[Spooks] Before the CIA, There Was the Pond

[Irv [K3IRV] McWherter]

I also enjoyed it very much and shared it with some old navy friends.

Irv - K3IRV

On Thu, Jul 29, 2010 at 8:30 PM, L.T. Easterly <corqpub at gmail.com> wrote:

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> This is neat! I had not heard of this find!
>
>
> On Thu, Jul 29, 2010 at 12:15 PM, Al Fansome <al_fansome at hotmail.com>
> wrote:
>
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> > this list
> >
> >
> > July 29, 2010
> >
> > AP IMPACT: Before the CIA, There Was the Pond
> >        By THE ASSOCIATED PRESS
> >
> > Filed at 10:39 a.m. ET
> >
> > NEW YORK (AP) -- It was a night in early November during the infancy of
> > the Cold War when the anti-communist dissidents were hustled through a
> > garden and across a gully to a vehicle on a dark, deserted road in
> > Budapest. They hid in four large crates for their perilous journey.
> >
> > Four roadblocks stood between them and freedom.
> >
> > What Zoltan Pfeiffer, a top political figure opposed to Soviet
> > occupation, his wife and 5-year-old daughter did not know as they were
> > whisked out of Hungary in 1947 was that their driver, James McCargar,
> > was a covert agent for one of America's most secretive espionage
> > agencies, known simply as the Pond.
> >
> > Created during World War II as a purely U.S. operation free of the
> > perceived taint of European allies, the Pond existed for 13 years and
> > was shrouded in secrecy for more than 50 years. It used sources that
> > ranged from Nazi officials to Stalinists and, at one point, a French
> > serial killer.
> >
> > It operated under the cover of multinational corporations, including
> > American Express, Chase National Bank and Philips, the Dutch-based
> > electronic giant. One of its top agents was a female American
> > journalist.
> >
> > Now the world can finally get a deeper look at the long-hidden roots of
> > American espionage as tens of thousands of once-secret documents found
> > in locked safes and filing cabinets in a barn near Culpeper, Va., in
> > 2001 have finally become public after a long security review by the
> Central
> > Intelligence Agency.
> >
> > The papers, which the Pond's leader tried to keep secret long after the
> > organization was dissolved, were placed in the National Archives
> >  in College Park, Md., in 2008 but only opened to the public in April.
> > Those records plus documents obtained by The Associated Press in the
> > past two years from the FBI, CIA and other agencies under the Freedom of
> >  Information Act portray a sophisticated organization obsessed with
> > secrecy that operated a network of 40 chief agents and more than 600
> > sources in 32 countries. The AP has also interviewed former officials,
> > family members, historians and archivists.
> >
> > The Pond, designed to be relatively small and operate out of the
> > limelight, appeared to score some definite successes, but rivals
> > questioned its sources and ultimately, it became discredited because its
> >  pugnacious leader was too cozy with Sen. Joseph McCarthy and other
> > radical anti-communists.
> >
> > The documents also highlight issues still relevant today: the rivalry
> > among U.S. intelligence agencies that have grown to number 16, the
> > government's questionable use of off-the-books operations with budgets
> > hidden from congressional oversight, and the reliance on contractors to
> > undertake sensitive national security work.
> >
> > Created by U.S. military intelligence as a counterweight to the Office
> > of Strategic Services, the forerunner of the CIA, it functioned as a
> > semiautonomous agency for the State Department after World War II and
> > ended its days as a contractor for the CIA with links to J. Edgar
> Hoover's
> > FBI.
> >
> > The organization counted among its exploits an attempt to negotiate the
> > surrender of Germany with Hermann Goering, one of Adolf Hitler's
> >  top military leaders, more than six months before the war ended; an
> > effort to enlist mobster Charles ''Lucky'' Luciano in a plot to
> > assassinate Italian dictator Benito Mussolini;
> >  identifying the location of the German heavy water plants doing atomic
> > research in Norway; and providing advance information on Russia's first
> > atomic bomb explosion.
> >
> > There were other tangible successes, such as planting a high-level mole
> > in the Soviet secret police and, in a major operation code-named
> > ''Empire State,'' the Pond paid a group of dissidents behind the Iron
> > Curtain with CIA funds to obtain cryptographic systems to break coded
> > messages from Moscow.
> >
> > But it was Pfeiffer's successful escape that was among the most
> > high-profile operations, garnering headlines, although the Pond's role
> > was kept secret for years.
> >
> > McCargar, a State Department official who secretly was the Pond's agent
> > in Budapest, had been ordered to find a way to get Pfeiffer and his
> > family out of the country. The Hungarian was the leader of a small but
> > increasingly popular anti-communist party that had made gains in August
> > elections, and he had begun to get death threats.
> >
> > McCargar coordinated the escape with the help of fellow State Department
> >  employee Edmund Price, also identified in the papers as working for the
> >  Pond. But it was McCargar, armed with a pistol, who drove them from
