- The Washington Times - Sunday, September 1, 2002

SACRED SECRETS: HOW SOVIET INTELLIGENCE OPERATIONS CHANGED AMERICAN HISTORY
By Jerrold and Leona Schecter
Brassey's, $26.95, 402 pages
REVIEWED BY JOSEPH C. GOULDEN

Sen. Daniel Patrick Moynihan spent his last years in office seemingly competing with Al Gore for the title of "Dumbest Intelligent Man in Washington." Sen. Moynihan's favored oratorical hobbyhorse was the claimed irrelevance of intelligence agencies, foreign and domestic. Rather than contribute towards sensible foreign policy decisions, he contended, the spooks spent most of their time in meaningless spy-vs.-spy games.
I suggest that Sen. Moynihan pick up a copy of "Sacred Secrets," by the talented Washington writer-couple Jerrold and Leona Schecter, and flip to page 187, where they pose several questions: "How did the activities of Soviet intelligence agents change American government policies? Did they really affect American political thinking and cultural life? Did they change American history? The answer is, 'They did.'" And then the Schecters proceed to examples documented in their intensively researched survey of Soviet intelligence, which draws upon archival work and interviews in Moscow, as well as astute examination of the famed VENONA intercepts of U.S.S.R. spy traffic:
"The influence of American pro-Communist ideologues in the government heightened tensions that brought about the war between Japan and the United States," the authors assert.
The Soviet dictator Joseph Stalin feared being drawn into a two-front war with Germany and Japan; hence it was essential to turn Tokyo's attentions elsewhere. The Soviets dispatched an intelligence operative to Washington, where he met with Harry Dexter White, a high Treasury Department official, at the Old Ebbitt Grill.
White had been under the control of GRU (Red Army intelligence) since the early 1930s, and he willingly followed Soviet instructions. Over the next month, in his role as a key economic adviser, White steered the Roosevelt administration into bargaining demands that he knew the Japanese would not accept, chiefly withdrawal of their troops from China and Manchuria and "an end to expansionism." He also urged an oil embargo a taunt that led to the Japanese attack on Pearl Harbor.
"An idealistic American diplomat gave the Soviet Union the West's bargaining positions at Yalta, helping to bring down the Iron Curtain on Eastern Europe."
Here the villain was Alger Hiss, of the State Department, whose role as a Soviet agent is no longer arguable by serious persons. Soviet documents examined by the Schecters "reveal that he secretly met with a high ranking officer of the GRU … during the Yalta Conference and laid out for the Soviets all the strengths and weaknesses of the Western allies' bargaining position." Thus Stalin knew the points on which the Allies would yield, giving him a blue print on obtaining Soviet domination of Eastern Europe:
"A high ranking American bureaucrat gave the Soviets the printing plates with which they issues so many occupation marks in postwar Germany that the Western allies had to change the currency to stop inflation; this led to the Berlin Crisis of 1948."
Once again, the American doing Moscow's bidding was White, in conjunction with Treasury colleague Nathan Silvermaster. At the Teheran Conference of 1943, the British and the Americans agreed to a common German occupation currency, Allied Military, or AM, marks, to be printed in the U. S. At White's insistence, and over vehement objections from Gens. George Marshall, Dwight Eisenhower, and others duplicate printing plates went to Moscow.
A Soviet boast overheard in a VENONA intercept stated that White, "following our instructions … attained the positive decision of the Treasury Department to provide the Soviet side with the plates for engraving Soviet occupations marks, namely the consent to produce for the Red Army two billion occupation marks." Predictably, the Russians flooded Western zones of Germany with AM marks, leading to a currency crisis in 1948 that resulted in the Berlin blockade.
"Sacred Secrets" is an important contribution to intelligence literature. The authors had long experience in Moscow, where Mr. Schecter ran the Time magazine bureau. As serious historians, they gained the confidence of former Soviet intelligence officers, who filled in blanks in the surviving record with interviews. Earlier books included the memoir of KGB officer Pavel Sudaplatov, and the story of Oleg Penkovsky, accurately titled "The Spy Who Saved the World."
Reliance is also made on memoirs of KGB veterans that are available only in Russian a major source, for instance, for the story of Harry White's scheming to get the United States and Japan into war. These sources enabled the Schecters to flesh out the many hidden meanings of the VENONA intercepts. What is not recognized by the general public is that the VENONA papers, standing alone, are nigh unintelligible. Through diligent research, the Schecters fix the missing pieces into the mosaic. In my estimate, their analysis of VENONA is the best yet published.
Their broad picture also contains intriguing footnotes. In 1948, for instance, accusations that Hiss and White were Soviet agents touched off a harsh political war over the issue of "communists in government." For security reasons, the existence of VENONA was tightly held. (The Schecters convincingly dash arguments, by Mr. Moynihan and others, that President Truman was never told of the intercepts.) When the Hiss and White names showed up in VENONA, Col. Carter Clarke, the head of Amy intelligence, feared that the program might be embroiled in politics.
As a prophylactic measure, he dispatched aide Oliver Kirby to "brief a small select group that included House Republican leader Les Arens and Washington Post publisher Philip Graham."
The revelations "deeply concerned" Mr. Graham. According to what Oliver Kirby told the Schecters, "Graham knew that the Democrats were in trouble. VENONA was a time bomb that could explode and destroy the party of the New Deal …" So his staunchly liberal paper did not endorse a candidate in the 1948 presidential election, and in 1952 he campaigned for Eisenhower over Adlai Stevenson. Mr. Graham never revealed that he knew the VENONA secret.
"Sacred Secrets" should cause a serious rethinking by persons such as Mr. Moynihan about the role of intelligence in foreign affairs. Like it or not, the game is a serious one, and it must be played.
Joseph C. Goulden is working on a book concerning intelligence operations that helped win the Cold War



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