syrian army officers; the CIA delivered half a million Syrian pounds to the leaders of the plot. But the Suez fiasco poisoned the political climate in the Middle East, pushed Syria closer to the Soviets, and forced the Americans and the British to postpone their plan at the end of October 1956.

In the spring and summer of April 1957, they revived it. A document discovered in 2003 among the private papers of Duncan Sandys, Prime Minister Harold Macmillan's defense secretary, spells out their effort in detail.

Syria had to be "made to appear as the sponsor of plots, sabotage and violence directed against neighbouring governments," it said. CIA and SIS would manufacture "national conspiracies and various strong-arm activities" in Iraq, Lebanon, and Jordan, and blame them on Syria. They would create paramilitary factions and spark revolts among the Muslim Brotherhood in Damascus. The creation of the appearance of instability would destabilize the government; border clashes manufactured by American and British intelligence would serve as a pretext for the pro-Western armies of Iraq and Jordan to invade. The CIA and SIS envisioned that any new regime they installed would likely "rely first upon repressive measures and arbitrary exercise of power" to survive.

Roosevelt identified Abdul Hamid Serraj, the longtime chief of the Syrian intelligence service, as the most powerful man in Damascus. Serraj was to be assassinated, along with the chief of the Syrian general staff and the head of the Communist Party.

The CIA sent Rocky Stone, who had cut his teeth in the Iran operation, to serve as the new chief of station in Damascus. Accredited as a diplomat, a second secretary at the American embassy, he used promises of millions of dollars and unlimited political power to befriend officers in the Syrian army. He represented his recruits in reports to headquarters as a crack corps for an American-backed coup.

Abdul Hamid Serraj saw through Stone in a matter of weeks.

The Syrians set up a sting. "The officers with whom Stone was dealing took his money and then went on television and announced that they had received this money from the 'corrupt and sinister Americans' in an attempt to overthrow the legitimate government of Syria," said Curtis F. Jones, a State Department officer sent to clean up the mess Stone left behind. Serraj's forces surrounded the American embassy in Damascus, seized Stone, and interrogated him roughly. He told them everything he knew. The Syrians identified him publicly as an American spy posing as a diplomat, a veteran of the CIA's coup in Iran, and a conspirator with Syrian army officers and politicians to overthrow the government in exchange for millions of dollars in American aid.

The revelation of this "particularly clumsy CIA plot," in the words of the U.S. ambassador to Syria, Charles Yost, had consequences that reverberate today. The Syrian government formally declared Rocky Stone persona non grata. That was the first time that an American diplomat of any stripe--be he a spy working undercover or a bona fide State Department officer--had been expelled from an Arab nation. In turn, the United States expelled the Syrian ambassador to Washington, the first expulsion of any foreign diplomat from Washington since World War I. The United States denounced Syria's "fabrications" and "slanders." Stone's Syrian co-conspirators, including the former president, Adib Shishakli, were sentenced to death. A purge of every military officer who had ever been associated with the American embassy followed.

A Syrian-Egyptian alliance grew from this political turmoil: the United Arab Republic. It was the locus of anti-American sentiment in the Middle East. As America's reputation plummeted in Damascus, Soviet political and military influence grew. After the botched coup, no Americans could win the trust of the increasingly tyrannical Syrian leadership.

One trouble with blown operations such as this was that they "couldn't possibly be 'plausibly denied,'" David Bruce's report to President Eisenhower had warned. The American hand was clear to all. Was there no accounting for "the immediate costs of disappointments (Jordan, Syria, Egypt, et al.)"? asked the report. Who was "calculating the impacts on our international position"? Was the CIA "stirring up the turmoil and raising the doubts about us that exist in many countries of the world today? What of the effects on our present alliances? Where will we be tomorrow?"

"WE CAME TO POWER ON A CIA TRAIN"

On May 14, 1958, Allen Dulles convened his deputies for their regular morning meeting. He lashed out at Wisner, advising him to do "some soul-searching" about the agency's performance in the Middle East. On top of the botched coup in Syria, anti-American riots had erupted without warning in Beirut and Algiers. Was this all part of a global plot? Dulles and his aides speculated that "the Communists were in fact pulling the strings" in the Mideast and across the world. As the fear of Soviet encroachment escalated, the goal of creating a tier of pro-American nations on the Soviets' southern flank grew more urgent.