> > Budapest, past four road blocks. At one, a Russian guard asked to see
> > what was in the four crates. McCargar bribed him with cigarettes.
> >
> > They arrived in Vienna, a hotbed of international intrigue, where the
> > U.S. shared control with their allies, the French and the British, as
> > well as the Soviets. Against this politically fraught backdrop, Pfeiffer
> >  and his family were taken to an airfield and spirited away to Frankfurt
> >  and on to New York. They arrived in the U.S. on Nov. 12 as heroes of
> > the anti-communist opposition.
> >
> > One of the escapees, Pfeiffer's daughter, Madeline, told the AP she
> > remembered sitting between her mother's legs in one crate and that she
> > was given sleeping pills to keep her quiet.
> >
> > ''It is strange to realize that I have lived though this, and that my
> > parents lived through this,'' said Madeline Pfeiffer, 67, now living in
> > San Francisco. On the 50th anniversary of their flight from Hungary, she
> >  said she sent McCargar a bottle of cognac -- what he and her parents
> > drank after escaping. Two other dissidents were taken out with them.
> >
> > The head of the Pond was Col. John V. Grombach, a radio producer,
> > businessman and ex-Olympic boxer who kept a small black poodle under his
> >  desk. He attended West Point, but didn't graduate with his class because
> > he had too many demerits, according to a U.S. Army
> >  document. His nickname was ''Frenchy,'' because his father was a
> > Frenchman, who worked in the French Consulate in New Orleans.
> >
> > The War Department had tapped Grombach to create the secret intelligence
> >  branch in 1942 as a foundation for a permanent spy service. Grombach
> > said the main objectives were security and secrecy, unlike the OSS,
> > which he said had been infiltrated by allies and subversives. It was
> > first known as the Special Service Branch, then as the Special Service
> > Section and finally as the Coverage and Indoctrination Branch.
> >
> > To the few even aware of its existence, the intelligence network was
> > known by its arcane name, the Pond. Its leaders referred to the G-2
> > military intelligence agency as the ''Lake,'' the CIA, which was formed
> > later, was the ''Bay,'' and the State Department was the ''Zoo.''
> > Grombach's organization engaged in cryptography, political espionage and
> >  covert operations. It had clandestine officers in Budapest, London,
> > Lisbon, Madrid, Stockholm, Bombay, Istanbul and elsewhere.
> >
> > Grombach directed his far-flung operations from an office at the
> > Steinway Hall building in New York, where he worked under the cover of a
> >  public relations consultant for Philips. His combative character had
> > earned him a reputation as an opportunist who would ''cut the throat of
> > anyone standing in his way,'' according to a document in his Army
> > intelligence dossier.
> >
> > In defining the Pond's role, Grombach maintained that the covert network
> >  sought indirect intelligence from people holding regular jobs in both
> > hostile countries and allied nations -- not unlike the Russian spies
> > uncovered in June in the U.S. while living in suburbia and working at
> > newspapers or universities.
> >
> > The Pond, he wrote in a declassified document put in the National
> > Archives, had a mission ''to collect important secret intelligence via
> > many international companies, societies, religious organizations and
> > business and professional men who were willing to cooperate with the
> > U.S. but who would not work with the OSS because it was necessarily
> > integrated with British and French Intelligence and infiltrated by
> > Communists and Russians.''
> >
> > On April 15, 1953, Grombach wrote that the idea behind his network was
> > to use ''observers'' who would build long-term relationships and produce
> >  far more valuable information than spies who bought secrets.
> > ''Information was to be rarely, if ever, bought, and there were to be no
> >  paid professional operators; as it later turned out some of the
> > personnel not only paid their own expenses but actually advanced money
> > for the organization's purposes.''
> >
> > The CIA, for its part, didn't think much of the Pond. It concluded that
> > the organization was uncooperative, especially since the outfit refused
> > to divulge its sources, complicating efforts to evaluate their reports.
> > In an August 1952 letter giving notice that the CIA intended to
> > terminate the contract, agency chief Gen. Walter Bedell Smith wrote that
> >  ''our analysis of the reports provided by this organization has
> > convinced us that its unevaluated product is not worth the cost.'' It
> > took until 1955 to completely unwind the relationship.
> >
> > Mark Stout, a former intelligence officer and historian for the
> > International Spy Museum in Washington, analyzed the newly released
> > papers and said it isn't clear how important the Pond was to U.S.
> > intelligence-gathering as a whole. ''But they were making some real
> > contributions,'' he said.
> >
> > Matthew Aid, an intelligence historian and author of ''The Secret Sentry:
> > The Untold History of the National Security Agency''
> >  who has reviewed some of the collection, said there was no evidence the
> >  Pond's reports made their way to decision-makers. ''I'm still not
> > convinced that Grombach's organization was a worthwhile endeavor in
> > World War II and even less so when it went off the books,'' he said.
