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Dulles’s aggressive Cold War stance found a key ally in President Truman’s defense secretary, James V. Forrestal, a former Wall Street investment banker at Dillon, Read who moved in Dulles’s circles and who shared Dulles’s suspicions about the Soviet Union. In early 1948, Forrestal persuaded the politically vulnerable Truman, who knew he was facing a tough challenge from Dewey, to appoint Dulles to a blue-ribbon committee to study the year-old CIA and propose ways to make it more effective.
The 193-page report would conclude its sharply critical assessment of the CIA by demanding that the agency take off its gloves in the growing confrontation with the Soviet Union.
Dulles and Forrestal flew into action, raising millions of dollars to tilt the election in favor of the U.S.-supported Christian Democrats.
Jim Forrestal, when the president ousted the Dulles ally from the Pentagon. By the time he was pushed out, Forrestal was showing signs of severe nervous exhaustion. Angry and despondent about his ouster, he began spiraling quickly downward, ranting about how the Soviets had infiltrated Washington and how they had marked him for liquidation. Early in the morning of May 22, 1949, after Forrestal was checked into the Bethesda Naval Hospital for psychiatric evaluation, he squeezed through the small bathroom window of his sixteenth-floor hospital suite and fell to his death. The tragic collapse of
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In June 1949, Dulles organized the National Committee for a Free Europe in conjunction with an illustrious board that included General Dwight D. Eisenhower, Hollywood director Cecil B. DeMille, and Time-Life publishing magnate (and close friend) Henry Luce.
committee was actually a CIA front that channeled funds to anti-Communist European émigrés and financed major propaganda efforts like Radio Free Europe. At least $2 million of the money poured into the committee’s clandestine projects came from the Nazi gold that Dulles had helped track down at the end of the war. In the early years of the Cold War, the Nazi treasure looted from Jewish families and German-occupied nations would become a key source of funding for Dulles’s secret operations.
citizen Dulles further spread his influence by inserting close allies like Frank Wisner in key intelligence posts. Like Dulles, Wisner was a former Wall Street lawyer who had fallen for the glamour of espionage life. In 1949, Dulles helped create a new intelligence outpost and buried it in the State Department bureaucracy under a purposefully dull name—the Office of Policy Coordination. Despite its innocuous title, the OPC wo...
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Field met with young OSS officer Arthur Schlesinger Jr., the future historian and Kennedy White House aide. Field proposed that the OSS subsidize the recruitment of left-wing German refugees in France, who would be dropped inside liberated areas of Germany, where they would begin to establish the country’s new political foundations. Schlesinger, a man of the left, but an ardent anti-Communist, immediately sniffed out Field’s proposal as a scheme to give the Soviet Union a head start in the occupation of Germany.
The Dulles-Wisner plot aggravated the Soviet premier’s already rampant paranoia, resulting in an epic reign of terror that, before it finally ran its course, would destroy the lives of untold numbers of people. Hundreds of thousands throughout Eastern Europe were arrested; many were tortured and executed. In Czechoslovakia, where nearly 170,000 Communist Party members were seized as suspects in the make-believe Field plot, the political crisis grew so severe that the economy nearly collapsed.
But, as was the case with the Communist true believers who advocated “heightening the contradictions” in order to bring about the glorious revolution, Operation Splinter Factor brought only more misery to the people of the Soviet bloc. Dulles would not live long enough to see their day of liberation.
“Allen Dulles’s motives are easy to imagine,” she remarked. “Anything that destabilized the situation in Eastern Europe was good for U.S. interests.
And yet, even in her enlightened state, Erica Wallach was not prepared to entirely forgive Allen Dulles. There was something disturbing about the man, at his core, that she wanted to put on record while she still had time. “Dulles had a certain arrogance in which he believed that he could work with the Devil—anybody’s Devil—and still be Allen Dulles,” she told her visitor. “He could work with Noel Field and betray him. He could work with the Nazis or with the Communists. He thought himself untouchable by these experiences and, of course, you cannot help be touched, be affected, no matter how
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which, like all the top New York firms of the day, drew their young talent almost exclusively from the Ivy League—showed
The spymaster and Herter took the young congressman under their wing during the ocean crossing. They schooled him about the importance of foreign aid as a facilitator of U.S.
The political relationship forged between the rising politician from California and Dulles’s East Coast circle would become one of the most significant partnerships of the postwar era. Nixon grew into a potent political weapon for the Dulles group, a cunning operator who managed to accrue solidly conservative credentials with the Republican Party’s popular base while dependably serving the interests of the GOP’s privileged leadership class.
The Dulles-Nixon alliance proved masterful at exploiting the Cold War panic
When Washington’s anti-Communist witch hunt raged out of control and threatened to consume even those who had lit the flame, Nixon again proved of great use to Dulles, working with him to keep the inferno within safe boundaries. In return for his services, Nixon won the patronage of the kingmakers in the Dulles circle, ensuring the politician’s steady rise toward Washington’s top throne.