The CIA's officers in Iraq had orders to work with political leaders, military commanders, security ministers, and power brokers, offering money and guns in exchange for anticommunist alliances. But on July 14, 1958, when a gang of army officers overthrew the pro-American Iraqi monarchy of Nuri Said, the Baghdad station was sound asleep. "We were caught completely by surprise," said Ambassador Robert C. F. Gordon, then an embassy political officer.

The new regime, led by General Abdel Karim Qasim, dug into the old government's archives. They held proof that the CIA had been deeply entwined with Iraq's royalist government, paying off the leaders of the old guard. One American working under contract for the CIA, posing as a writer for an agency front, the American Friends of the Middle East, was arrested in his hotel and disappeared without a trace. The officers at the CIA station fled.

Allen Dulles began calling Iraq "the most dangerous place in the world." General Qasim began allowing Soviet political, economic, and cultural delegations into Iraq. "We have no evidence that Qasim is a communist," the CIA advised the White House, but "unless action is taken to curb Communism, or unless the Communists make a major tactical error, Iraq will probably be transformed into a Communist-controlled state." The agency's leaders acknowledged among themselves that they had no idea what to do about that threat: "The only effective and organized force in Iraq capable of countering Communism is the Army. Our basic intelligence on the present situation of the Army is very weak." The CIA, having lost one battle in Syria, and another in Iraq, agonized over what to do to stop the Middle East from turning red.

After the Iraq debacle, Kim Roosevelt, the CIA's Near East division chief since 1950, resigned to seek his fortune as a private consultant to American oil companies. He was replaced by James Critchfield, the agency's longtime liaison with General Reinhard Gehlen in Germany.

Critchfield quickly became interested in the Ba'ath Party of Iraq after its thugs tried to kill Qasim in a bungled gun battle. His officers ran another failed assassination plot, using a poisoned handkerchief, an idea that was endorsed all the way up the CIA's chain of command. It took five more years, but the agency finally backed a successful coup in Iraq in the name of American influence.

"We came to power on a CIA train," said Ali Saleh Sa'adi, the Ba'ath Party interior minister in the 1960s. One of the passengers on that train was an up-and-coming assassin named Saddam Hussein.

15. "A VERY STRANGE
WAR"

The American view of the world from the Mediterranean to the Pacific was black and white: a firm American hand was needed in every capital from Damascus to Jakarta to keep the dominoes from falling. But in 1958, the CIA's effort to overthrow the government of Indonesia backfired so badly that it fueled the rise of the biggest communist party in the world outside of Russia and China. It would take a real war, in which hundreds of thousands died, to defeat that force.

Indonesia had fought for freedom from Dutch colonial rule after World War II and won it at the end of 1949. The United States supported Indonesia's independence under its new leader, President Sukarno. The nation came into the CIA's focus after the Korean War, when the agency realized that Indonesia had perhaps twenty billion barrels of untapped oil, a leader unwilling to align himself with the United States, and a rising communist movement.

The agency first raised the alarm over Indonesia in a report delivered to the National Security Council on September 9, 1953. After hearing the CIA's dire account of the situation, Harold Stassen, then director of the Mutual Security Agency, the military and economic aid organization that succeeded the Marshall Plan, told Vice President Nixon and the Dulles brothers that they "might well give thought to measures by this Government that would cause the fall of the new regime in Indonesia, since it was obviously a pretty bad one. If it is being as heavily infiltrated by Communists as CIA seemed to believe, it would be more sensible to try to get rid of it than to prop it up." But when Nixon briefed CIA officers in Washington four months later, after meeting Sukarno during a world tour, he reported that the Indonesian leader had "a tremendous hold on the people; is completely noncommunist; and there is no doubt that he is the main 'card' of the United States."

The Dulles brothers strongly doubted Nixon. Sukarno had declared himself a noncombatant in the cold war, and there were no neutrals in their eyes.

The CIA seriously considered killing Sukarno in the spring of 1955. "There was planning of such a possibility," Richard Bissell recounted. "The planning progressed as far as the identification of an asset"--an assassin--"whom it was felt might be recruited for this purpose. The plan was never reached, was never perfected to the point where it seemed feasible. The difficulty concerned the possibility of creating a situation in which the potential agent would have access to the target."