> >
> > What it may have lacked in quality and influence, however, the Pond
> > certainly made up with chutzpah.
> >
> > One of the outfit's most unusual informers was a French serial killer
> named
> > Marcel Petiot, Grombach wrote in a 1980 book.
> >
> > The Secret Intelligence Branch, as he referred to the Pond, began
> > receiving reports from Petiot during the war. He was a physician in
> > Paris who regularly treated refugees, businessmen and Gestapo agents,
> > but he also had a predilection for killing mostly wealthy Jews and
> > burning their bodies in a basement furnace in his soundproofed house. He
> >  was convicted of 26 murders and guillotined in 1946.
> >
> > Nevertheless, Grombach considered him a valuable informer because of his
> > contacts.
> >
> > One cable discovered among the newly released papers appears to confirm
> > the Pond was tracking Petiot's whereabouts. In the undated memo, the
> > writer says Petiot was drawn by a Gestapo agent ''into a trap to be
> > arrested by the Germans.'' Petiot was briefly arrested in 1943 by the
> > Gestapo.
> >
> > Such sources were often feeding their reports to top operatives -- often
> >  businessmen or members of opposition groups. But there were also
> > journalists in the spy ring.
> >
> > Ruth Fischer, code-named ''Alice Miller,'' was considered a key Pond
> > agent for eight years, working under her cover as a correspondent,
> > including for the North American Newspaper Alliance. She had been a
> > leader of Germany's prewar Communist Party and was valuable to the Pond
> > in the early years of the Cold War, pooling intelligence from
> > Stalinists, Marxists and socialists in Europe, Africa and China,
> > according to the newly released documents.
> >
> > But it was the help from businesses in wartime that was essential to
> > penetrating Axis territories.
> >
> > The Philips companies, including their U.S. division, gave the Pond
> > money, contacts, radio technology and supported Grombach's business
> > cover in New York. Philips spokesman Arent Jan Hesselink said the
> > company had business contacts with Grombach between 1937 and 1970. He
> > added that they could not ''rule out that there was contact between
> > Philips and Grombach with the intention of furthering central U.S.
> > intelligence during the war.''
> >
> > The Pond laid the groundwork and devised a detailed postwar plan to
> > integrate its activities into the U.S. Rubber Co.'s business operations
> > in 93 countries. It is unknown if the plan was ever carried out. The
> > Pond also worked with the American Express Co., Remington Rand, Inc. and
> >  Chase National Bank, according to documents at the National Archives.
> >
> > American Express spokeswoman Caitlin Lowie said a search of company
> > archives revealed no evidence of a relationship with Grombach's
> > organization. Representatives of the other companies or their successors
> >  did not respond to requests for comment.
> >
> > The Pond directed its resources for domestic political ends, as well.
> >
> > In the 1950s, Grombach began furnishing names to McCarthy on supposed
> > security risks in the U.S. intelligence community. By then, the Pond was
> >  a CIA contractor, existing as a quasi-private company, and the agency's
> >  leadership was enraged by Grombach's actions. It wasn't long before the
> >  Pond's contract was terminated and the organization largely ceased to
> > exist.
> >
> > The CIA withheld thousands of pages from the National Archives
> > collection of Grombach papers, including eight rolls of documents on
> > microfilm; the National Security Agency kept back devices used to send
> > coded messages. The CIA also declined a Freedom of Information Act
> > request by the AP detailing its relationship to the Pond, which the AP
> > has appealed.
> >
> > Grombach wrote to the Hoover Institution Archives at Stanford University,
> >  dated June 10, 1977, indicating most of his classified papers would go
> > to the American Security Council Foundation, an anti-communist group
> > that works on national security policy. Grombach died in 1982.
> >
> > Henry A. Fischer, the council's executive director, said safes at the
> > 683-acre Longea Estate -- site of the council's former Freedom Studies
> > Center -- were mistakenly removed by contractors hired to transfer the
> > contents of its Boston, Va., library. He said he had been told by staff
> > of the error when FBI agents were called to examine them. ''I have no
> > idea what they were going to do with them.''
> >
> > FBI historian John Fox said only one safe was removed from the property
> > by the contractors and drilled open, its contents turned over to the
> > CIA, which informed the bureau about the discovery in December 2001. Fox
> >  said the FBI recovered four other safes from the council and took them
> > to Quantico to be opened. After an investigation, Fox said the remaining
> >  documents were transferred to the CIA.
> >
> > ----
> >
> > Associated Press writer Toby Sterling in Amsterdam contributed to this
> > report.
> >
> > ----
> >
> > Online:
> >
> > National Archives Research Catalog:
> http://www.archives.gov/research/arc/
> >
> > CIA ''Pond'' article: http://bit.ly/cx5VIX
> >
> > John Grombach obit, see p. 132: http://bit.ly/cOnWW5
> >
> > _________________________________________________________________
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