According to John Loftus, the former Justice Department Nazi hunter, the two men first came in contact in late 1945, when young naval officer Richard Nixon was shuttling up and down the East Coast, wrapping up war-related business for the Navy. While sifting through the military paperwork, Nixon came across eye-opening Nazi documents that had been shipped to an old torpedo factory on the Virginia side of the Potomac.
documents revealed how the Dulles brothers had helped launder Nazi funds during the war. Loftus, citing confidential intelligence sources, alleged that Dulles and Nixon proceeded to cut a deal. “Allen Dulles,” reported Loftus, “told him to keep quiet about what he had seen and, in return, [Dulles] arranged to finance the young man’s first congressional campaign against Jerry Voorhis.”
to target Voorhis, a five-term Democratic congressman and ardent New Dealer from Nixon’s home district in Southern California. The crusading congressman was a particularly troublesome thorn in the sides of Wall Street and Big Oil. Voorhis shook the banking industry by pushing for the federal government to take over the nation’s privately owned, regional Federal Reserve Banks—a radical proposal that briefly won President Roosevelt’s support, but ultimately failed to overcome the banking lobby.
Voorhis also posed a direct legal threat to the Dulles brothers through his efforts to shine a light on the wartime collusion between Sullivan and Cromwell clients like Standard Oil and DuPont chemical company and Nazi cartels such as IG Farben. Voorhis further unnerved the Dulles circle by demanding a congressional investigation of the controversial Bank for International Settlements, charging that bank president Thomas McKittrick, a close associate of the Dulles brothers, was a Nazi collaborator.
biggest name he dropped—John Foster Dulles—produced a mighty echo in the cavernous caucus room of the Old House Office Building. Hiss reminded the committee that it was the Republican wise man who had offered him his current position as president of the prestigious Carnegie Endowment for International Peace, where Foster Dulles served as chairman of the board.
Arthur Schlesinger Jr. called it “an orgy in unconscious self-revelation.” President Kennedy told Schlesinger
showed that Nixon was a “sick” man. But, as usual, Nixon’s opponents underestimated him. Nixon may have suffered from a tortured psyche, but it made him acutely sensitive to the nuances of power. He had a Machiavellian brilliance for reading the chessboard and calculating the next series of moves to his advantage.
But at home, Nixon’s anti-Communism reeked of political cynicism, earning him the nickname “Tricky Dick.” He smeared his opponents with reckless abandon, labeling them as Reds or “dupes” or, in the case of his 1950 senatorial opponent, Helen Gahagan Douglas, a woman who was “pink down to her underwear.” Nixon never proved that Hiss was a card-carrying Communist or a Soviet agent, but, with typical hyperbole, he treated him like
White House attorney who became a key witness in the Watergate scandal that ended the Nixon presidency. Writing in his memoir Blind Ambition, Dean alleged that Nixon told fellow White House aide Charles Colson, “We built [the typewriter] in the Hiss case,” implying that with the help of FBI technicians, Nixon had used a replica of the Woodstock machine to trap his prey.
Chambers, a man who had launched his writing career by working for the Communist Party press, continued to enjoy his new life as a polemicist for the conservative media, first in Henry Luce’s plush Time-Life tower and then in the more modest Manhattan offices of William F. Buckley Jr.’s National Review.
He was convinced that he would never be forgiven by “substantial segments of the press and intellectual community” for exposing how the New Deal had been compromised by the Communist underground. Nixon brooded that it was this “hatred and hostility” that might have cost him the 1960 presidential election. Chambers, too, saw his decision to incriminate Hiss as part of a broader assault on New Deal–style government and its “drift toward socialism.” In his 1952 memoir Witness, Chambers conflated the Roosevelt presidency with the evils of Communist rule. The New Deal, he wrote, “was not a
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But by far the more common “traitors” were men like Hiss: well-educated, progressive idealists.
hands-off government that allowed encampments of hungry and homeless people to spring up all over the country without taking action.
In despair over the enormous human suffering of the Depression, with some fifteen million jobless—a quarter of the U.S. labor force—some of these New Dealers found themselves drawn, at least for a time, to the discipline and militancy of the Communist Party.
To this day, Alger Hiss—who was convicted of perjury, not treason—remains a conundrum, his guilt or innocence still hotly debated along ideological lines. When the Venona decrypts were declassified in the 1990s, some saw smoking-gun proof of his guilt, while others argued that the case had only entered an even murkier stage. In the end, Hiss will likely be seen as a perplexingly mixed bag: a fundamentally loyal American who had associated with left-wing circles in Washington and was not entirely forthcoming with Congress, but was never a serious threat to national security.
Harry Dexter White was a slight, bespectacled, fifty-five-year-old former government economist whose name meant little to the general public. But as the big thinker in Henry Morgenthau’s Treasury Department, White had played a major role in shaping New Deal policy. Among his many accomplishments was the creation of the World Bank and the International Monetary Fund, two linchpins of the postwar global financial order that White was widely credited with spearheading.
