The Devil's Chessboard: Allen Dulles and the Rise of America's Secret Government

by David Talbot

But even the sophisticated Mary found herself unnerved by one of her conversations with Dulles. She had observed that despite his cunning reputation, Allen always seemed so “open and trusting,” even with people about whom he clearly harbored suspicions or whom he “actually had the goods on.” As he listened to Mary, Dulles grinned. “I like to watch the little mice sniffing at the cheese just before they venture into the little trap,” he told her. “I like to see their expressions when it snaps shut, breaking their little necks.” Mary was taken aback by this outburst. She told him she found it repellent, but Dulles would have none of her outrage. “What’s the matter with you?” he said. “Don’t you realize that if I had not caught them, they were about to catch me?” It did not occur to Mary to ask why “little mice” could be so threatening, or how he could take such pleasure from their suffering.

The opposite of love is not hate, he said. It’s power. Relationships fueled by a drive for power, where one person seeks dominance over the other, are incapable of producing love.

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.

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. Ostensibly a private philanthropic group, the 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.

the Office of Policy Coordination.

Dulles and Wisner were essentially operating their own private spy agency. The OPC was run with little government oversight and few moral restrictions. Many of the agency’s recruits were ex-Nazis.

By turning the unsuspecting Field family into members of a far-reaching U.S. spy ring, Dulles would panic Stalin—already rattled by the 1948 defection of Yugoslavia’s Marshal Tito—into launching witch hunts that would fracture the Communist governments throughout Eastern Europe.

Operation Splinter Factor.

The Office of Policy Coordination men knew that many of the Splinter Factor victims were patriots who were beloved by their own people. But, in the eyes of Dulles, this actually made them more dangerous. As one political observer of Splinter Factor remarked, “Dulles wished to leave Eastern Europe devoid of hope so that he could introduce a pro-American, anti-Soviet form of government. . . . Nationalist Communists were making communism acceptable to the people, and so, accordingly, they had to be removed.”

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. Together, the Dulles circle and Richard Nixon would bring about a sharp, rightward shift in the nation’s politics, driving out the surviving elements of the New Deal regime in Washington and establishing a new ruling order that was much more in tune with the Dulles circle’s financial interests. The Dulles-Nixon alliance proved masterful at exploiting the Cold War panic that gripped the nation, using it to root out Rooseveltian true believers from government, along with a few genuine Communist infiltrators who posed a marginal threat to national security.

If the political winds had been blowing in a different direction in 1948, it might well have been men like Foster and Allen Dulles, Thomas McKittrick of BIS, and Walter Teagle and William Stamps Farish of Standard Oil instead of New Dealers like Hiss and White who were put under the investigative spotlight for treason. But by turning the table on New Deal officials such as White, who had long wanted to prosecute these high-level Nazi collaborators, the Dulles group ensured their own legal protection. 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.

Harry Dexter White’s death signified the final collapse of Washington’s New Deal order and the unique brand of utopian internationalism that he had championed. It was men like Nixon and Dulles who now moved into the vacuum.

Though political tensions could flare within the power elite, Mills wrote, there was a remarkable unity of purpose among these ruling groups. 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.”

The crucial task of unifying the power elite, according to Mills, fell to a special subset of the corporate hierarchy—top Wall Street lawyers and investment bankers. These men were the “in-between types” who shuttled smoothly between Manhattan corporate suites and Washington command posts. Little known to the general public, these skilled executors of power constituted in Mills’s words America’s “invisible elite.” 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.

Most of its victims were highly competent, experienced members of the foreign service whose policy differences with the new Dulles regime simply rendered them “incompatibles,” in McLeod’s Orwellian term. A number of these purge victims, such as John Carter Vincent and John Paton Davies Jr., were veterans of the China desk, where their only crime was infuriating the right-wing Taiwan lobby by honestly evaluating why Communist revolutionary Mao Tse-tung had been able to defeat corrupt warlord Chiang Kai-shek. The civil service apparatus was supposed to protect respected officials like this, many of whom had made valuable contributions to the U.S. government’s understanding of the world. But ideology trumped ability in Foster’s intensely politicized State Department.

nobody who endured the snide and relentless grilling at the hands of McCarthy and his equally ruthless chief counsel, Roy Cohn, could expect their career to survive.

Ike’s Cold War propaganda adviser, C. D. Jackson—a fascinating and somewhat mysterious character who had a background in the OSS and served as a sort of intelligence link among the White House, the CIA, and Henry Luce’s media empire—advised the president to launch an all-out attack on McCarthy.

Eisenhower and the Dulles brothers decided to use Nixon as their mediator with McCarthy. The two men were, in some ways, cut from the same rough cloth. Aggrieved outsiders in the Ivy League/Wall Street world of the power elite, they had both grabbed onto the club of anti-Communism as the blunt tool of their ferocious ambition. They had a working stiff’s bitterness that they clearly enjoyed venting at Harvard types like Alger Hiss as much as they did at hard-core Communists.