White would later be hailed as “arguably the most important U.S. government economist of the 20th century.”
behind-the-scenes campaign at Bretton Woods—an effort mounted by representatives of Wall Street, the State Department, and the Bank of England—to head off the Morgenthau-White assault on BIS, which the New Dealers wanted to replace with the World Bank and the International Monetary Fund.
By seizing the investigative momentum, Republicans like Dick Nixon, whom Loftus called “Allen Dulles’s mouthpiece in Congress,” made sure that the Dulles circle would never have to answer for their wartime actions.
That is a patient heritage which Americans have, that a man is presumed to be innocent until proven guilty . . . and certainly you would be the first to recognize that, in order for a man to have a fair trial, it requires all the rules and regulations of a court hearing.”
This procedure is not the American way of doing things. It is the un-American way.” But Nixon appeared unfazed by the press furor, moving quickly forward with his inquisition of Hiss—who, after White’s passing, would serve as the next best emblem of Rooseveltian treachery.
forced the vice presidential candidate to resign as Eisenhower’s running mate. It took Nixon’s brilliantly homespun TV address to the nation—which would go down in history as the “Checkers speech”
Wisner had even urged that Malaxa—who had finagled his way into the United States after the war as part of a Romanian trade delegation—be deported. Wisner had served as the OSS station chief in Romania, and he considered the country his turf. He was acutely sensitive to the factions and feuds within the Romanian exile community, where Malaxa provoked feelings passionate enough to tear apart all hope of a united anti-Soviet front. Despite Wisner’s feelings about Malaxa, he realized that Allen Dulles was deeply implicated in the Romanian’s “unsavory” story. Dulles had not only been Malaxa’s
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Malaxa again rose from the ashes, insinuating himself into the new Moscow-backed regime. He was the only Romanian capitalist to whom the Communist government returned his industrial property.
It was Gordon Mason who was given the unpleasant task of showing the evidence of Nixon’s corruption to General Smith,
After the Republican triumph, Dulles and Nixon were finally able to speed Malaxa’s immigration case through the bureaucracy. In December 1953, officials in Eisenhower’s Justice Department bypassed Congress and the INS and granted Malaxa permanent residence through an administrative decree. Justice Department officials explained that they had reached their decision due to the unique technical services provided by the Western Tube Corporation. The fact that Malaxa’s company did not actually exist—and never would—was politely overlooked by the new administration. Nicolae Malaxa lived out the rest
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As the new heads of the State Department and the CIA, they would direct the global operations of the most powerful nation in the world. The fraternal partnership gave the Dulles brothers a unique leverage over the incoming administration, and they were imbued with a deep sense of confidence that these were the roles they were destined to play. The 1952 presidential election represented the triumph of “the power elite,” in the phrase coined by sociologist C. Wright Mills, academia’s most
that characterized conventional theories about American politics. According to Mills, power in America was not solely in the hands of Marx’s “ruling class”—those who owned the means of production. Nor was it a balancing act of competing interests, such as big business, organized labor, farmers, and professional groups. This ebb-and-flow concept of power—which was clung to by liberal and conservative scholars alike—was a “fairy tale,” in Mills’s words, one that was “not adequate even as an approximate model of how the American system of power works.” Instead, Mills wrote in his 1956 masterpiece
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The top corporate executives, government leaders, and high-ranking military officers moved fluidly in and out of one another’s worlds, exchanging official roles, socializing in the same clubs, and educating their children at the same exclusive schools. Mills called this professional and social synchronicity “the fraternity of the successful.” Within this system of American power, Mills saw corporate chiefs as the first among equals. Long interlocked with the federal government, corporate leaders came to dominate the “political directorate” during World War II. The United States had largely
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They were the men who forged the consensus on key decisions of national significance and who made certain that these decisions were properly implemented. Their work was largely unseen and vaguely understood, but it had enormous impact on the lives of ordinary men and women. It was men like John Foster Dulles and Allen Dulles whom Mills had in mind when he wrote of the power elite’s inner core.
American colossus that had emerged in the postwar era. Mills took aim at the most important topics in American society: the soul-killing, “cheerfully robotic” regimentation of corporate life; the unique terrors of the nuclear age—an age, he argued, when war itself had become the enemy, not the Russians; and, of course, the overworld of American power, a realm that he believed few average citizens could grasp, even though it cast a long shadow over their daily existence.
Mills liked to exclaim. He wrote in a vigorous, clear style that rejected the academic caste’s “bloated puffery of Grand Theory,” in sociologist Todd Gitlin’s words. Soon after The Power Elite was published, it began stirring wide debate, catapulting over the ivy-covered walls of academia onto the bestseller list. Writing in The New York Times Book Review, corporate lawyer and presidential adviser Adolf Berle—a member in good standing of the power elite—found “an uncomfortable degree of truth” in Mills’s book but fought off his discomfort by concluding that it was essentially “an angry
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sensitive nerve with Cold War liberals like Arthur Schlesinger Jr.,