“Penetration begins at home,”

The Excelsior had also become a favorite rendezvous spot for espionage agents from around the world, as well as Italian men of mystery. Licio Gelli—leader of Propaganda Due, the conspiratorial Masonic order whose intrigues undermined Italian democracy for many years—kept three adjoining rooms at the hotel. The discreet gentlemen who paid visits to Gelli—whose secret anti-Communist operations drew funding from the CIA—would enter Room 127, conduct business in Room 128, and then exit through Room 129.

Dulles’s arrival in Rome was conveniently timed. By the following morning, the mobs running riot through the streets of Tehran were led and financed by the CIA—the final act in a covert drama aimed at overthrowing the democratically elected government of Prime Minister Mohammad Mossadegh and restoring the shah’s autocratic rule. Mossadegh, a dedicated patriot and wily survivor of Iran’s treacherous politics, had antagonized the British government by nationalizing the powerful Anglo-Iranian Oil Company (later renamed British Petroleum) soon after taking office in 1951. The British behemoth—the third-largest producer of crude oil in the world—ruled Iran with imperial arrogance for much of the twentieth century, crushing labor strikes in the hellish oil fields and propping up and replacing local regimes at will. Mossadegh’s defiant seizure of Iran’s oil treasure set off a global thunderclap.

The price-fixing case against the oil cartel, a holdover from the Truman years, was reduced from a criminal to a civil charge and conveniently transferred to Foster Dulles’s jurisdiction, the first time in U.S. history that an antitrust case was handed over to the State Department for prosecution. Foster argued that the case had national security implications, and it quietly disappeared, leaving Big Oil unscathed.

Overseas Consultants Inc.,

The Dulleses could see the ruthless streak beneath Kim Roosevelt’s smooth Groton and Harvard polish. Three years earlier, they had recruited Roosevelt to work in Iran as a lobbyist for their ill-fated Overseas Consultants Inc. deal. And for the past two years, he had been spearheading a secret CIA operation to organize an underground resistance network inside Iran, burying crates of guns and cash in the desert to distribute to tribal warriors in case of a Soviet invasion. Roosevelt now turned this clandestine effort against Iran’s elected government, hiring bands of mercenaries and paying military leaders to betray their country. When push came to shove, Kim Roosevelt revealed that he shared his grandfather’s enthusiasm for imperial misadventures.

uncertainty that he created, seeing it as a way to intimidate enemies and keep them off balance. After the president’s nuclear “bullet” statement, White House press secretary Jim Hagerty nervously asked his boss how he planned to handle follow-up questions about the atom bomb option. Ike smiled and said, “Don’t worry, Jim, if that question comes up, I’ll just confuse them.”

Foster pushed Eisenhower to consider using the ultimate weapons during one crisis after the next, including the climactic stage of the Korean War in 1953, the final French stand in Vietnam at Dien Bien Phu in 1954, the battle of nerves with China over the islands of Quemoy and Matsu that same year, and the 1958 confrontation with the Soviets over Berlin. At various, hair-raising moments of these crises, Eisenhower seemed poised to take Foster’s advice, and was only dissuaded by the alarmed opposition of allied leaders or the cooler-headed responses of the Chinese and Soviet governments.

Until Arbenz’s election in 1950, the giant company, whose operations sprawled throughout the Caribbean, ran Guatemala less like a banana republic than a banana colony. United Fruit not only owned huge plantations but almost every mile of railroad track in the country, the only major Atlantic port, and the telephone system. In the capital, rulers came and went at the whim of the company. One of Arbenz’s more cold-blooded predecessors, Jorge Ubico, thought of peasants as nothing more than beasts of burden. Before the 1944 revolt that toppled his dictatorship—an uprising that Arbenz had helped lead—farm workers were roped together like animals by Ubico’s army and delivered to plantations where they were forced to work in debt slavery to the landowners.

the real body count in Guatemala started after the invasion, when the CIA-backed regime of Castillo Armas began to “clean” the nation of political undesirables, labor organizers, and peasants who had too eagerly embraced Arbenz’s land reforms. It was the beginning of a blood-soaked era that would transform Guatemala into one of the twentieth century’s most infamous killing fields. The “stainless” coup, as some of its CIA engineers liked to call it, would actually result in a tide of gore, including assassinations, rampant torture and executions, death squad mayhem, and the massacres of entire villages.

As early as January 1952, the CIA started plotting to eliminate the top officials of the Arbenz government. Howard Hunt might have wanted to avoid the embarrassment of an Arbenz assassination in full public view, but the CIA had no qualms about compiling a secret “disposal list” of at least fifty-eight key Guatemalan leaders during the planning for the coup.

With the generous support of the American government, the Gehlen Organization—as it came to be known—thrived in Pullach, becoming West Germany’s principal intelligence agency.

Gehlen, in turn, cabled his own chummy messages to the U.S. intelligence chief, and once sent him a gold medallion of St. George slaying the dragon—the Gehlen Organization’s emblem—“as a symbol of our work against bolshevism.”

Peterson